ASSEMBLY (MAQUILA) AND TECHNICAL ASSISTANCE AGREEMENT
This Agreement is entered into on this 1st. day of September of 1998, by and
between TOLLYCRAFT YACHT CORPORATION, a corporation with offices in the United
States of America, represented by Xx. Xxxxx X. Xxxxx, hereinafter referred to
as the "COMPANY", and YACHTS OF THE AMERICAS, S.A. DE C.V. referred to as the
"CONTRACTOR", represented by Xx. Xxxxxx Xxxxx, in his capacity as Sole
Administrator, pursuant to the following Recitals and Clauses:
R E C I T A L S :
a) That on March 11, of this year, stock certificate number 3649 representing
2,000,000 shares of Tollycraft Yacht Corporation stock, was issued in favor
of Xxxxxx Xxxxx Xxxxx, trust account; said certificate was surrendered and
on the 14th of May of this year, certificates number 3686 through 3710
representing in total the same amount of shares as certificate 3649 were
issued in favor of Xxxxxx Xxxxx Xxxxx, Client Trust Account, Noman, S. de
X.X. client trust account, Petrugo Importaciones, S.A. de C.V. client trust
account, Xxxx Xxxxxx Client Trust Account and Xxxxxx Xxxxxxxx Client Trust
Account.
b) Yachts of the Americas, S.A. de C.V. is a Mexican corporation owned by
several Mexican nationals as well as several Mexican corporations.
It was specifically formed by these Mexican entities because of Reg S
shares that have been distributed to them as an inducement for their
participation in the formation of the above company. As a result Yachts of
the Americas has agreed to the building of a plant and facility in a
location directed by Tollycraft Yachts Inc. The facility itself will be
designed and constructed in conformance to plans developed by Tollycraft
Yachts. In addition the facility will be equiped with a five axle roter
tooling machine capable of the production of molds for Tollycraft. The
plant and all machinery will remain in the ownership of Yachts of the
Americas.
c) The COMPANY states that it desires that the CONTRACTOR manufacture for it,
in the CONTRACTOR's industrial facilities in Merida, Yucatan, Mexico, boats
and yachts of any type.
d) The CONTRACTOR states it is willing to manufacture for the COMPANY such
boats and yachts of any type, under the terms and conditions hereinafter
mentioned.
e) One of the primary reasons for which the CONTRACTOR entered into this
agreement is the use of the COMPANY's name in attracting other major boat
manufacturers to it's facilities in Mexico.
f) The COMPANY's primary reason for entering into this agreement, is the
ability to take advantage of the NAFTA treaty benefits, allowing it to be
more competitive in the United States market.
HAVING STATED THE FOREGOING, THE PARTIES AGREE ON THE FOLLOWING:
C L A U S E S :
FIRST. The CONTRACTOR covenants and agrees to contract, with the COMPANY, for
the manufacture of boats and yachts of any type, as the COMPANY may wish to
have manufactured in Merida, Yucatan, United Mexican States, utilizing
equipment and machinery (tools and spare parts) which have been provided or
which henceforth shall be provided by the COMPANY, as well as its own, which
are to be used exclusively in and for the work that is to be carried out by
the CONTRACTOR for the COMPANY. The CONTRACTOR guarantees that the manufacture
of such products shall be carried out in strict compliance with the
instructions and specifications of the COMPANY.
SECOND. Those articles, materials, and component parts for the products
referred to above, for the purposes indicated in Clause First above, are and
at all times shall continue to be, the sole and exclusive property of the
COMPANY, and once the components and products covered by this Contract have
been in Mexico, they must be returned by the CONTRACTOR to the COMPANY, to
such places and destinations as the COMPANY may determine. The COMPANY shall
bear the corresponding shipping charges, freight cartage and insurance while
in transit to and from Mexico, and duties on importation into the United
States of America.
THIRD. The CONTRACTOR may not, under any circumstances or for any reason sell,
or in any other manner dispose of, any of the component parts or any of the
repaired and/or manufactured products hereinabove referred to, within the
United Mexican States or the United States of America or any other place.
FOURTH. Any samples of the product officially requested by an agency or
department of the Federal Government of the United Mexican States, may only be
delivered upon written authorization of the COMPANY and only when official
receipt is given by the requesting agency or department.
FIFTH. The COMPANY shall determine at its sole discretion at all times, what
products will be repaired and/or manufactured by the CONTRACTOR, as well as in
what amounts, numbers or quantities and the types and qualities of materials
that will be used by the CONTRACTOR in performing the work hereby contracted.
SIXTH. The COMPANY shall notify the CONTRACTOR, whenever possible of its
expected production schedule of the various components and/or products and the
parts required therefor, for a period of one year, at least thirty (30) days
in advance, so that the CONTRACTOR may obtain the necessary permits or
licenses from the Federal Government of the United Mexican States for the
import of such component parts.
SEVENTH. In consideration of shares delivered, the CONTRACTOR agrees to pay to
the COMPANY the sum of $2,000,000.00 dollars in services, to be applied at
cost plus 20%. The manufacture of Boats and Yachts by the CONTRACTOR for the
COMPANY at the CONTRACTOR's facilities in Mexico shall never be higher than
50% of the total production of the CONTRACTOR, unless otherwise agreed to by
the parties.
EIGHTH. This Contract shall continue in force, for a maximum of 5 (five) years
or until terminated by either party. The CONTRACTOR shall continue to build
boats at cost for the COMPANY, for as long as this contract is in force.
NINETH. It is agreed between the parties that the COMPANY shall make available
to the CONTRACTOR the benefit of the knowledge know-how and commercial,
technical and practical experience, useful in the organization, management and
operation of the CONTRACTOR's facilities, and shall render certain management
assistance and services to the CONTRACTOR in connection therewith, so that:
a) All the obligations assumed by the CONTRACTOR in accordance herewith are
properly and efficiently complied with;
b) The COMPANY may be assured that all the materials, parts and components
delivered to the CONTRACTOR for the purposes indicated in Clause First
hereof are effectively utilized exclusively for such purposes;
c) The facility may be staffed by qualified management and technical
personnel; and
d) All efforts may be devoted to the achievement of maximum long-range profits
and growth of the COMPANY and the CONTRACTOR.
TENTH. The assistance and services to be rendered and performed by the COMPANY
in the fulfillment of the foregoing undertaking shall include the following:
a) Advise and assist in determining the number and types of employees
necessary to operate and manage the CONTRACTOR's facilities, and the scope
and requirements of assignments and positions;
b) Advise and assist in the establishment of purchasing procedures and in the
procurement of raw materials and other supplies;
c) Advise and assist in the operation of the CONTRACTOR's facilities,
including the scheduling of production, the establishment and maintenance
of production, quality and inventory controls;
d) Advise with respect to the packaging and storing of all materials;
e) Advise and assist in the establishment of maintenance practices and
procedures and in the development of an inventory control for materials;
f) Advise and assist in the establishment and maintenance of accounting,
auditing and budget procedures, cost analysis and capital and operating
cost controls;
g) Advise and assist in obtaining financing and the revision of capital
structure when needed, to provide for growth of the business;
h) Provide training for supervisory and production personnel;
i) Provide quality control services for components and finished products; and
j) Advise and assist in the installation of and operational training for new
equipment.
The above assistance and services shall be rendered by those employees which
the COMPANY may consider appropriate. The individuals involved in the
rendering of such assistance shall at all times be employees of the COMPANY
and the CONTRACTOR assumes no liability for their salaries and other benefits
which shall be covered at all times and in their entirety by the COMPANY.
Those individuals shall under no circumstances be considered to be
subordinated to the CONTRACTOR.
ELEVENTH. The COMPANY will be liable and assumes all responsibility that may
derive from the invasion, damage, affectation, or loss that may be caused to
any third party's intangible right with regard to the technical assistance to
be provided under the terms hereunder.
TWELFTH. The CONTRACTOR covenants and agrees to comply with all existing laws
and regulations in the United Mexican States in order to avoid penalties or
Government action, so as to hold all machinery, equipment, materials, parts
and tools, of any type or nature, or finished products, which are owned by the
COMPANY, free of any liens, claims or charges by any agency or department of
the Federal, State or Municipal Governments.
THIRTEENTH. The COMPANY hereby grants its full consent for the CONTRACTOR to
use the COMPANY's name, during the period that this contract is in force
without any limitation or remuneration owed to the COMPANY.
FOURTEENTH. For the interpretation and compliance of this Agreement, the
parties hereto expressly submit themselves to the competent Courts of the
state of Yucatan, Mexico, waiving any right that they may have to any other
jurisdiction, by reason of their present or future domiciles.
FIFTEENTH. This Agreement shall substitute any and all agreements previously
entered into between the parties and which might be opposed to the provisions
hereof. The parties agree that this Agreement is to be construed under the
laws of the United Mexican States, and no changes will be valid except when
made in writing by both parties.
HAVING READ THE ABOVE AGREEMENT, the parties accepted and ratified it, and
signed it in Merida, Yucatan, Mexico.
The COMPANY The CONTRACTOR
TOLLYCRAFT YACHT CORPORATION YACHTS OF THE AMERICAS,
S.A. DE C.V.
By: By:
Xxxxx X. Xxxxx Xxxxxx Xxxxx
Chairman, CEO Sole Administrator
