AGREEMENT
Exhibit
10.19
made
as
of the Twenty-ninth (29th) day of July, 2007
BETWEEN
the Owner:
Promotora
Xxxxx Hermosa, Inc.
0000
X.
Xxxxxxxx Xx., Xxx 000
Xxxxxx,
Xxxxxxx 00000
and
the
Architect:
(Name
and
address)
JNP
Architectos, Inc.
Ave
America 4641 y Manosca
Quito
Ecuador
For
the
Development Projects undertaken by Promotora Xxxxx Hermosa within the next
two
years after the date on the present contract.
The
Owner
and Architect agree as set forth below.
TERMS
AND
CONDITIONS OF AGREEMENT BETWEEN OWNER AND ARCHITECT
ARTICLE
1
ARCHITECT'S
RESPONSIBILITIES
1.1
ARCHITECT'S SERVICES
1.1.1
The
Architect's services consist of those services performed by the Architect,
Architect's employees and Architect's consultants as enumerated in Articles
2
and 3 of this Agreement and any other services included in Article
12.
1.1.2
The
Architect's services shall be performed as expeditiously as is consistent with
professional skill and care and the orderly progress of the Work. Upon request
of the owner, the Architect shall submit for the Owner's approval a schedule
for
the performance of the Architect's services which may be adjusted as the Project
proceeds, and shall include allowances for periods of time required for the
Owner's review and for approval of submissions by authorities having
jurisdiction over the Project. Time limits established by this schedule approved
by the owner shall not, except for reasonable cause, be exceeded by the
Architect or Owner.
1.1.3
The
services covered by this Agreement are subject to the time limitations contained
in Subparagraph 11.5.1.
ARTICLE
2
SCOPE
OF
ARCHITECT'S BASIC SERVICES
2.1
DEFINITION
2.1.1
The
Architect's Basic Services consist of those described in Paragraphs 2.2 through
2.6 and any other services identified in Article 12 as part of Basic Services,
and include normal structural, mechanical and electrical engineering
services.
2.2
SCHEMATIC DESIGN PHASE
2.2.1
The
Architect shall review the program furnished by the Owner to ascertain the
requirements of the Project and shall arrive at a mutual understanding of such
requirements with the Owner.
2.2.2
The
Architect shall provide a preliminary evaluation of the Owner's program,
schedule and construction budget requirements, each in terms of the other,
subject to the limitations set forth in the present agreement.
2.2.3
The
Architect shall review with the Owner alternative approaches to design and
construction of the Project.
2.2.4
Based on the mutually agreed-upon program, schedule and construction budget
requirements, the Architect shall prepare, for approval by the Owner, Schematic
Design Documents consisting of drawings and other documents illustrating the
scale and relationship of Project components.
2.2.5
The
Architect shall submit to the Owner a preliminary estimate of Construction
Cost
based on current area, blouse or other unit costs.
2.3
DESIGN DEVELOPMENT PHASE
2.3.1
Based on the approved Schematic Design Documents and any adjustments authorized
by the Owner in the program, schedule or construction budget, the Architect
shall prepare, for approval by the Owner, Design Development Documents
consisting of drawings and other documents to fix and describe the size and
character of the Project as to architectural, structural, mechanical and
electrical systems, materials and such other elements as may be
appropriate.
2.3.2
The
Architect shall advise the Owner of any adjustments to the preliminary estimate
of Construction Cost.
2.4
CONSTRUCTION DOCUMENTS PHASE
2.4.1
Based on the approved Design Development Documents and any further adjustments
in the scope or quality of the Project of in the construction budget authorized
by the Owner, the Architect shall prepare, for approval by the Owner,
Construction Documents consisting of Drawings and Specifications setting forth
in detail the requirements for the construction of the Project.
2.4.2
The
Architect shall assist the Owner in the preparation of the necessary bidding
information, bidding forms, the Conditions of the Contract, and the form of
Agreement between the Owner and Contractor.
2.4.3
The
Architect shall advise the Owner of any adjustments to previous preliminary
estimates of Construction Cost indicated by changes in requirements or general
market conditions.
2.4.4
The
Architect shall assist the Owner in connection with the Owner's responsibility
for filing documents required for the approval of governmental authorities
having jurisdiction over the Project.
2.5.1
The
Architect shall review and approve or take other appropriate action upon all
Contractor's submittals such as Shop Drawings, Product Data and Samples, but
only for the limited purpose of checking for conformance with information given
and the design concept expressed in the Contract Documents. The Architect's
action shall be taken with such reasonable
promptness
as to cause no delay in the Work or in the construction of the Owner or of
separate contractors, while allowing sufficient time in the Architect's
professional judgment to permit adequate review. Review of such submittals
is
not conducted for the purpose of determining the accuracy and completeness
of
other details such as dimensions and quantities or for
substantiating
instructions for installation or performance of equipment or systems designed
by
the Contractor, all of which remain the responsibility of the Contractor, to
the
extent required by the Contract Documents. The Architect's review shall not
constitute approval of safety precautions or, unless otherwise specifically
stated by the Architect, of construction means,
methods,
techniques, sequences or procedures. The Architect's approval of a specific
item
shall not indicate approval of an assembly of which the item is a component.
When professional certification of performance characteristics of materials,
systems or equipment is required by the Contract Documents, the Architect shall
be entitled to rely upon such certification to establish that the materials,
systems or equipment will meet the performance criteria required by the Contract
Documents.
2.5.2
The
Architect shall prepare Change Orders and Construction Change Directives, with
supporting documentation and data if deemed necessary by the Architect as
provided in the present agreement, for the Owner's approval and execution in
accordance with the Contract Documents, and may authorize minor changes in
the
Work not involving an adjustment in the Contract Sum or an extension of the
Contract Time which are not inconsistent with the intent of the Contract
Documents and or the intended functional use of the Facilities.
2.5.3
The
Architect shall interpret and decide matters concerning performance of the
Owner
and Contractor under the requirements of the Contract Documents on written
request of either the Owner or Contractor. The Architect's response to such
requests shall be made with reasonable promptness and within any time limits
agreed upon.
2.5.4
Interpretations and decisions of the Architect shall be consistent with the
intent of and reasonably inferable from the Contract Documents and shall be
in
writing or in the form of drawings. When making such interpretations and initial
decisions, the Architect shall endeavor to
secure
faithful performance by both Owner and Contractor, shall not show partiality
to
either, and shall not be liable for results of interpretations or decisions
so
rendered in good faith.
2.5.5
The
Architect's decisions on matters relating to aesthetic effect shall be final
if
consistent with the intent expressed in the Contract Documents.
2.5.6
The
Architect shall render written decisions within a reasonable time on all claims,
disputes or other matters in question between the Owner and Contractor relating
to the execution or progress of the Work as provided in the Contract
Documents.
ARTICLE
3
---------
ADDITIONAL
SERVICES
3.1
GENERAL
3.1.1
The
services described in this Article 3 are not included in Basic Services unless
so identified in Article 12, and they shall be paid for by the Owner as provided
in this Agreement, in addition to the compensation for Basic Services. The
services shall only be provided if authorized or confirmed in writing by the
Owner. If services described under Contingent Additional Services are required
due to circumstances beyond the Architect's control, the Architect shall notify
the Owner prior to commencing such services. If the Owner deems that such
services described in the present agreement are not required, the Owner shall
give prompt written notice to the Architect. If the Owner indicates in writing
that all or part of such contingent Additional Services are not required, the
Architect shall have no obligation to provide those services.
ARTICLE
3
----------
OWNER'S
RESPONSIBILITIES
3.1
The
Owner shall provide full information regarding requirements for the Project,
including a program which shall set forth the Owner's objectives, schedule,
constraints and criteria, including space requirements and relationships,
flexibility, expandability, special equipment, systems and site
requirements.
3.2
The
Owner shall establish and update an overall budget for the Project, including
the Construction Cost, the Owner's other costs and reasonable contingencies
related to all of these costs.
3.3
If
requested by the Architect, the Owner shall furnish evidence that financial
arrangements have been made to fulfill the Owner's obligations under this
Agreement.
3.4
The
Owner shall designate a representative authorized to act on the Owner's behalf
with respect to the Project. The Owner or such authorized representative shall
render decisions in a timely manner pertaining to documents submitted by the
Architect in order to avoid unreasonable delay in the orderly and sequential
progress of the Architect's services.
3.5
The
Owner shall furnish surveys describing physical characteristics, legal
limitations and utility locations for the site of the Project, and a written
legal description of the site. The surveys and legal information shall include,
as applicable, grades and lines of streets, alleys, pavements and adjoining
property and structures; adjacent drainage, rights-of-way, restrictions,
easements, encroachments, zoning, deed restrictions, boundaries and contours
of
the site; locations, dimensions and necessary data pertaining to existing
buildings, other improvements and trees; and information concerning available
utility services and lines, both public and private, above and below grade,
including inverts and depths. All the information on the survey shall be
referenced to a project benchmark.
3.6
The
Owner shall furnish the services of geotechnical engineers when
such
services are requested by the Architect. Such services may include but are
not
limited to test borings, test pits, determinations of soil bearing values,
percolation tests, evaluations of hazardous materials,
ground
corrosion and resistivity tests, including necessary operations for anticipating
subsoil conditions, with reports and appropriate professional
recommendations.
3.6.1
The
Owner shall furnish the services of other consultants when such services are
reasonable required by the scope of the Project and are requested by the
Architect.
3.7
The
Owner shall furnish structural, mechanical, chemical, air and water pollution
tests, tests for hazardous materials, and other laboratory and environmental
tests, inspections and reports required by law or the Contract
Documents.
3.7.1
The
Owner shall furnish an Environmental Assessment of the site when such tests
are
reasonable required by the Scope of the Project and are requested by the
Architect.
3.8
The
Owner shall furnish all legal, accounting and insurance counseling services
as
may be necessary at any time for the Project, including auditing services the
Owner may require to verify the Contractor's Applications for Payment or to
ascertain how or for what purposes the Contractor has used the money paid by
or
on behalf of the Owner.
3.9
The
services, information, surveys and reports required by Paragraphs 3.5 through
3.8 shall be furnished at the Owner's expense, and the Architect shall be
entitled to rely upon the accuracy and completeness thereof.
3.10
Prompt written notice shall be given by the Owner to the Architect if the Owner
becomes aware of any fault or defect in the Project or nonconformance with
the
Contract Documents.
3.11
The
proposed language of certificates or certifications requested of the Architect
or Architect's consultants shall be submitted to the Architect for review and
approval at least 14 days prior to execution. The Owner shall not request
certifications that would require knowledge or services beyond the scope of
the
Agreement.
ARTICLE
4
---------
CONTRUCTION
COST
4.1
DEFINITION
4.1.1
The
Construction Cost shall be the total cost or estimated cost to the owner of
all
elements of the Project designed or specified by the Architect.
4.1.2
The
Construction Cost shall include the cost at current market rates of labor and
materials furnished by the Owner and equipment designed, specified, selected
or
specially provided for by the Architect, plus a reasonable allowance for the
Contractor's overhead and profit. In addition, a reasonable allowance for
contingencies shall be included for market conditions at the time of bidding
and
for changes in the Work during construction.
4.1.3
Construction Cost does not include the compensation of the Architect and
Architect's consultants, the costs of the land, rights-of-way, financing or
other costs which are the responsibility of the Owner as provided in Article
4.
4.2
RESPONSIBILITY FOR CONSTRUCTION COST
4.2.1
Evaluations of the Owner's Project budget, preliminary estimates of Construction
Cost and detailed estimates of Construction Cost, if any, prepared by the
Architect, represent the Architect's best judgment as a design professional
familiar with the construction industry. It is
recognized,
however, that neither the Architect nor the Owner has control over the cost
of
labor, materials or equipment, over the Contractor's methods of determining
bid
prices, or over competitive bidding, market or negotiating conditions.
Accordingly, the Architect cannot and does not warrant or represent that bids
or
negotiated prices will not vary from the Owner's Project budget or from any
estimate of Construction Cost or evaluation prepared or agreed to by the
Architect.
4.2.2
No
fixed limit of Construction Cost shall be established as a condition of this
Agreement by the furnishing, proposal or establishment of a Project budget,
unless it regards the Architect fees or such fixed limit has been agreed upon
in
writing and signed by the parties hereto. If such a fixed limit has been
established, the Architect shall be permitted to include contingencies for
design, bidding and price escalation, to determine what materials, equipment,
component systems and types of construction are to be included in the Contract
Documents, to make reasonable adjustments in the scope of the Project and to
include in the Contract Documents alternate bids to adjust the Construction
Cost
to the fixed limit. Fixed limits, if any, shall be increased in the amount
of an
increase in the Contract Sum occurring after execution of the Contract for
Construction.
4.2.3
If
the Bidding or Negotiation Phase has not commenced within 90 days after the
Architect submits the Construction Documents to the Owner, any Project budget
or
fixed limit of Construction Cost shall be adjusted to reflect changes in the
general level of prices in the construction industry between the date of
submission of the Construction Documents to the Owner and the date on which
proposals are sought.
4.2.4
If
a fixed limit of Construction Cost (adjusted as provided in Subparagraph 4.2.3)
is exceeded by the lowest bona fide bid or negotiated proposal, the Owner
shall:
.1
give
written approval of an increase in such fixed limit;
.2
authorize rebidding or renegotiating of the Project within a reasonable
time;
.3
if the
Project is abandoned, terminate in accordance with present agreement;
or
.4
cooperate in revising the Project scope and quality as required to reduce the
Construction Cost.
4.2.4
If
the Owner chooses to proceed under Clause 4.2.4.4, the Architect, without
additional charge, shall modify the Contract Documents as necessary to comply
with the fixed limit, if established as a condition of this Agreement. The
modification of Contract Documents shall be the limit of the Architect's
responsibility arising out of the establishment of a fixed limit. The Architect
shall be entitled to compensation in accordance with this Agreement for all
services performed whether or not the Construction Phase is
commenced.
ARTICLE
5
---------
USE
OF
ARCHITECT'S DRAWINGS SPECIFICATIONS AND OTHER DOCUMENTS
5.1
The
Drawings, Specifications and other documents prepared by the Architect for
this
Project are instruments of the Architect's service for use solely with respect
to this Project and, unless otherwise provided, the Architect shall be deemed
the author of these documents and shall retain all common law, statutory and
other reserved rights, including the copyright. The Owner shall be permitted
to
retain copies, including reproducible copies, of the Architect's Drawings,
Specifications and other documents shall not be used by the Owner or others
on
other projects, for additions to this Project or for completion of this Project
by others, unless the Architect is adjudged to be in default under this
Agreement, except by agreement in writing and with appropriate compensation
to
the Architect.
5.2
Submission or distribution of documents to meet official regulatory requirements
or for similar purposes in connection with the Project is not to be construed
as
publication in derogation of the Architect's reserved rights.
ARTICLE
6
---------
ARBITRATION
6.1
Unresolved claims, disputes and other matters in question between the parties
to
this Agreement arising out of or relating to this Agreement or breach thereof,
shall be subject to lawful recourse of the parties pursuant to law in the
Republic of Ecuador
ARTICLE
7
---------
TERMINATION,
SUSPENSION OR ABANDONMENT
7.1
This
Agreement may be terminated by either party upon not less than seven days'
written notice should the other party fail substantially to perform in
accordance with the terms of this Agreement through no fault of the party
initiating the termination.
7.2
If
the Project is suspended by the Owner for more than 30 consecutive days, the
Architect shall be compensated for services performed prior to notice of such
suspension. When the Project is resumed, the Architect's compensation shall
be
equitably adjusted to provide for expenses incurred in the interruption and
resumption of the Architect's services. However, such equitable adjustment
to
the Architect's compensation shall be paid only in those instances in which
the
Owner has not extended the period of time for the Architect's performance of
services under this Agreement equal to the time by which the Project was
suspended.
7.3
This
Agreement may be terminated by the Owner upon not less than seven days' written
notice to the architect in the event that the Project is permanently
abandoned.
7.4
Failure of the Owner to make payments to the Architect in accordance with this
Agreement shall be considered substantial nonperformance and cause for
termination.
7.5
If
the Owner fails to make payment when due the Architect for services and
expenses, the Architect may, upon seven days' written notice to the Owner,
suspend performance of services under this Agreement. Unless payment in full
is
received by the Architect within seven days of the date of the notice, the
suspension shall take effect without further notice. In the event of a
suspension of services, the Architect shall have no liability to the Owner
for
delay or damage caused the Owner because of such suspension of
services.
7.6
In
the event of termination not the fault of the Architect, the Architect shall
be
compensated for services performed prior to termination, together with
Reimbursable Expenses then due.
ARTICLE
8
-----------
PAYMENTS
TO THE ARCHITECT
8.1
DIRECT PERSONNEL EXPENSE
8.1.1
Direct Personnel Expense is defined as the direct salaries of the
Architect's
personnel engaged on the Project. Such Expense shall be established as a fixed
fee for the duration of this contract at $150,000 cash or 250,000 shares S-8
of
the company (the company should decide to register S-8 stock in lieu of payment
to the Architect at its sole discretion).
8.1.2
If
paid in stock, the whole amount should be prepaid before the Architect begins
services.
8.2
REIMBURSABLE EXPENSES
8.2.1
Reimbursable Expenses are in addition to compensation for Basic and Additional
Services and include expenses incurred by the Architect and Architect's
employees and consultants in the interest of the Project, as identified in
the
following Clauses.
8.2.1.1
Expense of transportation in connection with authorized out-of- town travel;
long-distance communications; and fees paid for securing approval of authorities
having jurisdiction over the Project.
8.2.1.2
Expense of reproductions, postage and handling of Drawings, Specifications
and
other documents.
8.2.1.3
If authorized in advance by the Owner, expense of overtime works requiring
higher than regular rates.
8.2.1.4
Expense of renderings, models and mock-ups requested by the Owner.
8.2.1.4
Expense of additional insurance coverage or limits, including professional
liability insurance, requested by the Architect and Architect's
consultants.
OWNER:
Promotora Xxxxx Hermoso, Inc. ARCHITECT: JNP
Arhitectos, Inc.
By:
/s/
Xxxxx Xxxxxxx By:
/s/
Xxxxx Xxxxxxx
NAME:
Xxxxx Xxxxxxx NAME:
Xxxxx
Xxxxxxx
TITLE:
President and CEO
TITLE:
President