Exhibit 10.6
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SHELTER AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of March 2007, by and
between, on the one hand, NxStage Medical, Inc., a Delaware corporation whose
mailing address is ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
("CLIENT"), and, on the other hand, Entrada Partners, a Texas limited
partnership, whose mailing address is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ("ENTRADA") and Entrada Group de Mexico, S. de ▇.▇. de C.V., a Mexican
variable capital limited liability company whose mailing address is ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇ ▇/▇, ▇▇▇▇▇▇ Industrial Fresnillo, Fresnillo, Zacatecas
("ENTRADA MEXICO").
RECITALS:
Entrada and Entrada Mexico provide services to manufacturing clients under
Entrada Mexico's shelter program. As part of the shelter program, Entrada Mexico
provides a workforce, facilities and related services in Fresnillo, Zacatecas,
Mexico in order to manufacture or assemble each client's products.
CLIENT produces medical devices (the "PRODUCTS"), and would like to enter
into a business arrangement with Entrada and Entrada Mexico to obtain the
benefits of a Mexico manufacturing operation.
CLIENT wishes to engage Entrada and Entrada Mexico to provide their Shelter
Program Services (as such term is defined below) to CLIENT, and Entrada and
Entrada Mexico are willing to provide such Shelter Program Services to CLIENT on
the terms set forth herein.
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
AGREEMENTS:
1) Shelter Program Services. Entrada agrees to provide or arrange for Entrada
Mexico to provide the Shelter Program Services for CLIENT's operations at the
Facility, as hereinafter defined, pursuant to the following:
a) Workforce. Entrada and Entrada Mexico represent and warrant that Entrada
Mexico has a collective bargaining agreement with a union with which it has
an excellent relationship, that the right of such union to be the party to
the collective bargaining agreement with Entrada Mexico has been challenged
by another union, that such challenge is completely without merit, and that
it will be dismissed without in any way affecting CLIENT's operations.
Entrada will arrange for the provision of a workforce (the "WORKFORCE") in
the numbers and in the categories that CLIENT deems necessary to carry on
export-oriented maquila shelter (albergue) activities for CLIENT's
manufacture or assembly of its Products as follows:
(i) Entrada agrees to exert its best efforts to provide, through
Entrada Mexico or another entity that, directly or indirectly, is
totally controlled by Entrada ("AFFILIATE"), candidates to hire to
produce the Products on behalf of CLIENT. The candidates shall be
recruited and hired by Entrada Mexico pursuant to the worker profiles
provided by CLIENT. Without prejudice to Entrada Mexico's obligations
as employer of the Workforce, as between Entrada Mexico and CLIENT,
CLIENT will have direct supervisory control and management
responsibility for all Workers.
(ii) CLIENT will have the right to select from the candidates
recruited by Entrada Mexico or an Affiliate, those candidates that
best meet CLIENT's profile for non-salaried workers. The Workforce
will include production line workers, material handlers, group
leaders, and inspectors. In addition to the foregoing Workforce
personnel, Entrada, Entrada Mexico or an Affiliate will recruit and
hire salaried workers pursuant to the profiles therefor provided by
CLIENT.
(iii) Without prejudice to Entrada Mexico's obligations as employer of
the Workforce, as between Entrada Mexico and CLIENT, CLIENT will have
the full responsibility to train and supervise the candidates accepted
by CLIENT as part of the Workforce (each such accepted and retained
candidate, whether non-salaried or salaried, is referred to as a
"WORKER") pursuant to the legal provisions in effect in Mexico,
provided that, without limiting Entrada Mexico's obligations set forth
in (v) below, Entrada Mexico will notify CLIENT's management orally,
and when reasonably possible in writing, of all material applicable
legal requirements related to such training and supervision.
(iv) Under no circumstances shall Entrada or Entrada Mexico terminate
any Worker without the prior participation, knowledge or express
written authorization from CLIENT. Entrada and Entrada Mexico assume
any and all liabilities, and will bear the cost resulting from a
Worker termination that occurs without the prior participation,
knowledge or express written authorization from CLIENT.
(v) Entrada Mexico shall be responsible, to CLIENT's exclusion, for
complying with all labor related obligations to the Workers, including
those arising from the Federal Labor Law, Social Security Law,
Worker's Housing National Fund Institute Law, and any other applicable
contractual or legal provisions. Entrada Mexico shall save CLIENT
harmless from any claims that the Workers might file for causes
attributable to Entrada Mexico (except if Entrada Mexico reasonably
acts pursuant to CLIENT's instructions).
b) Facility. The parties agree that the manufacture or assembly of CLIENT's
Products will be initially conducted in approximately 15,000 square foot
space which is part of a larger building (the "SHARED OCCUPANCY BUILDING")
leased by Entrada Group de Mexico from Grupo Profrezac S.A. under terms and
conditions that Entrada represents are substantially similar to, but not
less favorable to Entrada Mexico (other than with respect to the term of
the lease) than, those in the document hereto attached as Exhibit "A-2."
Entrada Mexico will move CLIENT's operations, when completed, into a new,
approximately 35,000 square foot manufacturing space which is part of a
larger building (such manufacturing space, the "FIRST NEW BUILDING") that
is being developed and is owned by Inmuebles Arizac II S.R.L. ("INMUEBLES
ARIZAC"). For as long as and to the extent CLIENT's operations for the
manufacture or assembly of CLIENT's Products ("PRODUCTION OPERATIONS") are
conducted in the Shared Occupancy Building, the First New Building or the
Second New Building, as hereinafter defined, or in any other building
mentioned herein, each and every such building in which such operations are
conducted are referred to herein, jointly and severally, as a "Facility."
The terms and conditions of use of the Facility are more fully described in
Exhibit "A" attached hereto and incorporated herein.
(i) Arrangements for the First New Building. Entrada Mexico, as part
of this Agreement, will enter into a lease with Inmuebles Arizac for
the First New Building at the location described in Exhibit A-1 and
pursuant to specifications approved in writing, in advance, by CLIENT.
The construction of the First New Building, which will be
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completed in no more than [**] months from the date of execution of
this Agreement (the "CONSTRUCTION PERIOD"), will comply with the
construction standards of the Fresnillo Industrial Park, where the
First New Building will be located.
(ii) Delayed Construction of the First New Building. Entrada will pay
to CLIENT $[**] (U.S. Dollars) for each day that completion of
construction of the First New Building is delayed beyond the [**]
month Construction Period, unless such delay is a Justified Delay. As
used herein, the term "JUSTIFIED DELAY" means a delay in the
construction of the First New Building due to: (a) any circumstance
beyond the reasonable control of Entrada, Entrada Mexico, the relevant
Affiliate, or their subcontractors, (b) an act of God, or (c) force
majeure. The [**] month term of the Construction Period shall be
extended by the number of days that each Justified Delay continues.
(iii) Environmental Assessment. Attached hereto as Exhibit "A-3" is a
Phase 1 environmental study showing that the Facility and the real
property on which it is located are free from contamination.
(iv) Second New Building. At any time within twelve (12) months after
the date of execution of this Agreement, CLIENT may request Entrada to
arrange for the construction of an additional building of at least
35,000 square feet of manufacturing space (such manufacturing space,
the "SECOND NEW BUILDING") for use as an additional facility for
manufacture or assembly of CLIENT's Products. The Second New Building
will be located adjacent to, but not more than 30 feet from the South
wall of, the First New Building, and will have a floor plan and site
plan substantially similar to the ones referenced in Exhibit "A."
(v) Construction Arrangements for the Second New Building. Unless
otherwise agreed by the parties in writing, the construction of the
Second New Building shall commence within [**] days of CLIENT's
requesting Entrada to arrange for its construction. Entrada commits to
substantially complete the interior of the building within [**] months
and to substantially complete the building within [**] months after
such commencement. (the "SECOND NEW BUILDING CONSTRUCTION PERIOD").
(vi) Delayed Construction of the Second New Building. Entrada will pay
to CLIENT $[**] (U.S. Dollars) for each day that completion of
construction of the Second New Building is delayed beyond the time
periods specified in (a) above, unless such delay is a Justified
Delay. The time periods stated in (a) above shall be extended by the
number of days that each Justified Delay continues.
(vii) Facility Leasing Arrangements. The First New Building will be
leased from a third party (the "FIRST NEW BUILDING LANDLORD") by
Entrada Mexico or an Affiliate pursuant to a lease arrangement (the
"FIRST NEW BUILDING LEASE"). The Second New Building, if constructed,
will be leased from a third party (the "SECOND NEW BUILDING LANDLORD")
by Entrada Mexico or an Affiliate pursuant to a lease arrangement (the
"SECOND NEW BUILDING LEASE").The terms and conditions of the First New
Building Lease and, if applicable, the Second New Building Lease shall
be substantially the same, in form and substance, to the document
hereto attached as Exhibit "A-2." For as long as and to the extent
CLIENT's operations are conducted in the Shared Occupancy Building,
the First New Building or the Second New Building, as hereinafter
defined, the leasing arrangement for each will be a "Lease," as such
term is used herein.
Page 3
(viii) Damage to Facility. If (a) the Facility is damaged as a result
of any cause not attributable to CLIENT, and (b) such damage halts all
operations for the manufacture or assembly of CLIENT's Products at the
Facility for more than [**] consecutive business days (the "PRODUCTION
INTERRUPTION GRACE PERIOD"), the following provisions will apply:
(1) Single Building Facility. If CLIENT's Production Operations
are conducted hereunder in only one building at the time of the
damage, the following provisions will apply:
(A) If the owner of such building (the "LANDLORD")
elects, within [**] days after the date of the damage, to
repair such damage, Entrada will provide CLIENT with up to
[**] square feet of production space in another building in
Fresnillo for a period of up to [**] months on terms
substantially similar to those contained in Exhibit "A"
hereof for the damaged building.
If the Landlord fails to complete the repair of
the damaged Facility building within 120 days after the date
of damage, CLIENT will be entitled to terminate this
Agreement by giving written termination notice to Entrada.
Upon the effective date of such termination notice, CLIENT
will have no further liability under this Agreement except
to pay amounts and to perform obligations that have accrued
and are due as of the date on which CLIENT gives such
termination notice.
(B) If the Landlord fails to elect, within [**] days after
the date of the damage, to repair such damage (or elects not
to do so), CLIENT will be entitled to terminate this
Agreement by giving written termination notice to Entrada.
Upon giving such termination notice, CLIENT will have no
further liability under this Agreement except to pay amounts
and to perform obligations that have accrued and are due as
of the date on which CLIENT gives such termination notice.
(C) During the period that CLIENT cannot carry out the
Production Operations at the damaged Facility, CLIENT will
not be required to pay the Facility Fee (as such term is
defined in Exhibit A) for that Facility.
(D) Entrada will notify CLIENT of Landlord's elections
mentioned in (viii)(1)(A) and (viii)(1)(B) immediately
above, or failure to so elect, within one business day from
the date that Landlord communicates its elections to Entrada
or Entrada Mexico, or, if Landlord fails to elect, on the
thirty-first day after the date of the damage.
(2) Multiple Building Facility. If CLIENT's Production
Operations are conducted hereunder in more than one building at
the time of the damage, CLIENT's Production Operations will be
conducted in the remaining building of the Facility and this
Agreement will continue in effect. If the Landlord elects to
repair the damaged building, CLIENT's Production Operations will
be resumed in the repaired building if and when such repair is
completed and the building is ready for occupancy.
Page 4
(A) If the Landlord elects to repair such damage but fails
to complete the repair of the damaged Facility building
within 120 days after the date of damage, CLIENT will be
entitled to terminate the effect of this Agreement with
respect to the damaged building only, by giving written
notice thereof to Entrada. Upon the date such notice is
given, CLIENT will have no further liability under this
Agreement with respect to the damaged building, except to
pay amounts and to perform obligations that have accrued and
are due as of the date on which CLIENT gives such notice. In
this case, the Facility Fee payable by CLIENT with respect
to the damaged building will terminate upon the date such
notice is given.
(B) If the Landlord fails to elect, within [**] days after
the date of the damage, to repair such damage (or elects not
to do so), CLIENT will be entitled to terminate the effect
of this Agreement with respect to the damaged building only,
by giving written notice thereof to Entrada. Upon the date
such notice is given, CLIENT will have no further liability
under this Agreement with respect to the damaged building,
except to pay amounts and to perform obligations that have
accrued and are due as of the date on which CLIENT gives
such notice. In this case, the Facility Fee payable by
CLIENT with respect to the damaged building will terminate
upon the date such notice is given.
(C) During the period that CLIENT cannot carry out the
Production Operations at the damaged building, CLIENT will
not be required to pay the Facility Fee for that building.
(D) Entrada will notify CLIENT of Landlord's elections
mentioned in (viii)(2)(A) and (viii)(2)(B) immediately
above, or failure to so elect, within one business day from
the date that Landlord communicates its elections to Entrada
or Entrada Mexico, or, if Landlord fails to elect, on the
thirty-first day after the date of the damage.
(E) If damage to all buildings comprising the Facility
(referred to in the next sentence only, as the "damaged
buildings") in which CLIENT's Production Operations are
conducted hereunder prevents CLIENT from conducting its
Production Operations in all such buildings, Entrada and
CLIENT will make their best efforts in good faith to locate
and enter into, as soon as possible, a mutually-acceptable
leasing arrangement for an alternative location (the
"Alternative Site") into which to move and conduct the
Production Operations. If Entrada and CLIENT are unable to
so locate or lease an Alternative Site, CLIENT will be
entitled to terminate this Agreement by giving written
termination notice to Entrada. Upon giving such termination
notice, CLIENT's sole liability under this Agreement will be
to (a) pay amounts and to perform obligations that have
accrued and are due as of the date on which CLIENT gives
such termination notice, and (b) pay [**] percent ([**]%) of
the Facility Fee that would be applicable hereunder to the
damaged buildings had such damage not occurred, for the
lesser of: (i) six (6) months, or (ii) the period from the
date on which the repair of each such damaged building is
complete to the date on which such damaged building is
re-let.
Page 5
(ix) Condition Report. Entrada will provide to CLIENT as soon as
practicable a photographic report, signed by Entrada, of the Facility
and the real property on which the Facility is located, showing the
condition thereof at the time of delivery for use for CLIENT's
Production Operations.
c) Import/Export. Entrada and Entrada Mexico will be responsible for
managing the services set forth in Exhibit "B" (the "IMPORT/EXPORT
SERVICES"). The cost of the Import/Export Services will be passed through
to CLIENT by Entrada, without any additional ▇▇▇▇-up except as noted in
subclauses (i) and (ii) below. For purposes of this Agreement,
Import/Export Services do not include services provided to or for CLIENT by
its own U.S. Customs Broker.
(i) United States Customs and Duties. CLIENT will retain title to all
of its Materials, Products, and Equipment, each as defined herein,
that are used in connection with its operations hereunder or located,
at any time, at the Facility. For purposes of U.S. Customs, CLIENT
will be the "importer and exporter of record," and will contract
directly with the U.S. Customs Broker to be its agent for U.S.
Customs' purposes and CLIENT will be responsible for compliance as
well as the payment of all U.S. tariffs, duties, bonds, U.S. Customs
Broker's charges and all other charges or exactions involved in the
U.S. import and export process. In order to move goods across the
U.S.-Mexico border expeditiously, CLIENT may be required to maintain
with the U.S. Customs Broker a reasonable deposit to cover expected
duties and charges. CLIENT will be responsible for supplying all
information, including cost submissions, required by U.S. Customs in
connection with the importation of foreign products into the U.S.
CLIENT will also be responsible for supplying to Entrada, on a timely
basis, the commercial invoice and all other documents required as part
of the import and export process. In view of Entrada's reliance on
data supplied by CLIENT, CLIENT agrees to indemnify and hold Entrada
harmless against all, loss, damage, costs (including, without
limitation, reasonable attorneys' fees), and liabilities (including,
without limitation, assessments, fines or penalties, whether imposed
by the U.S. Customs Service or otherwise) arising or resulting from
the entry of CLIENT's Products into the U.S. Likewise, Entrada and
Entrada Mexico agree to indemnify and hold CLIENT harmless against
all, loss, damage, costs (including, without limitation, reasonable
attorneys' fees), and liabilities (including, without limitation,
assessments, fines or penalties, whether imposed by the U.S. Customs
Service or otherwise) arising or resulting from negligence or willful
misconduct directly attributable to Entrada and/or Entrada Mexico.
(ii) Mexican Customs and Duties. Entrada Mexico shall be "importer and
exporter of record" for Mexican customs purposes and shall comply with
all record keeping and reporting obligations set forth by law.
Provided CLIENT supplies all necessary information, Entrada Mexico
shall obtain all necessary licenses and permits to import CLIENT's
materials, supplies, equipment and tooling into Mexico under Entrada
Mexico's Maquiladora Program. CLIENT shall be responsible for any cost
incurred for bonds, Mexican duties, tariffs, fees, government
processing fees, countervailing duties, if applicable, other import
costs and Mexican Customhouse brokerage fees associated with shipment
of CLIENT's goods. Entrada will contract or will cause Entrada Mexico
to contract with a qualified Mexican Customs Broker to be its agent
for Mexican Custom's purposes. Entrada and Entrada Mexico agree to
undertake all necessary actions before the Mexican Customs authorities
to obtain the clearance through Mexican Customs of (A) the importation
of CLIENT's Materials, as hereinafter defined, parts, components and
any other required inputs (all items imported into Mexico are referred
to, jointly and severally, as the "INPUTS"), as well as machinery and
equipment (collectively the
Page 6
"EQUIPMENT"), and (B) the exportation from Mexico of CLIENT's finished
Products, Equipment and other items. CLIENT understands and agrees
that, in order for Entrada or Entrada Mexico to be able to fulfill its
obligations to process the shipments and obtain the necessary permits
on behalf of CLIENT under this clause (ii), CLIENT must supply
Entrada, on a timely basis, with all pertinent information and
documentation of all items to be imported or exported through Mexican
Customs, including, without limitation, complete descriptions, makes,
models, serial numbers, weights, costs, country of origin and
certificates of origin. CLIENT acknowledges that (X) it typically
takes approximately thirty (30) days to obtain the initial Mexican
permits from the time the completed submission of the appropriate
application, and (Y) until such permit has been approved, CLIENT's
Materials, Equipment and other property may not be imported into
Mexico. Special permits needed to meet CLIENT's specific requirements
may take a longer period of time and will be obtained at CLIENT's
cost.
CLIENT will pay, promptly when due, all Mexican customs tariffs,
duties, value-added tax, countervailing duties, if any, customs
processing fees, fines, bonds, costs of compliance with applicable
non-duty restrictions and barriers, and Mexican customs brokerage
charges (collectively, the "MEXICAN DUTIES") that may arise in respect
of the import and export activities referred to herein. CLIENT
specifically agrees to pay all Mexican Duties that (A) may become
payable in the future with respect to Inputs imported into Mexico that
are subsequently exported to the United States, whether or not
incorporated into Products, and (B) relate to Inputs or Equipment that
undergo a change of customs regime in Mexico. CLIENT will be
responsible for providing to Entrada all information and
documentation, including U.S. import declarations, that may be
required in order to calculate the amounts of such Mexican Duties.
Entrada Mexico agrees to file for and secure any Mexican import
license, permit or authorization that allows it to import any
materials, supplies equipment and machinery or, in general, any good
on a duty free basis, if applicable, depending on the origin of such
materials, supplies, equipment and machinery or under the lowest
available duty rate, such as under the North American Free Trade
Agreement or other international trade agreements executed by Mexico,
or the "Programas de Promocion Sectorial." If a "Regla Octava"
authorization were necessary to achieve the above considering the
property, the importation of which is necessary for CLIENT's
Production Operations, Entrada and CLIENT will mutually agree on how
to apply and manage the related process and costs. Also, Entrada
Mexico with the information in this regard that shall be requested by
Entrada or Entrada Mexico and furnished by CLIENT, shall maintain all
records that substantiate the information contained in the documents
required in connection with the importation and/or exportation of
CLIENT's goods, in accordance with the terms, conditions and time
limits required by applicable laws and sufficiently detailed as
provided by law to permit Mexican Customs authorities to perform their
duties, including customs audits. Any fine or penalty imposed by the
Mexican authorities that derive from an inspection, review, audit or,
in general, any other action taken by the Mexican government in
connection with the above, will be the sole responsibility of Entrada
and Entrada Mexico, unless the fine or penalty relates to any
violation of the law that is attributable to CLIENT's failure to
comply with Entrada's instructions, in which case CLIENT shall pay
such fine or penalty or reimburse to Entrada or Entrada Mexico any
payment that the Mexican government imposes on Entrada or Entrada
Mexico.
(iii) Equipment. Contemporaneously with the execution of this
Agreement, CLIENT, Entrada and Entrada Mexico shall execute a
"Commodatum Agreement" substantially in the form and with the content
set forth in Exhibit "H" with respect to the Equipment that
Page 7
CLIENT sends to the Facility. Entrada Mexico will file for recordation
the Commodatum Agreement in the Public Registry of Property and
Commerce of Fresnillo, Zacatecas, Mexico, within ten (10) days of its
execution, to establish the ownership of CLIENT, and all governmental
fees and costs shall be paid by CLIENT.
In addition, Entrada and Entrada Mexico agree to insert or stamp in
all customs invoices to be used by Entrada Mexico for the importation
of the equipment, tools, raw materials, supplies and other goods
furnished by CLIENT into Mexico, the following legend "This commercial
invoice is issued exclusively for customs purposes in order to import
into Mexico the goods covered by the same and therefore does not
transfer ownership of the goods."
Upon CLIENT's written request for the return of machinery and/or
equipment covered by the Commodatum Agreement, Entrada and Entrada
Mexico shall undertake to obtain appropriate governmental clearance
and documentation for the return of the machinery and/or equipment to
the address the CLIENT designates. Any costs and related expenses of
said governmental clearances, insurance and of transportation will be
paid by CLIENT.
(iv) On site Seminar. Entrada will provide CLIENT, at CLIENT's
location, a [**] seminar on the principles and procedures of the
U.S.-Mexico import/export process. The seminar is intended for senior
management and for persons involved in the CLIENT's day-to-day
import/export activity pertinent to this Agreement. In addition,
CLIENT will be provided an Entrada Import/Export Manual.
d) Permits. Entrada, through Entrada Mexico, will be responsible for
obtaining all facility and environmental related permits, licenses and
approvals required by Mexican law including but not limited to Municipal
Operating License, Maquila related permits and registrations (collectively
"FACILITY PERMITS") required to manufacture, store, ship and/or assemble
CLIENT's Products in the Facility. CLIENT shall reimburse Entrada all fees
paid for Facility Permits. Any fine or penalty imposed by the Mexican
government to Entrada Mexico for not having any of the Facility Permits
will be the sole responsibility of Entrada and/or Entrada Mexico. Also,
Entrada and/or Entrada Mexico agree to indemnify CLIENT for any damage
caused as a consequence of any fine or penalty imposed or if the Mexican
government determines to, due to the conduct of Entrada Mexico, close,
permanently or temporarily, the Facility, unless the fine or penalty is
attributable to CLIENT's failure to comply with Entrada's instructions, in
which case the fine or penalty shall be paid by CLIENT or reimbursed to
Entrada or Entrada Mexico in case the Mexican government imposed the fine
or penalty to Entrada or Entrada Mexico.
e) Procurement in Mexico. Entrada will provide to CLIENT a list of
preferred suppliers in the Fresnillo/Zacatecas region for maintenance,
repair and operational needs ("MRO"). Entrada will advise CLIENT on issues
related to MRO sourcing and purchasing, if requested. CLIENT will be
responsible for quoting and placing its own MRO orders. Entrada will
administer all accounts payable related to CLIENT's MRO purchases, and will
provide a pick-up and delivery service for same, as requested. The
guidelines for the procurement services are fully described in Procurement
in Mexico, attached hereto as Exhibit "E" and incorporated herein.
2) Certain Responsibilities of CLIENT. CLIENT agrees that it will have sole
responsibility to do the following:
Page 8
a) Materials and Technology. CLIENT will provide the following items that
are necessary or appropriate for its operations at the Facility: (i) all
raw materials, parts, components, production supplies, packaging materials
(collectively, the "MATERIALS"), (ii) all Equipment necessary or
appropriate for the manufacture or assembly of the Products at the
Facility, and (iii) the technology and technical assistance necessary to
enable the Workforce to manufacture or assemble the Products at the
Facility. At CLIENT's request and expense, Entrada Mexico will fence an
area within the Facility to store the Materials therein, and place a sign
with the legend "Propiedad de NxStage Medical, Inc." Such area and sign
will have the dimensions that CLIENT indicates.
b) Production, Training and Quality Control. CLIENT will be responsible
for: (i) planning, training, scheduling, directing and supervising the
manufacture or assembly of the Products by the Workforce at the Facility,
and (ii) the quality of all Products manufactured or assembled by the
Workforce at the Facility.
3) Fees and Costs. CLIENT will pay to Entrada: (a) the Shelter Program Service
Fee, as defined in attached Exhibit "C," (b) the Facility Fee, and (c) all other
amounts called for herein and in the exhibits and attachments hereto
(collectively, the "FEES AND COSTS"), at the times and in the amounts more fully
described in Exhibit "C" attached hereto and elsewhere herein.
4) Billing Procedures. Entrada will submit weekly invoices for amounts that are
payable under this Agreement to CLIENT at the Facility. CLIENT's Mexico
representative will be responsible for supplying CLIENT's U.S. office with
copies of any of the backup documentation related to the weekly invoices. Each
invoice will be accompanied by paid receipts or third party invoices for costs
incurred by Entrada or Entrada Mexico for CLIENT's account. With respect to
costs incurred in Mexico by Entrada or Entrada Mexico, if the pertinent invoice
is accompanied by a document signed by CLIENT's representative on-site at the
Facility, such signature will conclusively signify the accuracy of the Mexican
Costs, as hereinafter defined, and will conclusively bind CLIENT to pay or
reimburse Entrada for such approved Mexican Costs. As used in this Section, the
term "Mexican Costs" means: (i) the number of basic and overtime hours worked
during the relevant work week, (ii) the number of Workers utilized during the
relevant period, (iii) the costs incurred in Mexico (other than freight and
customs charges, which the parties agree do not require the approval by CLIENT's
on-site representative) described in Section 3.c above for which reimbursement
is sought in the invoice, and (iv) the incidental reimbursable and pass-through
expenses including, but not limited to, those identified in attached Exhibits
"C" and "D."
5) Payment Obligations. CLIENT hereby agrees to pay Entrada the amount of each
such invoice as follows:
a) Labor Charges. In order to pay the Workers every Friday, Entrada will
provide to CLIENT an electronic invoice by Monday of the week following the
week in which the labor charges were incurred. CLIENT agrees to pay the
invoice within [**] business days via electronic fund transfer to Entrada's
bank account.
b) Facility Fee. Subject to the terms of Exhibit "A," the Facility Fee will
be due and payable on the first day of every month.
c) Non-Labor Charges. All other (non-labor) invoice charges, including,
without limitation, Entrada's Shelter Program Service Fee and reimbursable
and pass-through expenses, will be due and payable within [**] days after
the date of such invoice.
Page 9
d) Certain Costs. CLIENT understands and agrees that certain purchases or
services requested by CLIENT may require deposits or payments in advance.
The following are examples of payments typically required in advance:
duties required by US or Mexican customs; payments required by Mexico
contractors for construction projects; and advance payments required by
Mexico car dealers for the order and purchase of vehicles. In each such
instance, Entrada will submit an invoice to CLIENT for the amount due and
will make the corresponding deposit, purchase, or payment when CLIENT pays
such invoice. CLIENT will be responsible for paying for repetitive cash
purchases and will maintain a ▇▇▇▇▇ cash fund for such purpose under the
control of CLIENT's representative at the Facility.
e) Disputed Charges. If CLIENT disputes any portion of any invoice, CLIENT
agrees that it will pay the undisputed portion of the invoice as if there
were no such dispute about the remainder of the invoiced amount.
f) Late Charge. Any undisputed amounts payable by CLIENT hereunder that are
not paid when due, shall be payable with interest accruing on such amount
from the due date until payment in full has been made at an interest rate
equal to the lesser of: (1) 1.0 % per month; or (2) the maximum monthly
interest rate allowable by applicable law.
6) Worker Termination Costs. Except as provided in Section 1.a.iv, CLIENT will
have the sole, unconditional responsibility to pay any and all costs associated
with the severance or termination of any and all Workers, including production
line workers, material handlers, group leaders and inspectors, supervisory
workers, monthly salaried administrative and technical workers. CLIENT will pay
Entrada for any and all payments incurred in connection with or associated with
the severance or termination of any or all of the Workers (the "SEVERANCE
OBLIGATIONS"), including, without limitation, any such severance or termination
that results from the expiration of this Agreement or its termination for any
reason at the time of termination of each Worker. In the event CLIENT instructs
Entrada to terminate any member of the Workforce without any justified cause as
provided by applicable Mexican Law, CLIENT agrees to pay the Severance
Obligations, and, provided that Entrada, Entrada Mexico and their counsel
consult with CLIENT and follow CLIENT's reasonable suggestions with respect to
the defense and, if proper, settlement, of any claims filed by such member of
the Workforce, wages accrued after the Worker's termination until the matter is
fully resolved, penalties and other charges included in any final judgment, plus
all legal fees that may be incurred by Entrada, Entrada Mexico or any Mexico
Affiliate in connection with such matter.
a) Letter of Credit. If and when the number of Workers employed on behalf
of CLIENT equals or exceeds [**], CLIENT agrees to provide, and thereafter
maintain with, Entrada an irrevocable letter of credit (the "LETTER OF
CREDIT") to ensure the prompt payment of the Severance Obligations. The
Letter of Credit must be issued by an institution reasonably acceptable to
Entrada and must name Entrada as the beneficiary. Entrada, as beneficiary,
must be entitled to draw on the Letter of Credit if any portion of the
Severance Obligations is not paid when due hereunder. The amount of the
Letter of Credit must be adjusted annually to the amount of such Severance
Obligations that would be due on the date of such adjustment, assuming the
termination of all Workers on such date.
7) Insurance. The parties agree as follows:
a) Property Insurance. CLIENT will have sole responsibility to obtain and
maintain, at its sole cost, any and all insurance that it deems necessary
or appropriate for its Materials, Products,
Page 10
Equipment, Inputs, inventory, supplies, work in process, finished or
semi-finished goods and other personal property of any type against any and
all risks, whether located in the Facility, elsewhere in Mexico, while in
transit, or in the United States. Entrada will have no liability for any
damage, loss or injury suffered by CLIENT, whether direct, consequential,
incidental or otherwise, with respect to such property. Entrada hereby
advises CLIENT that it is legally required to have a Mexican insurance
company issue any policy insuring any of CLIENT's property located in
Mexico, including, but not limited to, CLIENT's Materials, Products,
Equipment, inventory, supplies, work in process, finished and semi-finished
goods.
b) Facility Insurance. Entrada will provide, or cause to be provided, at
its sole cost, fire and casualty insurance by a reputable Mexican insurance
company in an amount that represents the cost of reconstruction of the
Facility.
c) Liability Insurance; Miscellaneous Insurance Provisions:
i) Entrada Liability Insurance Policy. Entrada will provide and
maintain, at its own cost, or cause to be provided and maintained, at
its sole cost, a policy of general liability insurance covering the
activities at the Facility (the "GENERAL LIABILITY POLICY") with
minimum coverage limits of $1,000,000 per occurrence, naming Entrada
as the beneficiary. The General Liability Policy may not be cancelled
without at least 60 days' prior written notice to CLIENT. Within 60
days after execution of this Agreement, Entrada will deliver to CLIENT
a certificate of insurance showing the General Liability Policy to be
in effect in accordance with the requirements of this paragraph.
ii) CLIENT Liability Insurance Policy. CLIENT will provide and
maintain at its own cost, or cause to be provided and maintained, at
its sole cost, a policy of general liability insurance covering the
activities at the Facility with minimum coverage limits of $1,000,000
per occurrence, naming CLIENT as the beneficiary. This policy may not
be cancelled without at least 60 days' prior written notice to
Entrada. Within 60 days after execution of this Agreement, CLIENT will
deliver to Entrada a certificate of insurance showing the General
Liability Policy to be in effect in accordance with the requirements
of this paragraph.
iii) Waiver of Subrogation. CLIENT, Entrada and Entrada Mexico waive,
and Entrada and Entrada Mexico will cause the Mexican Affiliates to
waive, any and all rights of subrogation against each other and
against all contractors, subcontractors, materialmen, vendors,
consultants, agents and employees of each other for damages and lost
profits, including, but not limited to, damages sounding in tort,
civil liability, strict liability, warranty, negligence or strict
products liability.
iv) Insurance Waiver Provision. All insurance agreements in connection
with insurance required to be provided or obtained under the
provisions of this Agreement shall include an express provision
waiving subrogation against Entrada and Entrada Mexico for damages and
lost profits, including, but not limited to, damages sounding in tort,
civil liability, strict liability, warranty, negligence or strict
products liability.
v) Product Liability Indemnity. CLIENT hereby indemnifies, and agrees
to protect, defend and hold Entrada and Entrada Mexico harmless
against all demands, obligations, claims, costs, expenses, judgments,
awards and liabilities of any nature, claimed or asserted by any
unaffiliated person, as a result of, or in any way arising out of, or
Page 11
consequential to the design, manufacture, assembly, use, delivery,
consumption, or integration into other products of any of CLIENT's
Products, except if such demands, obligations, claims, costs,
expenses, judgments, awards or liabilities arise from Entrada's or
Entrada Mexico's negligence of willful misconduct, or breach of its or
their obligations hereunder.
vi) Entrada Disclaimer. NEITHER ENTRADA NOR ENTRADA MEXICO IS THE
DESIGNER OR MANUFACTURER OF THE PRODUCTS AND NEITHER OF THEM MAKES,
AND HEREBY DISCLAIMS, ANY AND ALL REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, ABOUT THE PRODUCTS, THEIR QUALITY, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
8) Term.
a) Commencement; Duration. The term of this Agreement will commence on
March 1, 2007 (the "COMMENCEMENT DATE"), and will expire on February 28,
2012, 60 (sixty) months after the commencement of the Agreement.
b) Conforming Extension. If, pursuant to CLIENT's instructions, Entrada
Mexico extends its Lease of the Facility, then CLIENT will extend the term
of this Agreement by the same period that such lease is extended.
Subject to Entrada Mexico extending its lease for the Facility to provide
for the uninterrupted use thereof, this Agreement shall extend for
successive one-year terms upon the mutual agreement of the parties. At
least one hundred twenty (120) days prior to the expiration of the initial
term of this Agreement or any extension thereof, the parties will endeavor
in good faith to (i) provide written notice to each other of their
intention not to extend this Agreement, or (ii) initiate negotiations to
extend this Agreement and the lease for the Facility. Upon termination of
this Agreement, the parties will cooperate to undertake all necessary
actions to wind down CLIENT's operation as quickly as possible or to
implement Section 9.e below, as the CLIENT may elect.
9) Termination.
a) Cause.
(i) Any party (the "TERMINATING PARTY") may terminate this Agreement
for "cause," at any time, by giving written notice of such termination
(the "FOR CAUSE TERMINATION NOTICe") to the other party (the
"BREACHING PARTY"), without the need of first securing a judgment or
arbitral award therefor. As used in this Section, the term "CAUSE"
means: (A) the bankruptcy (whether voluntary or involuntary),
insolvency, liquidation, receivership, dissolution, or assignment for
the benefit of creditors of the breaching party (a "BANKRUPTCY
PROCEEDING"), or (B) a material breach by the breaching party of any
of the breaching party's material obligations under this Agreement,
including the obligations set forth in Section 1.b.viii above (such a
breach is referred to as a "MATERIAL BREACH"), that is not cured in
accordance with clause (ii) below.
(ii) No party will be entitled to give a For Cause Termination Notice
based upon a Material Breach unless (1) it has first given the
breaching party written notice (the "BREACH NOTICE") specifying the
Material Breach, and (2) such Material Breach is not cured within the
following period, as applicable:
Page 12
(I) If the Material Breach is CLIENT's failure to make any
payment called for herein when due (a "PAYMENT BREACH"), CLIENT must
cure such payment delinquency in full within two (2) business days
after Entrada gives CLIENT a Breach Notice regarding such delinquent
payment.
(II) If the Material Breach is other than a Payment Breach by
CLIENT, the breaching party must cure such Material Breach within
thirty (30) days after the terminating party gives the Breach Notice.
Notwithstanding the immediately preceding sentence, if such Material
Breach is of a type that cannot be completely cured within thirty (30)
days, such Material Breach will not constitute cause for termination
if the breaching party commences to cure such Material Breach within
such thirty (30) day period and thereafter diligently pursues such
cure to completion, provided that such completion takes place no later
than ninety (90) days from the date that the Breach Notice is given.
The provisions of this paragraph (II) do not apply to the obligations
set forth in Section 1.b.viii above, since those obligations will be
subject to the periods mentioned therein without an additional cure
period.
b) Changed Circumstances.
(i) In addition to its right to terminate this Agreement for "cause,"
pursuant to clause (a) of this Section, CLIENT may terminate this
Agreement, without further liability under this Agreement other than
to pay amounts and perform obligations that have accrued and are due
as of the date that CLIENT vacates the Facility used for the
Production Operations, by giving written notice of such termination
(the "CHANGED CIRCUMSTANCES TERMINATION NOTICE") to Entrada and
Entrada Mexico if any of the following circumstances (each a "CHANGED
CIRCUMSTANCE") occur:
(1) If one or more Unrelated Persons, as hereinafter defined,
acquire a 50% or greater ownership interest in Entrada or Entrada
Mexico without the approval of CLIENT (such acquisition is referred to
hereinafter as an "UNAPPROVED CHANGE IN ENTRADA CONTROL"). As used in
this clause, the term "Unrelated Person" means any person who does not
own an equity interest in Entrada or Entrada Mexico at the time of
execution of this Agreement. CLIENT agrees that it will not
unreasonably withhold, delay or condition its approval of a change in
control of Entrada, and will approve such change unless it reasonably
concludes that such change in control will adversely and materially
affect CLIENT's business.
(2) If (A) there is a strike of Workers at the Facility that does
not arise from actions or inactions of CLIENT, and (B) as a result of
the Strike, CLIENT's Production Operations are halted for [**]
consecutive business days (such a Worker's strike is referred to
hereinafter as a "STRIKE").
(3) If (A) any lien or encumbrance is placed on Entrada Mexico's
or the relevant Affiliate's business, or the seizure or attachment of
Entrada Mexico's or the relevant Affiliate's assets as a consequence
of a labor, tax or any other kind of claim, and (B) as a result of
such lien, encumbrance or seizure, CLIENT's Production Operations are
halted for [**] consecutive business days (such liens, encumbrances
and seizures are referred to hereinafter, jointly and severally, as a
"LIEN").
(ii) CLIENT will not be entitled to terminate this Agreement due to a
Changed Circumstance except as follows:
Page 13
(1) If the Changed Circumstance Notice is based on an Unapproved
Change in Entrada Control, CLIENT must issue such Changed
Circumstances Termination Notice within 5 business days after receipt
of Entrada's request of approval of such change in control.
(2) If the Changed Circumstance Notice is based on a Strike,
CLIENT must issue such Changed Circumstances Termination Notice before
the earlier of: (A) 30 days after the commencement of the Strike, and
(B) the day on which the Strike ends.
(3) If the Changed Circumstance Notice is based on a Lien, CLIENT
must issue such Changed Circumstances Termination Notice before the
earlier of: (A) 30 days after CLIENT's Production Operations are
halted, and (B) the day on which the Lien is removed.
c) Certain Remedies and Limitations.
(i) In the event that this Agreement is terminated as permitted by any
of the preceding clauses of this Section 9, the terminating party will
retain its right to recover damages from the breaching party.
(ii) CLIENT will be entitled to terminate this Agreement as a result
of a Bankruptcy Proceeding of, or Material Breach by Entrada or
Entrada Mexico. If such Bankruptcy Proceeding or Material Breach
occurs within 12 months after the execution of this Agreement, CLIENT
will have no obligation to assume the Lease. If such Bankruptcy
Proceeding or Material Breach occurs more than 12 months after the
execution of this Agreement, CLIENT will assume the Lease for the
First New Building and the Second New Building, except if either of
the following circumstances (the "Lease Termination Circumstances")
then exist: (1) Lessor will not allow the CLIENT to assume the Lease,
or (2) CLIENT is not able to continue its Production Operations in the
Facility for a period of [**] consecutive business days, due to
failure by Entrada and/or Entrada Mexico to act in accordance with
Section 9(e) below, or otherwise.
If a Bankruptcy of, or Material Breach by Entrada or Entrada Mexico
occurs more than 12 months after the execution of this Agreement, and
neither of the Lease Termination Circumstances then exist, CLIENT (1)
will not be entitled to terminate the Lease, and (2) will
automatically succeed to: (a) all rights of lessee under the Lease for
the First New Building and the Second New, and (b) all legal duties of
lessee to Lessor under the Lease for the First New Building and the
Second New Building, but only to the extent such duties arise on or
after the effective date of CLIENT's succession as lessee under the
Lease for the First New Building and the Second New Building, all
without the need for further instruments to be executed.
(iii) CLIENT will be entitled to terminate this Agreement as a result
of a Strike subject to Section 9.b.ii(2) above. If such Strike occurs
within 12 months after the execution of this Agreement, CLIENT will
have no obligation to assume the Lease. If such Strike occurs more
than 12 months after the execution of this Agreement, CLIENT will
assume the Lease for the First New Building and the Second New
Building, except if such Strike continues for [**] consecutive days
and is the result of Entrada's or Entrada Mexico's actions or
inactions.
Page 14
(iv) If CLIENT terminates this Agreement in the event of an Unapproved
Change of Entrada Control as set forth in Sections 9.b.i(1) and
9.b.ii(1) above, except if as a result of the Unapproved Change in
Entrada Control CLIENT's continuation of Production Operations at the
Facility for [**] consecutive business days or more is prevented,
CLIENT will assume the Lease for the First New Building and the Second
New Building.
(v) CLIENT will not be entitled to terminate this Agreement in the
event of the imposition of a lien, encumbrance or seizure similar to a
Lien, but that does not prevent CLIENT's continuation of Production
Operations at the Facility for [**] consecutive business days or more.
This Agreement will continue in full force and effect notwithstanding
such event. If CLIENT's continuation of Production Operations at the
Facility is prevented for [**] consecutive business days or more,
CLIENT will have no obligation to assume the Lease.
d) Certain Continuing Obligations. CLIENT agrees that upon the expiration
of this Agreement or termination of this Agreement pursuant to this Section
9 or pursuant to Section 1.b, CLIENT will pay, at the time of such
expiration or termination, all amounts payable by it hereunder that have
accrued as of the date of such termination, including, without limitation,
Severance Payments, the Shelter Plan Service Fee and, in accordance with
Exhibit "A," the Facility Fee. Entrada recognizes that it will only be
entitled to receive from CLIENT such amounts.
e) Effect of Termination. Upon CLIENT's termination of this Agreement as
set forth in this Section 9, CLIENT shall have the right to take full
responsibility of the Facility and services otherwise provided by Entrada
and Entrada Mexico, in which case, Entrada and Entrada Mexico, within sixty
(60) calendar days of the date that the written notice is delivered, agree
to transfer or assign to CLIENT or its designated Mexican company, at
CLIENT's election:
(i) All Facility Permits and contracts to the extent that such
Facility Permits are assignable under applicable law.
(ii) All Workers that have been hired to work for CLIENT based on its
written requests; to this effect, Entrada and Entrada Mexico agree to
enter into an Employer Substitution Agreement in the format to be
provided by CLIENT, under which CLIENT will acknowledge the respective
employees' seniority.
(iii) All of the machinery, equipment, materials, work in process and
inventory of finished Products by performing a "virtual" import-export
operation or any other simplified form of customs transfer as
established in the Mexican Customs Law, its Regulations and/or the
Foreign Trade General Rules.
(iv) All of the assets purchased on behalf of CLIENT and registered in
Entrada Mexico's books without any additional compensation for Entrada
Mexico, on the understanding that CLIENT will be responsible for any
applicable Mexican Value Added Tax ("VAT") on the transfer of such
assets.
(v) The Lease.
10) Use of Subcontractors. Without in any way relieving it of any obligation or
duty otherwise undertaken hereunder, Entrada will have the right, upon the prior
written consent of CLIENT, which shall not be unreasonably withheld, to enter
into a subcontract with one or more third parties to provide portions of the
Page 15
Shelter Program Services in Mexico. The parties agree that Entrada will select
the Mexican customs broker required for CLIENT's operations, and that, unless
otherwise agreed by the parties, all import and export transactions related to
CLIENT's operations will be carried out through such Mexican customs broker.
11) CLIENT Property. The parties agree that all CLIENT's right, title, and
interest to intellectual property, Materials, Products and Equipment used in
connection with the manufacture or assembly of CLIENT's Products at the Facility
will remain the property of CLIENT. At no time will Entrada or Entrada Mexico be
deemed to have any ownership interest in such property. Entrada agrees not to
use any of CLIENT's assets, including intellectual property and proprietary
information and patented and copyrighted materials, for purposes other than as
set forth in the Agreement. Entrada agrees to indemnify CLIENT for breach of
such obligations.
12) Notices. All statements, notices, demands and requests for payments from one
party to another will be, unless otherwise specified herein, delivered
personally or sent by mail, postage prepaid, certified or registered mail, to
the address set forth on the first page hereof, or such addresses as the parties
may hereafter designate to each other in writing.
13) Jurisdiction. This Agreement will be interpreted under the laws of the State
of Delaware. Any controversy or claim under this Agreement (including, without
limitation, any claim for damages arising out of a party's breach of any of the
obligations under this Agreement) will be settled by binding arbitration, and
judgment upon the award rendered by the arbitrators may be entered in, and
enforced by, and court having jurisdiction. Arbitration hereunder will be
conducted in accordance with Section 14.
14) Arbitration. The arbitration will be conducted in San Antonio, Texas, or
such other location to which the parties hereafter agree in writing, by the
American Arbitration Association in accordance with commercial arbitration rules
of the American Arbitration Association. The arbitration will be conducted in
English.
a) There will be three arbitrators, one chosen by Entrada, one chosen by
CLIENT, and the third chosen by the two arbitrators previously appointed.
Within twenty (20) days after the submission by a party of a demand for
arbitration, each of the parties will select one arbitrator. In the event
of a failure of a party to select an arbitrator within the designated time
period, the other party may request the American Arbitration Association to
make such appointment. The two arbitrators so appointed will select a third
arbitrator, but, if the said two arbitrators cannot promptly agree upon a
third arbitrator, either party may request that the American Arbitration
Association appoint a third arbitrator.
b) The parties hereby confer upon arbitrators the right to direct each of
the parties to produce whatever documents the arbitrators deem appropriate
in advance of the arbitration hearing.
c) The arbitration award must be made within ten (10) months of the filing
of the notice of intention to arbitrate, and the arbitrators must agree to
comply with this schedule before accepting appointment. Notwithstanding the
preceding sentence, the time limit may be extended by agreement of the
parties. If, for any reason within the reasonable control of such party, a
party does not completely present its case to the arbitrators in sufficient
time to allow the arbitrators to make a timely award, the arbitrators may,
in their sole discretion, deem the other party to be the prevailing party
in such arbitration proceedings and to make the award accordingly.
Page 16
d) The arbitrators will have no authority to award any of the following:
lost profits, punitive, consequential, exemplary, or incidental damages, or
damages payable by the prevailing party to a third party due to a
contractual obligation of the prevailing party to such third party.
e) At the request of either party, the award of the arbitrators shall
include findings of facts and conclusions of law, the additional cost of
which, if any, will be borne solely by the requesting party.
f) In any arbitration proceeding hereunder, each party shall bear the
expenses of its witnesses. All other costs of arbitration, including,
without limitation, the fees and of the arbitrators, the cost of the record
or transcripts thereof, if any, and all other fees and costs shall be
allocated to the parties to the arbitration as determined by the arbitral
panel.
g) The written decision of any two arbitrators will be final and binding on
the parties and will be legally enforceable in any court of competent
jurisdiction as an arbitration award to the maximum extent by law.
15) Exclusion of Certain Damages. Notwithstanding anything to the contrary in
this Agreement, in the event of a breach by either party of such party's
obligations under this Agreement or a claim for indemnification, the
non-breaching party or the indemnitee, as the case may be, will (in addition to
whatever equitable relief is available to such party under this Agreement or
under applicable law) have the right to recover (a) all damages incurred or
sustained by such non-breaching party as a result of such breach by the other
party, or (b) the indemnified losses sustained by such indemnitee; provided,
however, for purposes of this Agreement, the terms "damages" and indemnified
losses will be deemed to exclude damages for, and indemnified losses that
consist of, lost profits, punitive, consequential, exemplary, or incidental
damages, and damages payable by the non-breaching party to a third party due to
a contractual obligation of the non-breaching party to such third party, that
the non-breaching party is not able to meet because of the breach of this
Agreement by the breaching party (collectively, "EXCLUDED DAMAGES"), even if the
breaching party or the indemnifying party has been advised of the possibility
that the non-breaching party or the indemnitee will sustain any such Excluded
Damages.
16) Confidentiality. The information that CLIENT will provide to Entrada and/or
Entrada Mexico may include trade secrets, or proprietary or confidential
information. Entrada and Entrada Mexico will regard and preserve as confidential
all information and know-how related to CLIENT's business, revealed to or
learned by Entrada and/or Entrada Mexico from any source as a result of this
Agreement, whether or not such information is verbally described, or marked or
otherwise identified as confidential. Without limiting the foregoing, Entrada
and Entrada Mexico will refrain from disclosing or disseminating, or permitting
to be disclosed or disseminated, any customer list, pricing, methods, technical
information, know-how, patents, processes, programs, practices, or any other
material or data conceived, designed created, developed, used assembled or
manufactured, by CLIENT.
The entire right, title, and interest, including copyright, in all inventions
and original works of authorship fixed in any tangible medium of expression
heretofore or hereafter created by Entrada and/or Entrada Mexico or on Entrada's
and/or Entrada Mexico's behalf, for CLIENT or furnished to CLIENT hereunder is
hereby transferred to and vested in CLIENT. The parties expressly agree to
consider as work made for hire those works ordered or commissioned by CLIENT
which qualify as such in accordance with the copyright, authors rights, or
invention protection laws. For all such inventions and other original works,
Entrada and Entrada Mexico agree to provide documentation satisfactory to CLIENT
to ensure the conveyance of all such right, title, and interest, including
copyright, to CLIENT.
Page 17
17) Assignment. Neither party may assign its rights under this Agreement or
delegate any of its performance obligations hereunder without the prior written
consent of the other party, which consent will not be unreasonably withheld,
delayed or conditioned. However, Entrada may assign, without the consent of
CLIENT, Entrada's rights to collect the Facility Fee, and Entrada and Entrada
Mexico hereby authorize CLIENT to assign this Agreement in its entirety to (i)
an affiliate of CLIENT, or (ii) a third party that acquires 50% or more of the
total equity issued by CLIENT, or substantially all of CLIENT's assets, provided
the assignee has at least the same or better creditworthiness as compared to
CLIENT at the time the assignment takes place.
In addition, Entrada and Entrada Mexico may use Affiliates to provide the
services provided hereunder, provided that they first inform CLIENT in writing
who the relevant Affiliate will be and what its responsibilities will be.
18) Binding Nature. This Agreement and each and every provision hereof will be
binding on and will inure to the benefit of each of the parties and their
respective successors and permitted assigns, and all such persons will execute
any instruments that may be necessary or appropriate to carry out and execute
the purposes and intentions of this Agreement. Each and every successor in
interest of any party will hold such interest subject to all terms and
provisions of this Agreement.
19) Miscellaneous Provisions. The parties hereto will be independent
contractors, and neither party will be an agent, partner or co-venturer of the
other party. This Agreement will be governed by and construed and interpreted in
accordance with the substantive laws of the State of Delaware without reference
to the conflicts of law provisions thereof. This Agreement may be amended only
by a written agreement signed by duly authorized agents of both parties.
Headings of provisions are for convenience only and are not to be used in
construing this Agreement. No waiver by any party or any person claiming through
or under a party of any breach of this Agreement by the other party in one or
more instances will constitute a waiver with respect to any other or subsequent
breach. In the event that any provision of this Agreement will be declared by a
court of competent jurisdiction to be invalid, illegal, or otherwise
unenforceable, the validity, legality, and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
20) Inconsistencies. In the event of any conflict or inconsistency between any
provisions of this Agreement and any printed provisions in any other document
now existing or hereafter issued by either party, the provisions of this
Agreement will prevail and will govern the interpretation of the contract
between the parties.
21) Counterpart Execution. This Agreement may be executed in one or more
counterparts, and each of the counterparts will for all purposes be deemed to be
an original, and all such counterparts will constitute one and the same
instrument.
22) Timing of Essence. Time is of the essence of this Agreement.
23) Tax Consequences. Entrada, Entrada Mexico and the Affiliates shall comply
with all applicable Mexican legal provisions in effect that relate to transfer
pricing rules such that, by complying with the current transfer pricing rules as
they relate to the manufacturing and assembly activities Entrada is undertaking
for CLIENT, Entrada and CLIENT shall be exempted, to the extent provided by law
and the activities of CLIENT in Mexico are restricted to the compliance of this
Agreement, from any permanent establishment provisions for income tax purposes.
24) Value Added Tax. Entrada, Entrada Mexico and any relevant Affiliate shall
comply with their obligations under the VAT Law, and, to the extent permitted by
law, they will endeavor to recover or
Page 18
have offset by Mexican authorities, and, if so recovered or offset, will
promptly credit such recovered or offset amount against VAT or other Mexican
taxes payable by CLIENT hereunder, and any balance will be promptly credited to
CLIENT.
25) Exchange Rate. Any expense in Mexican Pesos that Entrada or Entrada Mexico
is entitled to recover from CLIENT, shall be converted into U.S. Dollars by
using the best available exchange rate from the banking or any other foreign
exchange institution providing services to Entrada or Entrada Mexico. On each
Entrada invoice, Entrada will provide to CLIENT a list of the expenditures made
in Mexican Pesos, the equivalent amount in U.S. Dollars, and the exchange rate
used.
26) Certain Payments. In the performance of its obligations hereunder, Entrada
and Entrada Mexico shall comply strictly with all applicable laws, regulations
and orders of the United States and Mexico. Without limiting the generality of
this Section, Entrada and Entrada Mexico hereby acknowledge and agree that
certain laws of the United States, including the Foreign Corrupt Practices Act,
prohibit any person subject to the jurisdiction of the United States from making
any payment of money or anything of value, directly or indirectly, to any
foreign government official, foreign political party or candidate for foreign
political office for the purpose of obtaining or retaining business. Each of
Entrada and Entrada Mexico hereby represents and warrants that, in the
performance of its duties hereunder, it has not made, and will not make, any
such proscribed payment. Entrada and Entrada Mexico shall indemnify and hold
harmless CLIENT from and against any and all claims, losses and liabilities
attributable to any breach by Entrada or Entrada Mexico of its obligations under
this Section.
27) Mutual Indemnity. Entrada and Entrada Mexico will indemnify and hold
harmless CLIENT from and against any and all claims, losses and liabilities
arising from criminal conduct by the employees of Entrada, Entrada Mexico or the
relevant Affiliate that are not assigned full-time to CLIENT's operations.
CLIENT will indemnify and hold harmless Entrada, Entrada Mexico and/or the
relevant Affiliate from and against any and all claims, losses and liabilities
arising from willful misconduct or gross negligence that constitute criminal
conduct by CLIENT's employees or other employees that are supervised by CLIENT.
Entrada will assign one of its employees or an employee of Entrada Mexico or the
relevant Affiliate to spot-check shipments and the other activities carried out
at the Facility to attempt to prevent criminal conduct.
28) Joint and Several Liability. Entrada and Entrada Mexico will be jointly and
severally liable (in solidum) to CLIENT with respect to the obligations of
Entrada, and/or Entrada Mexico and/or the Affiliates, arising from, or in
connection with, this Agreement.
29) Entire Agreement. The terms and provisions contained herein, together with
the exhibits attached hereto, constitute the entire agreement between the
parties and, except as stated herein, supersede all previous communications and
understandings, either oral or written, between the parties hereto with respect
to the subject matter hereof. No agreements or understandings varying or
extending the terms of this Agreement will be binding upon either party hereto
unless in writing signed by a duly authorized officer or representative thereof
of each party.
Page 19
IN WITNESS WHEREOF, the parties have set their hands on this instrument by means
of their duly authorized representatives on the date and year first above
written.
ENTRADA PARTNERS, NxSTAGE MEDICAL, INC., a(n) _______
a Texas Limited Partnership corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
Its: Global Factory Managing Partner Its: President & CEO
ENTRADA GROUP DE MEXICO,
S. de ▇.▇. de C.V.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------
Its: Legal Representative
Page 20
NXSTAGE MEDICAL AND ENTRADA SHELTER AGREEMENT
List of Exhibits
Exhibit A. Facility Related Obligations
Exhibit A-2. Lease Agreement
Exhibit B. Shelter Program Services
Exhibit C. Shelter Program Service Fees and Costs
Exhibit D. Client Reimbursable Costs and Policies
Exhibit E. Procurement in Mexico
Exhibit F. Annual Compensation Calculation - example
Exhibit G. Not Required
Exhibit H. Commadatum (Bailment) Agreement
EXHIBIT "A"
FACILITY RELATED OBLIGATIONS
This Exhibit is attached to and made a part of that certain Shelter
Agreement, of even date herewith (the "AGREEMENT"), executed by Entrada, Entrada
Mexico (referred to herein, jointly and severally, as "ENTRADA") and NxStage
Medical, Inc. ("CLIENT").
Unless specifically defined herein, terms that are defined in the Agreement
will have the same meanings when used herein.
Entrada will make available for CLIENT's manufacturing process in Mexico
pursuant to the Agreement, the following facilities, each located in the
Fresnillo Industrial Park in Fresnillo, Zacatecas, Mexico, on the terms and
conditions stated herein:
(a) A PORTION OF THE BUILDING WHERE TRICON CURRENTLY OPERATES (referred to in
the Agreement and hereinafter, as the "SHARED OCCUPANCY BUILDING"): CLIENT
agrees to pay to Entrada, commencing ________________, 2007, a fee (the
"FACILITY FEE") of US $[**] U.S. Cents) per square foot per month for the
use of a portion of the Shared Occupancy Building measuring approximately
15,000 square feet of manufacturing space until the earlier of (i) such
time that Entrada completes the First New Building described in (b) below
in accordance with the terms of the Agreement, or (ii) the expiration of
nine (9) months after the date of execution of the Agreement. The floor
plan of the Shared Occupancy Building is attached hereto as Exhibit A-1.
The manufacturing space used for CLIENT's operations in the Shared
Occupancy Building will at all times be physically separated from the
manufacturing space used for operations of Tricon, but CLIENT's Workforce
will have access to bathrooms and the cafeteria in the Shared Occupancy
Building.
(b) THE NEW FACILITY:
(1) Entrada has commenced the construction of a new building (referred to
in the Agreement and hereinafter, as the "FIRST NEW BUILDING") of
approximately 70,000 square feet, for the production of its clients'
products. Approximately 35,000 square feet of the First New Building
(Modules 2 and 3 thereof) will be dedicated to CLIENT's Production
Operations. The facility fee for Modules 2 and 3 (the "FIRST NEW BUILDING
FACILITY FEE") shall be US [**] cents per square foot per month. The floor
plan of the First New Building is attached hereto as Exhibit A-2.
The construction period for the First New Building is expected to be
approximately [**] months in duration. Entrada intends to complete the
interior of the First New Building on or about April 1, 2007, at which time
Client shall be able to begin to install its Equipment. Entrada intends to
substantially complete the First New Building on or about May 1, 2007.
CLIENT shall commence paying the First New Building Facility Fee once its
Production Operations can reasonably begin in the First New Building.
(2) If requested in writing by Client within the twelve (12) months
following the date of execution of the Agreement, Entrada will construct a
second building (referred to in the Agreement and hereinafter, as the
"SECOND NEW BUILDING") of 35,000 square feet of manufacturing space in a
building immediately adjacent to the First New Building pursuant to a
floor plan substantially similar to the one attached hereto as Exhibit A-2,
unless otherwise requested in writing by Client.
(3) The Second New Building would be built and leased under terms and
conditions substantially similar to the First New Building with the sole
exception being that the Facility Fee for the Second New Building would be
negotiated in good faith between the parties prior to the expiration of the
twelve month period. If the parties can not reach agreement, then Entrada's
obligation to reserve the land for the construction of NxStage's Second New
Building terminates.
(4) Unless otherwise agreed by the parties in writing, the construction
period for the Second New Building will be approximately [**] months from
construction commencement notice to completion, and CLIENT shall commence
paying the Second New Building Facility Fee, in addition to the Facility
Fee that is due with respect to any other Facility that is used for its
Production Operations, as of the date that CLIENT's Production Operations
can reasonably begin in the Second New Building.
(5) Except as set forth above in this paragraph (b), all references in the
Agreement (including references in this Exhibit A) to the Facility (whether
or not such term is capitalized), mean the First New Building, the Second
New Building and, to the extent and for as long as it is used for CLIENT's
Production Operations, the Shared Occupancy Building.
(c) IN CONNECTION WITH ANY FACILITY, CLIENT AND ENTRADA AGREE THAT:
(1) Entrada will include with the monthly billing an amount equal to [**]%
of the Facility Fee. This amount covers Entrada Mexico's obligation to the
owner of the Facility to advance Mexico's value added tax ("IVA") on the
space. Entrada will credit CLIENT for the IVA paid on the Facility within
[**] days of Entrada Mexico receiving reimbursement from the Mexican
government (or otherwise recovering such IVA). Credit will be given to
CLIENT at the peso/US dollar exchange rate that applies on the date of
actual reimbursement by the Mexican government (or other recovery thereof).
Client will not pay any part of the Facility Fee more than [**] days in
advance of its due date.
(2) The Facility Fee will be adjusted every 12 months by an amount equal to
the percentage increase or decrease, if any, in the cost of living for the
preceding year based upon the U.S. Consumer Price Index-All Items-U.S.
Cities Average, All Urban Consumers (1967=100) published by the Bureau of
Labor Statistics of the U.S. Department of Labor (the "CPI") In the event
the CPI ceases to be published, the most comparable substitute (the
"SUBSTITUTE INDEX") will be used thereafter as selected by the mutual
agreement of the parties.
(3) Upkeep. Subject to the next sentence, Entrada will keep the Facility in
good repair at all times. CLIENT will bear the costs of repairs or
maintenance of the Facility that relate to damages (other than normal wear
and tear) caused by CLIENT, the Workers or other persons under the
supervision of CLIENT.
(4) Leasehold Improvements. Subject to the leasehold improvement conditions
and restrictions set forth in Exhibit A-2 and the limitation described in
the next sentence, CLIENT will be entitled, at its sole cost, to cause
alterations or additions that are reasonably necessary to CLIENT's
Production Operations to be made to the Facility (the "ALTERATIONS"),
including installation of (i) electrical power and distribution systems,
(ii) telephone systems, (iii) electrical fixtures and (iv) appliances.
CLIENT may not make any alteration or addition that involves or results in
(A) modification of the basic structure of the Facility, (B) modification
of the external
appearance or the basic utility services of the Facility, or (C) any
alteration that involves or results in penetration of the Facility roof.
Subject to the conditions and restrictions set forth in Exhibit A-2, at the
request of CLIENT, Entrada will assign, without representation or warranty,
to CLIENT or its designee, any removable improvements made to the Facility
as part of the Alterations provided such improvements were made with funds
supplied by CLIENT. CLIENT will have the right, but not the obligation, to
remove removable improvements made as part of the Alterations, as well as
furniture, trade fixtures, machinery and business equipment installed by
CLIENT, no later than (A) the end of the term of the Lease, or (B) CLIENT's
earlier termination of the Lease. Any such improvements and other property
so installed not timely moved will be conclusively deemed to be abandoned.
CLIENT shall, at its own expense, repair all damages resulting from the
installation and removal of such leasehold improvements, furniture, trade
fixtures, machinery and business equipment.
(5) Maintenance of Common Areas. CLIENT will pay to Entrada a reasonable
fee for sweeping of parking lots and maintenance of common areas in the
industrial park in which the Facility is located, provided that such fee
does not exceed the amount of US $[**] U.S. Cents) per square foot of the
Facility space used for CLIENT's Production Operations, per year.
(6) Outside Storage. If CLIENT's operations at the Facility require outside
storage, Client and Entrada agree to negotiate a separate agreement with
respect to the terms of such outside storage, including its associated
charge.
(7) Utility Costs. CLIENT will be responsible for paying the cost of
installation, measurement, and consumption of the telecommunications
services, water and sewer, and electric power consumed in connection with
CLIENT's Production Operations at the Facility, and will be responsible for
paying all costs and making all deposits due the Federal Electrical
Commission of Mexico associated with the establishment and fulfillment of
CLIENT's electrical requirements. The deposits, and the installation,
measurement, infrastructure, capacity, contracting, service and other
similar costs (other than actual consumption costs) for all of the
utilities that serve the Facility are estimated as follows:
1. Security deposit on 300KVA to CFE - $[**] USD (paid by NxStage)
2. One-time purchase of 300 KVA's from CFE - $[**] (paid by NxStage)
3. Routine monthly consumption - $[**] - $[**] (paid by NxStage)
4. Routine monthly water and sewer charges - $[**] - $[**] (paid by
NxStage)
5. Routine monthly trash removal - $[**] (paid by NxStage)
Entrada Mexico will provide, at no additional cost to CLIENT, one 500 KVA
transformer for powering equipment and machinery within the facility and
one 30 kVA dry transformer to support office power and general lighting in
the warehouse and common areas, as specified on Exhibit A-2.
(8) Temperature Control. Entrada Mexico will provide, at no additional cost
to CLIENT, an evaporative cooler for the office area of the Facility.
(9) Environmental Indemnification. Entrada and CLIENT acknowledge that, in
order for Entrada Mexico to conduct CLIENT's Production Operations in
compliance with all applicable Environmental Laws, Entrada will advise
CLIENT with respect to such Environmental Laws as part of the Shelter
Program Services. In addition, Entrada and CLIENT acknowledge that all
installation, dismantling and replacement of Equipment and Production
Operations in the Facility must be conducted by Entrada Mexico, subject to
the supervision and direction of CLIENT. Accordingly, CLIENT shall save,
indemnify and hold Entrada and its affiliates (including without limitation
its parent, sister and subsidiary entities) harmless against any all
liabilities, claims, demands, obligations, causes of action, allegations,
orders, damages, penalties, losses, costs, expenses, including, without
limitation, attorney's fees, injuries or judgments (other than Excluded
Damages), arising out of, relating to, or resulting from (1) the presence,
generation, use, handling, storage, transport, discharge, leakage,
spillage, or seepage of, or pollution by any hazardous substance at or
about the Facility that arises as a result of the operations of CLIENT, and
(2) the violation of any Environmental Laws that arises as a result of the
operations of CLIENT. The foregoing indemnification obligations, however,
will not apply to the extent CLIENT's actions were taken in reliance upon
or consistent with advice provided by Entrada. Entrada and Entrada Mexico
agree to indemnify CLIENT for any damage (other than Excluded Damages)
caused as a consequence of the Mexican government's deciding to, due to the
conduct of Entrada or Entrada Mexico, close the Facility permanently or for
more than [**] consecutive business days. The provisions of this clause
shall survive the termination or expiration of the Agreement.
Entrada and Entrada Mexico represent and warrant that, to the best of their
respective knowledge, except for Tricon's operations, no industrial
assembly or manufacturing activities have been carried out in the Shared
Occupancy Building and the real property on which it is constructed, and no
industrial assembly or manufacturing activities have been carried out on
the real property that are or will be the site of the First New Building or
the Second New Building.
Inmuebles Arizac, S. de ▇.▇. de C.V. (the "LESSOR") represents and warrants
that, to the best of its knowledge, no industrial assembly or manufacturing
activities have been carried out on the real property that are or will be
the site of the First New Building or the Second New Building.
Entrada and Entrada Mexico jointly, and the Lessor severally represent and
warrant that, to the best of their respective knowledge, neither has
contaminated any part of the Facility or the real property on which it is
constructed beyond the limits permitted by the applicable legal provisions,
or have received notice that any environmental administrative proceedings
were or have been commenced against, or with respect to, them.
(10) Financing. CLIENT understands and acknowledges that Entrada may seek
financing to provide the necessary capital to construct or operate the
Facility and as a result thereof maybe required to assign or grant a
security interest in the right to collect the Facility Fee to a third party
lender in order to obtain the required financing. Accordingly, CLIENT
hereby consents to such assignment of any accounts receivable with respect
to the Facility Fee due to Entrada to any financial institution or third
party lender, so long as CLIENT is notified in writing of such assignment.
CLIENT further agrees to cooperate in providing said financial institution
or third party lender reasonable financial information required in order to
obtain said financing. Additionally, CLIENT agrees to execute all
reasonable documents required by said financial institution or third party
lender to effectuate and/or perfect said assignment. Entrada acknowledges
and understands that nothing herein will be deemed to grant or authorize
the granting of any security interest in CLIENT's Equipment, Materials,
Products, tools, or other property located in the Facility or used by
Entrada to fulfill its obligations under the Agreement.
(11) Succession as Lessee. If CLIENT terminates the Agreement pursuant to
Section 9 thereof as a result of a Bankruptcy Proceeding of, or a Material
Breach by Entrada or Entrada Mexico, that occurs more than 12 months after
the execution of the Agreement,, then, in the absence of the
Lease Termination Circumstances, as defined and used in such Section 9,
CLIENT will automatically, with no further instruments being required to be
executed, succeed to: (a) all rights of lessee under the Lease for the
First New Building and the Second New Building, and (b) all legal duties of
lessee to Lessor under the Lease for the First New Building and the Second
New Building, but only to the extent such duties arise on or after the
effective date of CLIENT's succession as lessee under the Lease for the
First New Building and the Second New Building.
Until such succession by CLIENT to the rights and obligations of the lessee
under the Lease for the First New Building and the Second New Building,
Entrada and Entrada Mexico shall pay the rent when due under the Lease,
shall be responsible for penalties for late payment, and shall abide by all
other covenants, conditions, representations, promises and other agreements
set forth in the Lease.
CLIENT will not be required to pay the Facility Fee that would otherwise be
applicable to the period after the effective date of CLIENT's succession as
lessee under the Lease for the First New Building and the Second New
Building.
(12) Miscellaneous. Lessor hereby grants the option to Entrada Mexico, as
lessee, to extend the term of the Lease, at any time and from time to time,
in order to make it coterminous with the Agreement.
In the event that Lessor wishes to sell a Facility, Lessor must first
obtain the written consent of the purchaser to the terms and conditions of
this Exhibit, and deliver it to CLIENT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
(13) Lessor Consent. The undersigned Lessor executes this Exhibit for the
sole purpose of evidencing its consent to the matters indicated above.
CLIENT
NxSTAGE MEDICAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Its: President & CEO
Date: 3/19, 2007
ENTRADA
ENTRADA PARTNERS LTD., a Texas Limited
Partnership
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Its: Global Factory, Managing Partner
Date: 3/20, 2007
ENTRADA MEXICO
ENTRADA GROUP de MEXICO, S. de ▇.▇. de
C.V., a Mexican Corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Its:
-----------------------------------
Date: 3/20, 2007
LESSOR CONSENT
The undersigned is the Lessor referred to in the foregoing and executes
this document for the sole purpose of evidencing its consent to the matters
indicated above.
Date: 3/22, 2007
LESSOR
INMUEBLES ARIZAC, S. de ▇.▇. de C.V.
By: /s/ illegible
------------------------------------
Its: Legal Representative
EXHIBIT "A-2"
LEASE AGREEMENT
THIS LEASE AGREEMENT (THE "AGREEMENT") IS ENTERED INTO BY AND BETWEEN
INMUEBLES ARIZAC, S. DE ▇.▇. DE C.V., A MEXICAN COMPANY (THE "LESSOR") AND
ENTRADA GROUP DE MEXICO, S. DE ▇.▇. DE C.V., A MEXICAN COMPANY (THE "LESSEE"),
ACCORDING TO THE FOLLOWING RECITALS AND CLAUSES:
RECITALS
I. LESSOR, through its legal representative, hereby states that:
a. LESSOR is the legal owner of a tract of land (the "Land") and the
improvements built on the Land (the "Building") (the Land and Building
are collectively referred to as the "Property") located at the
Fresnillo Industrial Park. Fresnillo, Zacatecas, Mexico (the
"Industrial Park"). The Property and its total usable area are more
fully described in Exhibit "A," attached hereto and made a part hereof
for all purposes.
b. The Property is zoned for light and medium industrial purposes by the
competent authorities in Fresnillo, Zacatecas, Mexico. A Copy of
Zoning License to be provided to CLIENT for review.
▇. ▇▇▇▇▇▇ desires to lease the Building to LESSEE in accordance with the
terms hereof.
▇. ▇▇▇▇▇▇'▇ legal representative has sufficient capacity and authority to
execute this Agreement. Copy of Lessor's Representative's Power of
Attorney to be provided to CLIENT for review.
II. LESSEE, through its legal representative, hereby states that:
a. LESSEE desires to lease the Building from LESSOR in accordance with
the terms hereof.
b. LESSEE's legal representative has sufficient capacity and authority to
execute this Agreement.
III. Both parties, through their legal representatives, hereby state that:
a. This Agreement is being executed free from any and all consensual
defects.
b. The parties acknowledge their qualification as commercial entities in
accordance with the Commercial Code of Mexico.
BASED ON THE FOREGOING PREMISES AND OTHER GOOD AND VALUABLE CONSIDERATION,
THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, LESSOR AND
LESSEE AGREE AS FOLLOWS:
CLAUSES
FIRST: THE PROPERTY.
LESSOR shall deliver to LESSEE the temporary use and possession of the
Building, in accordance with the terms hereof, and LESSEE shall accept the
delivery of same and covenants and agrees, as more fully described herein,
to use and enjoy the Building and, on a non-exclusive basis and in
accordance with the rules and regulations, if any, applicable to the
Industrial Park, the parking and other areas on the Property that are
provided for the common benefit of occupants of the Building and such
occupants' respective guests and invitees.
SECOND: USE AND ENJOYMENT OF THE PROPERTY.
LESSOR states that it has clear, absolute and complete ownership of the
Property, and LESSEE shall have the uninterrupted, quiet use and enjoyment
of same.
Similarly, LESSOR and LESSEE agree that, as provided in the Civil Code for
the State of Zacatecas, this Agreement shall survive any ownership
conveyance with respect to the Property or the foreclosure of any lien or
mortgage of LESSOR and/or its assignees, transferees, successors and any
and all other third parties in the chain of title of the Property, and that
any default in payment of such liens or mortgages shall in no way prejudice
the terms of this Agreement or any extensions hereof. Any amendments to
such liens or mortgages or any new liens or mortgages covering all or part
of the Property shall contain a provision acknowledging the existence,
validity, priority and duration of this Agreement.
THIRD: DELIVERY OF THE PROPERTY.
LESSOR shall deliver the Building to LESSEE on or about May 1, 2007
(hereinafter the date of "Initiation of the Lease").
LESSOR represents and warrants that the Building is in compliance with the
construction, urban development, zoning, environmental, construction
density, and other applicable laws, codes, regulations, ordinances and
norms.
FOURTH: USE OF THE PROPERTY.
LESSOR acknowledges that LESSEE intends to use the Building as a location
for the manufacture and assembly of the products (the "Production
Operations") of its client (the "CLIENT") pursuant to a Shelter Agreement
(the "Shelter Agreement") executed by the CLIENT, LESSEE and LESSEE's
affiliate, Entrada Partners, a Texas limited partnership
("Entrada Partners"). The term "Building," as used herein with respect to
CLIENT's obligations, means that portion of the edifice on the Property
that is used for the Production Operations of CLIENT pursuant to the
Shelter Agreement.
LESSEE shall use the Building for its manufacturing, office and related
operations and shall comply with all applicable laws and regulations with
respect to the level of noise generated by the use of the Building.
FIFTH: LEASE PRICE.
Beginning on the Initiation of the Lease, LESSEE shall pay monthly lease
payments (such payments are referred to hereinafter as "lease payments" or
"rent") equivalent to U.S. $[**] U.S. Cents) per square foot, plus the
applicable value added tax. Taking into account that the Building has a
total area of 35,780 square feet, as shown on the floor plan attached
hereto as Exhibit "A-1," the total monthly rental is equal to U.S. $[**]
U.S. Dollars), plus the applicable value added tax. The monthly rental
amount shall be adjusted annually by an amount equal to the percentage
increase, if any, in the cost of living for the preceding year based upon
the U.S. Consumer Price Index-All Items-U.S. Cities Average, All Urban
Consumers (1967=100) published by the Bureau of Labor Statistics of the
U.S. Department of Labor (the "CPI"). In the event the Index ceases to be
published, the most comparable substitute (the "Substitute Index") will be
used thereafter as selected by the mutual agreement of the parties. The
lease payments will be paid in United States Dollars or Mexican Pesos, at
the exclusive option of LESSEE. Lease payments in Mexican Pesos will be
based on the official exchange rate published in the Diario Oficial de la
Federacion on the date of payment.
The lease payments shall be paid in advance, in monthly installments, no
later than the [**] day of each month. All payments are to be made to
LESSOR at the address of LESSOR set forth in Article Twenty-Third or at any
other place indicated by LESSOR to LESSEE in writing. If any payment of
rent or any other amount called for hereunder is not paid when due, it
shall bear interest at the rate equal to the lesser of: (a) 1.5% per month,
or (b) the maximum rate allowed by applicable law, from its due date until
paid in full.
LESSOR agrees to render to LESSEE formal Mexican invoices for the full
amounts due in connection with this Agreement within [**] business days
from the date of payment. The invoices must comply with all the legal and
tax requirements and include a breakdown of the value added tax. In the
event lease payments are made in U.S. Dollars, the corresponding invoices
will additionally reflect the exchange rate used for converting U.S.
Dollars to Mexican Pesos, in accordance with the terms described above.
SIXTH: TAXES AND UTILITIES.
LESSEE shall be liable for payment of the value added tax that corresponds
to the lease payments, and shall be entitled to refunds of said value added
tax. In addition, LESSEE shall be obligated to pay to LESSOR, upon demand,
all property taxes that become due
after the Initiation of the Lease. LESSOR shall be liable for the income
tax due on lease payments and other amounts derived under this Lease.
LESSEE shall directly contract with, and pay for all service provided by,
public utilities it may require for the use of the Building. LESSOR
represents that all public utility services are available at the Building.
Availability and sufficiency of utilities shall meet the requirements set
forth by CLIENT and shall be confirmed by LESSOR and LESSEE. LESSOR and
LESSEE shall represent that CLIENT shall not be responsible for any amounts
owed to utilities prior to occupancy. The parties agree that LESSEE shall
only be responsible for the connection of, and payment for, public utility
services that it actually uses. Any capacity of public utilities acquired
by LESSEE from the respective utility companies will be LESSEE's property
to the extent allowed by applicable law, and therefore LESSEE may take such
capacity or assign it to any individual or entity that it considers
appropriate when this Agreement terminates.
SEVENTH: MAINTENANCE.
During the term of this Agreement, the responsibility for maintenance,
repairs and replacements with respect to the Building shall be governed by
the following provisions:
1. At or before the later of the Initiation of the Lease or its taking
occupancy of the Building, LESSEE will have the right to inspect the
Building thoroughly. LESSEE acknowledges and agrees that (i) LESSEE's
payment of the first month's rent shall signify that the Building is
in good sanitary order, condition and repair and is acceptable to
LESSEE, and (ii) at LESSEE's sole cost and expense, it will keep the
Building and every part thereof in good condition and repair including
without limitation, the maintenance, replacement and repair of any
storefront, doors, window casements, glazing, plumbing, (except
concealed plumbing that is underground or within the walls or doors)
pipes, electrical wiring and conduits, heating and air conditioning
system (when there is an air conditioning system). LESSEE shall, upon
the expiration or sooner termination of this Lease, surrender the
Building to LESSOR in good condition, broom clean, ordinary wear and
tear and damage from causes beyond the reasonable control of LESSEE
excepted. Any damage to adjacent premises caused by LESSEE's use of
the Building shall be repaired at the sole cost and expense of LESSEE,
unless otherwise covered by applicable insurance. Damage to the
Building or to adjacent premises caused by LESSOR, its agents,
servants, invitees or employees, shall be repaired at the sole cost
and expense of LESSOR, unless otherwise covered by applicable
insurance.
2. Notwithstanding the provisions of Clause Seventh (1) above, LESSOR
shall repair and maintain the structural portions of the Building,
including, but not limited to, the exterior walls, roof (including
leaks) underground and concealed plumbing, power distribution
connections and telecommunications infrastructure, unless such
maintenance and repairs are caused in part or in whole by the act,
neglect, fault or omission of any duty by LESSEE, its agents,
servants, employees, invitees, or any damage caused by breaking and
entering, in which case LESSEE shall pay to LESSOR the actual cost of
such maintenance and
repairs. LESSOR shall not be liable for any failure to make such
repairs or to perform any maintenance unless such failure shall
persist for an Unreasonable Time, as defined in the next paragraph,
after written notice of the need of such repair or maintenance is
given to LESSOR by LESSEE. Except as provided in Clause Ninth hereof,
there shall be no abatement of rent and no liability of LESSOR by
reason of any injury to or interference with LESSEE's business arising
from the making of any repairs, alterations or improvements in or to
any portion of the Building.
As used in the preceding paragraph, the term "Unreasonable Time" means
(i) [**] calendar days with respect to repair work or maintenance that
is necessary not to impair the ability to operate the Building in part
or in whole, or (ii) [**] calendar days with respect to other repair
work or maintenance.
EIGHTH: ALTERATIONS.
LESSEE may not make any of the following modifications or alterations
without the express written authorization of LESSOR, which authorization
shall not be unreasonably withheld: (i) modify the basic structure of the
Building, (ii) modify the external appearance or the basic utility services
of the Building, or (iii) make any other alteration that involves piercing
of the roof. All fixtures and/or equipment of any nature installed in the
Building by LESSEE during the term of this Agreement, whether permanently
affixed or not, shall continue being the property of LESSEE and will be
removed thereby at the expiration or termination of this Agreement or any
extension hereof, unless LESSEE elects to leave them as part of the
Building. With the exception of items (i), (ii) and (iii) of the preceding
sentence, LESSEE is hereby authorized to make alterations to the Building
that are reasonably necessary to Lessee's business operations in the
Building.
NINTH: LIABILITIES OF THE PARTIES.
1. LESSEE and LESSOR shall each be responsible for damages to the
Property and/or LESSEE's business caused by their own fault or
negligence or that of their agents, employees, contractors,
contractors' employees or visitors.
2. In the event that LESSEE's occupancy or use of all or any part of the
Property is interrupted as a result of an event (the "Dispossession
Event") that is not caused by LESSEE, whether such interruption
results from fire, natural disaster, destruction, eminent domain,
other governmental action, or otherwise, LESSOR shall give LESSEE
notice (the "LESSOR Election Notice") within 30 days after the
Dispossession Event as to whether LESSOR intends to repair or rebuild
the affected portion of the Property. If (a) LESSOR fails to give
LESSEE the LESSOR Election Notice within 30 days after the
Dispossession Event, (b) LESSOR notifies LESSEE that the affected
portion of the Property will not be rebuilt or repaired or cannot be
rebuilt or repaired within 120 days from the date of the Dispossession
Event, or (c) if such rebuilding or repair is commenced but is not
substantially completed within said 120-day completion period, LESSEE
may terminate this Agreement by giving LESSOR written notice of
LESSEE's decision
to terminate within 30 days after LESSOR's failure to give the LESSOR
Election Notice within the period mentioned above, LESSEE's receipt of
LESSOR Election Notice or upon the expiration of such 120-day
completion period, as applicable.
If LESSOR states in LESSOR Election Notice that it will not rebuild or
repair the affected portion of the Property, this Agreement shall
immediately terminate as it relates to the affected portion of the
Building, or in its entirety if all or substantially all the Building
or its use is the subject of LESSOR Election Notice. In the event of
termination pursuant to this paragraph, LESSEE agrees to pay, at the
time of such termination the following amounts: (1) the entire accrued
and unpaid rent, and (2) all other accrued and unpaid amounts payable
by LESSEE hereunder.
The rent payable by LESSEE with respect to the affected portion of the
Building will be abated for the period of time that occupancy or use
of each such affected portion of the Property is interrupted in the
same proportion that such affected portion of the Building bears to
the total area of the Building.
3. The parties to this Agreement agree as follows:
a Any amounts required to be paid hereunder or under applicable law
by LESSEE to LESSOR for damage to the Building shall be reduced
by the amount of insurance proceeds paid to LESSOR as a result of
such damage.
b. Upon termination of this Agreement pursuant to the terms of this
Clause Ninth, LESSEE shall be released and totally freed of all
its obligations hereunder that have not accrued or been incurred
prior to the date of receipt by LESSOR of LESSEE's written notice
of termination. LESSOR shall immediately return to LESSEE any
prepaid rent, unless LESSEE owes any amounts to LESSOR, in which
case LESSOR may offset the amounts so owed by LESSEE.
TENTH. ENVIRONMENTAL REPRESENTATIONS.
LESSOR represents and warrants to LESSEE as follows:
a. That, to the best of LESSOR's knowledge, there are not any
outstanding, pending or threatened orders, directives or other
requirements of any governmental body having jurisdiction
relating to compliance with environmental laws, regulations and
norms at the Property or the presence of Hazardous Substances on
the Property, and that LESSOR does not have any knowledge of, and
is not now, and has not been, negotiating or otherwise
corresponding in any manner with any governmental body having
jurisdiction with respect to any alleged violation of
environmental laws, regulations and norms relating to the
Property.
b. That, to the best of LESSOR's knowledge, during LESSOR's
ownership, no substance (each, a "Hazardous Substance") that is a
contaminant or other material deemed to be hazardous under the
applicable environmental legal provisions have been stored,
treated or disposed of by LESSOR or any other person or entity
at, on or under the Property, and that there are no underground
storage tanks on the Property.
c. That a Phase 1 environmental study, attached hereto as Exhibit
"B," has been carried out, and that no contamination beyond the
limits permitted by the applicable legal provisions was detected.
d. That, to the best of LESSOR's knowledge, until now, the only
lessees of, and activities that have been carried out in the
Property are listed in the document that is attached as Exhibit
"C," and that none of them contaminated any part of the Property
beyond the limits permitted by the applicable legal provisions,
or had any environmental administrative proceedings commenced
against, or with respect to, them.
▇. ▇▇▇▇▇▇ covenants and agrees to indemnify LESSEE and save LESSEE
harmless from and against all losses, costs, claims, demands,
suits, actions, damages and expenses that LESSEE may sustain,
incur or be or become liable for by reason or arising from the
presence, clean up or removal of any Hazardous Substances that
were introduced to, or existed on the Property prior to the
effective date hereof, at, on or under the Property or arising
from or out of the discharge of any Hazardous Substances into the
environment or onto adjoining property, or compliance with any
environmental laws, regulations and norms, including any clean
up, decommissioning, restoration or remediation of the Property.
f. From and after such date, if any, upon which CLIENT assumes the
obligations of LESSEE under this Agreement, LESSOR covenants and
agrees to indemnify LESSEE and save LESSEE harmless from and
against all losses, costs, claims, demands, suits, actions,
damages and expenses that LESSEE may sustain, incur or be or
become liable for by reason or arising from the presence, clean
up or removal of any Hazardous Substances that are introduced to,
or exist on the Property subsequent to the effective date hereof,
at, on or under the Property or arising from or out of the
discharge of any Hazardous Substances into the environment or
onto adjoining property, or compliance with any environmental
laws, regulations and norms, including any clean up,
decommissioning, restoration or remediation of the Property, due
to actions or inactions of third parties other than third parties
hired by LESSEE.
LESSEE represents and warrants to LESSOR as follows:
a. LESSEE is responsible for obtaining any and all environmental
permits, authorizations and filing any preventive reports or
environmental impact statements that are required by law in
connection with its industrial activities carried out at the
Property.
b. LESSEE covenants and agrees to indemnify LESSOR and save LESSOR
harmless from and against all losses, costs, claims, demands,
suits, actions, damages and expenses that LESSOR may sustain,
incur or be or become liable for by reason or arising from the
presence, clean up or removal of any Hazardous Substances brought
on, and released on, the Property by LESSEE during the term of
the Lease, including any clean up, decommissioning, restoration
or remediation of the Property, but only to the extent that such
clean up, decommissioning, restoration or remediation is caused
by LESSEE's bringing on to the Property or releasing Hazardous
Substances.
ELEVENTH: THIRD PARTY OCCUPANCY.
In the event of a default hereunder by LESSEE or in the event of an early
termination of the Shelter Agreement by CLIENT, pursuant to Section 9 of
the Shelter Agreement, which Section is incorporated herein by this
reference, as a result of a Bankruptcy Proceeding of, or a Material Breach
by Entrada or Entrada Mexico (as such terms are defined in the Shelter
Agreement), that occurs more than 12 months after the execution of the
Shelter Agreement, then, in the absence of the Lease Termination
Circumstances, as defined and used in Section 9 of the Shelter Agreement,
CLIENT will automatically, with no further instruments being required to be
executed, succeed to: (1) all rights of LESSEE under this Lease, and (2)
subject to the remaining provisions of this Clause Eleventh, all legal
duties of LESSEE to LESSOR under the Lease, but only to the extent such
duties arise on or after the effective date of CLIENT's succession to
LESSEE.
In the case of such succession, the CLIENT will substitute for LESSEE under
the rules of novation, and LESSOR hereby agrees to such novation and shall
consider the CLIENT as LESSEE for the remainder of the term of this Lease
pursuant to its terms and conditions. Until such succession, Entrada Mexico
shall pay the rent when due, shall be responsible for penalties for late
payment, and shall abide by all other covenants, conditions,
representations, promises and other agreements set forth in the Lease.
TWELFTH: INSURANCE.
1. During the term of this Agreement, LESSEE will obtain and maintain in
force, at LESSEE's expense, fire and casualty insurance issued by a
reputable Mexican insurance company in an amount that represents the
cost of the reconstruction of the Building pursuant to the legal
provision in effect at the time of reconstruction.
2. LESSEE will provide and maintain, or cause to be provided and
maintained, a policy of general liability insurance covering the
activities at the Building with minimum coverage limits of $1,000,000
per occurrence naming LESSEE and its parent and
affiliate Companies, as appropriate, as beneficiaries and loss payees.
In addition LESSOR shall be named as additional insured
3. LESSEE and LESSOR waive any and all rights of subrogation against each
other and against all contractors, subcontractors, materialmen,
vendors, consultants, agents and employees of each other for insured
damages and lost profits, including, but not limited to, damages
sounding in civil liability, strict liability, warranty, negligence or
strict products liability; provided, this provision shall not be
effective if it prevents LESSEE'S ability to obtain appropriate
insurance.
4. LESSEE and the CLIENT shall obtain and maintain insurance to cover its
personal property located at the Building.
5. All the insurance provided in this clause shall be obtained and
evidenced under valid and enforceable policies issued by insurers
authorized to do business in Mexico and acceptable to LESSOR.
6. All policies of property insurance herein provided shall designate
LESSOR and LESSEE as the insured as their respective interests may
appear in the covered property.
7. In case of casualty that results in damage to, or destruction of the
Building, LESSEE shall give written notice to LESSOR, which agrees to
promptly file a claim under the appropriate insurance policy, and to
pursue such claim to its conclusion diligently thereafter.
8. The sum of insurance proceeds that are paid as a result of such damage
or destruction, less any costs, fees and expenses, if any, incurred in
connection with adjustment of the loss, shall be used by LESSOR for
the purposes of restoring, replacing, rebuilding or repair of the
Building as nearly as possible to its original value, condition and
character existing immediately prior to such damage or destruction to
the extent LESSOR is obligated to restore or replace the Building
pursuant to this Lease.
THIRTEENTH: TERM.
The term of this Agreement shall be for a period of sixty (60) months,
beginning on ________ __, 2007, and ending on ___________ __, 2012. LESSEE
will have the option to extend the above term for as long as necessary to
make it coterminous with the Shelter Agreement. LESSOR acknowledges that
this Lease will continue in effect in its terms even if LESSOR should
transfer title to the Property to a third party.
FOURTEENTH: SURRENDER OF THE PROPERTY.
LESSEE shall, on the last day of the term of this Agreement or of its
extension or upon early termination, surrender and deliver on the
corresponding date the Building to the possession and use of LESSOR,
without delay, in the same condition in which LESSEE received such, except
for the normal wear and tear, and damage from causes beyond the
reasonable control of LESSEE. All signs and inscriptions of similar nature
installed by LESSEE shall be removed on or prior to the expiration of the
term of this Agreement.
All leasehold improvements, furniture, trade fixtures, machinery and
business equipment installed by LESSEE shall remain as property of LESSEE
and shall be removed by LESSEE no later than at the end of the term of this
Agreement, as it may be extended, unless LESSEE at the expiration or
termination of this Agreement or any extension hereof elects to leave them
as part of the Building. LESSEE shall, at its own expense, repair all
damages resulting from the installation and removal of such leasehold
improvements, furniture, trade fixtures, machinery and business equipment.
FIFTEENTH: LESSOR'S RIGHT TO PERFORM LESSEE'S COVENANTS.
If at any time during the term of this Agreement or any extension of same,
LESSEE fails to perform one or more of its obligations assumed in this
Agreement, LESSOR, after [**] days written notice to LESSEE (or immediately
and without notice in the case of emergency), and without waiving or
releasing LESSEE from any of its obligations contained in this Agreement,
may, but shall be under no obligation to, perform acts that LESSEE has
agreed to perform in accordance to this Agreement. All reasonable sums paid
by LESSOR in connection with the performance of any such obligations of
LESSEE shall be payable by LESSEE to LESSOR on demand.
SIXTEENTH: LESSEE'S RIGHT TO PERFORM LESSOR'S COVENANTS.
If at any time during the term of the Agreement or any extension of same,
LESSOR fails to perform one or more of its obligations assumed in this
Agreement, LESSEE after [**] calendar days written notice to LESSOR (or
immediately and without notice in the case of emergency), and without
waiving or releasing LESSOR from any of its obligations contained in this
Agreement, may, but shall be under no obligation to, perform acts that
LESSOR has agreed to perform in accordance to this Agreement. All
reasonable sums paid by LESSEE in connection with the performance of any
such obligations of LESSOR shall be payable by LESSOR to LESSEE on demand.
SEVENTEENTH: ENTRY ON THE PROPERTY BY LESSOR.
LESSEE shall permit LESSOR and its authorized representative to enter the
Building at all reasonable times, upon [**] notice, for the purpose of
inspecting same and performing any necessary work therein, following
reasonable notice by LESSOR, except in the case of any emergency, for which
no notice will be required. Notwithstanding the above, LESSOR shall not in
any way interfere with LESSEE'S operations when entering the Building.
EIGHTEENTH: HOLD HARMLESS.
LESSOR agrees to indemnify, defend and hold LESSEE harmless against any
liabilities, including fines and charges incurred by, or imposed on, LESSEE
as a direct or indirect result of any act or omission of LESSOR.
LESSEE agrees to indemnify, defend and to hold LESSOR harmless against any
liabilities, including fines or charges incurred by, or imposed on, LESSOR
as a direct or indirect result of any negligent act or omission of LESSEE.
NINETEENTH: SUBORDINATION.
LESSEE agrees that this Lease and the entire interest of LESSEE hereunder
are subject and subordinated to (a) all present mortgages, deeds of trust
or other lien instruments affecting the Property that have been executed by
LESSOR (each a "Current Lien"), and (b) each future mortgage, deed of trust
or other lien instrument affecting the Property that is hereafter executed
by LESSOR, and to which LESSEE hereafter gives its express written consent
(each a "Future Lien"). In addition to the conditions of the immediately
preceding sentence, the holder (the "Lienholder") of each Current Lien and
of each Future Lien to which this Lease is acknowledged or agreed to be
subordinate in accordance with this Article Nineteenth (each of such liens
is referred to hereinafter as a "Lien") (i) must recognize LESSEE's rights
under this Lease, and (ii) must agree that LESSEE's rights hereunder will
not be disturbed as long as LESSEE is not in default hereunder beyond any
applicable cure period. In the event of a sale or assignment of LESSOR's
interest in the Building, or in the event of a foreclosure proceeding or
exercise of the power of sale under any Lien affecting the Building, LESSEE
shall attorn to the purchaser and recognize such purchaser as LESSOR. This
paragraph, which will be binding on the CLIENT upon its succession to
LESSEE's obligations pursuant to Article Eleventh, is self-operative and no
further instruments are required to give effect to its terms.
LESSEE acknowledges and agrees that LESSOR's interest under this Lease,
including LESSOR's rights to collect lease payments and other amounts due
under this Lease, may be assigned by LESSOR to a Lienholder, and LESSOR
hereby authorizes and directs LESSEE to make all payments and to perform
all its obligations hereunder as directed by the Lienholder in writing.
LESSOR hereby relieves LESSEE from any liability to LESSOR by reason of
following the directions of the Lienholder.
TWENTIETH: MODIFICATION TO THE CONTRACTUAL DOCUMENTS.
Any modification, release or discharge of this Agreement or waiver of any
of the provisions thereof, shall not be valid or obligatory, unless made in
writing and signed by LESSOR and LESSEE. The parties agree that (a) no
lease payments will be required or made hereunder more than 30 days in
advance, and (b) unless otherwise provided herein, no modifications of this
Lease will be effective, without the written consent of the Lienholder if
any Lien is then in effect. For these purposes, LESSOR will give LESSEE
and CLIENT written notice, in advance, of the existence and identity of any
Lienholder and Lien.
TWENTY-FIRST: SOLE CONTRACTUAL DOCUMENT.
The parties agree that this Agreement and the exhibits referenced herein
contain all the obligations and agreements between the parties relating to
the subject matter hereof, and, therefore, this Agreement is the sole
contractual document executed between the parties relating to the subject
matter hereof, and replaces any other agreement, either oral or written,
between the parties relating to the subject matter hereof.
TWENTY-SECOND: APPLICABLE LAW AND JURISDICTION.
This Agreement shall be subject to the provisions of the Civil Code of the
State of Zacatecas, Mexico. LESSOR and LESSEE expressly agree to submit
themselves to the jurisdiction of the competent courts of Fresnillo,
Zacatecas, Mexico, waiving any other jurisdiction and law that might
correspond by reason of their present or future domiciles or for any other
reason whatsoever.
TWENTY-THIRD: NOTICES.
All notices, demands and requests called for in this Agreement shall be
made through writing and shall be deemed to have been properly given (i)
upon the date of receipt, if served personally or (ii) upon date of
receipt, if sent by overnight courier, with proof of receipt, addressed to
LESSOR or LESSEE, as the case may be, at the respective addresses last
designated by notice to the other party for that purpose. Until the parties
designate other addresses, their addresses shall be as follows:
LESSOR: Inmuebles Arizac, S. de ▇.▇. de C.V.
c/o Tunicco LLC
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
LESSEE: At the Building
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With copy to: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Entrada Partners
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
TWENTY-FOURTH: TRANSLATION.
This Agreement is prepared in English and Spanish. In case of
inconsistencies, the English version will prevail.
IN WITNESS WHEREOF, the parties are obligated in accordance with the terms
of this Agreement, which is entered into on 3/20, 2007.
LESSOR: LESSEE:
ENTRADA GROUP DE MEXICO, S. de
INMUEBLES ARIZAC, S. de ▇.▇. de C.V. R.L. de C.V.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------ ---------------------------------
Name: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Its: Legal Representative Its: Legal Representative
WITNESS: WITNESS:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------- -------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, #▇▇▇ Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBITS
Exhibit "A" Site Plan of the Property
Exhibit "A-1" Floor Plan of Building
Exhibit "B" Copy of Phase 1 Environmental Study
Exhibit "C" List of previous lessees and their activities in the Property
Exhibit A
Site Plan of NxStage Medical
[**]
Exhibit A-1 of Lease Agreement
"First New Building"
[**]
EXHIBIT B - COPY OF PHASE 1 ENVIRONMENTAL STUDY
Copy attached hereto. Original retained by NxStage
PHASE I
ENVIRONMENTAL SITE ASSESSMENT
FOR THE EVALUATION OF POTENTIALLY HAZARDOUS MATERIALS
APPROXIMATELY 39.76 ACRES OF VACANT LAND
PARQUE INDUSTRIAL FRESNILLO
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
PREPARED FOR:
ENTRADA PARTNERS
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
SITE INSPECTOR -----------------------------
SIGNATURE
▇▇▇ ▇▇▇▇▇▇, P.G. /s/ ▇▇▇ ▇▇▇▇▇▇
PROJECT MANAGER -----------------------------
SIGNATURE
FEBRUARY 15, 2007
PREPARED BY:
(▇▇▇▇▇▇ ENVIRONMENTAL SERVICES LOGO)
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PHONE ▇▇▇.▇▇▇.▇▇▇▇ ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇
FAX ▇▇▇.▇▇▇.▇▇▇▇ ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
TABLE OF CONTENTS
1.0 Executive Summary.............................................................. 1
2.0 Introduction................................................................... 3
2.1 Purpose and Organization of Report....................................... 3
2.2 Limitations.............................................................. 3
2.3 Information Sources...................................................... 4
3.0 Site Overview.................................................................. 5
3.1 Site Location and Description............................................ 5
3.2 Legal Description........................................................ 5
3.3 Improvements on the Site................................................. 5
3.4 Current Uses of the Site................................................. 5
3.5 Past Uses of the Site.................................................... 5
3.6 Current and Past Uses of Adjoining Properties............................ 5
3.7 Site Map................................................................. 6
4.0 Historical Review.............................................................. 7
4.1 Property Ownership....................................................... 7
4.2 Historical Aerial Photographs............................................ 7
4.3 Interviews............................................................... 7
4.4 Previous Environmental Studies........................................... 8
5.0 Environmental Setting.......................................................... 9
5.1 Topography............................................................... 9
5.2 Soils.................................................................... 9
5.3 Geology & Hydrology...................................................... 9
5.4 Groundwater.............................................................. 9
6.0 Site Reconnaissance............................................................ 10
6.1 Hazardous Substances in Connection with Identified Uses.................. 10
6.2 Hazardous Substance Containers and Unidentified Substance Containers..... 10
6.3 Onsite Storage Tanks..................................................... 10
6.4 Indications ofPCBs....................................................... 10
6.5 Indications of Solid Waste Disposal...................................... 10
6.6 Physical Setting Analysis - Migrating Hazardous Substances............... 10
6.7 Other Conditions of Concern.............................................. 11
7.0 Regulatory Review.............................................................. 13
7.1 Hierarchy of Regulations................................................. 14
7.2 General Law of Ecological Equilibrium and Environmental Protection....... 15
7.3 National Water Commission (CNA).......................................... 15
8.0 Findings, Opinions, Conclusions & Recommendations.............................. 16
8.1 Findings................................................................. 16
8.2 Opinions................................................................. 16
8.3 Conclusions.............................................................. 16
8.4 Recommendations.......................................................... 16
9.0 Appendices..................................................................... 18
APPENDIX A FIGURES
APPENDIX B SITE PHOTOGRAPHS
APPENDIX C QUALIFICATIONS
APPENDIX D LETTER OF ENGAGEMENT
APPENDIX E GLOSSARY OF TERMS
29.76 ACRES OF VACANT LAND
PARQUE INDUSTRIAL FRESNILLO ENVIRONMENTAL SITE ASSESSMENT
FRESNILLO, ZACATECAS, MEXICO PAGE 1
(▇▇▇▇▇▇ ENVIRONMENTAL SERVICES LOGO)
1.0 EXECUTIVE SUMMARY
PHASE I ENVIRONMENTAL SITE ASSESSMENT (ESA)
CLIENT: Entrada Partners
------- ----------------
PROPERTY: The subject property (hereinafter the Site) consists
of approximately 29.76 acres (12.044 hectares) of
vacant land situated within Parque Industrial
Fresnillo, located at Km. ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ of Zacatecas,
Mexico.
INSPECTION DATE: The Site was inspected on February 3, 2007, by ▇▇▇▇▇
▇. ▇▇▇▇▇▇ of ▇▇▇▇▇▇ Environmental Services.
BRIEF ASSET DESCRIPTION: The Site is approximately 29.76 acres of vacant,
unimproved land located within Parque Industrial
Fresnillo.
The Site is bordered on the northwest by Circuito
Fresnillo-Poniente, MG Electronics, Aircraft, and
Creaciones; on the northeast by Leche Lala, Corona,
and Circuito Fresnillo Norte; on the southeast by
vacant land and a university; and on the southwest by
Circuito Fresnillo-Sur, and an electric transmission
station, vacant land, and a residential subdivision
across Circuito Fresnillo-Sur.
HISTORICAL REVIEW: Information on the historical use of the Site was
obtained from an interview with ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇,
manager of environmental health and safety for
Entrada Group, and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, engineer
with Construccion y Mantenimiento Industrial Comain,
SA. de C.V. These gentlemen stated that Entrada Group
has owned Parque Industrial Fresnillo since 2004. At
that time of the purchase of the Site, three
companies had been located at the Site since
approximately 2000. Prior to current development as
an industrial park, the Site was vacant land owned by
the State of Zacatecas, Mexico.
There were no obvious recognized areas of
environmental concern noted during the historical
review.
AGENCY INFORMATION: The following government agency was consulted: the
Instituto Nacional de Estadistica, Geografia e
Informatica (INEGI).
FINDINGS: The Site is located within an industrial park.
Numerous piles of discarded construction materials
were observed
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on the northwesternmost section of the Site during
the inspection.
OPINIONS: According to Entrada Group representatives, the
occupants of the industrial park will be light
industrial, storage and distribution businesses. The
risk of environmental concern from planned operations
at the industrial park is considered de minimus.
According to Entrada Group representatives, the
construction materials will be utilized in leveling
areas of the Site prior to building construction. The
risk of environmental concern from this discarded
construction debris is considered de minimus.
The Site appears to have always been vacant land with
no obvious, potential environmental concerns due to
its past history.
CONCLUSIONS: This assessment has revealed no evidence of
recognized environmental conditions in connection
with the Site.
RECOMMENDATIONS: MES recommends no additional environmental studies at
this time.
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2.0 INTRODUCTION
2.1 PURPOSE AND ORGANIZATION OF REPORT
2.1.1 PURPOSE
This Phase I Environmental Site Assessment (ESA) seeks to identify, to
the extent feasible pursuant to the processes prescribed in Hie
American Society for Testing and Materials (ASTM) Bulletin E 1527-00,
recognized environmental conditions in connection with the Site.
This Phase I ESA was prepared for the exclusive use oiEntrada
Partners. This study is intended to be used in providing a baseline
documentation of the current condition of the Site, and also to
identify environmental liabilities, potential problems, or aesthetic
concerns that might stem from current or past Site activities.
2.1.2 SCOPE
The study included a site visit, a review of site history and an
assessment of the condition of the property. The information used in
the assembling of this Phase I ESA was accumulated during a site
visit; personal interviews; a review of aerial photographs; and a
review of readily available federal, state, and local regulatory
agency records.
2.2 LIMITATIONS
This ESA is written for the Site as is and does not take into account any
future changes. While impossible to ever guarantee that a site is totally
free of contamination, ▇▇▇▇▇▇ Environmental Services (MES) believes that
reasonable inquiry regarding the Site has been made and that further
investigation for potential environmental liabilities not already
identified is not warranted.
Under no circumstances does MES accept responsibility for conditions at the
Site, whether those conditions are identified in this report or not, to the
extent that MES neither caused nor contributed to the conditions. MES is
not responsible for the accuracy of information provided by others.
This Phase I ESA has been prepared for the exclusive use and reliance
oiEntrada Partners. The dissemination of this report or portions thereof to
third parties without the written consent MES and Entrada Partners is
prohibited. Reliance on the information and conclusions presented in this
ESA by a third party is prohibited. MES assumes no liability or
responsibility for the interpretation of this information, or any actions
taken as a result of such interpretation, by any third party.
The following limitations were encountered during the preparation of this
assessment:
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Access Limitations Interiors of the buildings within
the industrial park were not
accessible. All dangerous chemical
warehouses were locked and were
only observed through chain-link
fencing.
Physical Obstructions to None
Observations
Outstanding Information Requested None
Other None
Limitations and exceptions to the American Society for Testing and
Materials (ASTM) Bulletin E1527-00 scope of work for the preparation of
this assessment are as follows:
Regulatory Agency Records are not readily available in Mexico.
Historical information such as historical aerials, historical topographic
maps and historical telephone directories area not readily available for
this Site.
The topographic map of the Site area was not readily available.
The historical information presented in this report is generally limited by
the extent of the knowledge of those persons interviewed. Government
records (e.g., title searches) were not obtained.
If additional pertinent information is discovered following submission of
this report, it should be forwarded to MES for review and reevaluation of
recommendations and conclusions.
2.3 INFORMATION SOURCES
Information on the historical use of the Site was obtained primarily from
an interview with ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, manager of environmental health and
safety for Entrada Group, and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, engineer with
Construccion y Mantenimiento Industrial Comain, S.A. de C.V. Government
records (geologic and soil maps) were obtained from the offices of INEGI.
In addition, information obtained during the on-site reconnaissance
includes a review of Site records and visual information obtained and
recorded in the form of photographs and notes.
Surrounding land usage was determined by interviews and inspecting the
perimeter of the Site.
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3.0 SITE OVERVIEW
3.1 SITE LOCATION AND DESCRIPTION
3.1.1 LOCATION
The Site is approximately 29.76 acres of vacant, unimproved land
situated within Parque Industrial Fresnillo, located at Km. ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ of Zacatecas, Mexico.
The exact location is denoted on the Site Location Map in Appendix A.
3.1.2 DESCRIPTION
The Site consists of approximately 29.76 acres of vacant,
predominantly unimproved land and is irregularly shaped.
3.2 LEGAL DESCRIPTION
A legal description of the Site was not available.
3.3 IMPROVEMENTS ON THE SITE
At the time of the inspection, the Site was unimproved vacant land except
for the initial stages of a building located southwest of Leche LaLa.
3.4 CURRENT USES OF THE SITE
The Site is vacant land situated within an industrial park.
3.5 PAST USES OF THE SITE
According to representatives of Entrada Group, the Site has always been
vacant land.
3.6 CURRENT AND PAST USES OF ADJOINING PROPERTIES
The Site is bordered on the northwest by Circuito Fresnillo-Poniente and
the developed portion of Parque Industrial Fresnillo; on the northeast by
Leche Lala, Corona, and Circuito Fresnillo-Norte and Calle Plateros,
followed by vacant land; on the southeast by vacant land and Zacatecas
Polytechnic University; and on the southwest by Circuito Fresnillo-Sur, and
an electric transmission station, vacant land, and a residential
subdivision across Circuito Fresnillo-Sur.
Leche Lala is milk distribution entity. The adjacent property occupied by
Corona is a beer processing plant.
Adjacent to the Site to the northwest are MG Electronics, Aircraft, and a
vacant building that was occupied by Aramark.
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The names of the current occupants of the Parque Industrial Fresnillo and
their activities are given in the following table:
OCCUPANT ACTIVITY YEAR OF OCCUPATION
--------------------------- --------------------------------------- ---------------------
Gilbarco ▇▇▇▇▇▇-▇▇▇▇ Manufactures pumps for combustibles 2004
Tricon Manufactures injection plastics 2005
MCA Electronics assembly 2004-5
Electrex Assembles automotive electric harnesses 2006
MG Electronics Manufactures harnesses for Sears 2006
Aircraft Manufactures aeronautic parts 2007
Talport Currently vacant [Will occupy in March
2007]
Chata Assembles automotive harnesses 2006
▇▇▇▇▇▇ Fluidics Corporation Produces windshield wiper fluids Mid-2006
▇▇▇▇▇▇▇ Rubber Company Manufactures injection plastics Mid-2006
Between 2000 and 2005, Tymex occupied the Gilbarco building, producing
athletic shoes. The building currently occupied by Electrex served as an
employee dining hall for Tymex employees between 2000 and 2005. Between
2000 and November, 2006, Aramark, a company producing apparel, occupied the
building that Talport has purchased and will occupy beginning in March,
2007.
3.7 SITE MAP
A site map is presented as Site Drawing in Appendix A. This shows major
features of the Site and highlights any areas of potential environmental
concern.
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4.0 HISTORICAL REVIEW
4.1 PROPERTY OWNERSHIP
Information on the historical use of the Site was obtained primarily from
an interview with ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, manager of environmental health and
safety for Entrada Group, and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, engineer with
Construccion y Mantenimiento Industrial Comain, S.A. de C.V. Government
records (i.e. title searches) were not obtained.
According to Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Entrada Group acquired the Site
in 2004 and developed the Site into Parque Industrial Fresnillo.
4.2 HISTORICAL AERIAL PHOTOGRAPHS
One historical aerial photograph (2005) of the Site was obtained from
Google Images. The photograph depicts the perimeter of the industrial park
and seven buildings within the park. To the north of the Site and within
the industrial park, several commercial businesses are visible. To the
east-southeast of the Site, Circuito Fresnillo-Norte, vacant land, Leche
Lala, and the Corona facility are visible. To the southwest of the Site,
Circuito Fresnillo-Sur, the university, vacant land, and a residential
subdivision are visible.
No obvious areas of environmental concern appear in this photograph.
4.3 INTERVIEWS
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, environmental health and safety manager with Entrada
Group, was interviewed about the history and current status of the Site.
▇▇. ▇▇▇▇▇▇▇ has been with Entrada Group since 2004. He stated that up until
2000, the Site was vacant, undeveloped land owned by the State of
Zacatecas. ▇▇. ▇▇▇▇▇▇▇ stated that in 2000 three companies began operations
-- Tymex, Aramark, and Creaciones -- and that these entities were light
industrial in nature. In 2004 Entrada Group purchased a tract of land that
encompasses the Site and began development of the industrial park.
▇▇. ▇▇▇▇▇▇▇ stated that waste chemicals and hazardous materials are removed
from the park periodically by two companies: Ecoquim of Escobedo and Dian
Procesos Metalurgicos of Tlajomulco.
▇▇. ▇▇▇▇▇▇▇ knew of no past spills, leaks, releases, or storage of
hazardous materials or chemicals on the Site.
▇▇. ▇▇▇▇▇▇▇ further stated that wastewater generated on the Site will be
treated for disposal by the City of Fresnillo, water is provided by the
City of Fresnillo, and electricity is provided by CFE. Most of the
businesses that will occupy the industrial park are light industrial and/or
distribution.
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4.4 PREVIOUS ENVIRONMENTAL STUDIES
A Phase II Environmental Site Assessment of Parque Industrial Fresnillo was
performed by Environmental Resources Management (ERM) on November 10, 2006.
The study stated that ten soil samples were collected from five separate
sampling locations and were analyzed for TPH, VOCs, PAHs, heavy metals, and
PCBs. The study concluded that "TPH, VOCs, PAHs, and PCBs were not detected
in any of the samples at concentrations above laboratory limits of
quantification" and that "low concentrations of [heavy] metals were
identified" in all samples but "at concentrations well below respective
industrial comparison criteria."
▇▇. ▇▇▇▇▇▇▇ produced an Annual Certificate of Operation issued by SMARNAT
to Entrada Group on March 15,2006, which stated that Parque Industrial
Fresnillo was in compliance with fundamental regulations regarding its
atmospheric, dangerous chemicals, emissions, and transference of
contaminants for 2005.
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5.0 ENVIRONMENTAL SETTING
5.1 TOPOGRAPHY
The topographic map of the Site area was not readily available.
5.2 SOILS
According to INEGI maps, the soils underlying the plant site are classified
as Rendzina and Lithosols.
The Site area consists of sedimentary and igneous rocks with soils formed
by alluvial deposits of sand, gravel, and silt. Rendzina and lithosol soils
typify northwestern Mexico. Rendzina soil has little depth (10-15 cm),
lying directly on top of carbonaceous material.
5.3 GEOLOGY & HYDROLOGY
The state of Zacatecas is located in the Great Plains section of North
America. The uppermost formations from which the parent materials of soils
weather are of the Cretaceous and Tertiary periods. The sedimentary
deposits slope gently toward the Gulf of Mexico. This section of the state
of Zacatecas receives approximately 485 millimeters of precipitation
annually, and annual temperature is 59.4 degrees F (15.4 degrees C).
5.4 GROUNDWATER
Groundwater for the Fresnillo, Zacatecas, area is typically encountered at
depths of 300 meters. These water units would most likely not be impacted
by releases from underground storage tank systems or surface spills.
Flow direction in these units is highly variable but is generally toward
the nearest down gradient water body (lakes, creeks, rivers, etc.) and can
be approximated by observing the surface topography.
Recharge areas for these perched aquifers are very local, and they can be
influenced by surface development of impervious cover (buildings, parking
lots, roads), major road construction (underpasses, utility trenches), and
variations in annual rainfall.
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6.0 SITE RECONNAISSANCE
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ of MES inspected the Site on February 3,2007. The interior
and perimeter of the Site was inspected and the abutting properties were
inspected from the Site and accessible right-of-ways. Observations presented
below were indicative of the conditions of the Site at the time of the
inspection. Site Photographs are presented in Appendix B.
The Site consists of approximately 29.76 acres (12.044 hectares) of undeveloped,
vacant land located within Parque Industrial Fresnillo, Fresnillo, Zacatecas,
Mexico.
6.1 HAZARDOUS SUBSTANCES IN CONNECTION WITH IDENTIFIED USES
No hazardous substances were observed at the time of the inspection.
6.2 HAZARDOUS SUBSTANCE CONTAINERS AND UNIDENTIFIED SUBSTANCE CONTAINERS
No hazardous substance containers or unidentified substance containers were
observed on the Site at the time of the inspection.
6.3 ONSITE STORAGE TANKS
No storage tanks were observed on the Site during the inspection.
No underground storage tanks or evidence of underground storage tank
systems were observed on the Site.
6.4 INDICATIONS OFPCBS
Polychlorinated Biphenyl (PCB) compounds are coolants or lubrication oils
formerly used in some electrical transformers, light ballasts, electrical
panels or other similar equipment. The PCB content in electrical
transformers has been divided into three categories by the EPA. Those
units, which contain less than 50 parts per million (ppm), are defined PCB
free and those units which contain between 50 ppm and 500 ppm of PCBs and
are defined as PCB-Contaminated. Units with a PCB content greater than 500
ppm are classified as PCB-Containing.
No electrical equipment was observed on the Site during the inspection.
6.5 INDICATIONS OF SOLID WASTE DISPOSAL
Piles of discarded construction materials were observed on the
northwesternmost section of the Site during the inspection.
6.6 PHYSICAL SETTING ANALYSIS - MIGRATING HAZARDOUS SUBSTANCES
Hazardous materials released on the Site would likely be transported off
site via rain runoff to the southeast of the Site.
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6.7 OTHER CONDITIONS OF CONCERN
PITS, SUMPS, DRYWELLS AND CATCHBASINS
No pits, drywells or catchbasins were noted.
STORM WATER DRAINAGE
Stormwater runoff will generally flow to the southeast of the
Site. No standing water or apparent storm water problems were
observed at the Site.
SOIL STAINING OR DISCOLORATION
No areas of soil staining or discoloration were noted on the
Site.
MEANS OF SITE ACCESS
The Site is accessible from Circuito Fresnillo-Sur to the
southeast of the Site and Circuito Fresnillo-Norte to the north
of the Site.
NATURAL FEATURES
The Site contains no natural water bodies, streams/bayous, rare
or unusual vegetation, erosion plains, springs, etc.
LANDFILL, DUMPING OR DIRECT BURIAL ACTIVITY
Numerous piles of discarded construction materials were observed
on the northwesternmost section of the Site during the
inspection.
SURFACE IMPOUNDMENTS OR HOLDING PONDS
No surface impoundments or holding ponds were observed on the
Site.
AIR EMISSIONS - WASTEWATER DISCHARGE
No air emissions or wastewater discharges were observed on the
Site during the inspection.
INDUSTRIAL AND MANUFACTURING ACTIVITIES
No industrial or manufacturing activities were observed on the
Site during the inspection.
MONITORING ▇▇▇▇▇ OR REMEDIAL ACTIVITIES
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No monitoring ▇▇▇▇▇ or remedial activities were observed on the
Site during the inspection.
LEACHATE OR SEEPS
No leachate or seeps were observed on the Site during the
inspection.
DEAD, DISTRESSED, DISCOLORED OR STAINED VEGETATION
No areas of dead or distressed vegetation were observed on the
Site during the inspection.
CHEMICALS SPILLS OR RELEASES
No obvious signs of chemical spills or releases were observed on
the She during the inspection.
SURFACE WATER CONTAMINATION
No evidence of surface water contamination was observed on the
Site during the inspection.
OIL OR GAS WELL EXPLORATION, ABSTRACTION, OR REFINERY ACTIVITIES
No oil or gas related operations were observed on the Site.
CHEMICAL GASES, PETROLEUM PRODUCTS OR FOUL ODORS
No chemical gases, petroleum product odors, or other foul odors
were observed on the Site during the inspection.
FARM WASTE CONCERNS
No indications of farm waste concerns were observed on the Site.
BULK CHEMICAL STORAGE AREAS
No bulk chemical storage areas were observed on the Site during
the inspection.
OBSERVED RAILROAD SPURS AND ELECTRICAL TOWER TRANSMISSION LINE
No electrical tower transmission lines or railroad spurs were
observed on the Site.
WATERWELLS, CISTERNS AND SEPTIC SYSTEM
No waterwells, cisterns, or septic systems were observed on the
Site.
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HEAVY EQUIPMENT
A forklift was observed in the vicinity of the building
construction.
DISCHARGES, LEACHATE, MIGRATION, OR RUN-OFF OF POTENTIAL
CONTAMINANTS FROM AN OFF SITE SOURCE ONTO THE SITE
No evidence of discharges, leachate, or migration of potential
contaminants from off-site sources onto the Site was observed
during the Site inspection.
WETLANDS, ARCHAEOLOGICAL, OR ENVIRONMENTALLY SENSITIVE AREAS
There are no known wetlands, archaeological sites, or other types
of environmentally sensitive areas at the Site.
ASBESTOS CONTAINING MATERIALS
No potential asbestos containing materials were observed on the
Site during the inspection.
RADON
There does not appear to have been a radon survey at the Site.
LEAD BASED PAINT
No evidence of lead based paint was observed on the Site.
FORMALDEHYDE FOAM INSULATION
No evidence of formaldehyde foam insulation was observed at the
Site at the time of inspection.
LEAD IN DRINKING WATER
Tests were not performed for lead in the drinking water.
7.0 REGULATORY REVIEW
The Mexican environmental regulatory program is found in Articles 4, 25, 27,73
and 115 of Mexico's Constitution, which establishes federal, state, and
municipal jurisdictions in matters of environmental protection and empowers the
federal Congress to promulgate environmental legislation.
The Mexican environmental authorities are:
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- Ministry of Environment, Natural Resources (SEMARNAP)
- National Institute of Ecology (INE)
- Attorney General for Environmental Protection (PROFEPA)
- National Water Commission (CNA)
- State and Municipal Environmental Authorities
SEMARNAP is the central organization that houses INE, PROFEPA and CNA. INE is
the regulatory arm of SEMARNAP that is responsible for maintaining and
publishing all environmental regulations. PROFEPA's purpose is to promote the
decentralization of regulatory activities and to coordinate the implementation
of federal environmental policies with state and municipal authorities. CNA has
jurisdiction over water usage and discharges.
7.1 HIERARCHY OF REGULATIONS
The general hierarchy of environmental regulations is as follows:
- Regulations; and,
- Law;
- Technical Standard or NORM.
7.1.1 GENERAL ENVIRONMENTAL LAW
Mexican environmental legislation is based upon the General Law of
Ecological Equilibrium and Environmental Protection (General
Environmental Law), Regulations of the General Environmental Law, its
Regulation, and the Official Mexican Norms (NORMs) for environmental
matters. The provisions of this legislation are applied in the
performance of inspections, execution of safety measures,
determination of violations and their sanctions, and administrative
procedures for appeals under these regulations.
7.1.2 REGULATIONS OF THE GENERAL ENVIRONMENTAL LAW
The Regulations supplement and expand upon the General Environmental
Law in the respective media. These regulations are intended to
establish clear administrative mechanisms and procedures to fulfill
the mandates of the General Environmental Law. The Regulations,
consistent with the provisions of the General Environmental Law
establish the jurisdiction of Mexico's environmental authorities,
create specific legal
requirements to be met, and detail sanctions and administrative
recourse for noncompliance in each area. The Regulations also contain
licensing, permitting, manifesting, and reporting requirements within
their respective scope.
7.1.3 NORMS
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NORMs are the technical standards. The standards rely upon
quantitative ecological technical standards and ecological criteria to
determine compliance. To date, approximately 150 environmental NORMs
have been issued under the General Environmental Law, its Regulations,
and the Law of National Waters and its Regulation.
7.2 GENERAL LAW OF ECOLOGICAL EQUILIBRIUM AND ENVIRONMENTAL PROTECTION
The modern Mexican environmental legal regime is founded upon the General
Environmental Law, which went into effect March 1, 1988 and superseded
prior environmental laws. The General Environmental Law is a comprehensive
environmental statute addressing the full spectrum of environmental issues
including pollution in all media, natural resource conservation,
environmental impact and risk assessment, ecological zoning, and sanctions.
The General Environmental Law is federal in scope and, in the absence of
state and municipal regulations, applies to all natural resource and
environmental protection issues in Mexico. It establishes the respective
jurisdictions, as discussed above, and the duties of federal, state, and
municipal environmental authorities in environmental policy and
enforcement.
SEMARNAP, through INE and PROFEPA, and in conjunction with the state and
municipal environmental authorities, is required to apply, implement, and
enforce the provisions of the General Environmental Law, its regulations
and NORMs and, where applicable, the local environmental laws and
ordinances.
7.3 NATIONAL WATER COMMISSION (CNA)
Jurisdiction over water usage and discharges was delegated to CNA, formerly
an agency of the ministry of Agriculture and Hydraulic Resources. The
delegated powers include standard setting, use and discharge permitting,
and enforcement of industrial water practices involving federal waterways,
i.e., lakes, rivers, and federal canals. CNA administers the 1992 Law of
National Waters, its 1994 Regulation, and the existing technical norms.
Industrial discharges to municipal sewers and/or treatment systems are
generally subject to the Federal NORMs and are regulated by the particular
municipality.
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8.0 FINDINGS, OPINIONS, CONCLUSIONS & RECOMMENDATIONS
8.1 FINDINGS
MES has performed a Phase I Environmental Site Assessment in conformance
with the scope and limitations of ASTM Practice E 1527-00 of the
approximately 29.76 acres of vacant land located in Parque Industrial
Fresnillo, Fresnillo, Zacatecas, Mexico. Any exceptions to, or deletions
from, this practice are described in Section 2.0. This assessment has
revealed the following evidence of suspect recognized environmental
conditions in connection with the Site:
The Site is located within an industrial park.
Numerous piles of discarded construction materials were observed on the
northwesternmost section of the Site during the inspection.
Suspect recognized environmental conditions are defined as information
obtained during the preparation of this Phase I Environmental Site
Assessment suggesting the presence of any hazardous substances or petroleum
products at a property that, in the opinion of the environmental
professional, may indicate an existing release, past release, or material
threat of a release of any hazardous substances or petroleum products into
structures on the Site or into the ground, groundwater, or surface water of
the Site. Upon further evaluation by the Environmental Professional, the
identified suspect environmental condition may or may not be determined to
be a Recognized Environmental Condition.
8.2 OPINIONS
The following opinions on the suspect environmental conditions are offered
by the environmental professional conducting this Phase IESA:
According to Entrada Group representatives, the occupants of the industrial
park will be light industrial, storage and distribution businesses. The
risk of environmental concern from planned operations at the industrial
park is considered de minimus.
According to Entrada Group representatives, the construction materials will
be utilized in leveling areas of the Site prior to building construction.
The risk of environmental concern from this discarded construction debris
is considered de minimus.
The Site appears to have always been vacant land with no obvious, potential
environmental concerns due to its past history.
8.3 CONCLUSIONS
This assessment has revealed no evidence of recognized environmental
conditions in connection with the Site.
8.4 RECOMMENDATIONS
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MES recommends no additional environmental studies at this time.
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9.0 APPENDICES
APPENDIX A FIGURES
APPENDIX B SITE PHOTOGRAPHS
APPENDIX C QUALIFICATIONS
APPENDIX D LETTER OF ENGAGEMENT
APPENDIX E GLOSSARY OF TERMS
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APPENDIX A
FIGURES
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(SITE PLAN)
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(MAP)
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(GRAPHIC)
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APPENDIX B
Site Photographs
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(GRAPHIC)
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(GRAPHIC)
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(GRAPHIC)
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(GRAPHIC)
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(GRAPHIC)
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(GRAPHIC)
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(GRAPHIC)
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(GRAPHIC)
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(GRAPHIC)
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APPENDIX C
QUALIFICATIONS
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▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
TITLE Environmental Geologist/President
EDUCATION
BS, Geology, Louisiana State University -1979
PROFESSIONAL REGISTRATIONS/LICENSES
Licensed Geologist - License # 914 - Texas Board of Professional Geoscientists
Licensed Asbestos Inspector - License # 60-0259 - Texas Department of Health
Licensed Asbestos Management Planner - License # 20-5408 -Texas Department of
Health Certified 40-Hour OSHA Hazardous Waste Operations
Certified Moid Assessor - Environmental Assessment
Association Registered Petroleum Geologist #3881 - American Associate of
Petroleum Geologist
Registered Environmental Assessor - California Environmental Protection Agency
Registered Professional Geologist - State of Tennessee
Certified Environmental Inspector - Environmental Assessment Association
PROJECT EXPERIENCE
- Managed the assessment division of SSCI which included all Phase I
environmental site assessments nationwide. Wrote or managed over 2,500
Phase I site assessments on commercial, residential, industrial and raw
land in 44 states and Mexico. Clients included asset management firms, real
estate agencies, developers, banks, law firms, the RTC, the FDIC, and other
government agencies.
- Managed Phase II and Phase III projects throughout the United States.
Projects included lead- paint surveys; PCB surveys; hazardous and
non-hazardous waste disposal; underground storage tank removal; wetlands
research; monitor well placement; soil and groundwater sampling; subsurface
mapping and interpretation of analytical results.
- Managed the closure of hazardous sites in Texas, Louisiana, Florida and
California.
- Conducted Environmental, Safety, and Industrial Hygiene audits on drilling
rigs (on and offshore) for Petroleos Mexicanos (PEMEX) Exploration and
Production in southern and eastern Mexico.
- Conducted or managed over 1,500 limited and comprehensive asbestos surveys.
- Installed or managed the installation of over 300 soil borings, Geoprobes,
and groundwater monitor ▇▇▇▇▇.
- Coordinated and negotiated site closures with clients, service companies,
field personnel and regulatory agencies such as the Louisiana Department of
Environmental Quality, Texas Natural Resources Conservation Commission,
California Water Quality Control Board, and others.
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- Provided interoffice support to clients, including site assessment review,
technical evaluation of conclusions and recommendations, and technical
recommendations on contamination delineation and remediation.
PROFESSIONAL SOCIETIES AND AFFILIATIONS
Past President - Texas Association of Environmental Professionals
Member - National Association of Environmental Professionals
Member - Texas Association of Environmental Professionals
Member - American Indoor Air Quality Council
Member - Houston Geological Society
Professional Experience
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES
Houston, Texas
March, 1997 to Present
PRESIDENT
- Manage all Phase I environmental site assessments in the United States and
South America.
- Manage all Phase II and Phase III projects.
- Responsible for customer relations, marketing, and business development of
national and international accounts.
- Responsible for the preparation and submittal of technical proposals to
government entities and private industry.
SEPARATION SYSTEMS CONSULTANTS, INC.
Houston, Texas
May 1991 to February, 1997
BUSINESS DEVELOPMENT/DIVISION MANAGER
- Managed the assessment division which included all Phase I environmental
site assessments nationwide.
- Managed all Phase II and selected Phase III projects.
- Responsible for customer relations, marketing, and business development of
national and international accounts.
- Responsible for the preparation and submittal of technical proposals to
government entities and private industry.
- Managed large environmental construction projects. Duties included contract
negotiation and execution, project planning, budget monitoring, scheduling,
staffing, regulatory compliance, change order negotiation and report
preparation. Clients included the Army Corps of Engineers, various banks,
asset management firms, and attorneys.
- Managed the training division which provided hazardous material (HAZWOPER),
RCRA, underground storage tank (initial and refresher), lead awareness, and
health and safety training.
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- Responsible for development of promotional materials for trade shows and
corporate advertising.
- Implemented and responsible for the maintenance of a company-wide Novell
network.
- Established and implemented a systematic process for customer follow up.
Instrumental in obtaining customer feedback and coordinating the
implementation of substantive changes as a result of feedback.
REGENT PETROLEUM, INC.
Lafayette, LA
April 1986-May 1991
VICE PRESIDENT
- Marketed drilling prospects in the Gulf Coast region.
- Raised venture capital for drilling prospects and royalty acquisition.
- Reviewed division orders, working interest contracts, and mineral leases.
- Managed disbursement of production proceeds for offshore investors.
- Generated drilling prospects.
- Evaluated working interest purchases.
- Testified before the Louisiana Department of Natural Resources
- Conducted research in the Louisiana Department of Conservation and various
courthouses throughout Louisiana, Arizona, California, Mississippi and
Alabama.
DYNAMIC EXPLORATION
Lafayette, LA
February 1981 -April 1986
EXPLORATION GEOLOGIST
- Marketed drilling prospects in the Gulf Coast region.
- Generated drilling prospects.
- Evaluated working interest purchases.
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE Environmental Consultant
EDUCATION
M.S., Environmental Science University of Houston-Clear Lake - 2001
B.S., Environmental Science ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ -▇▇▇▇
A.A.S., Court Reporting
Alvin Community College -1981
PROFESSIONAL REGISTRATIONS/LICENSES
Army Corps of Engineers Wetland Delineator Certification training (38 hours)
Texas Engineering Extension Service, Texas A&M: Fundamentals of Environmental
Sampling and Analysis
PROFESSIONAL SOCIETIES AND AFFILIATIONS
Society of Wetland Scientists
Texas Association of Environmental Professionals
National Court Reporters Association
PROFESSIONAL EXPERIENCE
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES
Houston, Texas
February, 1998 to Present
- Contract work, performing Phase I Environmental Site Assessments, U.S. and
Mexico. Responsibilities include environmental background research;
interpretation of topographical maps, soil surveys, and aerial photographs;
interviewing property owners; and preparing complete report.
- Soil sampling at industrial properties in Mexico.
- Performing wetlands determinations and delineations, development of
wetlands mitigation plans for clients, and preparation of Section 404
permit.
ECLIPSE ENVIRONMENTAL
Houston, Texas
August, 1998 - Present
- Sole proprietor, performing wetlands determinations and delineations,
preparing complete report, client contact, contract bidding, billing.
▇▇▇▇▇ COMMUNITY COLLEGE
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Alvin, Texas
August, 1984 - Present
- Instructor of English grammar, punctuation, and transcript preparation and
court reporting skills building.
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APPENDIX D
Letter of Engagement
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January 29, 2007
Entrada Partners
c/o ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
RE: Phase I Environmental Site Assessment Proposal Three-20 acre Tracts of
Vacant Land Industrial Park Fresnillo, Zacatecas, Mexico
Dear ▇▇. ▇▇▇▇▇:
In accordance with your request, ▇▇▇▇▇▇ Environmental Services (MES) is pleased
to submit this proposal to Entrada Partners for a Phase I Environmental Site
Assessment (ESA) on the above referenced property.
INTRODUCTION
The purpose of this proposal is to define the scope of work, cost, limitations,
and terms and conditions associated with completing a Phase I ESA on the above
referenced site. To the extent commercially practicable the Phase I ESA will be
prepared in accordance with the standards and procedures of the American Society
for Testing and Materials (ASTM) Standard Practice for Environmental Site
Assessments, Designation E 1527-00.
The objective of the Phase I ESA is to evaluate historical and present uses of
the site for evidence of impacts by hazardous substances. This Phase I ESA will
be conducted by an environmental professional under standards of good commercial
and customary practices that constitute "all appropriate inquiry into the
previous ownership and uses of the property" as defined in 42 USC Section 9601
(35) (B).
BACKGROUND
MES understands there are multiple tracts of vacant land to be investigated
which total approximately 60 acres and is located in an industrial park in
Fresnillo, Zacatecas, Mexico.
SCOPE OF WORK
The scope of work for this Phase I ESA includes the following components:
- Review of Existing Data and Records
- Site Reconnaissance
- Interviews
- Findings Evaluation and Report Preparation
- Project Management
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PHONE: (▇▇▇) ▇▇▇-▇▇▇▇ E-MAIL: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
TAX: (▇▇▇) ▇▇▇-▇▇▇▇ WEB PAGE: ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇
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Phase I Environmental Site Assessment Proposal
Three-20 acre Tracts of Vacant Land
Industrial Park
FresnMo, Zacatecas, Mexico
Page 2
LIMITATIONS
The Phase IESA is a limited inquiry into the environmental characteristics of
the property. It includes an opinion on the existence of regulated environmental
contamination (e.g., hazardous substances) by an environmental professional
based upon an examination of readily available public and facility records,
interviews with people knowledgeable about the site, and a site visit.
This ESA does not include any sampling or analyses unless authorized as
Additional Services. Furthermore, the location of or identification of
undocumented buried tanks or concealed wastes, hidden conditions, and subsurface
conditions are not included.
COST AND DELIVERY
The cost to complete the outlined scope of work on the referenced property is
$[**] (USD). This is a lump sum fee, due upon receipt of and will include three
copies of the report. In the event of the cancellation of this project, Entrada
Partners agrees to reimburse MES for all expenses incurred.
MES agrees to complete and deliver the reports within 3 weeks from receipt of
authorization to proceed. If the terms and conditions meet with your approval,
please sign below and return as soon as possible. I appreciate the opportunity
to be of service to you.
Submitted by, Accepted by,
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES ENTRADA PARTNERS
By: /s/ ▇▇▇ ▇▇▇▇▇▇ BY /S/ ILLEGIBLE FEB. 1, 2007
------------------- ---------------- DATE
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PHONE: (▇▇▇) ▇▇▇-▇▇▇▇ E-MAIL: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
TAX: (▇▇▇) ▇▇▇-▇▇▇▇ WEB PAGE: ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇
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APPENDIX E
Glossary of Terms
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GLOSSARY OF TERMS
PROFEPA
PROFEPA is the Mexican environmental inspection and enforcement authority.
PROFEPA reports to the Secretary of Environmental Media, Natural Resources and
Fisheries (SEMARNAP).
HAZARDOUS WASTE
Congress defined the term "hazardous waste" in Section 1004(5) of RCRA as a
"solid waste, or combination of solid wastes, which because of its quantity,
concentration, or physical, chemical, or infectious characteristics may: (1)
Cause, or significantly contribute to an increase in mortality or an increase in
serious irreversible, or incapacitating reversible, illness or; (2) Pose a
substantial present or potential hazard to human health or the environment when
improperly treated, stored, transported, or disposed of, or otherwise managed."
MAQUILADORA
Maquiladoras are Mexican manufacturing and assembly plants that are owned by
foreign parent companies. Under Mexico's maquiladora program, foreign parent
companies, of which most are in the U.S., export raw materials and partially
assembled components "in-bond" (tariff free) to their maquiladora plants for
final assembly. Under the current system, the finished goods produced at the
Mexican facility can then be exported with tariffs imposed only on the value
added to the material during the processing steps that occurred in Mexico.
Mexican law requires that hazardous wastes generated from "in-bond" raw
materials in the maquiladora plants either (1) be exported to the country of
origin for management, or (2) be nationalized. Nationalization, whereby the
waste could remain in Mexico, has been used rarely. Therefore, most hazardous
wastes from "in-bond" raw materials produced by maquiladora plants are sent back
to the U.S. Such wastes include acids, bases, liquids containing heavy metals,
metal-plating wastes, organic solvents, and cyanide wastes.
NATIONAL ECOLOGICAL INSTITUTE (INE)
INE is the Mexican environmental authority responsible for issuing hazardous
waste export permits. The Mexican export permit is known as a Guia Ecologica
(Ecological Guide). INE reports to the Secretary of Environmental Media, Natural
Resources and Fisheries (SEMARNAP).
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END OF REPORT
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EXHIBIT C - LIST OF PREVIOUS LESSEES AND THEIR ACTIVITIES IN THE PROPERTY
No prior lessees known.
EXHIBIT "B"
ENTRADA
SHELTER PROGRAM SERVICES
Entrada and Entrada Mexico will provide to CLIENT the following services, as
well as other related incidental services, pursuant to the Shelter Services
Agreement of which this Exhibit is a part for which no consideration other than
the Shelter Program Service Fee will be paid (except for the reimbursement of
certain out-of-pocket expenses and costs as contemplated in this Agreement).
Accounting
- Responsible for all Mexico accounting requirements (CLIENT is
responsible for any internal cost accounting for its operation)
- Transact and administer currency exchange
- Responsible for all banking matters in Mexico
- Responsible for tax reporting, declarations and remittances with
appropriate Mexican governmental agencies including company income tax
declarations, value added tax, and employer related taxes, within the
periods required by applicable law
- Recover Mexican value added tax and credit to CLIENT an amount equal
to the funds that CLIENT provided in advance for Entrada Mexico's
timely payment of value added tax
- [**]
Administration Services in Mexico
- Responsible for acquisitions of all Mexico permits
- Consult with CLIENT to assure facility compliance with all local laws
and regulations
- Manage all inspections with Mexican governmental agencies.
- [**]
Environmental, Health and Safety
- Coordination of environmental impact studies, if required.
- Securing of hazardous waste permits or material permits, the Licencia
de Funcionamiento, the Informe Preventivo and the Cedula de Operacion.
or any other permit required for CLIENT's operations. [**]
- Advice on, and assistance in complying with, Mexican environmental
laws and regulations
- Coordination of the removal / disposal of hazardous wastes and scrap
materials as well as the preparation of the documents required to
affect the removal/disposal of such items. [**]
Page 1 of 4
- Coordination of translation of environmental related documents, such
as MSDS sheets, if such translation is required by CLIENT or Mexican
laws. [**]
- Provide Industrial Safety Training
- Advice on, and assistance in complying with, Mexican occupational
health and safety laws and regulations
Facility Management
- Oversee facility improvements of CLIENT 's production area
- Responsible for maintenance and repair of manufacturing space
(building)
- Liaison with local utility companies(systems design is Client's
responsibility)
- Provide cleaning services for facility offices, cafeteria and
bathrooms
- Provide exterior landscaping and grounds keeping services
- [**]
- Provide around the clock, external security for the facility
- Fumigation and pest control for facility
- Trash Collection coordination and disposal, on the understanding that
the collection of production floor waste will be collected from the
dumpsters designated by Entrada to that effect.
Government and Community Relations
- Responsible for all interface with local, state and government
authorities [**]
Human Resource Management
- Staffing: Recruitment, screening and contracting of Mexican personnel
(training of the workforce is CLIENT 's responsibility)
- Compensation & Benefits: consulting and administration
- Personnel administration & Workplace policies
- Labor Relations: Union and Employee
- Coordination of government programs, available for workers including
housing, day care and adult education
- [**]
- [**]
- [**]
- [**]
Page 2 of 4
Import/Export Management
Cross Border Logistics:
- Coordination of consolidation and staging of shipments from Laredo,
Texas to Mexican facility and from Mexican facility to Laredo, Texas
- Contracting and coordination of carriers providing ground, full
trailer and LTL, air and rail transportation between Laredo, Texas and
Mexican facility (Note: A CLIENT representative shall be present to
instruct Entrada Mexico regarding how to load and unload the and
equipment at the Facility in Fresnillo. [**]
- Assisting US and Mexican customs brokers to clear shipments through
Mexican and U.S. Customs
- [**]
- [**]
U.S. Customs
- Recommendation to CLIENT of U.S. Customs Broker. CLIENT is the U.S.
Importer of Record.
- Collaborate with CLIENT's U.S. Customs Broker and U.S. Customs
Specialist to secure appropriate tariff classifications for CLIENT 's
products
- Provide CLIENT overview of product qualification process
- Coordinate special importations, bonded shipments, etc.
- Assist CLIENT and U.S. Customs broker obtain rulings from U.S. Customs
for marking of products and packaging and obtain marking waivers from
U.S. Customs
Mexican Customs and In-Bond Administration
- Responsible for contracting and managing relationship with Mexican
customs broker. Entrada Mexico is the Mexico importer of record.
- Responsible for administration of the maquila or in-bond program and
all related government permits
- Responsible for compliance with Mexican Customs provisions, including
Anexo 24
MRO Purchases & Accounts Payable Management
Responsible for all Accounts Payable in Mexico to Mexican vendors other
than those purchases related to CLIENT's ▇▇▇▇ of Materials (raw materials).
[**]
Page 3 of 4
On-Site Medical and Urgent Care
[**]
Payroll Management
Responsible for Time & Attendance activities
- Process and payment of weekly payroll
- Process and payment of all employee benefits including vacations and
bonuses
- Prepare, submit and all required employer payments to federal and
state agencies e.g. Seguro Social, Infonavit etc.
ENTRADA GROUP, a Texas Limited CLIENT
Partnership
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------- ----------------------------------
Its: Global Factory, Managing Partner Its: President & CEO
Entrada Group de Mexico
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Its: Legal Representative
Page 4 of 4
EXHIBIT C
SHELTER PROGRAM SERVICE FEES AND COSTS
The Fees and Costs called for in the Shelter Services Agreement of
which this Exhibit is a part (the "Agreement"), will be the sum of: (a) the
Shelter Program Service Fees, as calculated below with respect to the number of
Workers in the Workforce, (b) the Facility Fee and (c) the Reimbursable Costs,
as hereinafter defined and as called for in the Agreement.
2) Shelter Program Service Fee Calculation. The Shelter Program Service Fee
will be calculated by multiplying (i) the Shelter Program Service Fee rate
("Service Fee Rate") set forth in the following chart for the highest
number of Workers (the "Headcount") in the Workforce during any single day
of a week for which the Shelter Program Service Fee is payable, by (ii) the
total number of hours for which Workers are paid during the week to which
the invoice is applicable. The shelter fee, while the operation is housed
in the Tricon facility shall be $[**] per week regardless of headcount.
Once the new facility is ready for occupancy, the fee schedule shown below
will take effect. The shelter fees shall be tiered such that Fee Schedule 1
applies while NxStage occupies 35,000 square feet; Fee Schedule 2 applies
if NxStage is occupying a minimum of 70,000 square feet.
Shelter Plan Service Fee Chart
Shelter Program Shelter Program
Service Fee Service Fee
U.S.$ / Hour U.S.$ / Hour
Headcount At 35,000 Sq Ft At 70,000 Sq Ft
------------------- --------------- ---------------
1-[**] [**] [**]
[**]-[**]
[**]-[**] [**] [**]
[**]-[**] [**] [**]
[**]-[**] [**] [**]
For every employee [**] [**]
> [**] and
up to [**]
Economic Related Adjustments. Subject to the terms hereof, the Service Fee Rate
will be adjusted annually at the end of each calendar year beginning on December
31, 2007 by the amount of the percentage increase (or decrease), if any, in the
cost of living from the commencement of the applicable calendar year based upon
the U.S. Consumer Price Index - All Items - U.S. Cities Average, All Urban
Consumers (1967 = 100) published by the Bureau of Labor Statistics of the U.S.
Department of Labor (the "CPI"). In the event the Index ceases to be published,
the most comparable substitute (the "Substitute Index") will be used thereafter
as selected by the mutual agreement of the parties.
Reimbursable Costs. All reasonable costs and expenses incurred by Entrada in the
performance of its duties under this Agreement, such as those identified in
Exhibits "D" and "E" attached hereto and incorporated herein and in this Section
2, shall be reimbursed by Client in accordance with this Section 2, except for
those costs and expenses that will be borne by Entrada pursuant to the
terms of this Agreement, including but not limited to, those costs and expenses
identified in the Agreement and Exhibit A. Before incurring any costs and
charges that shall be reimbursed by Client, Entrada must obtain the written
consent of Client. Client's On-Site Representative may approve any costs and
expenses up to a threshold amount that is notified to Entrada in writing from
time to time, except for those routine and recurring expenses, such as freight,
for which no prior authorization from Client shall be required. Initially, such
threshold amount for each requisition or authorization shall be $[**] USD. All
other costs and expenses above this threshold must be previously authorized in
writing by Client except for labor costs, which will be authorized by the
On-Site Representative regardless of their amount. Client agrees to reimburse
Entrada for the following costs and charges incurred by Entrada in connection
with this Agreement in accordance with the procedures described in this Section
2.
Costs Certain Work force Compensation Related. All payments made to or on
behalf of workers by Entrada in the performance of this Agreement. CLIENT
understands and agrees that the payments made to, or for the benefit of,
the workers may consist of wages, employer taxes, fringe benefits,
attendance and punctuality bonuses, year end bonuses and other personnel
costs including worker transportation and food service, if required, and
that the amount of such payments depends on a variety of factors, such as
applicable statutes and regulations, as well as the Collective Bargaining
Agreement. An example of the composition of these payments is set forth on
Exhibit "F" attached hereto. The actual amount of the payments (the "Weekly
Compensation Amount") will be computed weekly, and the corresponding amount
to be reimbursed to Entrada will be based on the U.S. Dollar-Mexican Peso
exchange rate at which Entrada purchased Pesos from a major Mexican and/or
U.S. financial institution for the applicable week. The labor rates paid by
Entrada to the Mexican workers are based on Mexican Labor laws and include
Social Security, taxes, and all other benefits prescribed by Mexican law.
It is agreed that any compulsory increase in such wage caused by (1) an act
of the Government of Mexico, or (2) resulting from the current provisions
of that certain Collective Bargaining Agreement between Entrada and the
Union dated August 22, 2003, a copy of which is attached to this Agreement
as Exhibit "G" (the "Collective Bargaining Agreement") or as amended from
time to time will be paid by CLIENT to Entrada in accordance with the terms
of this Agreement. The labor compensation to be reimbursed by CLIENT will
include its proportionate share of any increase in premiums for workers'
compensation insurance or similar benefits that may be assessed or imposed,
from time to time and for any reason, by the Mexican Social Security
Administration or any other governmental authority.
Worker Overtime Costs. CLIENT agrees to reimburse Entrada for any overtime
paid to Workers as required by Mexican law that CLIENT requests or confirms
in writing.
Logistics and Customs Expenses. All logistics and freight charges, customs
brokerage fees, and all payments required by the government of Mexico
including tariffs, duties, and fines attributable to CLIENT's personal
property.
Other Costs and Payments. All other costs or payments made by Entrada in
the performance of this Agreement that are contemplated by this Agreement
or approved in writing by CLIENT.
Unit of Currency. Unless otherwise specifically stated herein, all monetary
units referred to herein and elsewhere in this Agreement are U.S. Dollars.
All amounts payable to Entrada hereunder are to be paid in U.S. Dollars.
2) Certain Inspection Rights. CLIENT will have the right with reasonable
notice to have its personnel examine and/or audit the records of Entrada
relating to the calculation of any amounts due by CLIENT to Entrada
pursuant to the Agreement including any and all pass-through costs or
charges VAT (and VAT recovery and credit), the Facility Fee and any and all
matters related to the Shelter Plan Service Fee, as well as the records of
Entrada and Entrada Mexico relating to any costs that Entrada or Entrada
Mexico incur in connection with the Agreement, to the extent such review
does not violate the confidentially obligations of Entrada and Entrada
Mexico as to their other shelter customers.
3) Indemnification: Entrada and Entrada Mexico agree to hold CLIENT harmless
in actions regarding workers paid through Entrada Mexico or any Mexican
supplier paid through Entrada Mexico for disputes regarding non-payment
provided CLIENT has reimbursed or paid Entrada the correct monies due.
ENTRADA GROUP, a Texas Limited CLIENT - NxStage Medical
Partnership
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------- ----------------------------------
Its: Global Factory, Managing Partner Its: President & CEO
Entrada Group de Mexico
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Its: Legal Representative
EXHIBIT D
CLIENT REIMBURSABLE COSTS AND POLICIES
Below are examples of incidental expenditures by Service that are included as
reimbursable or pass through costs and are billed to CLIENT in the weekly
invoice. Except for payroll, and ordinary course of business customs and
trucking expenses, any expenses in excess of US$[**] in annual aggregate by
individual category or for any single item must be pre-approved by CLIENT's
onsite manager. These expenditures are only examples of the types of
expenditures subject to reimbursement and are in addition to any cost or
expenditure enumerated in the body of the Shelter Services Agreement.
HUMAN RESOURCE MANAGEMENT
Recruitment
1. Recruitment advertising (print or radio) placed solely in the
name of the client company. This applies to advertising both
inside and outside of the Zacatecas labor market area.
2. Non-customary expenses related to the filling of urgent labor
requisitions must be approved in advance by authorized client
firm personnel. In the case of the cancellation of such urgent
requests, costs incurred prior to the cessation of recruitment
effort will be billed to the account of the client. As soon as it
is evident that cancellation of an urgent labor request will
occur, please advise the Entrada HR staff as promptly as possible
in order to limit unnecessary expenditures.
3. Expenses incurred by candidates from outside of the
Fresnillo/Zacatecas area who have been invited to interview for a
salaried position.
4. Laboratory tests or special examinations requested by CLIENT as
part of the screening process.
Personnel Management
1. Fees for visas and passports that are required for employees
traveling outside of Mexico for training, or for company
business.
2. The cost for the issuance of FM-3 business visas required for
U.S. personnel assigned to client's Mexican facilities. This may
include translation and/or certification of documents needed for
the application.
3. Fees related to training provided by third parties to the CLIENT.
4. Charges for worker badges for which the CLIENT requires special
graphics, such as the client firm's logo.
Page 1
5. Costs related to insurance or benefits requested by the CLIENT
for its managers over and above that which is required by the
Mexican Social Security rules.
6. The cost of in-plant uniforms and CLIENT sponsored athletic team
uniforms.
Labor Relations Management
1. Payment of life insurance premium for all workers assigned to the
CLIENT manufacturing process by Entrada.(premium is approximately
$[**]US per year per worker).
On Site Medical and Urgent Care Services
The cost of prescription medicines that are not commonly stocked for
the client's workforce and agreed to by CLIENT
Facilities Management
1. Expenses incurred in the painting and sealing of production floor
areas subsequent to the initial occupation of the manufacturing
facility.
2. Changes resulting from damage done to the building by CLIENT
supervised personnel. This may include damage done to overhead
doors or to interior walls by employee-operated forklifts.
3. Expenses that result from the removal of graffiti from the
interior of the CLIENT's facility.
4. Waste disposal fees.
5. The cost of maintenance and spare parts for mechanical units,
including air conditioners, installed by or for the CLIENT.
6. Charges related to the purchase of spare parts and service of
additional transformers required by CLIENT.
7. Charges related to the purchase of spare parts and service of
CLIENT's air compressors equipment.
8. Expenses related to the provision of dedicated, in-plant security
9. Sanitary supplies used in the bathrooms and kitchen.
Page 2
ENVIRONMENTAL SERVICES
1. The cost of any environmental impact study required by CLIENT.
Entrada will arrange for and closely coordinate third party
provision of this service.
2. The expense incurred in obtaining a Mexican Government issued
hazardous waste or material permit. For example, spent
lubricating oil is considered a hazardous waste in Mexico, as are
the empty containers in which the oil was stored.
3. Travel Expenses incurred by Entrada for travel outside of the
states of Zacatecas for the purpose of obtaining special permits
that may be required for CLIENT's operations. For example, the
legal manufacture of firearms, ammunition or personal defense
products require special permits that are typically issued only
in Mexico City.
4. Entrada Mexico is responsible for complying with Mexican
environmental laws and regulations. CLIENT shall work with
Entrada Mexico to set up and operate the manufacturing processes
so that it meets said laws and regulations. Should inspection
authorities discover any irregularities attributable to CLIENT
that result in fines, then CLIENT shall reimburse Entrada Mexico
for said payment, if, and only if, such irregularities are due to
CLIENT's failure to follow the instructions from Entrada Mexico
or willful misconduct or gross negligence that constitute
criminal conduct by CLIENT's employees or other employees that
are supervised by CLIENT.
5. Fees incurred in the removal/disposal of hazardous wastes
generated in the provision of the Shelter Program Services to
CLIENT, by third party providers such as Residuos Industriales
Multiquim (RIMSA) and others as well as in the preparation of the
documents required to affect the removal / disposal of such
items.
6. Charges related to any tests performed at CLIENT's request of the
quality of water supplied to the facility by the municipal water
authority.
7. Costs associated with the removal/disposal of scrap materials.
8. Costs related to a site inspection performed by a qualified third
party at the time CLIENT leaves the facility and all costs
associated with the clean up of the facility.
9. Costs related to the translation of environmental related
documents such as MSDS sheets.
10. Costs to obtain the Licencia de Funcionamento, the Informe
Preventivo and the Cedula de Operacion.
MISCELLANEOUS
1. Charges made in connection with the installation and maintenance
of any special communications equipment that is required by
CLIENT These may include costs related to the installations of T1
lines or fiber optic telecommunications equipment.
Page 3
2. Registration, licensing and insurance fees that are applicable to
vehicles utilized in Mexico by CLIENT's operations for
transporting workers.
3. The cost of a water treatment system for drinking water or
bottled water supplied to the facility where CLIENT'
manufacturing is taking place;.
4. Cost increases associated with the death or injury of a workforce
member assigned to CLIENT's manufacturing operation that are
levied by the Mexican Social Security Administration or any
governmental authority, except where caused by the negligence or
willful misconduct of the employees of Entrada, Entrada Mexico or
the relevant Affiliate that are not assigned full-time to
CLIENT's operations, or the breach of their obligations under
this Exhibit or the Agreement of which it forms integral part.
ENTRADA PARTNERS, a Texas Limited NxStage Medical, Inc.
Partnership
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------- ----------------------------------
Its: Global Factory, Managing Partner President & CEO
ENTRADA Group de Mexico, S. de ▇.▇.
de C.V.
Its: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Page 4
EXHIBIT "E"
PROCUREMENT IN MEXICO
Procurement is an activity that is comprised of various functions: 1) Sourcing;
2) Purchasing; 3) Payment; 4) Pick-Up and Delivery; 5) Receiving. This document
outlines the respective responsibilities and policies of Entrada (E) and
MANUFACTURER (M) regarding the procurement of local supplies and services in
Mexico.
For purposes of this document, the word local refers to the cities of Fresnillo
and Zacatecas. The phrase, "supplies and services", refers to MRO (Maintenance,
Repair and Operating) supplies and services, those everyday supplies and
services used by (M) to keep production lines moving. It does not include (M's)
raw materials which are those items typically found on (M's) ▇▇▇▇ of Materials.
(E) and (M) may make separate arrangements for the procurement of (E's) raw
materials in Mexico.
1. Sourcing
a. Definition: sourcing is the activity of locating supplies and
services that meet manufacturer's requirements and requesting a
sales quotation from the appropriate vendor(s) who provide these
supplies and services;
b. Entrada's Responsibilities:
1. (E) will provide (M) with a List of Preferred, Local MRO
Vendors by product group.
2. (E) will consult with (M) on an as-needed basis regarding
sourcing issues.
c. MANUFACTURER's Responsibilities:
(M) will be responsible for the sourcing activity
2. Purchasing
a. Definition: the purchasing activity consists of placing an order
with a vendor. Although it technically is separate from the
payment activity, the person placing the order must understand
the ramifications that the purchase terms negotiated have on the
payment process. In addition, (M) will be responsible for
specifying all conditions of the purchase such as quality and
timeliness.
b. (M's) Responsibilities:
1. (M) will place the order (Purchase Order) with the vendor.
The purchase order format and a unique numbering sequence
will be provided to (M) by (E). Legally, the purchase order
will be in (E)'s name;
2. (M) will negotiate the terms and conditions of the purchase
order with the vendor including payment terms, shipping
methods and delivery dates. The terms of the purchase order
will be subject to the agreed upon payment terms and
policies enumerated in number 3 below.
3. Payment Policies according to Type of Purchase
A. "$[**]US or Greater" Purchase: Vendor invoices greater than
$[**]US. These invoices shall be paid by (E) once (M) has advanced the
monies to (E). At the time of placing the purchase order, (M) must
notify and coordinate with (E) the special invoicing of (M) to cover
the payment. Once in receipt of the monies, (E) will follow the
payment practices outlined herein.
B. "Advance Payment" Purchase: Those purchases where the vendor
requires that the monies accompany the purchase order. Unless this
purchase qualifies as a "▇▇▇▇▇ cash" purchase (see below), typically
the vendor will require that the monies be sent via bank wire transfer
to the vendor's bank. (E) will process bank related purchases daily
and will require that (M) provide it with all information related to
the purchase at least 24 hours prior to said banking day.
C. "Credit" Purchase: A purchase in which the vendor extends credit
for the purchase. Typically, credit, if extended, is for a period of
10 days. If (E) does not have credit with a local vendor with whom (M)
would like to purchase from, (E) will submit a credit application upon
(M's) request. To secure vendor's approval can take up to 30 days. On
occasion, (M) may have a relationship with a vendor in the US who has
a Mexico affiliate that is willing to extend longer credit terms to
(M). In this event, once (M) has arranged with the US vendor payment
by (E), then (E) will pay pursuant to the agreed upon terms.
(E) will pay all "credit" purchases with an (E) company check on
Fridays from 1:00p.m to 5:00p.m. In order for a "credit" purchase to
be paid on any given Friday, (E) must receive by the preceding
Thursday all appropriate documentation signed by (M).
D. "COD" Purchase: A purchase in which the Mexico vendor requires
payment or the order upon delivery to the facility. In the event (M)
seeks payment from (E) for a "COD" purchase, (M) must submit to (E)
the appropriate documentation (24) hours prior to its delivery.
E. "US. Credit Card" Purchase: Certain Mexico vendors do not accept
checks nor do they extend credit. If (E) chooses to purchase from
these vendors, (M) must pay with a U.S. credit card or ▇▇▇▇▇ cash (see
below).
F. "▇▇▇▇▇ Cash" Purchase: (M) will pay in cash the following purchases
or expenditures: 1) the vendor will not or can not invoice E; 2) the
invoice is less than [**] pesos; 3) an advance or reimbursement
requested by one of (M's) workers from (M) for company purposes.
(M) will advance to Entrada US initially $[**]US and then on an
as-needed basis an amount of money proportional to the size of cash
expenditures projected monthly for the Mexican operation. Entrada US
will transfer the monies to Entrada Mexico.
(E) will provide (M's) authorized representative with the funds in
pesos and the representative will be responsible for all issues
related to the disbursement of the funds. In order to replenish the
fund, the representative will submit to (E) Mexico a reconciliation
form that is consistent with (E's) bookkeeping and Mexican income tax
rules for deductibility.
4. Pick Up and Delivery of Purchases
a. Deliveries :
b. "COD" Deliveries: COD deliveries to the plant site by 3rd party
carriers shall be made between 9:00am and 3:00pm, Monday thru
Friday;
c. Entrada Pick up and Delivery Service: At the end of each week day
(M) will deliver to (E) a copy of the Purchase Order log. The log
will identify those orders that the vendor will not provide
delivery to the facility and that require pick up. Once the order
appears on the daily log, (E) will pick up and transport to the
Facility those orders that are from Fresnillo within 48 hours and
those orders that are from Zacatecas within the week ordered.
Special arrangements may be made with (E) for pick up and
delivery service from Zacatecas.
* Assumes purchases that can be carried by Entrada's vehicle. If
item is too large or of a nature not appropriate for the vehicle,
then (E) will contract an appropriate carrier, the cost of which
shall be born by (M).
5. Receiving:
a. All deliveries shall be received by (E) at (E's) designated
receiving area in the Facility. If deliveries arrive outside
(E's) hours of operation, (E) shall/not accept the delivery and
instruct the carrier or vendor to return during (E's) hours of
operation. With (E)'s assistance, (M) shall be responsible to
verify all delivered
purchases against purchase order and vendor invoice and to note
any discrepancies;
ENTRADA PARTNERS, a Texas Limited CLIENT
Partnership
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------- --------------------------------
Its: Global Factory Managing Partner Its: President & CEO
ENTRADA GROUP DE MEXICO
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Its Legal Representative
EXHIBIT F
ANNUAL COMPENSATION CALCULATION(EMPLOYER COST)
Position: _______________
Prepared by: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Entrada Group de Mexico SRL de CV
For: Salario Diario [**] Salario inicial del nuevo tabulador
Date: February 7, 2007 ▇▇▇▇ de Vac 6
Exchange Rate: 10.83 pesos = 1 USD Tipo de Cambio [**]
MONTHLY
DESCRIPTION SALARY ANNUAL
----------------------- ------- ------
Monthly Salary [**] [**]
LEGAL Christmas Bonus [**] [**]
Vacation Days [**] [**]
Vacation Premium [**] [**]
Social Security/Housing [**] [**]
Salary Credit [**] [**]
State Payroll Tax [**] [**]
Profit Sharing [**] [**]
Attendence Bonus [**] [**]
SUBTOTAL I [**] [**]
DEL ▇▇▇▇▇▇▇
Grocery Bonus [**] [**]
Savings Fund [**] [**]
SUBTOTAL II [**] [**]
OTHER Major Medical [**] [**]
Life Insurance [**] [**]
SUBTOTAL III [**] [**]
TOTAL PESOS [**] [**]
TOTAL USD [**] [**]
FOOTNOTES:
Calculations are only applicable for the first [**] months as long as the
employee does not receive payments for IMSS, Retirement, INFONAVIT, Employment
Risk with applicable porcentages as of February 13, 2007
Minimum wage for D.F.$[**]
Minimum wage for Zone "C" $[**]
Termination payment for [**] years of seniority
Severance limit [**]
Vacation Time for [**] years of seniority - [**] days
IMSS Integration Factor (Factor de Integracion IMSS) [**] without including
variable wages
Grocery cupons - Any amount up to $[**] pesos daily is IMSS (social
security) exempt. The amounts that exceed will be subject to to the respective
IMSS, SAR and Infonavit =[**]
State Payroll Tax Factor 1.9% plus surtax 5% UAZ
Saving Funds limit [**] times the minimum wage Zone C [**]
Grocery Cupons annual limit for employee payment [**]
Attendance and punctuality bonus [**] for each concept. Bonus will be lost if
employee does not work [**] hours.
EXHIBIT F
ANNUAL COMPENSATION CALCULATION(EMPLOYER COST)
Position: _______________
Prepared by: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Entrada Group de Mexico SRL de CV
For: Salario Diario [**] Salario del nuevo tabulador despues de 3 meses
Date: February 13, 2007 ▇▇▇▇ de Vac 6
Exchange Rate: 10.83 pesos = 1 USD Tipo de Cambio [**]
MONTHLY
DESCRIPTION SALARY ANNUAL
----------------------- ------- ------
Monthly Salary [**] [**]
LEGAL Christmas Bonus [**] [**]
Vacation Days [**] [**]
Vacation Premium [**] [**]
Social Security/Housing [**] [**]
Salary Credit [**] [**]
State Payroll Tax [**] [**]
Profit Sharing [**] [**]
Attendence Bonus [**] [**]
SUBTOTAL I [**] [**]
DEL ▇▇▇▇▇▇▇
Grocery Bonus [**] [**]
Savings Fund [**] [**]
SUBTOTAL II [**] [**]
OTHER Major Medical [**] [**]
Life Insurance [**] [**]
SUBTOTAL III [**] [**]
TOTAL PESOS [**] [**]
TOTAL USD [**] [**]
FOOTNOTES:
Calculations are only applicable for the first [**] months as long as the
employee does not receive payments for IMSS, Retirement, INFONAVIT,
Employment Risk with applicable porcentages as February 13, 2007
Minimum wage for D.F. $[**]
Minimum wage for Zone "C" $[**]
Applicable compensation for [**] years of seniority
Seniority bonus limit to [**] Vacation Time for [**] years of seniority - [**]
days
IMSS Integration Factor (Factor de Integracion IMSS) [**] without including
variable wages
Grocery Bonus - Any amount exceding the maximum amount of IMSS retention of
$[**] pesos daily, will apply to the respective IMSS, SAR and Infonavit =[**]
State Tax Factor 1.9% plus 5% UAZ
Saving Funds limit [**] times the minimum wage Zone C [**]
Grocery Bonus annual limit for employee payment [**]
Attendance and punctuality bonus [**] for each concept. Bonus will be lost if
employee does not work [**] hours.
EXHIBIT "H"
COMMODATUM AGREEMENT
COMMODATUM AGREEMENT (THIS "AGREEMENT") ENTERED INTO AMONG NXSTAGE MEDICAL,
INC., ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE
(HEREINAFTER REFERRED TO AS THE "▇▇▇▇▇▇"), BY ENTRADA GROUP DE MEXICO, S. DE
▇.▇. DE C.V., A MEXICAN LIMITED LIABILITY COMPANY (HEREINAFTER REFERRED TO AS
THE "BAILEE") AND BY ENTRADA PARTNERS, A TEXAS LIMITED PARTNERSHIP ("ENTRADA"),
PURSUANT TO THE FOLLOWING RECITALS AND CLAUSES:
RECITALS
A. That ▇▇▇▇▇▇, Bailee and Entrada, through their representatives, state that
they are parties to that certain Shelter Agreement dated as of March 1,
2007 as amended (the "Shelter Agreement"), under which Entrada and Bailee
agreed to provide certain services with regard to products of ▇▇▇▇▇▇.
B. Bailee, through its representative, states that, in order to carry out its
obligations under agreement referred to in paragraph A. above, it requires
from ▇▇▇▇▇▇ the delivery in bailment (commodatum) of certain machinery,
tools and equipment listed and described in Exhibit "A" which, duly signed
by the parties, is attached to this Agreement (hereinafter referred as the
"Equipment").
▇. ▇▇▇▇▇▇, through its representative, desires to grant the temporary and
gratuitous use of the Equipment to the Bailee in order for the Bailee to
carry out its obligations under the agreement mentioned in paragraph A.
above.
D. Entrada and Bailee, through their legal representatives, recognize that the
Equipment is and will continue to be owned by ▇▇▇▇▇▇ and that the latter
has authorized the deliver of the Equipment to the Bailee, and that the
Bailee will assume any and all obligations as Bailee of the Equipment under
the terms of this Agreement.
▇. ▇▇▇▇▇▇ states that for all legal purposes it has its domicile at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America.
F. Bailee states that for all legal purposes it has its domicile at ▇▇▇▇.
Fresnillo A Plateros KM 2 S/N, Parque Industrial Fresnillo, Fresnillo,
Zacatecas ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇.
▇. Entrada states that for all legal purposes it has its domicile at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
In consideration of the foregoing, the parties agree to the following:
-1-
CLAUSES
FIRST.- PURPOSE OF THE AGREEMENT. ▇▇▇▇▇▇ gratuitously and temporarily grants to
Bailee the custody 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 Equipment shall remain vested in ▇▇▇▇▇▇. Therefore, the Bailee and Entrada
hereby agree not to represent to any third party or authority, including the
Mexican Customs authorities, as being the owners of the Equipment.
SECOND.- DELIVERY OF EQUIPMENT. ▇▇▇▇▇▇ 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,
tools, and/or equipment property of ▇▇▇▇▇▇, which may be delivered in custody to
Bailee in the future by agreement of the parties. The Equipment shall be
complete with all its parts additions, accessories and peripherals in operating
condition.
▇▇▇▇▇▇ will deliver the Equipment at Laredo, TX United States of America, and,
with ▇▇▇▇▇▇'▇ US Customs Broker's cooperation, Bailee shall import the Equipment
into Mexico under the temporary importation regime under Bailee's Maquiladora
Program, or any other similar or applicable program. Any item added to the
Equipment delivered to Bailee under the terms and conditions herein established,
shall continue to be imported on a temporary basis and must be used in the
domicile at ▇▇▇▇. Fresnillo A Plateros KM 2 S/N, Parque Industrial Fresnillo,
Fresnillo, Zacatecas ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇, unless the parties agree to carry out
the importation under the permanent importation regime.
Bailee shall comply with all legal provisions applicable to the temporary
importation of the Equipment and ▇▇▇▇▇▇'▇ US Customs Broker and Bailee's Customs
Broker 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 ▇▇▇▇▇▇ is and
shall continue to be the owner of the Equipment. For any Equipment that it is
imported into Mexico after the execution of this Agreement, the commercial
invoice to be utilized to import the Equipment into Mexico shall state that such
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.
THIRD.- EXPENSES. The necessary expenses for the use, maintenance, repair and
preservation, as well as all expenses related to the use, operation, security
measures, and necessary personnel for the use of the Equipment hereby given in
commodatum will be the exclusive responsibility of ▇▇▇▇▇▇.
FOURTH.- LOCATION OF EQUIPMENT. Bailee shall maintain the Equipment at the
address located at ▇▇▇▇. Fresnillo A Plateros KM 2 S/N, Parque Industrial
Fresnillo, Fresnillo, Zacatecas ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇, as well as all the permits,
licenses and official documentation pertaining to the importation into Mexico of
the Equipment, at the domicile mentioned in Recital F. above, and may not remove
it from said location without the prior written consent of ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall
not remove the Equipment or cause the Equipment to be removed from said location
without the proper customs documentation prepared by Bailee's Mexican Customs
Broker or in violation to this agreement.
FIFTH.- NO DISPOSITION OR ENCUMBRANCES. Bailee shall not sell nor assign its
rights hereunder unless authorized by the Shelter Agreement and its Exhibits 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 within ten (10) calendar days
following the execution of this agreement. The cost for recordation of this
Agreement and any expenses, fees and costs related to the protection and defense
of the Equipment for causes not attributable to Bailee shall be borne by ▇▇▇▇▇▇.
▇▇▇▇▇▇ shall label all Equipment, with the following legend "Propiedad de
NxStage Medical, Inc.") (Property of NxStage Medical, Inc.).
SIXTH.- USE OF EQUIPMENT. The Equipment provided by ▇▇▇▇▇▇ shall be used
exclusively for the performance of the obligations contained in the "Shelter
Agreement" for the benefit of ▇▇▇▇▇▇.
SEVENTH.- LOSS OF EQUIPMENT AND ORDINARY WEAR AND TEAR. Subject to the
provisions of the Shelter Agreement ▇▇▇▇▇▇ shall bear the risk of loss, damage,
or ordinary wear and tear of the Equipment occurring at any time and whether the
Equipment is located in Mexico or in the United States.
EIGHTH.- INSURANCE. As provided in the Shelter Agreement, ▇▇▇▇▇▇ will be
responsible for contracting insurance coverage for the Equipment.
NINTH.- RETURN OF EQUIPMENT. Bailee shall immediately return, at ▇▇▇▇▇▇'▇ cost
to any address that ▇▇▇▇▇▇ may designate, the Equipment to ▇▇▇▇▇▇ when ▇▇▇▇▇▇ so
requests, as no specific duration for the commodatum has been agreed upon
hereunder; and therefore, pursuant to Article _______ the Civil Code for the
State of Zacatecas. ▇▇▇▇▇▇ has the right to demand the return of the Equipment
at any time.
TENTH.- INSPECTION. ▇▇▇▇▇▇ reserves unto itself the right to inspect the
Equipment at any time whatsoever.
ELEVENTH.- COMPLIANCE WITH LAWS. Bailee covenants, at its own cost, subject to
the provisions of this Agreement and the Shelter Agreement, to comply with all
laws, regulations and other legal provisions applicable to the Equipment and to
notify ▇▇▇▇▇▇ immediately, in writing, of any claim, demand, litigation, or any
other lien, that might affect the Equipment.
TWELFTH.- RECOVERY OF EQUIPMENT. ▇▇▇▇▇▇ will have the right to recover the
Equipment at any time and Bailee covenants to return it at the Customs House of
the City of Laredo, TX United States of America, or to any other address that
▇▇▇▇▇▇ may designate, upon request by ▇▇▇▇▇▇. All expenses, including but not
limited to, Mexican customs fees, export duties, transportation, and any other
type of expenses will be the exclusive responsibility of ▇▇▇▇▇▇.
Upon written request by ▇▇▇▇▇▇ to Bailee, Bailee shall deliver and transfer the
Equipment to ▇▇▇▇▇▇ within a reasonable time. Such transfer shall be made in
accordance with Article 112 of the Customs Law and the General Foreign Trade
Rules of the year in which the transfer is made.
Bailee recognizes that ▇▇▇▇▇▇ may transfer title to the Equipment and assign its
rights under this Agreement at any time. In such case, ▇▇▇▇▇▇ will notify, in
writing, Bailee about the assignment its interest under this Agreement and the
name of its successor.
THIRTEENTH.- TERM. This Agreement shall continue in force for an indefinite
period of time. However, this Agreement will terminate on the same date that the
Shelter Agreement is terminated. Upon termination for any reason of this
Agreement, Bailee shall immediately return, at ▇▇▇▇▇▇'▇ cost to any address that
▇▇▇▇▇▇ may designate, the Equipment to ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall be exclusively
responsible for any taxes that are imposed in connection with such transfer of
title to the Equipment.
FOURTEENTH.- REGISTRATION. The parties agree that this Agreement and any of its
amendments shall be recorded with the Public Registry of Property of the city
where the Equipment will be located within ten (10) calendar days after this
Agreement and any of its amendments is executed. ▇▇▇▇▇▇ shall pay for the cost
of recordation.
FIFTEENTH.- NOTICES. Every notice or other communication required or
contemplated by this Agreement shall be given to the other party pursuant to the
same terms and conditions as set forth in the Shelter Agreement.
SIXTEENTH.- JURISDICTION AND APPLICABLE LAW. For the interpretation and
fulfillment of this agreement, the parties hereby expressly submit to the
jurisdiction of the competent courts in the City of Fresnillo, Zacatecas,
Mexico, and to the applicable commercial laws of Mexico, expressly waiving any
other jurisdiction and law that might correspond to them by virtue of their
present or future domicile or for any other reason whatsoever.
SEVENTEENTH.- This Agreement shall be executed in Spanish and English versions,
therefore the parties agree that in the event a dispute or other inconsistency
should arise regarding interpretation or meaning of terms and obligations
described herein, the Spanish version shall control.
[SIGNATURE PAGE FOLLOWS]
This agreement is executed, in five sets, in the dates and places mentioned
herein below.
▇▇▇▇▇▇ BAILEE
NXSTAGE MEDICAL, INC., ENTRADA GROUP DE MEXICO,
S. DE ▇.▇. DE C.V
By: /s/ Jefffrey ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇
Position: President & CEO Position: Legal Representative
Date: 3/19/07 Date: 3/20/07
Place: MA Place:
------------
ENTRADA
ENTRADA PARTNERS, A TEXAS LIMITED
PARTNERSHIP
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Position: President, Global Factory,
Managing Partner
Date: 3/20/07
Place: ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WITNESS WITNESS
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇. ▇. ▇. ▇▇▇▇▇▇▇ Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Exhibit "A"
List of Machinery and Equipment
CONTRATO DE COMODATO (ESTE "CONTRATO") QUE CELEBRAN POR Y ENTRE, NXSTAGE
MEDICAL, INC., UNA SOCIEDAD CONSTITUIDA Y EXISTENTE DE CONFORMIDAD CON LAS LEYES
DEL ESTADO DE DELAWARE, ESTADOS UNIDOS DE AMERICA (A LA CUAL EN LO SUCESIVO SE
DENOMINARA EL "COMODANTE"), Y POR ENTRADA GROUP DE MEXICO, S. DE ▇.▇. DE C.V.,
UNA SOCIEDAD DE RESPONSABILIDAD LIMITADA MEXICANA, (A LA CUAL EN LO SUCESIVO SE
DENOMINARA EL "COMODATARIO") Y POR ENTRADA PARTNERS, UNA SOCIEDAD DE TEXAS,
ESTADOS UNIDOS DE AMERICA ("ENTRADA"), AL TENOR DE LAS SIGUIENTES:
DECLARACIONES
A. Que tanto el Comodante, el Comodatario y Entrada, son partes de cierto
Contrato de Servicios que celebraron el dia March 1, 2007 y sus
modificaciones (el "Contrato de Servicios"), bajo el cual Entrada y el
Comodatario se obligan a proporcionar ciertos servicios respecto de
productos de Comodante.
B. El Comodatario, a traves de su representante, manifiesta que, con el fin de
cumplir con sus obligaciones derivadas del contrato mencionado en el
parrafo A. anterior, requerira la entrega en comodato por parte del
Comodante de cierta maquinaria, herramienta y equipo el cual se detalla en
la lista, firmada por ambas partes, que se agrega al presente contrato como
Anexo "A" (en lo sucesivo, el "Equipo").
C. El Comodante, a traves de su representante, manifiesta que desea otorgar el
uso gratuito y temporal del Equipo al Comodatario a efecto de que este
cumpla con sus obligaciones conforme al contrato referido en el parrafo A.
anterior.
D. Entrada y el Comodatario, a traves de su representante, reconocen que el
Equipo es y continuara siendo propiedad del Comodante y que esta ultima
empresa ha autorizado la entrega del Equipo al Comodatario, y que el
Comodatario asumira todas y cada una de las obligaciones como comodatario
del Equipo en los terminos de este Contrato.
E. El Comodante senala como domicilio el ubicado en ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Estados Unidos de America.
F. El Comodatario senala como domicilio el ubicado en ▇▇▇▇. Fresnillo A
Plateros KM 2 S/N, Parque Industrial Fresnillo, Fresnillo, Zacatecas ▇.▇.
▇▇▇▇▇, ▇▇▇▇▇▇.
▇. Entrada senala como domicilio el ubicado en ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Estados Unidos de America.
En virtud de lo anterior, las partes otorgan las siguientes:
CLAUSULAS
PRIMERA.- OBJETO DEL CONTRATO. El Comodante concede gratuitamente y
temporalmente al Comodatario la custodia del Equipo que se menciona en la
Declaracion B. de este contrato, para el exclusivo fin que se senala en la
Declaracion C. El Comodatario y Entrada convienen y se obligan en no ostentarse
ante cualquier ▇▇▇▇▇▇▇ o autoridad gubernamental, incluyendo las autoridades
aduaneras mexicanas, como propietarios del Equipo.
SEGUNDA.- ENTREGA DEL EQUIPO. El Comodante entregara al Comodatario, en las
fechas en que las partes acuerden, el Equipo en calidad de Comodato. Las partes
podran modificar periodicamente la lista que se adjunta como Anexo "A", a efecto
de que se incluya maquinaria, herramienta y/o equipo propiedad de Comodante, que
por acuerdo de las partes entregue el Comodante al Comodatario, en custodia, en
un futuro. El Equipo estara completo con todas sus partes, aditamentos y
accesorios y en perfectas condiciones de uso.
El Comodante entregara el Equipo en la ciudad de Laredo, TX, Estados Unidos de
America, y, con la cooperacion del Agente Aduanal estadounidense del Comodante,
el Comodatario importara el Equipo a Mexico bajo el regimen de importacion
temporal al ▇▇▇▇▇▇ del programa de maquila de exportacion del Comodatario, o
bajo cualquier otro programa similar o aplicable. Cualquier Equipo adicional que
sea entregado al Comodatario, en los terminos del presente, continuaran siendo
importados temporalmente y deberan ser utilizados en el domicilio del
Comodatario ubicado en ▇▇▇▇. Fresnillo A Plateros KM 2 S/N, Parque Industrial
Fresnillo, Fresnillo, Zacatecas ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇, salvo que las partes
acuerden llevar a cabo la importacion bajo el regimen de importacion definitiva.
El Comodatario ▇▇▇▇▇▇ cumplir con todas las disposiciones aplicables a la
importacion temporal del Equipo y el Agente Aduanal estadounidense del Comodante
y el Agente Aduanal del Comodatario deberan proporcionar cualquier servicio
administrativo necesario para llevar a cabo la importacion temporal del Equipo a
Mexico. El nombre del Comodatario ▇▇▇▇▇▇ aparecer en los documentos de
importacion del Equipo, sin embargo, queda expresamente convenido que el
Comodante mantendra en todo momento la propiedad del Equipo. Para cualquier
importacion de Equipo que se lleve a cabo con posterioridad a la celebracion de
este Contrato, la factura o comprobante comercial que se utilice para la
importacion del Equipo ▇▇▇▇▇▇ indicar que dicha factura comercial se expide
unicamente para efectos aduanales a efecto de llevar a cabo la importacion
temporal a Mexico de los bienes que ▇▇ ▇▇▇▇▇▇▇ por la misma, y por lo tanto no
se transfiere la propiedad de dichos bienes.
TERCERA.- GASTOS. Seran por cuenta exclusiva del Comodante todos los gastos
necesarios para el uso mantenimiento, reparacion y conservacion, asi como todos
los gastos relacionados con las medidas de seguridad y personal necesario para
la operacion del Equipo otorgado en Comodato.
CUARTA.- UBICACION DEL EQUIPO. El Comodatario ▇▇▇▇▇▇ conservar el Equipo en el
domicilio ubicado en ▇▇▇▇. Fresnillo A Plateros KM 2 S/N, Parque Industrial
Fresnillo, Fresnillo, Zacatecas ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇, asi como todos los permisos,
licencias y documentacion oficial concerniente a su importacion, en el domicilio
mencionado en la Declaracion F. anterior, y no podra removerla de dicho
domicilio sin el previo consentimiento por escrito del Comodante. El Comodante
no removera el Equipo, ni hara que el Equipo sea removido de dicha ubicacion,
sin la documentacion aduanera apropiada preparada por el Agente Aduanal mexicano
del Comodatario, o en violacion de este contrato.
QUINTA.- NO DISPOSICION O GRAVAMENES. El Comodatario no podra vender ni ceder
sus derechos bajo este contrato, salvo que se encuentre autorizado para ello por
el Contrato de Servicios y sus anexos, ni de manera alguna gravar, dar en prenda
o establecer gravamen alguno sobre el Equipo. El Comodatario ademas conviene en
proteger el Equipo de cualquier reclamo proveniente de terceros y para tal
efecto conviene en presentar a registro el presente contrato ante el Registro
Publico de la Propiedad dentro de los diez (10) ▇▇▇▇ naturales siguientes a la
firma del presente contrato. El costo de registro de este contrato y cualesquier
gastos, honorarios y costos relacionados con la proteccion y defensa del Equipo
por causas no imputables al Comodatario sera por cuenta del Comodante.
El Comodatario marcara todo el Equipo con la leyenda "Propiedad de NxStage
Medical, Inc.".
SEXTA.- USO DEL EQUIPO. El Equipo otorgado en comodato por el Comodante ▇▇▇▇▇▇
ser utilizado unica y exclusivamente para llevar a cabo las obligaciones
contenidas en el "Contrato de Servicios" a beneficio del Comodante.
SEPTIMA.- PERDIDA DEL EQUIPO. Sujeto a los terminos del Contrato de Servicios,
el Comodante asume el riesgo sobre la perdida total o parcial del Equipo, o dano
al mismo, asi como por el desgaste normal que sufra el mismo, en cualquier
momento ya sea que el Equipo se encuentre ubicado en Mexico o en los Estados
Unidos.
OCTAVA.- SEGUROS. Tal y como se establece en el Contrato de Servicios, el
Comodante sera responsable de contratar una poliza de seguro de cobertura para
el Equipo.
NOVENA.- DEVOLUCION DEL EQUIPO. En virtud de que no se ha determinado plazo del
Comodato, y de conformidad con el Articulo ____ del Codigo Civil del Estado de
Zacatecas, el Comodante tiene el derecho de exigir la devolucion del Equipo en
cualquier momento, en cuyo caso se tendra por terminado el presente contrato, el
Comodatario, a costo del Comodante, devolvera inmediatamente el Equipo al
Comodante, en el domicilio que el Comodante designe y cuando este se lo
solicite.
DECIMA.- INSPECCION. El Comodante se reserva el derecho de inspeccionar el
Equipo en cualquier momento que lo considere conveniente.
DECIMA PRIMERA.- CUMPLIMIENTO DE LEYES. El Comodatario se obliga, a su costa,
sujeto a las disposiciones de este contrato y del Contrato de Servicios, a
cumplir con todas las leyes, reglamentos y ▇▇▇▇▇ disposiciones legales
aplicables al Equipo, y a notificar de inmediato y por escrito al Comodante de
cualquier reclamacion, demanda, litigio, embargo, o cualquier otro gravamen o
limitacion que pueda afectar al Equipo.
DECIMA SEGUNDA.- RECUPERACION DEL EQUIPO. El Comodante tendra derecho a
recuperar el Equipo en cualquier momento y el Comodatario se obliga a entregarlo
en la Aduana de la ciudad de Laredo, TX, Estados Unidos de America, o en
cualquier otro domicilio que el Comodante designe. Todos los gastos de entrega
del Equipo, tales como honorarios aduanales, derechos de exportacion, transporte
y de cualquier otro tipo seran por cuenta exclusiva del Comodante.
Si el Comodante asi se lo solicita al Comodatario por escrito, el Comodatario se
obliga a hacer la entrega del Equipo, dentro de un periodo razonable de tiempo,
mediante la formalizacion de una transferencia aduanal del Equipo a la empresa
maquiladora que el Comodante le indique. Dicha transferencia ▇▇▇▇▇▇ hacerse en
los terminos del articulo 112 de ▇▇ ▇▇▇ Aduanera y de conformidad con las Reglas
de Caracter General en materia de Comercio Exterior del ano en el que se lleve a
cabo la entrega.
El Comodatario reconoce que el Comodante podra transferir la propiedad del
Equipo y ceder sus derechos bajo el presente Contrato en cualquier tiempo. En
dicho caso, el Comodante notificara, por escrito, al Comodatario de dicha cesion
y del nombre de su sucesor. El Comodante sera el unico responsable del pago de
cualesquier impuestos que se causen en relacion con dicha transmision de la
propiedad del Equipo.
DECIMA TERCERA.- TERMINO. La vigencia del presente contrato sera por un termino
indefinido. Sin embargo, el presente contrato terminara en la misma fecha en que
el Contrato de Servicios termine. A la terminacion de este contrato por
cualquier razon, el Comodatario, a costo del Comodante, devolvera el Equipo
inmediatamente al Comodante, en el domicilio que el Comodante designe.
DECIMA CUARTA.- REGISTRO. Las partes convienen en que este Contrato y
cualesquier convenio modificatorio que en su caso celebren, ▇▇▇▇▇▇ registrarse
ante el Registro Publico de la Propiedad en la ciudad donde se encuentre
localizado el Equipo dentro de los diez (10) ▇▇▇▇ siguientes de que el presente
contrato o cualesquier modificacion al mismo sea formalizada. El Comodante
pagara el costo de dicho registro.
DECIMA QUINTA.- NOTIFICACIONES. Cualquier notificacion o comunicacion que se
requiera dar conforme al presente contrato se dara de conformidad con los
terminos y condiciones senalados en el Contrato de Servicios.
DECIMA SEXTA.- JURISDICCION Y LEY APLICABLE. Para todo lo relacionado con la
interpretacion y cumplimiento del presente Contrato, las partes se someten a la
jurisdiccion y competencia de los Tribunales de la Ciudad de Fresnillo,
Zacatecas, Mexico, y a las leyes mercantiles mexicanas aplicables, expresamente
renunciando a cualquier otro fuero y ley que pudiera llegar a corresponderles
por razon de sus domicilios presentes o futuros o por cualquier otra causa.
DECIMA SEPTIMA.- INTERPRETACION. Este contrato ▇▇▇▇▇▇ celebrarse en los Idiomas
Ingles y espanol. Sin embargo, en el caso de que alguna contradiccion llegare a
surgir relacionada con la interpretacion o el significado del mismo, las partes
estan de acuerdo en que la version en espanol prevalecera.
[SIGUE HOJA DE FIRMAS]
Este contrato se firma en cinco tantos en los lugares y fechas que a
continuacion se indican.
COMODANTE COMODATARIA
NXSTAGE MEDICAL, INC., ENTRADA GROUP DE MEXICO,
S. DE ▇.▇. DE C.V
Por: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Por: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------- -----------------------------------
Nombre: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Nombre: ▇▇▇▇ ▇▇▇▇▇
Cargo: President & CEO Cargo: Legal Representative
Fecha: 3/19/07 Fecha: 3/20/07
Lugar: MA Lugar:
----------
ENTRADA
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ AMERICA
Por: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------
Nombre: ▇▇▇▇ ▇▇▇▇▇
Cargo: Global Factory, Managing Partner
Fecha: 3/20/07
Lugar: ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TESTIGOS
Por: /s/ ▇.▇. ▇▇▇▇▇▇▇ Por: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------- -----------------------------------
Nombre: ▇.▇. ▇▇▇▇▇▇▇ Nombre: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Domicilio: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. Domicilio: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ANEXO "A"
Lista de Maquinaria y Equipo
-12-
NXSTAGE - ENTRADA SHELTER AGREEMENT
COMMADATUM AGREEMENT - EXHIBIT A - MACHINERY, TOOLS AND EQUIPMENT LIST
Lunch room equipment
Lunch room furniture
Office furniture
Office furniture - cubicles
Conference room furniture
Air compressor and dryer
Back-up compressor
Wireless AP
SonicWall Firewall/VPN
Domain Controller Server
IP Based Phone Equip - Hub
IP Phones
Electrical fixtures and installation
Compressed air distribution piping
IT cabling
Central Vacuum
Manufacturing floor process water and drains
CEMA Equipment and Construction
Racking
Shelving
Fork lift
Pallet jacks
Pallet spinner/wrapper
Manual pallet jacks
Portable defibrilator
Tubing Un-Coiler
Luggage Tag Printer
Label Printer for Carton Labels
Filling System for Fluid Concentrate
Hand held ultrasonic welder
Solvent Dispensers
Tubing Cutters
Tape Machines
Scales for Inventory Count/Pkg weigh check
Packaging Heat Sealers
Leak Testers
UV Lights
Terumo Sterile Tubing Welder
Portable Clean Room
Fixturing for SAK Disposable
Fixturing for PAK Disposable
Additional Weld Thickness Gages for FMP Inspection
Durability tester improvements
Assy Fixture for Pea Pod
Assy Fixture for Dual Lumen spike
Portable carts
Shelves
Bins
Benches
Chairs
Pressure regulators
Calibrated rulers
Test Fixtures, custom NxStage
Concentrate totes
NXSTAGE - ENTRADA SHELTER AGREEMENT
COMMADATUM AGREEMENT - EXHIBIT A - MACHINERY, TOOLS AND EQUIPMENT LIST
NXSTAGE - ENTRADA SHELTER AGREEMENT
COMMADATUM AGREEMENT - EXHIBIT A - MACHINERY, TOOLS AND EQUIPMENT LIST
Milling Machine
Lathe
Band Saw
Immersion Circulator Model 1122S
Scale VA-12kg
Door force setting
Cam Valve Adjuster
highpot tester
Electrical safety
Inline temp Mesa meter 90DX
Pinch Valve Assy Fixture
Can valve adjuster
Spring Adjust tool
EFD 1500XL Epoxy Dispenser
▇▇▇▇▇▇▇ ▇▇▇ Scale
Microscope
ATP Automation Equipment
Die Cast Tooling - Base, Door, Chassis Plates, rotor, Handles
Cycler service test equipment and bench equip
PFSL service test equipment and bench equip
Service shared equipment
Service spare test equipment
Machine shop equipment non-capital
3x5/3x4 Surface Plate w/stand
MicroHite - Electronic Height gage
Optical Comparator
Microscope
Drop Indicators
Deltronic Pins up to 3/4"
Gage Blocks & Pins
Thread Gages - Various Go/No-Go
Digital Camera
Shelves
Bins
Benches 3x6, ESD protected and lighting
Chairs
NXSTAGE - ENTRADA SHELTER AGREEMENT
COMMADATUM AGREEMENT - EXHIBIT A - MACHINERY, TOOLS AND EQUIPMENT LIST
