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EXHIBIT 10.110
ASSEMBLY (MAQUILA) AGREEMENT
between
WILSHIRE TECHNOLOGIES, INC.
as "COMPANY"
and
WILSHIRE INTERNATIONAL DE MEXICO, S.A. DE C.V.
as "CONTRACTOR"
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INDEX
CLAUSE PAGE
------ ----
Witnesseth......................................................1.
I Appointment.....................................................1.
II Delivery of materials...........................................1.
III Information.....................................................2.
IV Production estimates............................................2.
V Consideration...................................................2.
VI Accounting records..............................................3.
VII Company's inspections and visits................................3.
VIII Ownership of Materials and Fixed Assets.........................4.
IX Insurance.......................................................4.
X Sales in Mexico.................................................4.
XI Samples.........................................................5.
XII Confidentiality.................................................5.
XIII Compliance of laws and regulations..............................5.
XIV Independent Contractors.........................................5.
XV Term............................................................6.
XVI Jurisdiction....................................................6.
XVII Language........................................................6.
XVIII Notices.........................................................6.
XIV Previous agreements.............................................7.
EXHIBIT
A Employee certification
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THIS ASSEMBLY (MAQUILA) AGREEMENT IS ENTERED INTO BY AND BETWEEN WILSHIRE
TECHNOLOGIES, INC. ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF
CALIFORNIA, UNITED STATES OF AMERICA (HEREINAFTER REFERRED TO AS THE "COMPANY"),
AND BY WILSHIRE INTERNATIONAL DE MEXICO, S.A. DE C.V., A MEXICAN CORPORATION
(HEREINAFTER REFERRED TO AS THE "CONTRACTOR") PURSUANT TO THE FOLLOWING RECITALS
AND CLAUSES:
WITNESSTH
WHEREAS, COMPANY is the owner of certain technical know-how, processes,
knowledge, trade names and trademarks concerning parts, materials and equipment
in connection with the manufacturing of certain products used in industrial
clean rooms.
WHEREAS, the COMPANY desires to contract the assembly and/or manufacture in
Mexico of various products.
WHEREAS, the CONTRACTOR has adequate industrial facilities in Tijuana, Baja
California, Mexico, to assemble and/or manufacture such products and is willing
to assemble and/or manufacture those products for the COMPANY under the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and mutual promises, covenants
and agreements hereinafter set forth, the COMPANY and the CONTRACTOR agree as
follows:
CLAUSES
FIRST.- APPOINTMENT. The COMPANY appoints the CONTRACTOR as its contract
manufacturer in Mexico for the purpose of assembling and/or manufacturing for
the COMPANY of various products used in industrial clean rooms, and assemblies
and subassemblies therefor, and such other products as may be agreed to upon by
the parties from time to time (hereinafter referred to as the "PRODUCTS"). The
CONTRACTOR accepts such appointment.
SECOND.- DELIVERY OF MATERIALS. The COMPANY shall deliver to the CONTRACTOR, on
a periodic basis, on consignment, such raw materials, components, subassemblies
and supplies as are necessary for the assembly and/or manufacture of the
Products. If appropriate, the parties shall agree in
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writing on any local components that should be incorporated into the assembly
and/or manufacturing process.
The CONTRACTOR shall carry out the assembly and/or manufacture of the Products
at its facilities in Tijuana, Baja California, Mexico, utilizing raw materials,
components, subassemblies and parts ("MATERIALS") machinery, equipment, tooling,
fixtures, molds, dies, jigs, testing equipment ("FIXED Assets") furnished by the
COMPANY under gratuitous bailment, as well as those assets now or hereafter
owned or possessed by the CONTRACTOR, if any.
For these purposes, the COMPANY will deliver to the CONTRACTOR, all the
necessary Materials and Fixed Assets as may be required.
THIRD.- INFORMATION. The COMPANY shall make available to the CONTRACTOR the
knowledge, technical and practical experience and all other know-how
("INFORMATION") as well as the technical assistance services necessary to enable
the CONTRACTOR to perform hereunder. The CONTRACTOR guarantees that the assembly
and/or manufacture of the Products shall be carried out in strict compliance
with the Information and the quality guidelines of the COMPANY.
FOURTH.- PRODUCTION ESTIMATES. From time to time, the COMPANY shall notify the
CONTRACTOR of the expected production schedule of the Products for the next
calendar semester and shall inform the CONTRACTOR the Materials and Fixed Assets
required therefor, to enable the CONTRACTOR to secure from the Federal
Government of Mexico the permits and licenses necessary to import into Mexico
such Materials and Fixed Assets. It shall be the exclusive responsibility of the
CONTRACTOR to secure all necessary import permits and licenses in a timely
fashion to allow for shipment by the COMPANY of the Materials and Fixed Assets
for importation thereof, for assembly and/or manufacture by the CONTRACTOR and
for shipment by the CONTRACTOR of the finished Products on schedule. The
COMPANY, in turn, shall be liable for timely shipment of all such Materials the
CONTRACTOR.
The COMPANY's requirements for assembled and/or manufactured Products are
estimated to range from zero (0) to one million (1,000,000) units per month. The
CONTRACTOR shall fill all orders within the above range not later than thirty
days after receipt thereof. Should the COMPANY's actual requirements for one or
more months exceed these estimates, and should the CONTRACTOR be unable to meet
the excess requirements, it shall so notify the COMPANY within the five days
next following receipt of the COMPANY's order for Products. Failure to serve
such notice in time shall be deemed as an acceptance of the order by the
CONTRACTOR.
FIFTH.- CONSIDERATION. The COMPANY agrees to pay the CONTRACTOR a sum equal to
the total normal and necessary cost and expenses incurred by the CONTRACTOR, for
the work hereunder, in assembling and/or manufacturing for the COMPANY the
Products in its industrial plant located in San
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Antonio del Mar 20301 A, Parque Industrial Xxxxx Del Sur II, Tijuana, Baja
California, Mexico, including, but not limited to, the cost of direct and
indirect labor, fringe benefits, rent, utilities, purchase local components,
insurance and others.
In addition to the foregoing, the COMPANY shall pay to the CONTRACTOR, for the
work to be done hereunder, an assembly/manufacturing fee of two percent (2%)
calculated on the above amount of expenses and costs. The parties may from time
to time modify such assembly/manufacturing fee and its base for calculation.
The CONTRACTOR shall invoice the COMPANY the amounts determined under the
preceding paragraphs, on a monthly basis. All invoices must be prepared in
accordance with the provisions established by the Mexican tax laws and
regulations. In particular, the invoices must include Mexican value added tax,
if any, payable by the COMPANY. The invoices must be prepared in U.S. Dollars,
converting the corresponding amount of Mexican currency at the rate of exchange
published in the Federal Official Gazette each Monday following the week during
which the assembly/manufacture being invoiced was performed.
The COMPANY agrees to pay the CONTRACTOR each invoice within thirty (30) days
from the date of receipt. If any portion of the invoice is disputed by the
COMPANY, the COMPANY agrees that it will pay the undisputed portion of the
invoice within the above thirty (30) day period.
Unless otherwise instructed in writing by the CONTRACTOR, the COMPANY agrees to
make all payments directly to CONTRACTOR's bank account indicated by the
CONTRACTOR in writing, with instructions from the COMPANY to the bank to credit
the corresponding amount to the CONTRACTOR's account.
SIXTH.- ACCOUNTING RECORDS. The CONTRACTOR will maintain accurate and complete
records of all normal and necessary costs and expenses incurred by the
CONTRACTOR in assembling and/or manufacturing the Products which are payable by
the COMPANY under the Agreement. Such records will be maintained in accordance
with recognized commercial accounting practices so they may be readily audited.
The CONTRACTOR will permit the COMPANY to examine and audit these records and
all supporting records at all reasonable times. The CONTRACTOR will retain all
such records for a period of not less than one calendar year after the
completion of this Agreement.
SEVENTH.- COMPANY'S INSPECTIONS AND VISITS. The CONTRACTOR shall allow the
COMPANY's personnel access during business hours to the facility or facilities
in which the work contracted hereunder is being carried out, in order for the
COMPANY's personnel to provide the technical assistance indicated in Clause
Third and to ascertain compliance on the part of the CONTRACTOR with all of the
technical specifications and quality controls of the COMPANY in connection with
the assembly and/or manufacturing process, to assure that the Materials and
Fixed Assets provided to the CONTRACTOR by the COMPANY are utilized properly and
exclusively for the purposes stated herein.
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The CONTRACTOR will maintain accurate and complete records of all hours worked
by direct labor employees engaged in the Manufacturing for which payment under
this Agreement is to be computed on the basis of actual time clocked and all
other costs and charges of any kind payable by the COMPANY under the Agreement.
Such records will be maintained in accordance with the recognized commercial
accounting practices so they may be readily audited. CONTRACTOR will permit the
COMPANY to examine and audit these records and all supporting records at all
reasonable times. All payments, if any, made under this Agreement by the COMPANY
will be subject to final adjustments as determined by such audit(s). The
CONTRACTOR will retain all such records for a period of not less than one
calendar year after the completion of this Agreement.
The above assistance, inspection and auditing activities shall be carried out by
those employees or agents of the COMPANY, which the COMPANY may consider
appropriate. The individuals involved in carrying out such functions shall at
all times be employees or agents of the COMPANY. The CONTRACTOR assumes no
liability for the salaries and other benefits of such employees or agents, which
shall be covered by the COMPANY, and assumes no other liability with respect to
such employees or agents. Those employees or agents shall under no circumstances
be considered to be subordinated to the CONTRACTOR and they shall receive all
instructions and compensation directly from the COMPANY. Accordingly, no labor
relationship shall be deemed to exist between the CONTRACTOR and the COMPANY's
employees or agents for any purposes under Mexican law or under the laws of any
other jurisdiction. The COMPANY shall hold the CONTRACTOR harmless from any
salaries, other benefits or any other amounts it may be required to pay to such
personnel or to third parties as a result of a final court or labor board
decision, resulting from the activities of such employees or agents in Mexico.
In compliance with the foregoing provision, the COMPANY shall cause all its
employees and agents who may carry out the assistance, inspection and audit
functions referred to above, to execute an affidavit in the terms of the text
attached hereto as Exhibit A, certifying that no labor relationship exists
between them and the CONTRACTOR and that under no circumstances shall they
receive or execute instructions given to them by the CONTRACTOR or its
employees.
EIGHTH.- OWNERSHIP OF MATERIALS AND FIXED ASSETS. The CONTRACTOR shall under no
circumstances be considered to have any proprietary interest in the Materials or
in the Fixed Assets which the COMPANY may deliver to the CONTRACTOR for the
purposes indicated in Clause Second above, unless otherwise agreed by the
parties. Any commercial invoice which may be issued by the COMPANY in order to
comply with customs requirements for the importation or exportation of any items
provided by the COMPANY to the CONTRACTOR, shall not be considered for any
purposes to be evidence of conveyance of title of such items in favor of the
CONTRACTOR. Once the Products covered by this Agreement have been assembled
and/or manufactured by the CONTRACTOR they must be returned by the CONTRACTOR to
the COMPANY, at the latter's cost, to such places and destinations as the
COMPANY may indicate.
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NINTH.- INSURANCE. The COMPANY will obtain and maintain any and all insurance
that it deems necessary or appropriate for all Materials and Fixed Assets
furnished to the CONTRACTOR herein, from the time of delivery to the CONTRACTOR,
until same are returned to the COMPANY. Upon written request from the COMPANY,
the CONTRACTOR will acquire, through qualified brokers and at the COMPANY's
expense, Mexican insurance covering the COMPANY's above mentioned assets.
TENTH.- SALES IN MEXICO. In consideration for the CONTRACTOR's assembly and/or
manufacturing activities hereunder, the COMPANY may authorize the CONTRACTOR in
writing to sell finished Products in Mexico, for which purpose the COMPANY shall
sell to the CONTRACTOR the finished Products, at the then prevailing prices, for
resale by the CONTRACTOR. In the event of any such sales, the CONTRACTOR shall
secure proper approval from the competent Mexican authorities. The right granted
to the CONTRACTOR to sell Products in Mexico shall be without prejudice to the
right of the COMPANY to make direct sales of the Products in Mexico.
Other than as above provided, the CONTRACTOR may not, under any circumstances or
for any reason, sell or in any other manner dispose of, any of the Materials or
any of the Products which are the subject matter of this Agreement.
ELEVENTH.- SAMPLES. Any samples of the Products officially requested by an
agency or department of the Federal Government of the United Mexican States or
of the United States of America, may be delivered only upon written
authorization of the COMPANY, provided an official receipt is secured by the
requesting agency or department.
TWELFTH.- CONFIDENTIALITY. The CONTRACTOR will regard and preserve as
confidential all Information related to the COMPANY's business, revealed to or
learned by the CONTRACTOR from any source as a result of this Agreement. Except
to the extent absolutely necessary and essential to the process of training
employees for the assembly and/or manufacture of the Products, the CONTRACTOR
will not disclose nor disseminate, nor permit to be disclosed nor disseminated,
any customer list, pricing, methods, technical information, know-how, patents,
trademarks, processes, programs, practices, or other material or data conceived,
designed, created, developed, used, assembled or manufactured by the COMPANY.
The entire right, title, and interest, including copyright, in all original
works of authorship fixed and any tangible medium of expression heretofore or
hereafter created by the CONTRACTOR for the COMPANY or furnished to the COMPANY
hereunder is hereby transferred to and vested in the COMPANY. The parties
expressly agree to consider as work made for hire those works ordered or
commissioned by the COMPANY which qualify as such in accordance with applicable
copyright laws. For all such original works, the CONTRACTOR agrees to provide
documentation satisfactory to the COMPANY to assure the conveyance of all such
right, title, and interest, including copyright, to the COMPANY.
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THIRTEENTH.- COMPLIANCE OF LAWS AND REGULATIONS . The CONTRACTOR shall comply
with all existing laws and regulations in the United Mexican States in order to
avoid penalties or Government actions, so as to hold all Materials, Fixed Assets
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.
FOURTEENTH.- INDEPENDENT CONTRACTORS. This Agreement is entered into by
independent contractors on a principal-to-principal basis. The CONTRACTOR is an
independent contractor and consequently it is to carry out assembly and/or
manufacture of the Products and in general it is to perform this Agreement with
its own personnel and under its own direction and control. The CONTRACTOR shall
not be the agent, representative or attorney-in-fact of the COMPANY and
consequently it shall have no authority whatsoever to act in the name or on
behalf of the COMPANY or to bind the COMPANY in any way.
FIFTEENTH.- TERM. This Agreement shall continue in force until terminated by
either party. Either party may terminate this Agreement upon sixty (60) days
written notice to the other party.
The CONTRACTOR shall be entitled to no payment by reason of termination of this
Agreement.
Upon termination of this Agreement for whatever cause, the CONTRACTOR shall
immediately return to the COMPANY, at its domicile in the United States of
America or at such other place as the COMPANY may instruct, at the COMPANY's
cost, all Materials, Fixed Assets and Information furnished by the COMPANY, as
well as all Products in process and all finished Products. The CONTRACTOR
expressly waives any right of retention it may have over the aforesaid goods.
SIXTEENTH.- JURISDICTION. For the interpretation and fulfillment of this
agreement, the parties hereby expressly submit to the jurisdiction of the
competent courts in the City of Tijuana, State of Baja California, Mexico,
expressly waiving any other jurisdiction that might correspond to them by virtue
of their present or future domicile or for any other reason whatsoever.
SEVENTEENTH.- LANGUAGE The parties agree to execute this Agreement in English
and Spanish versions. In any event Spanish version shall prevail. .
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EIGHTEENTH.- NOTICES. All notices required to be sent to either party of this
Agreement shall be in writing and delivered personally to the address of the
other party as set forth below or to such other address as may be hereafter
designated in writing:
To COMPANY: WILSHIRE TECHNOLOGIES, INC.
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
XXX
Attn.: Xx. Xxxxx X. Xxxxxxxx
To CONTRACTOR: WILSHIRE INTERNATIONAL DE MEXICO, S.A.
DE C.V.
San Antonio del Mar 20301 A
Parque Industrial Xxxxx del Sur II
Tijuana, Baja California
Mexico
Attn.: Xx. Xxxx X. Xxxxxxx
NINETEENTH.- PREVIOUS AGREEMENTS. This Agreement substitutes any and all
agreements previously existing between the parties. This Agreement may only be
amended through a written agreement signed by a duly authorized representative
of each party.
IN WITNESS WHEREOF, the parties have executed this Agreement through their duly
authorized representatives in Carlsbad, California, United States of America, on
this 3rd day of February , 1998.
THE COMPANY THE CONTRACTOR
WILSHIRE TECHNOLOGIES, INC. WILSHIRE INTERNATIONAL DE MEXICO,
S.A. DE C.V.
By /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxx
------------------------------ ------------------------------
Name: Xx. Xxxxx X. Xxxxxxxx Name: Xx. Xxxx X. Xxxxxxx
Title: Chief Financial Officer. Title: General Manager
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EXHIBIT "A"
Wilshire Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX
00000
Dear Sirs:
This will acknowledge that effective ___________, 199_, I have accepted an
assignment from Wilshire Technologies, Inc. ( THE "COMPANY") to carry out
services for installation, maintenance, and repair of machinery and equipment
and services under which no knowledge is transmitted or under which knowledge is
transmitted which is not secret, which may be obtained from the mere examination
of the product and mere knowledge of the progress of technique, or which are not
used in the industrial reproduction of a product or process, and therefore do
not constitute "Know How" such as supervision, inspection, control and/or audit
activities, related to the manufacturing and/or assembly services provided to
the Company by Wilshire International de Mexico, S.A. de C.V., at the latter's
facilities in Tijuana, Baja California, Mexico, for the time periods required
and in the functional areas, as will be determined by the Company. I understand
that the Company might also from time-to-time, enter into or amend Assembly
(Maquila) Agreements with its foreign subsidiaries or contractors and I fully
understand and accept the following provisions when providing services to the
Company at the facilities of its foreign subsidiaries or contractors under any
future Agreements:
1. Under no circumstances shall I ever be considered an employee of any
subsidiary or contractor with which the Company might conduct
business in a foreign country, and there shall not exist any
subordinate relationship between myself and such subsidiaries or
contractors and no foreign labor laws shall be applicable to any
services to the Company by the undersigned in any foreign country.
2. I am aware that any services which I might render for the Company in
any foreign country shall be on behalf of and for the benefit of the
Company, from which I shall receive orders and instructions
exclusively and from which I shall receive full compensation.
3. I understand that any orders and instructions that I might receive
regarding services rendered for the Company in a foreign country
must be issued by an officer or management employee of the Company.
In the event that I should receive instructions from persons who are
not employees of the Company, such instructions shall have to be
confirmed by an officer or management employee of the Company.
_____________________________________ Date: ____________________, 199_.
(Signature)
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The State of ________________)
County of ___________________)
BEFORE ME, the undersigned a Notary Public in and for said County and State on
this day personally appeared ___________________________________ known to me to
be the person whose name is that the foregoing instrument, and acknowledged to
me that he executed such instrument for the purpose and consideration therein
expressed.
GIVEN UNDER MY HAND AND SEAL OF THIS OFFICE, this ____ day of __________, 199_.
My commission expires: ____________________________________
Notary Public in and for __________,
County of ________________.
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Wilshire Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX
00000
Dear Sirs:
I hereby acknowledge that effective , 19 I have accepted an assignment from
Wilshire Technologies,, Inc. (THE "COMPANY"), to carry out supervision,
inspection, control and/or audit activities related to the manufacturing and/or
assembly services provided to the Company by Wilshire International de Mexico,
S.A. de C.V., at the latter's facilities in Tijuana, Baja California, Mexico,
for the time periods required and in the functional areas, as will be determined
by the Company. I understand that the Company might also from time-to-time,
enter into Assembly (Maquila) Agreements with its foreign subsidiaries or
contractors and I fully understand and accept the following provisions when
providing services to the Company at the facilities of its foreign subsidiaries
or contractors under any future Agreements:
1. Under no circumstances shall I ever be considered an employee of any
subsidiary or contractor with which the Company might conduct
business in a foreign country, and there shall not exist any
subordinate relationship between myself and such subsidiaries or
contractors and no foreign labor laws shall be applicable to any
services provided to the Company by the undersigned in any foreign
country.
2. I am aware that any services which I might render for the Company in
any foreign country shall be on behalf of and for the benefit of the
Company, from which I shall receive orders and instructions
exclusively and from which I shall receive full compensation.
3. I understand that any orders and instructions that I might receive
regarding services rendered for the Company in a foreign country
must be issued by an officer or management employee of the Company.
In the event that I should receive instructions from persons who are
not employees of the Company, such instructions shall have to be
confirmed by an officer or management employee of the Company.
_____________________________________ Date: ____________________, 199_.
(Signature)
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The State of ________________)
County of ___________________)
BEFORE ME, the undersigned a Notary Public in and for said County and State on
this day personally appeared ___________________________________ known to me to
be the person whose name is that the foregoing instrument, and acknowledged to
me that he executed such instrument for the purpose and consideration therein
expressed.
GIVEN UNDER MY HAND AND SEAL OF THIS OFFICE, this ____ day of __________, 199_.
My commission expires: ____________________________________
Notary Public in and for __________,
County of ________________.
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EXHIBIT 10.110a
COMMODATUM AGREEMENT
between
WILSHIRE TECHNOLOGIES, INC.
as the "Xxxxxx"
and
WILSHIRE INTERNATIONAL DE MEXICO,DE C.V.
as the "Bailee"
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INDEX
CLAUSE PAGE
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Recitals.......................................................1.
I Purpose of the agreement.......................................1.
II Delivery of Equipment..........................................2.
III Maintenance Expenses...........................................2.
IV Location of Equipment..........................................2.
V No disposition or encumbrances.................................3.
VI Use of Equipment...............................................3.
VII Preservation of Equipment......................................3.
VIII Loss of Equipment..............................................3.
IX Insurance......................................................3.
X Return of Equipment............................................3.
XI Disclaimer of liability........................................4.
XII Inspection.....................................................4.
XIII Compliance with laws...........................................4.
XIV Expenses.......................................................4.
XV Recovery of Equipment..........................................4.
XVI Term...........................................................4.
XVII Jurisdiction...................................................4.
EXHIBIT
A List of Equipment
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COMMODATUM AGREEMENT ENTERED INTO BY AND BETWEEN WILSHIRE TECHNOLOGIES, INC.,
ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA, UNITED STATES
OF AMERICA (HEREINAFTER REFERRED TO AS THE "XXXXXX" AND BY WILSHIRE
INTERNATIONAL DE MEXICO, S.A. DE C.V., A MEXICAN CORPORATION (HEREINAFTER
REFERRED TO AS THE "BAILEE"), PURSUANT TO THE FOLLOWING RECITALS AND CLAUSES:
RECITALS
A. That the Xxxxxx and the Bailee, through their representatives, state
that they are parties to that certain Assembly (Maquila) Agreement dated
as of February 3, 1998, (the "MAQUILA AGREEMENT"), under which the
Bailee agreed to provide certain services with regard to products of the
Xxxxxx.
B. The Xxxxxx, through its representative, states that it is the owner of
the machinery and equipment object of this Agreement and that it wishes
to grant in commodatum to Bailee the machinery and equipment listed and
described in EXHIBIT "A" which is attached to this Agreement,
(hereinafter referred as the "EQUIPMENT").
C. The Bailee, through its representative, states that, in order to carry
out its obligations under the Maquila Agreement, it requires from the
Company the delivery in bailment (commodatum) the Equipment.
D. The Xxxxxx states that for all legal purposes it has its domicile at
0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx, Xxxxxx Xxxxxx of America.
E. The Bailee states that for all legal purposes it has its domicile at San
Antonio del Mar 20301 A, Parque Industrial Xxxxx del Sur, Tijuana, Baja
California, Mexico.
In consideration of the foregoing, the parties agree to the following:
CLAUSES
FIRST.- PURPOSE OF THE AGREEMENT. Xxxxxx gratuitously grants to Bailee the use
of the Equipment referred to in Recital B. of this Agreement, for the exclusive
purpose stated in Recital C.. At all times, title and ownership of the Equipment
shall remain vested in Xxxxxx.
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SECOND.- DELIVERY OF EQUIPMENT. Xxxxxx shall deliver the Equipment to Bailee in
commodatum, at the times agreed to by the parties. The parties may from time to
time amend the list attached as Exhibit "A" so that it may include machinery
which may be delivered to Bailee in the future by Agreement of the parties. The
Equipment shall be complete with all their parts additions, accessories and
peripherals in operating condition.
Xxxxxx will deliver the Equipment at X.X. Xxxxx Customs Brokers, Calexico,
California, United States of America or such other customs broker as the Xxxxxx
may designate, and the Bailee shall import the Equipment into Mexico under the
temporary importation regime under Bailee's Maquiladora Program. Any item added
to the Equipment delivered to the Bailee in the terms and conditions herein
established shall continue to be imported on a temporary basis and must be used
in the domicile located at San Antonio del Mar 20301 A, Parque Industrial Xxxxx
del Sur II, Tijuana, Baja California, Mexico.
Bailee shall comply with all legal provisions applicable to the temporary
importation of the Equipment and shall provide all the administrative services
necessary to carry out the importation of the Equipment into Mexico. Bailee
shall appear as the importer of record of the Equipment in all the paperwork and
documents used for such importation into Mexico, however, it is expressly agreed
that Xxxxxx is and shall continue to be the owner of the Equipment, thus the
commercial invoice to be utilized to import the Equipment into Mexico shall have
a provision stating the following:
"THIS COMMERCIAL INVOICE IS ISSUED EXCLUSIVELY FOR CUSTOMS PURPOSES
IN ORDER TO IMPORT INTO MEXICO THE GOODS COVERED BY SAME AND
THEREFORE DOES NOT TRANSFER THE OWNERSHIP OF THE GOODS. IN ADDITION,
THE ISSUER RESERVES ITSELF TITLE OVER SUCH GOODS."
Bailee shall keep in the domicile designated in Recital E. herein the permits,
licenses and official documentation pertaining to the importation into Mexico of
the Equipment.
Xxxxxx shall assume the costs of all duties, fees, expenses and customs brokers=
fees, Mexican and American, incurred in importing, exporting and transporting
the Equipment in Mexico pursuant to the terms and conditions set forth herein.
THIRD.- MAINTENANCE EXPENSES. The necessary expenses for the use, maintenance,
repair and preservation of the Equipment hereby given in commodatum will be the
exclusive responsibility of Bailee.
FOURTH.- LOCATION OF EQUIPMENT. Bailee shall maintain the Equipment at its
current domicile and may not remove it from said location without the prior
written consent of Xxxxxx.
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FIFTH.- NO DISPOSITION OR ENCUMBRANCES. Bailee shall not sell, assign its rights
hereunder or in any manner encumber, pledge or otherwise cause a lien on the
Equipment. Bailee further agrees to protect the Equipment from any and all third
party claims and for such purposes agrees and undertakes to file this Agreement
for registration with the Public Registry of Property and Commerce of Tijuana,
Baja California, Mexico, within thirty (30) days following its date of
execution.
SIXTH.- USE OF EQUIPMENT. Bailee promises to use the Equipment only and
exclusively for the purposes for which it was built, and will gear its
operations to the capabilities thereof.
SEVENTH.- PRESERVATION OF EQUIPMENT. Bailee covenants and agrees to diligently
preserve and maintain the Equipment in the state in which it is received.
EIGHTH.- LOSS OF EQUIPMENT. Bailee shall be liable towards Xxxxxx for the total
or partial loss of the Equipment, as well as for the deterioration suffered
thereby, except for the deterioration deriving from its normal use, Bailee shall
also be liable in the event of loss of the Equipment when such is a result of
fortuitous cause or force majeure, and until the Equipment is returned to Xxxxxx
pursuant to the terms of this Agreement.
NINTH.- INSURANCE. Bailee must contract with an authorized company, for extended
coverage insurance covering the Equipment for an amount not less than the
replacement value of the same, as indicated by Xxxxxx, and must name Xxxxxx as
the beneficiary of such insurance.
TENTH.- RETURN OF EQUIPMENT. Bailee shall cease using and immediately return the
Equipment to Xxxxxx when Xxxxxx so requests and at the place where Xxxxxx so
requests, as no specific duration for the commodatum has been agreed upon
hereunder; and therefore, pursuant to Article 2385 of the Civil Code for the
State of Baja California, Xxxxxx has the right to demand the return of the
Equipment at any time, in which case this Agreement will terminate.
ELEVENTH.- DISCLAIMER OF LIABILITY. Xxxxxx does not assume any responsibility or
commitment towards Bailee, or towards any third party, with respect to their
personal property or to their persons, resulting from the possession or use of
the Equipment or from the lack of skill in using such Equipment, nor for any
other reason whatsoever. Bailee agrees to indemnify and hold Xxxxxx harmless
with respect to any such responsibility, liability or commitment.
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TWELFTH.- INSPECTION. Xxxxxx reserves unto itself the right to inspect the
Equipment at any time whatsoever, for the purpose of verifying the correct use
and operation thereof.
THIRTEENTH.- COMPLIANCE WITH LAWS. Bailee covenants, at its own cost, to comply
with all laws, regulations and other legal provisions applicable to the
Equipment and to notify Xxxxxx immediately, in writing, of any claim, demand,
litigation, or any other lien, that might affect the Equipment.
FOURTEENTH.- EXPENSES. All expenses related to the use, operation, security
measures, maintenance and operation of the Equipment will be borne by Bailee.
FIFTEENTH.- RECOVERY OF EQUIPMENT. Xxxxxx will have the right to recover the
Equipment at any time and Bailee covenants to return it upon request by Xxxxxx
at the place where Xxxxxx so requests. All expenses, including but not limited
to, Mexican customs fees, export duties, transportation, and any other type of
expense will be the exclusive responsibility of Bailee.
SIXTEENTH.- TERM. Unless earlier terminated pursuant to Clause Tenth hereof,
this Agreement will terminate immediately upon receipt by Bailee of written
notice from Xxxxxx.
SEVENTEENTH.- JURISDICTION. For the interpretation and fulfillment of this
agreement, the parties hereby expressly submit to the jurisdiction of the
competent courts in the City of Tijuana, State of Baja California, Mexico,
expressly waiving any other jurisdiction that might correspond to them by virtue
of their present or future domicile or for any other reason whatsoever.
20
This agreement is executed in triplicate, Carlsbad, California, United States of
America, on February 3, 1998.
XXXXXX BAILEE
Whilshire Technologies, Inc. Wilshire International de Mexico,
S.A. de C.V.
By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxx X. Xxxxxxx
----------------------------- ------------------------------
Name: Xx. Xxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer Title: General Manager
WITNESS WITNESS
-------------------------------- ---------------------------------
/s/ Xxxxxxxxx Xxxxxx /s/ Xxxxxxxxx Xxxxxx
