Agreement on the Seat of the IUCN in Honduras

Approve in all and each one of its parts the AGREEMENT No. 32-DGTC, which contains the "HEADQUARTERS AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF HONDURAS AND THE INTERNATIONAL UNION FOR THE CONSERVATION OF NATURE AND NATURAL RESOURCES (IUCN)", which literally states: "SECRETARIAT OF STATE IN THE OFFICE OF FOREIGN AFFAIRS AND INTERNATIONAL COOPERATION. AGREEMENT No. 32–DGTC. Tegucigalpa, M.D.C., September 24, 2015. THE CONSTITUTIONAL PRESIDENT OF THE REPUBLIC. Whereas: Said Agreement has as its purpose the establishment of the Headquarters Office of the International Union for the Conservation of Nature and Natural Resources in the country and in this way contribute to the development and strengthening of cooperation and assistance to conserve the integrity and diversity of nature in Honduras. Whereas: The signature is given as part of the activities framed in the priorities of the Government of Honduras in sustainable development, the conservation of natural resources and the well-being of its population as well as to ensure that all use of natural resources is equitable. Therefore: In application of Articles 16 and 245, numeral 1 and 11 of the Constitution of the Republic, Articles 116 and 118 of the General Law of Public Administration and Article 5 of the Civil Code. IT AGREES: FIRST: Approves in all and each one of its parts the "Headquarters Agreement between the Government of the Republic of Honduras and the International Union for the Conservation of Nature and Natural Resources (IUCN)", which literally states: Headquarters Agreement between the Government of the Republic of Honduras and the International Union for the Conservation of Nature and Natural Resources (IUCN). "The Government of the Republic of Honduras and the International Union for the Conservation of Nature and Natural Resources (IUCN) hereinafter referred to as the Parties". WHEREAS: That the International Union for the Conservation of Nature and Natural Resources (IUCN) is a non-profit, voluntary international organization; founded in 1948, it is the world's oldest and largest global environmental organization. With headquarters in Switzerland, it has more than 50 offices around the world. WHEREAS: The IUCN is governed by its Statutes of October 5, 1948, revised on October 22, 1996 and last amended on September 14, 2012 and has Observer Status before the General Assembly of the United Nations. WHEREAS: The mission of the IUCN is to influence, encourage and help societies throughout the world to conserve the integrity and diversity of nature and ensure that all use of natural resources is equitable and ecologically sustainable. WHEREAS: The IUCN, in addition to working on the scientific and technological aspects of nature conservation, also supports the implementation of demonstrative projects in the field, in the areas of its interest; activity that it has been carrying out since nineteen eighty-three in Central American countries. WHEREAS: The IUCN develops and supports cutting-edge science for conservation, particularly in species, ecosystems, biodiversity and the impact these have on human livelihoods. It executes thousands of field projects around the world to better manage natural environments and supports governments, non-governmental organizations, international conventions, United Nations organizations, companies and communities to develop laws, policies and best practices in environmental matters. WHEREAS: The Government of the Republic of Honduras has as country priorities sustainable development, the conservation of natural resources and the well-being of its population. WHEREAS: Having in mind the interest of the GOVERNMENT and the desires expressed by the IUCN to install in the Republic of Honduras a delegation to support the development of actions in favor of natural resources and its citizens. THEY AGREE TO THE FOLLOWING HEADQUARTERS AGREEMENT:

DEFINITIONS. 1. For purposes of this Agreement, it shall be understood as: "IUCN", the International Union for the Conservation of Nature and Natural Resources. 2. "DELEGATION", the IUCN Delegation. 3. "HEAD OF DELEGATION", the person designated by the IUCN to direct the activities of the Delegation in Honduras duly accredited by said entity, regardless of other officials who may be designated by the IUCN. 4. "DELEGATES", the persons designated by the IUCN to carry out activities in Honduras, under the direction of the Head of Delegation. 5. "FAMILY MEMBERS", the spouse, dependent relatives within the degrees of the law of the Head of Delegation and of the Delegates. 6. "CONVENTION", the Vienna Convention on Diplomatic Relations. 7. "SECRETARIAT" Secretariat of Foreign Affairs and International Cooperation". 8. "STATUTES", the Statutes of the IUCN. ARTICLE 2. ESTABLISHMENT AND HEADQUARTERS OF THE DELEGATION. 1. The GOVERNMENT and the IUCN agree that the latter shall establish in Honduras a Delegation, under the immediate responsibility of a Head designated by the IUCN. 2. For the development of its activities in the country, the Delegation shall have the number of Delegates that its Head considers necessary to carry out its work efficiently. 3. Delegates and the secretarial and service personnel of the Delegation shall be subordinate to its Head. 4. The Head of the Delegation and the Delegates may travel throughout the national territory, as well as leave and re-enter it, especially for the fulfillment of the actions that correspond to them from the protection and assistance activities that the Delegation carries out in the country and the region. 5. The IUCN is authorized to establish in Honduran territory a main headquarters and the operational sub-offices that are necessary for the proper performance, efficiency and effectiveness of its operations. ARTICLE 3. FUNCTIONS OF THE DELEGATION. The presence of the Delegation in Honduras reaffirms the mutual desire of the IUCN and the GOVERNMENT to promote the IUCN's vision of a just world that values and conserves nature. The aforementioned presence of an IUCN delegation within the framework of this Agreement cannot be interpreted as granting to the IUCN or to its representatives or Delegates, competencies or attributions of any kind, other than those expressly and exhaustively provided for therein. ARTICLE 4. RELATIONS BETWEEN THE GOVERNMENT AND THE IUCN. 1. The Delegation shall maintain its liaison with the GOVERNMENT through the Secretariat of Energy, Natural Resources, Environment and Mines of Honduras (SERNA) and/or any other that may be designated in its absence. This does not prevent the IUCN from maintaining work, cooperation and any other relations with other instances of the GOVERNMENT and other actors of civil society and the private sector. 2. With regard to proceedings that the IUCN is interested in carrying out from its central headquarters in Switzerland or another country where it may be established in due course, or from its Regional Office for Mexico, Central America and the Caribbean, the Secretariat of Energy, Natural Resources, Environment and Mines shall be responsible, through the Secretariat of Foreign Affairs and International Cooperation, for assuming the competence to attend to and resolve such proceedings.

LEGAL PERSONALITY AND LEGAL STANDING OF THE DELEGATION. The Delegation legally represents the IUCN and shall exercise in the Republic of Honduras the rights and obligations of the IUCN. It may exercise its legal standing throughout the territory of the Republic. Therefore it may contract obligations and acquire rights in accordance with the laws of the Republic of Honduras in the matters that are pertinent and in accordance with the provisions of this Agreement and be a party to judicial and administrative proceedings.

IMMUNITIES. 1. The Head of Delegation and Delegates of foreign nationality, in the performance of their official functions, shall enjoy in the national territory all the immunities and to the extent and with the exceptions that are recognized to diplomatic agents and their family members, both in criminal and civil or commercial matters. 2. The Delegation shall, for its part, enjoy all the immunities granted to diplomatic missions by the Convention, particularly the inviolability of its premises, its archives and documents, its correspondence and other forms of communication, its mail pouch and mail. 3. In case of application of jurisdictional immunity, the IUCN shall be responsible for the indemnification that may be due and shall ensure in its case due process in accordance with applicable law. 4. In administrative matters in which the Delegation intervenes before the GOVERNMENT, they shall only be responsible to the IUCN, and shall adjust their procedures to the principles referred to in its Statutes.

FINANCIAL RESOURCES. Without being affected by tax laws, regulations and other legal provisions. 1. The IUCN may have funds, foreign currency of any kind and in relation to its operations in the territory, keep its accounts in any currency, in accordance with the Regulation of the Central Bank of Honduras for the Management of Deposit Accounts in Foreign Currency, complementary resolution No. 88-3/2012 which establishes the types of currencies that institutions of the national financial system may maintain in deposit accounts these are: United States Dollar, Japanese Yen, Euro, Swiss Franc, British Pound, Yuan and Canadian Dollar. 2. The IUCN shall have freedom to transfer its funds, foreign currency from one country to another, or within any country and to convert to any other currency the foreign currencies it has in its possession, in accordance with the Regulation for Trading in the Organized Foreign Exchange Market in Articles 2 and 3 thereof. ARTICLE 8. EXEMPTIONS. 1. The IUCN and the Delegation, as well as its assets, income, transactions and property shall be exempt from all classes of direct, indirect taxes, levies and fees, including the following: a. From Income Tax and corresponding formal obligations, provided that the income obtained and its assets are used exclusively for the objectives established in its Statutes related to conservation of natural resources. b. From Sales Tax on added value and corresponding formal obligations, the levies whose payment is dispensed with, the scope of the exemption, the requirements to be met by the beneficiaries, the term or duration of the privilege that carry out shall be used exclusively for the objectives established in its Statutes. c. Tax exemptions shall be strictly personal. Consequently, they may not be transferred to persons other than the beneficiaries, unless special laws provide otherwise. d. From Tax on Stamped Paper and Tax Stamps on documents that contain acts or contracts necessary for the achievement of the objectives established in the Statutes. e. From any direct contribution, except when such contributions constitute fees for public services. f. From customs duties or equivalent charges and from any other taxes, fees, contributions, prohibitions or restrictions with respect to articles and vehicles that it imports or exports for its official use. Articles and vehicles imported duty-free may not be sold in the country, except in accordance with conditions agreed by the Government, which shall not be less favorable than those established for resident Diplomatic Missions. g. From customs duties or equivalent charges and from any other taxes, fees, contributions, prohibitions or restrictions with respect to merchandise and goods that it imports or exports for official use that are necessary for the achievement of the objectives established in the Statutes. h. From any tourism and airport taxes. 2. For the effectiveness of what is prescribed in the preceding subsection, it shall be necessary for the Delegation to carry out the respective tax exemption procedure through the Secretariat of State. 3. For the use of vehicles, the GOVERNMENT shall grant to the Delegation the respective license plates, which shall be marked with the initials "MI". The procedure for the granting of such plates shall be carried out through the Secretariat of State in the Office of Foreign Affairs and International Cooperation upon compliance with the requirements demanded of diplomatic officials.

EXEMPTIONS AND FACILITIES IN FAVOR OF THE HEAD OF DELEGATION. 1. The Head of Delegation and Delegates shall be exempt from all tax on salaries and remuneration and other benefits paid to them with funds from the IUCN. Likewise, they shall be relieved of the provisions on social security provided that they are already protected by those of another State or enjoy equivalent protection. 2. The Head of Delegation and Delegates may place the IUCN insignia in the Delegation premises, in their private residences and in official automobiles, registered as such in the corresponding registers of the GOVERNMENT. 3. The GOVERNMENT shall grant the necessary facilities for the Head of Delegation, Delegates and their family members to enter the national territory and remain in it for the time during which they exercise their functions and shall extend to them courtesy visa for the time they remain in their functions. The Delegation shall notify the Secretariat of State of the names of its Delegates, the date of beginning and termination of their functions, as well as the position and functions they will exercise in Honduras. The Secretariat of State shall extend to the Head of Delegation, to the Delegates and their family members an identity document showing the rank and function performed by the official, similar to that granted to resident diplomatic agents, or to the family condition. 4. The Head of Delegation, Delegates and their family members shall be exempt from providing any type of service of a national character provided that they are not Honduran nationals. Likewise, the obtaining of work permits shall not be necessary for employees of the IUCN of foreign nationality. 5. In case of internal disturbances or conflicts of an international character, the GOVERNMENT shall give to the Head of Delegation, to the Delegates and to their family members, all kinds of facilities so that, if they so desire, they may leave the country by the route they consider most expedient. 6. In the event that the Head of Delegation and Delegates have resided abroad during the year prior to their appointment in Honduras, they may import free of duties their household goods and personal and family belongings upon taking office in the country within the year following the taking of office. They shall also be granted the introduction at any time free of all taxes, duties and other charges of one vehicle for personal use every two years, for which "MI" plates shall be granted to the Head of Delegation and Delegates with the same requirements that Honduran law demands of diplomatic officials and the same diplomatic missions where applicable. These facilities shall be subject to the regime that Honduran law establishes in this regard for diplomatic officials and missions in Honduras and therefore shall also be governed by it, regarding the disposal of vehicles when a Head of Delegation or Delegates terminate their assignment. 7. The respective privileges shall be processed in accordance with the laws and current regulations of the country. 8. At the end of their mission, the GOVERNMENT shall authorize the sale of personal belongings in Honduras of the Head of Delegation and Delegates under the conditions authorized by the respective regulations for diplomatic agents. The IUCN shall enjoy in Honduran territory facilities of communication no less favorable than those granted to diplomatic missions. No censorship shall be applied to official correspondence or other official communications of the IUCN. The IUCN shall have freedom of speech and complete independence in the performance of its functions, immunity from judicial proceedings with respect to expressions whether oral or written in acts performed in the performance of its functions. The Head of Delegation and Delegates of IUCN shall be immune from all judicial proceedings with respect to words written or spoken and all acts executed in their official capacity. ARTICLE 10. SETTLEMENT OF DISCREPANCIES. 1. Discrepancies regarding the interpretation and application of the provisions of this Agreement shall be resolved between the IUCN and the GOVERNMENT represented by the Secretariat of Energy, Natural Resources, Environment and Mines, through the Secretariat of Foreign Affairs and International Cooperation. 2. To resolve discrepancies, both the GOVERNMENT and the IUCN shall take into account the national interest to be protected and the interest of the IUCN regarding the work carried out in Honduras and shall make every effort to settle the matter with good sense and fairness.

OBLIGATIONS. The Head of Delegation, Delegates and their family members are obliged to respect the provisions contained in the legal framework in force in the Republic of Honduras from the moment they enter the national territory and shall have the right to be protected by them and shall be governed at all times by the principles mentioned in the Statutes and this Agreement. ARTICLE 12. MODIFICATIONS OF THIS AGREEMENT. The provisions of this Headquarters Agreement may be modified at any time by agreement between the GOVERNMENT and the IUCN. ARTICLE 13. PROTOCOLS OR DERIVED AGREEMENTS. By agreement between the GOVERNMENT and the IUCN, protocols or agreements derived from this Agreement may be executed, which shall enter into force in accordance with the procedure stipulated by the legal system of Honduras. ARTICLE 14. EFFECTIVENESS AND TERMINATION. The effectiveness of this Agreement shall be for an indefinite period and shall commence on the date on which the GOVERNMENT communicates to the IUCN having completed the procedure established by the legal system of Honduras. The GOVERNMENT or the IUCN may renounce this Agreement by notifying the other Party of the decision to do so at least six months in advance of the date on which this Agreement shall become null and void. ARTICLE 15. COPIES AND DEPOSIT. This Agreement consists of two originals written in Spanish, one of which shall remain in the possession of the GOVERNMENT and the other in the possession of the IUCN. In witness whereof, the representatives of the Government and the IUCN sign this Agreement in the city of Tegucigalpa, Honduras, on the tenth day of the month of September 2015. For the Government of the Republic of Honduras, Roberto Ochoa Madrid, Assistant Secretary of Foreign Affairs and International Cooperation. For the International Union for the Conservation of Nature and Natural Resources (IUCN), Grethel Aguilar, Regional Director for Mexico, Central America and the Caribbean. SECOND: Submit to the consideration of the Sovereign National Congress this Agreement for purposes of Article 205 numeral 30 of the Constitution of the Republic. COMMUNICATE AND PUBLISH. (F Y S) JUAN ORLANDO HERNÁNDEZ ALVARADO CONSTITUTIONAL PRESIDENT OF THE REPUBLIC. (F Y S) ROBERTO OCHOA MADRID, SECRETARY OF STATE, BY LAW.

This Decree shall enter into force as of the day of its publication in the Official Gazette "La Gaceta". Given in the city of Choluteca, department of Choluteca, at the Convention Center of the Jicaral Hotel, on the twenty-seventh day of the month of September of the year two thousand seventeen. ANTONIO CÉSAR RIVERA CALLEJAS PRESIDENT MARIO ALONSO PÉREZ LÓPEZ SECRETARY JOSÉ TOMÁS ZAMBRANO MOLINA SECRETARY To the Executive Power Therefore: Execute it. Tegucigalpa, M.D.C., November 6, 2017. JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT OF THE REPUBLIC THE SECRETARY OF STATE IN THE OFFICES OF FOREIGN AFFAIRS AND INTERNATIONAL COOPERATION MARIA DEL CARMEN NASSER DE RAMOS Legislative Power DECREE No. 80-2017 THE NATIONAL CONGRESS, WHEREAS: That through Article 13 of the State Contracting Law and 146 of its Regulations, contracts executed that by reason of their term take effect in another government administration must be approved by the National Congress. WHEREAS: That in accordance with Article 205 Attribution 19) of the Constitution of the Republic it is the responsibility of the National Congress to approve or disapprove contracts that involve tax exemptions, incentives and concessions, or any other contract that is to produce or prolong its effects to the following government period of the Republic. THEREFORE, IT DECREES:

Approve in all and each one of its parts Contract No.: 0835/GLCSI/AMDC/2017.-CODE No. 1648 Supervision of the Construction of Road Solution, Sanitary, Storm and Electrical Installations of Boulevard Los Próceres executed on the 25th day of April 2017, between the Businessman Nasry Juan Asfura Zablah, Municipal Mayor of the Central District and Legal Representative of said Municipal Alcaldía and Mr. Amílcar René Girón Vásquez, as General Manager of the Professional Association Company, S.A DE C.V. (ASP), which literally states: "CONTRACT No. 0835/GLCSI/AMDC/2017.-CODE No. 1648 'SUPERVISION OF THE CONSTRUCTION OF ROAD SOLUTION, SANITARY, STORM AND ELECTRICAL INSTALLATIONS OF BOULEVARD LOS PRÓCERES.' PUBLIC COMPETITION No CPuNO-006-AMDC-111-2017. This contract is celebrated between: NASRY JUAN ASFURA ZABLAH, of legal age, married, businessman, Honduran and of this domicile, with Identity Card number 0801-1958-03886, acting in my capacity as Municipal Mayor of the Central District, position which I accredit with the Special Oath Taking Act number GDFM 001-2014 dated January 20, 2014, who for legal purposes of this contract shall be called 'THE CONTRACTOR' on one hand and AMÍLCAR RENÉ GIRÓN VÁSQUEZ, of legal age, Honduran, Civil Engineer, with Identity Card No. 1804-1970-01332, Municipal solvency No. 03-07001307734, acting in his capacity as General Manager of the company Professional Association, S.A. de C.V. (ASP), which capacity he accredits with Public Deed No. 2 dated June 6, 1996 and authorized by Lawyer and Notary Darío Orlando Rovelo Rodríguez and registered in the Commercial Registry of Francisco Morazán registered under Number 60 of volume 358, who henceforth and for purposes of this contract shall be called 'THE CONTRACTOR' on the other hand; whereas The Contractor wishes for The Contractor to execute the contract 'SUPERVISION OF THE CONSTRUCTION OF ROAD SOLUTION, SANITARY, STORM AND ELECTRICAL INSTALLATIONS OF BOULEVARD LOS PRÓCERES.'-Public Competition No. CPuNO-006-AMDC-111-2017; hereinafter called 'The Services' and The Contractor has accepted the offer for the execution and completion of said works and the remediation of any defects thereof; consequently this contract attests to the following: 1.- In this contract the words and expressions used shall have the same meaning as in the respective General and Special Conditions of the Contract to which reference is made hereinafter and the same shall be considered part of this contract and shall be read and interpreted as part thereof. 2.- The following documents constitute an integral part of this contract, are attached hereto and shall be read and interpreted together with it: a) The General Conditions of the Contract. b) The Special Conditions of the Contract. c) Bases of Public Competition. d) Terms of Reference (Technical, General and Special Specifications). e) Letter f) of Presentation of the Proposal, Technical Proposal and Economic Proposal presented by THE CONSULTANT in his Offer. f) Negotiation Minutes. g) Notice from the Contractor to the Consultant that he has been awarded the Contract; and, h) Order of Commencement i) Guarantees. j) Modifications to the base document if any. k) Plans. 3.- The Consultant hereby undertakes to develop the consulting services contracted in strict adherence to the component documents of the Contract, in accordance with the approved work program, within a total period of two hundred seventy (270) calendar days. 4.- The Consultant hereby undertakes to issue legal, technical and financial opinions prior to requesting and approving all modifications and change orders issued during contract execution. 5.- The Contractor hereby commits to pay the Consultant as consideration for the execution and completion of consulting services and the remediation of defects the price of the contract or those sums that become payable under the provisions of the contract within the deadline and in the manner established herein. 6.- The amount of the contract amounts to the sum of Five Million Five Hundred Fifteen Thousand Ninety-Four Lempiras with 85/100 (L.5,515,094.85). THE CONSULTANT undertakes to carry out all consulting work and fulfill all objectives thereof with the amount established in this contract; however, for purposes of additional work requested by the Contractor, the unit costs established in the table described below shall be used: [Table content omitted for brevity] In witness whereof, the parties sign this Contract in accordance with the laws of the Republic of Honduras on the twenty-fifth (25) day of April two thousand seventeen, (F and S) Nasry Juan Asfura Zablah, Municipal Mayor, Contractor. (F and S) Amílcar René Girón Vásquez, Professional Association, S.A. de C.V (ASP), CONSULTANT. Appendix 'A' General Conditions of Contract. 1. Definitions 1.1 In this Contract, the following terms shall be interpreted in the manner indicated below: (a) 'Applicable Law' means the laws and any other provisions that have the force of law in the country of the Contractor; (b) 'Contract' means the agreement entered into between the Contractor and the Consultant, as evidenced in the form signed by the parties, including all its annexes and appendices and all documents incorporated therein by reference; (c) 'Contract Price' means the price that the Contractor will pay to the Consultant in accordance with the Contract as full compensation for the performance of its contractual obligations; (d) 'GCC' means these General Conditions of the Contract; (e) 'ECC' means the Special Conditions of the Contract; (f) 'Party' means the Contractor or the Consultant, as the case may be, and 'Parties' means the Contractor and the Consultant; (g) In case the Consultant is a joint venture or groups (joint venture) formed by several firms, 'Member' means any of them; 'Members' means all these firms, and 'Member in charge' means the firm mentioned in the ECC to act on behalf of all in the exercise of all rights and obligations of the Consultant toward the Contractor under this Contract; (h) 'The Contractor' is the entity that contracts the services of the Consultant; (i) 'Consultant' is the firm, company or person that is to supply the services under the Contract; (j) 'Subconsultant' is the firm or person contracted by the Consultant to carry out part of the consulting services; (k) 'Services' means the work described in the terms of reference that the Consultant shall perform in accordance with this Contract; (l) 'Personnel' means the employees hired by the Consultant or by any Subconsultant to provide the Services or a part thereof; and, (m) 'Foreign Currency' means any currency other than that of the country of the Contractor. 2. Law Governing the Contract. 2.1 This Contract, its meaning and interpretation and the relationship it creates between the Parties shall be governed by the law of the country unless otherwise specified in the ECC. 3. Language. 3.1 This Contract shall be drawn up in the Spanish language. It shall mandatorily govern all matters related to it or to its meaning or interpretation. 4. Notices. 4.1 All notices between the parties under the Contract shall be made by written communication, to the address indicated for this purpose in the ECC. Written communication includes: letter or email; all with written confirmation of receipt. 5. Place Where Services Shall Be Provided. 5.1 Services shall be provided in the places indicated in the ECC and, when they do not specify where a particular task is to be performed, in the places that the Contractor may indicate. 6. Authorized Representatives. 6.1 The officials indicated in the ECC may take any action that the Contractor or the Consultant should or may take under this Contract and may sign on their behalf any document that, under this Contract, should or may be signed. 7. Taxes and Fees. 7.1 Unless otherwise indicated in the ECC, the Consultant, Subconsultant and Personnel of both shall pay the taxes, fees, levies and other impositions that correspond pursuant to applicable law, the amount of which is considered included in the Contract Price. 8. Entry into Force. 8.1 This Contract shall enter into force on the date it is signed by both Parties, or on the date following its execution indicated in the ECC. 9. Commencement of Provision of Services. 9.1 The Consultant shall begin to provide the Services fifteen (15) days after the date the Contract enters into force, or on the date indicated in the ECC. 10. Expiration of Contract. 10.1 Unless rescinded earlier, in accordance with the provisions of Clause 16, this Contract shall expire at the end of the term specified in the ECC, counted from the date the Contract enters into force. 11. Modification. 11.1 The terms and conditions of this Contract, including the scope of the Services or the Contract Price, may only be modified by written agreement between the Parties. 12. Force Majeure or Act of God. 12.1 The parties may not claim delays in the performance of obligations under this contract, except for situations of force majeure or act of God duly proven. Force Majeure or Act of God shall be understood as, among others: any event that could not have been foreseen or that, if foreseen, could not have been avoided, which makes it impossible to comply exactly with contractual obligations and provided that reasonable measures have been taken to avoid them and reduce their effects, the following are recognized as causes of Act of God or Force Majeure, among others:

• a)

  Quarantine restrictions;

• b)

  Freight Embargoes;

• c)

  War, Belligerency, Invasion, Civil War, Revolution, Rebellion, Piracy, Riots, Insurrection or Usurpation of Powers;

• d)

  Confiscation, Expropriation, Destruction, Obstruction ordered by any Governmental authority other than the Municipal Alcaldía of the Central District;

• e)

  Natural Disasters such as: Earthquakes, Tsunamis, Typhoons, Hurricanes, Floods;

• f)

  and other causes recognized as force majeure or act of God. 12.2 If a situation of Force Majeure occurs, the Consultant shall promptly notify the Contractor in writing of such situation and its causes. Unless it receives instructions to the contrary in writing from the Contractor, the Consultant shall continue to comply with the obligations established in the Contract to the extent possible and shall try to find all alternative means of compliance notwithstanding the existing Force Majeure situation. 13. Non-Breach of Contract. 13.1 Failure by one of the Parties to perform any of its obligations under the Contract shall not be considered a breach thereof or negligence, provided that such failure is due to a Force Majeure event. 14. Extension of Terms. 14.1 Any term within which a Party must perform an activity or task under this Contract shall be extended for a period equal to that during which said Party was unable to perform such activity as a consequence of a Force Majeure event. 15. Payments. 15.1 During the period in which it is prevented from providing the Services as a consequence of a Force Majeure event, the Consultant—unless otherwise agreed in the ECC—shall be entitled to continue receiving payments in accordance with the terms of this Contract and to receive reimbursement of reasonable and necessary additional expenses incurred during that period to provide the Services and to resume them at the end of such period. 16. Rescission by the Contractor. 16.1 The Contractor may terminate this Contract by written notice of rescission to the Consultant, issued at least thirty (30) days in advance, when any of the events specified in subsections (a), (b), (c) and (d) of this Clause occur; in the case of the event indicated in subsection (e), such notice shall be issued sixty (60) days in advance: (a) If the Consultant fails to remedy the breach of its obligations under this Contract within thirty (30) days following receipt of notice thereof, or such longer term as the Contractor may have subsequently accepted in writing; (b) If the Consultant is insolvent or declared bankrupt; (c) If the Consultant, as a consequence of a Force Majeure event, is unable to provide a substantial portion of the Services for a period of not less than sixty (60) days; (d) In case of budget cuts of national funds that are made due to the economic and financial situation of the country, the estimate of the perception of income less than projected expenses and in case of unforeseen needs or emergencies; or (e) If the Contractor, at its sole discretion, decides to rescind this Contract. 17. Rescission by the Consultant. 17.1 The Consultant, by written notice to the Contractor with not less than thirty (30) days advance notice, may rescind this Contract when any of the events specified in subsections (a) and (b) of this Clause occur: (a) If the Contractor fails to pay a sum owed to the Consultant under this Contract and provided that such sum is not subject to controversy, pursuant to Clause 39, within forty-five (45) days following receipt of the Consultant's written notice regarding late payment; or (b) If the Consultant, as a consequence of a Force Majeure event, is unable to provide a substantial portion of the Services for a period of not less than sixty (60) days. 18. Payments Upon Rescission of Contract. 18.1 Upon rescission of this Contract in accordance with Clauses 16 or 17 above, the Contractor shall make the following payments to the Consultant: The remuneration provided for in Clause 35, for Services satisfactorily rendered prior to the date the rescission enters into force; and (a) Except in case of rescission pursuant to subsections (a) and (b) of Clause 16, reimbursement of any reasonable expense inherent to the prompt and orderly rescission of the Contract, including travel and return expenses of Personnel and their eligible dependents. 19. Obligations of the Consultant. 19.1 The Consultant shall provide the Services and comply with its obligations with due diligence, efficiency and economy, in accordance with generally accepted professional techniques and practices; likewise, it shall observe appropriate management practices and employ suitable modern techniques and efficient and safe methods. In all matters related to this Contract or the Services, the Consultant shall always act as a loyal advisor to the Contractor and at all times shall protect and defend the interests of the Contractor in agreements reached with a Subconsultant or with third parties. 20. Conflict of Interest. 20.1 The remuneration of the Consultant in relation to this Contract or the Services shall be only that stipulated in Clauses 35 to 38 and the Consultant shall not accept for its benefit any commercial commission, discount or similar payment in relation to the activities contemplated in this Contract, or in the Services, or in the performance of its obligations under it; furthermore, the Consultant shall make every effort to ensure that neither the Personnel nor the Subconsultant, nor the agents of the Consultant or Subconsultant, receive any such additional remuneration. 21. Prohibition on Consultant and Its Affiliates from Having Other Interests in the Project. 21.1 The Consultant agrees that, both during the term of this Contract and after its termination, neither the Consultant nor any of its affiliates, nor any Subconsultant nor any affiliate thereof, may supply goods, construct works or provide services (other than the Services and any continuation thereof) for any project derived from the Services or closely related to them. 22. Prohibition on Engaging in Incompatible Activities. 22.1 Neither the Consultant nor any Subconsultant, nor the Personnel, may engage in, directly or indirectly, any of the following activities: (a) During the term of this Contract, any commercial or professional activity in the country of the Contractor that is incompatible with those assigned to them under this Contract; or (b) After this Contract is terminated, any other activity specified in the ECC. 23. Confidentiality. 23.1 Neither the Consultant nor any Subconsultant, nor the Personnel of either, may disclose, during the term of this Contract or after its expiration, any confidential or proprietary information of the Contractor related to the Project, the Services, this Contract or the activities or operations of the Contractor without the prior written consent of the latter. 24. Insurance to be Contracted by the Consultant. 24.1 a) The Consultant shall contract and maintain and shall ensure that any Subconsultant contracts and maintains, at its own cost (or that of the Subconsultant, as applicable) and on the terms and conditions approved by the Contractor, insurance against the risks and for the coverages indicated in the ECC; and b) at the request of the Contractor, shall present proof of the contracting and maintenance of such insurance and the payment of the respective premiums in force. 25. Actions of Consultant Requiring Prior Approval of Contractor. 25.1 The Consultant shall obtain prior written approval from the Contractor to perform any of the following actions: (a) The execution of a subcontract for the provision of any part of the Services; (b) The appointment of Personnel members not listed by name in Appendix A ('Key Personnel and Subconsultants'); and (c) the adoption of any other action specified in the ECC. 26. Obligation to Submit Reports. 26.1 The Consultant shall submit to the Contractor the reports and documents specified in the Terms of Reference, in the form, quantity and term established in said terms. 27. Fines. 27.1 Breaches of the contract by the Consultant shall be sanctioned with fines established in the ECC. 28. Ownership by Contractor of Documents Prepared by Consultant. 28.1 All plans, designs, specifications, technical studies, reports and other documents and computer programs prepared by the Consultant for the Contractor in accordance with the provisions of the preceding Clause shall become the property of the Contractor, to whom the Consultant shall deliver them no later than the end or expiration of the Contract, together with a detailed inventory of all of them. The Consultant shall retain a copy of such documents and computer programs for a term of not less than five years. The ECC shall indicate any restrictions regarding the use of such documents and computer programs in the future. 29. Contract Modification. 29.1 The Contractor may make changes within the general framework of the Contract by written order to the Consultant. If any of these changes cause an increase or decrease in the Services or in the time needed for the Consultant to execute any part of the Services included in the Contract, an equitable adjustment of the Contract Price shall be made. The Consultant shall present adjustment requests arising from this Clause within twenty (20) days following the date it receives the change order from the Contractor. 30. Personnel of the Consultant. 30.1 In Appendix A, the positions and agreed functions of the Consultant's minimum key Personnel are described. Under this Contract, the Contractor approves the Key Personnel and Subconsultants listed by position and by name in said Appendix A. Any modification in the list shall be before being hired by the Consultant, the Contractor shall previously obtain written approval thereof, and in the same manner to execute subcontracts, if not foreseen in the offer. The subcontracts, whether included in the offer or made later, shall not relieve the Consultant of any of its responsibilities or obligations contracted under the Contract. The qualifications, as well as the estimated time that they will provide individual Services, shall be those negotiated with the Contractor and that appear in the form of the economic proposal. 31. Removal and/or Substitution of Personnel. 31.1 (a) Unless the Contractor agrees otherwise, there shall be no changes in the composition of Key Personnel. If it becomes necessary to replace any member of Key Personnel, for any reason beyond the reasonable control of the Consultant, the Consultant shall immediately replace him with another person with qualifications equal to or superior to those of the person replaced. (b) If the Contractor: (i) becomes aware that a member of Personnel has behaved in an unacceptable manner or has been accused of committing a criminal act; or (ii) has reasonable grounds to be dissatisfied with the performance of any member of Personnel, in such cases the Consultant, upon written request from the Contractor stating the reasons therefor, shall replace him with another person whose suitability and experience are acceptable to the Contractor. (c) The Consultant may not claim reimbursement of any additional expense resulting from the removal and/or substitution of a member of Personnel, or inherent thereto. 32. Obligations of the Contractor. 32.1 The Contractor shall make every effort to ensure that the Government grants the Consultant the assistance and exemptions indicated in the ECC. 33. Modification of Applicable Law. 33.1 If, after the date of this Contract, any change occurs in the applicable law regarding taxes and fees that results in an increase or decrease in the cost of the Services rendered by the Consultant, the remuneration and reimbursable expenses payable to the Consultant under this Contract shall be increased or decreased as appropriate by agreement between the Parties and the corresponding adjustments of the maximum amounts stipulated in the Contract Price shall be made. 34. Services and Facilities. 34.1 The Contractor shall provide to the Consultant the services and facilities indicated in the ECC. 35. Payments to Consultant. 35.1 The manner and condition in which payments to the Consultant shall be made under the Contract shall be specified in the ECC. The total remuneration of the Consultant shall not exceed the Contract Price and shall be a sum that includes all costs of Personnel and Subconsultant, as well as costs of document printing, communications, travel, accommodation and similar items and all other expenses incurred by the Consultant in providing the Services. Except as provided in Clause 33, the Contract Price may only be increased above the sums established in Clause 36 if the Parties have agreed on additional payments pursuant to what is stipulated in Clause 11. 36. Contract Price. 36.1 The price payable in national currency, unless otherwise indicated in the ECC, shall be that indicated in the ECC. 37. Payment of Additional Services. 37.1 To determine the remuneration for additional services that may be agreed upon pursuant to Clause 11, it must be presented in accordance with the table established in the sixth clause of this contract, to break down the global price. 38. Conditions Relating to Payments. 38.1 Payments shall be made to the Consultant as indicated in the ECC. The Contractor shall make payments promptly, not exceeding a period of forty-five (45) days counted from the date the Consultant has submitted the corresponding payment request and it has been accepted by the Contractor. 39. Settlement of Disputes. If due to any disagreement in the interpretation, execution, effects and/or resolution of this contract, the contracting parties shall make all possible efforts to reconcile the conflicts or any disagreement, any divergence that arises on a matter and that is not resolved with the Executing Unit, shall be resolved by the Management of the AMDC prior to study of the case and Opinion of the Legal Management; this resolution shall have a definitive character within the Administrative channel, bringing to its knowledge the Honorable Municipal Corporation, Both parties submit to the jurisdiction and competence of the Civil Court of Contentious Administrative of the department of Francisco Morazán. 40. Corrupt Practices. 40.1 It is required that the suppliers/contractors participating in projects with AMDC financing observe the highest ethical standards, whether during the Bidding process or during contract execution. The definitions of actions constituting corrupt practices transcribed in Article 33.1 of the General Instructions to Bidders represent the most common, but are not exhaustive. For this reason, the AMDC shall act against any similar fact or claim considered to be corrupt, in accordance with the established procedure. 40.2 If it is verified that the Provider/Contractor has engaged in corrupt practices, the Contractor may cancel the contract in accordance with Clause 16 and execute the offer compliance guarantee. 40.3 If it is verified that the Provider/Contractor has engaged in corrupt practices, the AMDC may declare a firm ineligible to be awarded future contracts undertaken due to financing or with its own funds. The inhibition established may be temporary or permanent. 41. Inspections and Audits. 41.1 The Consultant shall allow the AMDC, or whomever it designates, to inspect or conduct audits of the Consultant's accounting records and financial statements related to contract execution. Appendix 'B' Special Conditions of Contract (ECC). The following Special Conditions of the Contract (ECC) complement the General Conditions of the Contract (GCC). In case of conflict, the provisions indicated here shall prevail over those of the GCC. The number of the corresponding clause of the GCC is indicated in parentheses. 1. Definitions (Clause 1 of GCC). The Contractor is: the Municipality of the Central District. 2. Notices (Clause 4 of GCC) In the case of the Contractor: Municipal Alcaldía of the Central District, Municipality of the Central District, Department of Control and Monitoring, Executive Building, 1st floor, across from Viera Hospital and Clinics, Barrio El Centro, Tegucigalpa, M.D.C., Honduras C. A., telephone (504) 2220-0582. Attention: Eng. Manuel Membreño. 3. Place Where Services Shall Be Provided (Clause 5 of GCC). Services shall be provided at the following location: The Section on Boulevard Los Próceres begins at the height of the American Embassy and ends at the height of the Bridge over El Río Chiquito that connects to the San Miguel colony and colony 21 de Octubre. 4. Authorized Representatives (Clause 6 of GCC). In the case of the Contractor Nasry Juan Asfura Zablah, Municipal Mayor, or whomever he designates during contract execution. 5. Entry into Force (Clause 8 of GCC). This Contract shall enter into force as of the date of signature of the contract. 6. Commencement of Provision of Services (Clause 9 of GCC). Consulting Services shall commence after the start order is issued. 7. Expiration of Contract (Clause 10 of GCC). The term shall be: two hundred seventy (270) calendar days. 8. Insurance to be Contracted by the Consultant (Clause 24 of GCC). The risks and coverages shall be the following: i. Civil liability insurance toward third parties with respect to motorized vehicles; which must be in effect during the contract period. ii. Employer's liability insurance and labor insurance against accidents; which must be in effect during the contract period. 9. Fines (Clause 27 of GCC). The A.M.D.C., in accordance with what is established in Article 72 of the General Provisions of the General Budget of Income and Expenditures of the Republic for fiscal year 2017, related to Article 72 of the State Contracting Law shall charge a fine equivalent to ZERO POINT EIGHTEEN PERCENT (0.18%) for each day of delay in service provision as well as for any breach of the obligations established in this contract until the end of the contract execution period, the foregoing without prejudice to making effective the Compliance Guarantee, proceeding, if the A.M.D.C. deems it appropriate, to the rescission of the Contract, also reserving the exercise of legal actions for damages by breach on the part of THE CONSULTANT that may be appropriate. 10. Ownership by Contractor of Documents Prepared by Consultant (Clause 28 of GCC). Restrictions: The Consultant may not use these documents for purposes unrelated to this Contract without prior written consent from the Contractor. Documents prepared shall be confidential, for exclusive use by the Contractor. The Consultant shall cede to the Contractor the copyright, patents and any other industrial property rights, where applicable, on the work and documents produced by it under the terms of this Contract. 11. Assistance or Exemptions (Clause 32 of GCC). The Municipality shall assist the Consultant in coordinating with other State institutions; however: The Consultant shall, in the first instance, coordinate its activities with State institutions as required. Procedures relating to mobilization and installation of electrical lines, telephone poles, drinking water and sewage pipes, whether for transfer of structures or/and for installation of new ones as applicable, must be coordinated with ENEE, Hondutel, SANAA. The Consultant together with the Contractor shall be responsible for carrying out all necessary procedures. 12. Services and Facilities (Clause 34 of GCC). Not Applicable. 13. Payments to Consultant (Clause 35 of GCC). Payments to the Consultant shall be as follows: Payment Method: Payments shall be made in national currency: Lempiras. • First payment: Ten percent (10%) of the contract value against delivery and approval of the Preliminary Report by AMDC authorities. • Periodic Payments: Eight payments corresponding to ten percent (10%) of the contract value against delivery and approval of Progress Reports. • Final Payment: Ten percent (10%) of the contract value against delivery and approval of the Final Report by AMDC authorities. Retaining in each payment 12.5% of the value of the professional fees or profit by deduction by law of the ISR, unless they present proof of having made payments on account and 10% of the value of the professional fees or profit for the purpose of additional guarantee of contract compliance, returning the value of the latter upon obtaining the settlement. It is understood and agreed that the percentage retained for purposes of ISR on the value of professional fees or profit is subject to change in accordance with modifications in the National Tax Law. 14. Contract Price (Clause 36 of GCC). The total amount of the Contract in Lempiras is Five Million Five Hundred Fifteen Thousand Ninety-Four Lempiras with 85/100 (L.5,515,094.85). 15. Conditions Relating to Payments (Clause 38 of GCC). All payments prior to their making must have the corresponding reports previously approved by the Department of Control and Monitoring. 16. Contract Compliance Guarantee: THE CONSULTANT is obliged to establish, before beginning the execution of the study, the following guarantee: a) Contract Compliance Guarantee: It shall be established through retentions equivalent to Ten Percent (10%) of each partial payment for professional fees. b) Additionally, a Contract Compliance Guarantee equivalent to Fifteen Percent (15%) of professional fees with exclusion of costs shall be required, with a validity of up to three (3) months after the scheduled deadline at the time of execution of consulting work; these Guarantees must be issued by a Bank or Insurance Company legally established and authorized to operate in the Republic of Honduras- The retention before mentioned shall be returned to the Consultant after the Consulting work is finalized and accepted through the issuance of the definitive receipt to the satisfaction of the A.M.D.C., provided that there are no third-party claims and prior presentation of the Final Report. Guarantees must contain the following clause: 'This Guarantee shall be executed at the simple request of the A.M.D.C., with the simple presentation of a non-compliance Note. The Guarantee shall be presented by the awarded Consultant ten (10) calendar days after the signing of the contract, to the entire satisfaction of the A.M.D.C., in accordance with Form No. 6 and must be extended by a Bank or Insurance Company legally constituted in the country. 17. Advance Payment Guarantee: Not applicable. 18. Settlement of Disputes (Clause 39 of GCC). If due to any disagreement in the interpretation, execution, effects and/or resolution of this contract, the contracting parties shall make all possible efforts to reconcile the conflicts or any disagreement, any divergence that arises on a matter and that is not resolved with the Executing Unit, shall be resolved by the Management of the A.M.D.C., prior to study of the case and Opinion of the Legal Management; this resolution shall have a definitive character within the Administrative channel, bringing to its knowledge the Honorable Municipal Corporation, both parties submit to the jurisdiction and competence of the Civil Court of Contentious Administrative of the department of Francisco Morazán. 19. Documents Comprising the Contract: The following documents form an integral part of this contract:

  • a)

    The Bases or Documents of Public Competition;

  • b)

    Clarifications and amendments to the Bases or Documents of Public Competition;

  • c)

    The offer negotiated in all its content (minutes of negotiation) of THE CONSULTANT;

  • d)

    Contract Compliance Guarantee presented by THE CONSULTANT;

  • e)

    the award notice;

  • f)

    terms of reference and Key Personnel; and, g) Other documents signed by the contracting parties in direct relation to the obligations of this contract. 20. Start Order. This shall be issued once THE CONSULTANT complies with all required requirements and presents the Contract Compliance Guarantee, for which it has a period of ten (10) calendar days counted from the Notice by the Contract Supervisor. 21. Withholdings. The Consultant shall be subject to national taxes on the expenses and amounts payable under the Contract (Professional fees), for which it shall detail them in the economic proposal. A withholding of 12.5% of the amount of professional fees from each payment shall be made, for purposes of payment of Income Tax, if it presents evidence that it makes advance payments, this withholding shall not be made. It is understood and agreed that the percentage withheld for purposes of ISR on the value of professional fees or profit is subject to change in accordance with modifications in the National Tax Law. The A.M.D.C. shall not incur labor responsibility for payment of benefits or social security under the contract, for which it must be assumed by the Consultant. 22. Extension of Term and Guarantees. Provided that justified cause exists THE CONSULTANT may request the extension of the deadline for execution of the consulting services subject of this Contract, or of any other stipulation that does not affect the nature or amount of the services or when reasons of force majeure or act of God duly proven occur, in which case it shall submit a written request to the authority responsible for contract execution before the end of execution of the consulting services.- When this occurs, the Guarantees shall be extended in the manner established by the State Contracting Law.- In case of extension in the Execution Term and that does not correspond to additional work requested by the Contractor, the costs incurred by THE CONSULTANT shall not be recognized. 23. Other Work Requested. THE CONTRACTOR may request at any time from THE CONSULTANT special reports. 24. Surveillance of Compliance. The Executing Unit shall ensure that THE CONSULTANT complies with everything established in this contract and the terms of reference. 25. Labor Responsibility. THE CONSULTANT shall be the sole responsible for the payment of labor and social obligations that arise with its own workers in the execution of this contract, in application of what is established in the Labor Code. - It shall also be responsible for damages that may be caused to third parties. 26. Causes of Contract Rescission. If the Consultant does not remedy the breach of its obligations under this Contract within thirty (30) days following receipt of notice thereof, or such longer term as the Contractor may have subsequently accepted in writing; b) If the Consultant is insolvent or declared bankrupt; c) If the Consultant, as a consequence of a Force Majeure event, is unable to provide a substantial portion of the Services for a period of not less than sixty (60) days; (d) In case of budget cuts of national funds that are made due to the economic and financial situation of the country, the estimate of the perception of income less than projected expenses and in case of unforeseen needs or emergencies; or and e) If the Contractor, at its sole discretion, decides to rescind this Contract.- THE CONTRACTOR may terminate this Contract by written notice of rescission to THE CONSULTANT, issued at least thirty (30) days in advance, when any of the events specified in subsections (a), (b), (c) and (d) of this Clause occur; in the case of the event indicated in subsection (e), such notice shall be issued sixty (60) days in advance.- 2.- Contract rescission shall be effected without further judicial or administrative proceedings other than the issuance of a Municipal Agreement by the Municipal Corporation of the Central District. 27. Settlement of Disputes. If due to any disagreement in the interpretation, execution, effects and/or resolution of this contract, the contracting parties shall make all possible efforts to reconcile the conflicts or any disagreement, any divergence that arises on a matter and that is not resolved with the Executing Unit, shall be resolved by the Management of the AMDC prior to study of the case and Opinion of the Legal Management; this resolution shall have a definitive character within the Administrative channel, bringing to its knowledge the Honorable Municipal Corporation, both parties submit to the jurisdiction and competence of the Civil Court of Contentious Administrative of the department of Francisco Morazán. 28. Environment. THE CONSULTANT shall ensure that all provisions and precautions are met, for the purpose of preserving the environment and the salubrity of the affected areas, when carrying out the contracted work. 29. Other Obligations. THE CONSULTANT shall not transfer, pledge, assign, transfer or make other dispositions of this contract or any part thereof, nor the rights, claims or obligations of THE CONSULTANT, derived from this contract, unless it has the written consent of THE CONTRACTOR, otherwise it shall give rise to rescission of the contract. 30. Force Majeure or Act of God. The parties may not claim delays in the performance of obligations under this contract, except for situations of force majeure or act of God duly proven.- Force Majeure or Act of God shall be understood as, among others: All events that could not have been foreseen or that, if foreseen, could not have been avoided, which makes it impossible to comply exactly with contractual obligations and provided that reasonable measures have been taken to avoid them and reduce their effects, the following are recognized as causes of Act of God or Force Majeure, among others:

    • a)

      Quarantine restrictions;

    • b)

      Freight Embargoes;

    • c)

      War, Belligerency, Invasion, Civil War, Revolution, Rebellion, Piracy, Riots, Insurrection or Usurpation of Powers;

    • d)

      Confiscation, Expropriation, Destruction, Obstruction ordered by any Governmental authority other than the Municipal Alcaldía of the Central District;

    • e)

      Natural Disasters such as: Earthquakes, Tsunamis, Typhoons, Hurricanes, Floods;

    • f)

      and other causes recognized as force majeure or act of God. 31. Termination of Contract for Convenience. THE CONTRACTOR at its convenience may at any time resolve this contract, in whole or in part, by written communication to THE CONSULTANT, stating the reasons for its resolution.- Said resolution shall be made in the manner and in accordance with the information provided in said communication and shall not prejudice any previous claim that THE CONTRACTOR may have against THE CONSULTANT.- Upon receipt of said communication, THE CONSULTANT shall immediately suspend the work, in this case THE CONSULTANT and THE CONTRACTOR shall proceed to the final settlement of the contract, in accordance with the information provided by the Executing Unit and THE CONSULTANT. 32. Integrity Clause. The Parties, in compliance with what is established in Article 7 of the Law of Transparency and Access to Public Information (LTAIP) and with the conviction that by avoiding corrupt practices we can support the consolidation of a culture of transparency, equity and accountability in State contracting and procurement processes, to strengthen the foundations of the Rule of Law, freely and voluntarily commit ourselves: 1. Maintain the highest level of ethical conduct, morality and respect for the laws of the Republic, as well as the values of: INTEGRITY, CONTRACTUAL LOYALTY, EQUITY, TOLERANCE, IMPARTIALITY AND DISCRETION WITH THE CONFIDENTIAL INFORMATION WE HANDLE, REFRAINING FROM MAKING PUBLIC STATEMENTS ABOUT IT. 2. Assume strict observance and application of the fundamental principles governing State contracting and procurement processes established in the State Contracting Law, such as: transparency, equality and free competition. 3. That during contract execution no person properly authorized in our name and representation and no employee, worker, partner or associate, authorized or not, shall conduct:

      • a)

        Corrupt practices: understood as those in which it is offered to give, receive, or request directly or indirectly anything of value to influence the actions of the other party;

      • b)

        Collusive Practices: understood as those that denote, suggest or demonstrate that there is a malicious agreement between two or more parties or between one of the parties and one or more third parties, made with the intention of achieving an improper purpose, including inappropriately influencing the actions of the other party. 4. Review and verify all information that must be presented through third parties to the other party, for purposes of the Contract, and we state that during the contracting or procurement process cause of this Contract, the information exchanged was duly reviewed and verified, whereby both parties assume and shall assume responsibility for the supply of inconsistent, inaccurate information or that does not correspond to reality, for purposes of this Contract. 5. Maintain due confidentiality regarding all information to which access is had by reason of the Contract and not provide or disclose it to third parties and in turn refrain from using it for different purposes. 6. Accept the consequences that may apply, in case it is declared that there is non-compliance with any of the commitments of this Clause by competent court and without prejudice to the civil or criminal liability that may be incurred. 7. Report in a timely manner to the corresponding authorities any irregular fact or act committed by our employees or workers, partners or associates, of which there is a reasonable indication and which could constitute civil and/or criminal liability. The foregoing extends to subcontractors with whom the Contractor or Consultant contracts, as well as to the partners, associates, executives and workers thereof. Non-compliance with any of the statements of this clause shall give rise to: a. On the part of the Contractor or Consultant: i. To the disqualification to contract with the State, without prejudice to the responsibilities that may be deduced from it. ii. To the application to the worker, executive, representative, partner, associate or proxy who has failed to comply with this Clause, of the sanctions or disciplinary measures derived from the labor regime and, where appropriate, to initiate the legal actions that correspond. b. On the part of the Contractor: i. To the definitive elimination of the (Contractor and the subcontractors responsible or who, being able to do so, did not report the irregularity) from its Register of Suppliers and Contractors that it keeps for this purpose so as not to be subject to future eligibility in contracting processes. ii. To the application to the employee or official breaching, of the sanctions that correspond according to the Code of Conduct Ethics of Public Servant, without prejudice to demanding administrative, civil and/or criminal liability as appropriate. In witness whereof, the parties express acceptance of the commitments adopted in this document, under the understanding that this Declaration forms an integral part of the Contract, signing voluntarily for the record. Appendix 'C' Terms of Reference. 'SUPERVISION OF THE CONSTRUCTION OF ROAD SOLUTION, SANITARY, STORM AND ELECTRICAL INSTALLATIONS OF BOULEVARD LOS PRÓCERES.' I. BACKGROUND. i. Generalities. Boulevard Los Próceres, being one of the busiest roads in the capital city both for public transportation from various colonies and residential areas in the northeast of the city and for intercity transportation from municipalities in the department of Francisco Morazán near Tegucigalpa such as Santa Lucía, Valle de Ángeles, San Juancito, among others, and adding to this the high commercial movement and the location of the San Felipe hospital in the area and taking into account the connection of this network with high-traffic boulevards and roads such as Boulevard Morazán, La Paz Avenue and the beginning of the peripheral ring, this road becomes one of the high-congestion corridors during various hours of the day. For this reason it is necessary to provide road solutions that improve the fluidity of vehicular traffic and the road reorganization in this artery of the capital city, as well as provide greater comfort, safety and reduce the operating costs and delay times for users of the network. With the purpose of contributing to road improvement and the beautification of the ornament of the capital city, the necessary logistics and equipment for the realization of said works shall be implemented. i. Improvement Works. The road solution and rehabilitation of the sanitary, storm and relocation of the electrical system of the road works begin at the height of the American Embassy, passing through the Simón Bolívar roundabout, San Felipe hospital, the Bambino warehouses and ending at the beginning of the bridge over the Río Chiquito; in front of the Fraternidad colony that connects to the San Miguel colony and 21 de Octubre at the end of Boulevard Los Próceres. ii. Objectives.

        • •

          Provide appropriate road circulation and improve the conditions of Boulevard Los Próceres and surrounding areas in the project's sphere of influence.

        • •

          Complement with the construction of other works that the Municipal Alcaldía plans in this corridor, such as the construction of the overpass of the intersection of La Paz Avenue with Paseo La Reforma and the construction of the roundabout at the entrance of colony 21 de Octubre.

        • •

          Reduce travel times and the rate of road accidents for users, as well as reduce vehicle operating costs.

        • •

          Increase the level of road safety for pedestrians, with the fundamental purpose of improving the quality of life and protecting the economy of the capital's residents. I. Location. The Section on Boulevard Los Próceres begins at the height of the American Embassy with and ends at the height

Approve in all and each one of its parts Contract No. 0928/GLCSI/AMDC//2017, CODE 1648 Construction of Road Solution, Sanitary, Storm and Electrical Installations of Boulevard Los Próceres, with Code No. 1648 LPuNo. 07-AMDC-113-2017, between the Businessman Nasry Juan Asfura Zablah, Municipal Mayor of the Central District and Legal Representative of said Municipal Alcaldía and Mr. Renzo Roberto Bottazzi Chinchilla, as Legal Representative of the Mercantile Company CONSTRUCTION EQUIPMENT, S.A. DE C.V. (ECO CONSTRUCTION, S.A. DE C.V.), which literally states: 'SECRETARY OF STATE IN THE OFFICES OF HUMAN RIGHTS, JUSTICE, GOVERNANCE AND DECENTRALIZATION. CONTRACT No. 0928/GLCSI/AMDC/2017, CODE 1648. CONSTRUCTION OF ROAD SOLUTION, SANITARY, STORM AND ELECTRICAL INSTALLATIONS OF BOULEVARD LOS PROCERES, WITH CODE No. 1648. LPuNo-07-AMDC-113-2017. We, Nasry Juan Asfura Zablah, of legal age, married, businessman, Honduran and of this domicile, holder of Identity Card 0801-1958-03886, acting in my capacity as Municipal Mayor of the Central District and consequently Legal Representative of the Municipal Alcaldía of the Central District, appointed to such position by Special Oath Taking Act number GDFM 001-2014 dated January 20, 2014, who for legal purposes of this Contract shall be called THE CONTRACTOR, and RENZO ROBERTO BOTTAZZI CHINCHILLA, of legal age, with Identity Card No. 0801-1977-05360, Municipal Solvency No. 03-29911669573, of this domicile, in his capacity as Legal Representative of the Mercantile Company CONSTRUCTION EQUIPMENT, S.A. DE C.V. (ECO Construction, S.A. de C.V.), R.T.N. No. 08019000233084, a character that accredits the Testimony of Public Deed No. 296, authorized by Lawyer and Notary Hilda Beneditt Lainez, Exequátur No. 1081, dated November 29, 2016, Mercantile Company established by public instrument No. 166 dated October 30, 1980, registered in the Commercial Registry of Francisco Morazán (CCIT) with No. 37436 and registration No. 75650, who for the purposes of this contract shall be called THE CONTRACTOR. Both THE CONTRACTOR and THE CONTRACTOR with sufficient powers to execute this type of acts and comply with the obligations that arise from it, agree to execute this Contract called CONSTRUCTION OF ROAD SOLUTION, SANITARY, STORM AND ELECTRICAL INSTALLATIONS OF BOULEVARD LOS PROCERES, WITH CODE No. 1648. Contract that shall be governed by the following clauses and legal conditions: FIRST CLAUSE: 1. The words and expressions used in this Contract shall have the same meaning as in the respective General and Special Conditions of the Contract. THE CONTRACTOR: Municipal Alcaldía of the Central District (AMDC) THE CONTRACTOR: ECO CONSTRUCTION, S.A. de C.V. THE SUPERVISOR: Department of Control and Monitoring FINANCING: Municipal Funds 2017 2. The following documents constitute an integral part of this Contract, are attached hereto and shall be read and interpreted together with it: The Special Conditions of the Contract. a) The General Conditions of the Contract. b) Specifications and compliance conditions c) The Offer Form and List of Activities and d) Quantities and Unit Price Cards submitted by the Contractor in its Offer. Notice from the Contractor to the Contractor that e) he has been awarded the Contract. Project Plans. f) Public National Auction Document Base for Contracting Works. g) Any other form or document that is established in clause CGC 2.3 of the Special Conditions of this contract. SECOND CLAUSE: WORK REQUIRED. THE CONTRACTOR with sufficient elements that it shall provide at its own cost and risk, undertakes to perform for THE CONTRACTOR the following work: The Project on Boulevard Los Próceres consists of the expansion to three effective lanes per direction of vehicular circulation (two lanes 3.50 meters and one lane 3.35 meters) and rehabilitation of the existing pavement shall be carried out through sealing of cracks and repair of potholes with asphalt mixture to subsequently carry out the placement of Whitetopping on the pavement. Activities shall commence with the demolition of existing concrete structures such as sidewalks, curbs with integrated gutters, walls, etc. to subsequently carry out common excavation activities and perform the construction of expansions on both sides of the pavement at the level of hydraulic concrete. Within the storm drainage works, the construction of a main rainwater collector and approximately 57 catch basins with their respective branches are considered, which will direct surface water toward the different inspection wells. For sanitary drainage, the construction of a sewage system with drainage piping on the axis of the entire section is planned with its domestic connections and respective inspection boxes. In the drinking water system all domestic inlet connections to businesses and homes must be constructed with their respective accessories due to the reconstruction of pedestrian sidewalks. Horizontal and vertical signage, for which SIECA Standards applicable to Central America shall be used, thermoplastic paint of high reflectance shall be considered due to high traffic and vertical signals that guide and prevent parking in the area. To improve vehicular flow in the sector, a Distributor shall be designed near the Bambino Warehouses, to reduce vehicular operating costs, optimizing circulation times. Relocation of the electrical system of primary and secondary lines throughout the entire project with 45-foot poles to reduce visual contamination and improve pedestrian orientation. Left turns shall be eliminated, leaving alternating turns at the accesses to existing neighboring colonies. As part of the improvements, the pedestrian is to benefit through the reconstruction of appropriate sidewalks, ramps and tactile strip for the blind. The project aims to improve the architecture and aesthetics of the area, through the use of frames, textures (pavers), lighting effects and improvements in existing busts, as well as special care of vegetation, with low-maintenance plants that visually improve the route. The project: CONSTRUCTION OF ROAD SOLUTION, SANITARY, STORM AND ELECTRICAL INSTALLATIONS OF BOULEVARD LOS PROCERES, WITH CODE No. 1648. Is located in the Section on Boulevard Los Próceres that begins at the height of the American Embassy and ends at the height of the Bridge over Río Chiquito that connects to the San Miguel colony and colony 21 de Octubre. UTM COORDINATES: Project Start: 479532.33m E1559255.93m N; Project End: 481101m E 1559198m N. THIRD CLAUSE: TERM: THE CONTRACTOR undertakes to construct the contracted work in strict adherence to the component documents of the Contract, in accordance with the approved Work Program, within a period of Two hundred forty (240) calendar days. FOURTH CLAUSE: THE CONTRACTOR undertakes to pay THE CONTRACTOR for the construction of the works received to its satisfaction in accordance with the terms and requirements of this Contract, at the unit prices of its proposal and to make effective the sums that become payable. FIFTH CLAUSE: UNIT COSTS. THE CONTRACTOR undertakes to carry out the execution of the project in accordance with the quantities and unit prices found in Appendix 'B' of this contract SIXTH CLAUSE: CONTRACT AMOUNT AND PAYMENT METHOD, GUARANTEES AND WITHHOLDINGS. Amount: The amount of this Contract comes to the sum of: Sixty-four million three hundred eleven thousand five hundred eighty Lempiras with 78/100 (L.64,311,580.78), which shall be paid through monthly estimates according to the progress of the work. The amount includes: Three million sixty-two thousand four hundred fifty-six Lempiras with 78/100 (L.3,062,456.78), for Delegated Administration, this shall be paid only if necessary and with the approval of the Supervision and Executing Unit. Payment Method: THE CONTRACTOR may be granted fifteen percent (15%) of the contract amount as Advance, prior to presentation of an advance guarantee equivalent to one hundred percent (100%) of the advance amount. The advance shall be deducted through withholdings from the first payment request until covering one hundred percent (100%) thereof. Guarantees: THE CONTRACTOR is obliged to establish, before beginning work execution, the following guarantees: a) Contract Compliance Guarantee, equivalent to fifteen percent (15%) of the contract amount, with a duration of three months additional to the scheduled term for contract termination, counted from the contract start order, b) Advance Guarantee: Prior to delivery of the advance THE CONTRACTOR shall present a guarantee for the equivalent of 100% of the advance amount, a duration of one month additional to the scheduled term for contract termination, counted from the contract start order. c) Work Quality Guarantee: Once final acceptance of the works has been made and final settlement of the contract has been carried out, THE CONTRACTOR shall substitute the contract compliance guarantee with a Work Quality Guarantee, equivalent to five percent (5%) of the final amount of the work and with a duration of twelve (12) months counted from the date of the Final Work Acceptance Act.- These Guarantees must be issued by a Bank or Insurance Company legally established and authorized to operate in the Republic of Honduras and must contain the following clause: 'This Guarantee shall be executed at the simple request of the Municipal Alcaldía of the Central District, with the simple presentation of a non-compliance note'. From each payment made to THE CONTRACTOR as work estimate, the following shall be withheld:

• a)

  Fifteen percent (15%) of each estimate for purposes of advance return until completing one hundred percent (100%) of the advance. In the final estimate the pending balance of said advance shall be deducted;

• b)

  Withholdings shall be deducted from THE CONTRACTOR for Income Tax in accordance with what is established in the laws of the Republic of Honduras, otherwise, THE CONTRACTOR shall accredit before THE CONTRACTOR, the corresponding advance payment for purposes of Income Tax in accordance with what is stipulated in the Law, by means of Certificate issued by the Executive Directorate of Income (DEI), now Tax Administration System (SAR), duly updated. SEVENTH CLAUSE: RECOGNITION OF ADDITIONAL COSTS. - Prices shall be subject to adjustment derived from the application of the procedure for recognition of additional costs through the polynomial formula described in the General Conditions of the Contract. EIGHTH CLAUSE: FINE. In accordance with Legislative Decree No. 171-2016, General Provisions of the Budget for fiscal year 2017, Art. No. 72, the daily fine applicable for failure to meet the deadline is zero point eighteen percent (0.18%) of the total contract value for each day of delay. The maximum amount of compensation for damages for all Works is 15%, likewise it is communicated in the general conditions of the contract numeral 48 and special conditions CGC 48.1. And all others established in clause 48.1 of the Special Conditions of the contract. NINTH CLAUSE: THE CONTRACTOR shall have the obligation to register in the Honduran Chamber of Construction Industry (CHICO) this Contract, in the same way it shall accredit before the Department of Control and Monitoring of THE CONTRACTOR AMDC, said registration to comply with what is established in Art. 35 of the State Contracting Law. TENTH CLAUSE: INTEGRITY CLAUSE: The Parties, in compliance with what is established in Article 7 of the Law of Transparency and Access to Public Information (LTAIP), and with the conviction that by avoiding corrupt practices we can support the consolidation of a culture of transparency, equity and accountability in State contracting and procurement processes, to strengthen the foundations of the Rule of Law, freely and voluntarily commit ourselves: 1. Maintain the highest level of ethical conduct, morality and respect for the laws of the Republic, as well as the values of: INTEGRITY, CONTRACTUAL LOYALTY, EQUITY, TOLERANCE, IMPARTIALITY AND DISCRETION WITH THE CONFIDENTIAL INFORMATION WE HANDLE, REFRAINING FROM MAKING PUBLIC STATEMENTS ABOUT IT. 2. Assume strict observance and application of the fundamental principles governing State contracting and procurement processes established in the State Contracting Law, such as: transparency, equality and free competition. 3. That during contract execution no person properly authorized in our name and representation and no employee, worker, partner or associate, authorized or not, shall conduct:

  • a)

    Corrupt practices: understood as those in which it is offered to give, receive, or request directly or indirectly anything of value to influence the actions of the other party;

  • b)

    Collusive Practices: understood as those that denote, suggest or demonstrate that there is a malicious agreement between two or more parties or between one of the parties and one or more third parties, made with the intention of achieving an improper purpose, including inappropriately influencing the actions of the other party. 4. Review and verify all information that must be presented through third parties to the other party, for purposes of the Contract, and we state that during the contracting or procurement process cause of this Contract, the information exchanged was duly reviewed and verified, whereby both parties assume and shall assume responsibility for the supply of inconsistent, inaccurate information or that does not correspond to reality, for purposes of this Contract. 5. Maintain due confidentiality regarding all information to which access is had by reason of the Contract, and not provide or disclose it to third parties and in turn refrain from using it for different purposes. 6. Accept the consequences that may apply, in case it is declared that there is non-compliance with any of the commitments of this clause by competent Court, and without prejudice to the civil or criminal liability that may be incurred. 7. Report in a timely manner to the corresponding authorities any irregular fact or act committed by our employees or workers, partners or associates, of which there is a reasonable indication and which could constitute civil and/or criminal liability. The foregoing extends to subcontractors with whom the Contractor contracts, as well as to the partners, associates, executives and workers thereof. Non-compliance with any of the statements of this clause shall give rise to: a. On the part of the Contractor: i. To the disqualification to contract with the State, without prejudice to the responsibilities that may be deduced from it. ii. To the application to the worker, executive, representative, partner, associate or proxy who has failed to comply with this clause, of the sanctions or disciplinary measures derived from the labor regime and, where appropriate, to initiate the legal actions that correspond. b. On the part of the Contractor: i. To the definitive elimination of the (Contractor and the subcontractors responsible or who, being able to do so, did not report the irregularity) from its Register of Suppliers and Contractors that it keeps for this purpose so as not to be subject to future eligibility in contracting processes. ii. To the application to the employee or official breaching, of the sanctions that correspond according to the Code of Conduct Ethics of Public Servant, without prejudice to demanding administrative, civil and/or criminal liability as appropriate. IN TESTIMONY WHEREOF, the parties execute this Contract in accordance with the laws of the Republic of Honduras on the day, twelfth (12) of the month of June of the year two thousand seventeen (2017). (F AND S) For and in the name of THE CONTRACTOR. Nasry Juan Asfura Zablah, Municipal Mayor of the Central District. For and in the name of THE CONTRACTOR (F AND S) RENZO ROBERTO BOTTAZZI CHINCHILLA Legal Representative ECO Construction, S.A. de C.V. R.T.N. No. 08019000233084 General Conditions of Contract Index of Clauses A. General Provisions ........................................... 1 Definitions ...................................................................... 2. Interpretation ..................................................................... 3. Language and Applicable Law .................................... 4. Decisions of the Works Supervisor ........................... 5. Delegation of Functions ............................................... 6. Communications ............................................................. 7. Subcontracts and Assignment of Contract ................ 8. Other Contractors ........................................................... 9. Personnel .......................................................................... 10. Risks of Contractor and Contractor ......................... 11. Risks of Contractor ..................................................... 12. Risks of Contractor ..................................................... 13. Insurance ......................................................................... 14. Site Investigation Reports of Works ........................ 15. Consultations on Special Conditions of Contract .... 16. Construction of Works by Contractor ....................... 17. Completion of Works by Scheduled Date ................ 18. Approval by Works Supervisor ................................. 19. Safety .............................................................................. 20. Discoveries .................................................................... 21. Taking Possession of Works Site ............................... 22. Access to Works Site ................................................... 23. Instructions, Inspections and Audits ....................... 24. Disputes ........................................................................ 25. Dispute Resolution Procedures .................................. 26. Appeals Against Contractor's Resolution ................. B. Schedule Control .......................................................... 27. Program ......................................................................... 28. Extension of Scheduled Completion Date ................ 29. Acceleration of Works ................................................. 30. Delays Ordered by Works Supervisor ....................... 31. Administrative Meetings ............................................. 32. Correction of Defects .................................................. 33. Prior Warning .............................................................. C. Quality Control ......................................................... 34. Identification of Defects ............................................. 35. Tests .............................................................................. 36. Uncorrected Defects ................................................... D. Cost Control ............................................................... 37. List of Valued Quantities (Work Budget) ............... 38. Cost Breakdown .......................................................... 39. Variations .................................................................... 40. Payments of Variations ............................................. 41. Projections .................................................................. 42. Work Estimates .......................................................... 43. Payments ..................................................................... 44. Compensable Events ................................................... 45. Taxes .......................................................................... 46. Currencies ................................................................... 47. Price Adjustments ....................................................... 48. Fines for Delay in Work Delivery ............................ 49. Advance Payment ....................................................... 50. Guarantees .................................................................. 51. Day Work .................................................................... 52. Cost of Repairs .......................................................... 53. Work Completion ....................................................... 54. Work Reception .......................................................... 55. Final Settlement ......................................................... 56. Operation and Maintenance Manuals ....................... 57. Termination of Contract ............................................ 58. Fraud and Corruption ................................................ 59. Payments After Contract Termination ..................... 60. Property Rights ........................................................... 61. Release of Performance ............................................ General Conditions of Contract. A. General Provisions. 1 Definitions 1.1 The words and expressions defined appear in bold (a). The Conciliator is the person appointed jointly by the Contractor and the Contractor or, failing that, by the Appointing Authority in accordance with clause 26.1 of these GCC, to resolve in the first instance any dispute, in accordance with the provisions of clauses 24 and 25 of these GCC. (b). The Valued Quantities List is the list duly prepared by the Bidder, with indication of quantities and prices, which forms part of the Bid. (c). Compensable Events are those defined in clause 44 of these GCC. (d) The Completion Date is the date of completion of the Works, certified by the Works Supervisor in accordance with Subclause 53.1 of these GCC. (e) The Contract is the agreement executed between the Contractor and the Contractor to execute the Works. It comprises the following documents: Contractual Agreement, Award Resolution Notice, Offer Letter, these Conditions, Specifications, Plans, Annexes and any other document indicated in the Contract. (f) The Contractor is the natural or legal person whose offer for the execution of the Works has been accepted by the Contractor. (g) The Contractor's Offer is the set formed by the Offer Letter and any other document that the Contractor presents with it and is included in the Contract. (h) The Contract Price is the price established in the Award Resolution Notice and subsequently, as adjusted in accordance with the Contract provisions. (i) Days means calendar days; (j) Business days all days of the year except Saturdays and Sundays and those determined to be national holidays. (k) Months means calendar months. (l) Day work means a variety of work paid on the basis of time used by the Contractor's employees and equipment, in addition to payments for (z) Site Investigation Reports of the Works, included in the bidding documents, are interpretive-type reports, based on facts, and relating to surface and subsurface conditions of the Works Site. (aa) Specifications means the specifications of the Works included in the Contract and any modification or addition made or approved by the Contractor. (bb) The Start Date is the latest date on which the Contractor shall begin execution of the Works and which is stipulated in the ECC. It does not necessarily coincide with any of the dates of taking possession of the Works Site. (cc) Subcontractor is a natural or legal person hired by the Contractor to perform part of the contract work, and includes work at the Works Site. (dd) Provisional Works are the works that the Contractor must design, construct, install and remove, and which are necessary for the construction or installation of the Works. (ee) A Variation is an instruction issued by the Contractor that modifies the Works. (ff). The Works are everything that the Contract requires the Contractor to construct, install and deliver to the Contractor as defined in the ECC. (gg). Force Majeure means an exceptional event or circumstance: (a) that is beyond the control of a Party, (b) that such Party could not have reasonably foreseen before signing the Contract, (c) that, once it arises, such Party could not have reasonably avoided or resolved, and (d) that is not substantially attributable to the other Party. Force Majeure may include, but is not limited to, exceptional events or circumstances of the type indicated below, provided that Conditions (a) through (d) specified above are satisfied: (

    • i)

      war, hostilities (regardless of whether war is declared or not), invasion, acts of foreign enemies, (

    • ii)

      rebellion, terrorism, revolution, insurrection, military coup or usurpation of power, or civil war, (

    • iii)

      disturbances, turmoil, disorder, strike or lockout carried out by persons other than the Contractor's Personnel and other Contractor employees and Subcontractors, (

    • iv)

      war munitions, explosive materials, ionizing radiation or radioactive contamination, except where attributable to use by the Contractor of such munitions, explosives, radiation or radioactivity, and (v) natural catastrophes, such as earthquakes, hurricanes, typhoons or volcanic activity. 2. Interpretation. 2.1. For the interpretation of these GCC, if the context so requires, the singular also means the plural, and the masculine also means the feminine and vice versa. The headings of the clauses are not relevant in themselves. The words used in the Contract have their ordinary meaning unless specifically defined. The Works Supervisor shall provide clarifications to inquiries about these GCC. 2.2 If the ECC provide for termination of the Works by sections, the references made in the GCC to the Works, to the Completion Date and to the Scheduled Completion Date apply to each Section of the Works (except for specific references to the Completion Date and Scheduled Completion Date of all the Works). 2.3 The documents constituting the Contract shall be interpreted in the following order of priority: (

      • a)

        Contract, (

      • b)

        Award Resolution Notice, (

      • c)

        Offer, (

      • d)

        Special Conditions of the Contract, (

      • e)

        General Conditions of the Contract, (

      • f)

        Specifications, (

      • g)

        Plans, (

      • h)

        Valued Quantities List, and (

      • i)

        Any other document that the ECC specifies forms an integral part of the Contract. 3. Language and Applicable Law 3.1 The language of the Contract shall be Spanish. 3.2 The contract shall be governed and interpreted according to Honduran Laws 4. Decisions of the Works Supervisor 4.1 Unless otherwise specified, the Works Supervisor, acting on behalf of the Contractor, may direct orders and instructions to the Contractor for the correct execution of the contract, in accordance with the contractual plans and specifications and taking into account the provisions of the State Contracting Law and its Regulations 5. Delegation of Functions 5.1. The Works Supervisor may not delegate to another person any of his duties and responsibilities. 6. Communications 6.1 Communications between the parties to which reference is made in the Contract Conditions shall be valid only when formalized in writing. Notifications shall enter into effect once they are delivered and/or written in the project logbook. 7. Subcontracts and Assignment of Contract 7.1 The Contractor may only subcontract work if approved by the Contractor. Subcontracting does not alter the Contractor's obligations. 7.2 Approval of the subcontracting shall be express, in writing, with indication of its object and economic conditions. Work subcontracted to third parties shall not exceed forty percent (40%) of the Contract amount. 7.3 The Contractor may not assign the Contract without written approval from the Contractor. 8. Other Contractors 8.1 The Contractor shall cooperate and share the Works Site with other contractors, public authorities, public utility companies and the Contractor on the dates indicated in the List of Other Contractors indicated in the ECC. The Contractor shall also provide them with the facilities and services described in said List. The Contractor may modify the List of Other Contractors and shall notify the Contractor accordingly. 9. Personnel 9.1 The Contractor shall employ the key personnel listed in the Key Personnel List, in accordance with what is indicated in the ECC, to perform the functions specified in the List, or other personnel approved by the Works Supervisor. The Works Supervisor shall approve any replacement of key personnel only if the qualifications, skills, training, capacity and experience of the proposed personnel are equal to or superior to those of the personnel listed. 9.2 If the Works Supervisor requests the Contractor to remove a member of the Contractor's workforce, stating the reasons for the request, the Contractor shall ensure that such person withdraws from the Works Site within seven days following and has no further participation in work related to the Contract. 10. Risks of Contractor and Contractor 10.1 Contractor risks are those stipulated in this Contract to correspond to the Contractor, and Contractor risks are those stipulated in this Contract to correspond to the Contractor. 11. Contractor Risk 11.1 From the Start Date of the Works until the date of issuance of the Defect Correction Certificate, Contractor risks are: (a) The risks of personal injury, death, or loss or damage to property (not including the Works, Plant, Materials and Equipment) as a result of: (i) use or occupation of the Works Site by the Works, or for purposes of executing the Works, as an inevitable result of the Works, or (ii) negligence, violation of duties established by law, or interference with legal rights by the Contractor or any person employed by him or hired by him, except the Contractor. (b) The risk of damage to the Works, Plant, Materials and Equipment, to the extent that it is due to failures by the Contractor or in the design done by the Contractor, or to war or radioactive contamination that directly affects the country where the Works are to be carried out. 11.2 From the Completion Date until the date of issuance of the Defect Correction Certificate, it shall be the Contractor's risk the loss or damage of the Works, Plant and Materials, except for loss or damages as a result of: (a) a defect that existed on the Completion Date; (b) an event that occurred before the Completion Date, and which was not a Contractor risk; or (c) the Contractor's activities at the Works Site after the Completion Date. 12. Contractor Risks 12.1 From the Start Date of the Works until the date of issuance of the Defect Correction Certificate, when the risks of personal injury, death and loss or damage to property (including, without limitation, the Works, Plant, Materials and Equipment) are not Contractor risks, they shall be Contractor risks. 13. Insurance 13.1 Unless otherwise indicated in the ECC, the Contractor shall contract insurance issued in the joint name of the Contractor and the Contractor, to cover the period between the Start Date and the expiration of the Defect Responsibility Period, for the total amounts and deductible amounts stipulated in the ECC, the following events constitute Contractor risks: (

        • a)

          For loss or damage to the Works, Plant and Materials; (

        • b)

          For loss or damage to Equipment; (

        • c)

          For loss or damage to property (not including the Works, Plant, Materials and Equipment) related to the Contract; and, (

        • d)

          For personal injury or death. 13.2 The Contractor shall deliver to the Works Supervisor, for approval, the insurance policies and certificates before the Start Date. Such insurance shall provide for compensation payable in the types and proportions of currencies required to rectify the loss or damages or harm caused. 13.3 If the Contractor does not provide the required policies and certificates, the Contractor may contract the insurance whose policies and certificates the Contractor should have provided and may recover the premiums paid by the Contractor from payments owed to the Contractor, or, if nothing is owed to it, consider them a debt of the Contractor. 13.4 The conditions of the insurance may not be modified without the approval of the Works Supervisor. 13.5 Both parties shall comply with all conditions of the insurance policies. 14. Site Investigation Reports of the Works 14.1 The Contractor, in preparing its Offer, shall base itself on the Site Investigation Reports of the Works indicated in the ECC, in addition to any other information available to the Bidder. 15. Consultations on Special Conditions of the Contract 15.1 The Works Supervisor shall respond to inquiries about the ECC. 16. Construction of Works by Contractor 16.1 The Contractor shall construct and install the Works in accordance with the Specifications and Plans. 17. Completion of Works by Scheduled Date 17.1 The Contractor may begin construction of the Works on the Start Date and shall execute them in accordance with the Program it had submitted, with updates approved by the Contractor, and complete them on the Scheduled Completion Date. 18. Approval by Works Supervisor 18.1 The Contractor shall be responsible for the design of provisional works. 18.2 The Contractor shall obtain approvals of the provisional works design from third parties when necessary. 18.3 All plans prepared by the Contractor for the execution of provisional and permanent works shall be approved by the Works Supervisor prior to their use. 19. Safety 19.1 The Contractor shall be responsible for the safety of all activities at the Works Site. 19.2 The Contractor shall provide its workers with the necessary protective equipment and implements and shall take the necessary measures to maintain hygiene and safety in the workplace in its camps and at the work site, in accordance with the applicable provisions on the matter. 20. Discoveries. 20.1 Any element of historical interest or otherwise or of great value that is discovered unexpectedly in the works area shall be the property of the Contractor. The Contractor shall notify the Works Supervisor of the discovery and follow the instructions given on how to proceed. 21. Taking Possession of Works Site. 21.1 The Contractor shall transfer to the Contractor possession of the entire Works Site. If possession of any part is not transferred on the stipulated date in the ECC, it shall be considered that the Contractor has delayed the start of the relevant activities and this shall constitute a compensable event. 22. Access to Works Site. 22.1 The Contractor shall allow the Works Supervisor, and any person authorized by him, access to the Works Site and any place where work related to the Contract is being or is expected to be performed. 23. Instructions, Inspections and Audits. 23.1 The Contractor shall comply with all instructions of the Works Supervisor that are in accordance with the contractual plans and specifications and taking into account the provisions of the State Contracting Law and its Regulations. (see appendix A) 24. Disputes 24.1 Dispute shall be understood as any disagreement on technical, financial, administrative, legal, environmental and any other aspect that arises between the Contractor and the Contractor, including the Works Supervisor, as a result of the execution of the Works. 25. Dispute Resolution Procedures. 25.1 In the case of disputes the Contractor shall interpret through motivated administrative act, the clauses subject of the dispute, resolving the doubts that result. This power shall be exercised through the administrative body of higher hierarchy responsible for contract execution, with hearing of the Contractor; and without prejudice to the legal remedies that correspond. 26. Appeals Against Contractor's Resolution. 26.1 Against the Contractor's resolution, the administrative court route shall be available before the Administrative Contention Courts, unless the ECC establish the possibility of resorting to Arbitration. A. Schedule Control. 27. Program. 27.1 Within the deadline established in the ECC and after the date of the Award Resolution Notice, the Contractor shall present to the Works Supervisor, for its opinion and subsequent approval by the Contractor, a Program containing the general methodologies, organization, sequence and execution schedule of all activities related to the Works. (see appendix A) 27.2 The Updated Program shall be that which reflects the actual progress achieved in each activity and the effects of such progress on the execution schedule of the remaining tasks, including any change in the sequence of activities. 27.3 The Contractor shall present to the Works Supervisor for its opinion and subsequent approval by the Contractor a Program at equal intervals not exceeding the period established in the ECC. If the Contractor does not submit said Updated Program within this deadline, the Works Supervisor may withhold the amount specified in the ECC from the next work estimate and continue withholding such amount until payment following the date the Contractor submitted the overdue Program. 27.4 The approval of the Program shall not in any way modify the Contractor's obligations. The Contractor may modify the Program and resubmit it to the Works Supervisor at any time. The Modified Program shall reflect the effects of Variations and Compensable Events. 28. Extension of Scheduled Completion Date. 28.1 The Contractor shall extend the Scheduled Completion Date when a Compensable Event occurs or a Variation is ordered that makes it impossible to complete the Works on the Scheduled Completion Date without the Contractor taking measures to accelerate the rate of execution of pending work and which generates additional costs. 28.2 The Contractor shall determine whether the Scheduled Completion Date should be extended and for how long, within 5 days following the date the Contractor requests from the Contractor a decision on the effects of a Variation or Compensable Event and provides all supporting information. If the Contractor has not given timely notice of a delay or has not cooperated in resolving it, the delay due to such failure shall not be considered in determining the new Scheduled Completion Date. (see appendix A) 29. Acceleration of Works. 29.1 When the Contractor wants the Contractor to complete the Works before the Scheduled Completion Date, the Contractor shall request the Contractor to submit valued proposals to achieve the necessary acceleration of work execution. If the Contractor accepts such proposals, the Scheduled Completion Date shall be modified as appropriate and ratified by the Contractor and the Contractor. 29.2 If the Contractor's priced proposals for accelerating work execution are accepted by the Contractor, such proposals shall be treated as Variations and their prices shall be incorporated into the Contract Price. 30. Delays Ordered by Works Supervisor 30.1 The Works Supervisor, with prior authorization from the Contractor, may order the Contractor to suspend the initiation or progress of any activity comprised in the Works, economically compensating for the expense generated by the delay. 31. Administrative Meetings 31.1 Both the Works Supervisor and the Contractor may request the contracting body to attend administrative meetings. The purpose of such meetings shall be to review the scheduling of pending work and resolution of matters raised in accordance with the Prior Warning procedure described in Clause 33. 31.2 The Works Supervisor shall keep a record of matters discussed at administrative meetings and provide copies thereof to attendees and the Contractor. Either at the meeting itself or subsequently, the Works Supervisor shall decide and communicate in writing to all attendees their respective obligations regarding the measures to be adopted. 32 Correction of Defects 32.1 The Works Supervisor shall notify the Contractor of all defects of which he becomes aware before the Defect Responsibility Period expires, which begins on the completion date and is defined in the ECC. The Defect Responsibility Period shall be extended as long as defects remain to be corrected. 32.2 Each time a defect is notified, the Contractor shall correct it within the deadline specified in the Works Supervisor's notification. 33 Prior Warning 33.1 The Contractor shall warn the Works Supervisor as soon as possible of any future possible events or specific circumstances that may impair the quality of the work, increase the Contract Price or delay the execution of the Works. The Works Supervisor may request the Contractor to submit an estimate of the expected effects that the future event or circumstance could have on the Contract Price and Completion Date. The Contractor shall provide such estimate as soon as reasonably possible. 33.2 The Contractor shall cooperate with the Works Supervisor in the preparation and consideration of possible ways in which any participant in the work may avoid or reduce the effects of such event or circumstance and to implement the instructions that the Works Supervisor accordingly orders. C. Quality Control 34. Identification of Defects 34.1 The Works Supervisor shall monitor the Contractor's work and shall notify him of any defects found. Such monitoring shall not in any way modify the Contractor's obligations. 35 Tests 35.1 If the Works Supervisor orders the Contractor to perform any test not contemplated in the Specifications to verify whether any work has defects and the test reveals that it does, the Contractor shall pay the cost of the test and samples, otherwise it must be borne by the Contractor. 36. Uncorrected Defects 36.1 If the Contractor has not corrected a defect within the deadline specified in the Works Supervisor's notification, the latter shall estimate the cost of correcting the defect and the Contractor shall pay such amount, without prejudice to the defect correction being entrusted by the Contractor to third parties. D. Cost Control 37. List of Valued Quantities (Work Budget) 37.1 The Valued Quantities List (Work Budget) shall contain the items corresponding to construction, assembly, testing and commissioning work to be performed by the Contractor. 37.2 The Valued Quantities List (Work Budget) is used to calculate the Contract Price. The Contractor is paid for the amount of work performed at the unit price specified for each item in the Valued Quantities List (Work Budget) 38. Cost Breakdown 38.1 If the Contractor or Works Supervisor requests it, the Contractor shall provide a breakdown of costs corresponding to any price appearing in the Valued Quantities List (Work Budget). (see appendix A) 39. Variations 39.1 All Variations shall be included in the Updated Programs submitted by the Contractor and shall be authorized in writing by the Contractor. 39.2 When accumulated variations exceed 10% of the Initial Contract Price, they shall be formalized through contract modification. (see appendix A) 40. Payments of Variations 40.1 When the Works Supervisor requests it, the Contractor shall submit a quote for the execution of a Variation. The Contractor shall provide it within seven (7) days following the request, or within a longer deadline if the Works Supervisor so determined. The Works Supervisor shall analyze the quote before giving an opinion on the Variation. 40.2 When the work corresponding coincides with an item described in the Valued Quantities List (Work Budget) and if, in the opinion of the Works Supervisor, the amount of work or its execution schedule does not produce changes in the unit cost above the limit established in Subclause 38.1, the price indicated in the Valued Quantities List (Work Budget) shall be used to calculate the value of the Variation. If the unit cost is modified, or if the nature or execution schedule of the work corresponding to the Variation does not coincide with the items in the Valued Quantities List (Work Budget), the Contractor shall provide a quote with new prices for the relevant work items. 41. Projections 41.1 When the Program is updated, the Contractor shall provide the Works Supervisor with an updated cash flow projection. Such projection may include different currencies as stipulated in the contract, converted as necessary using the contract exchange rates. 42. Work Estimates 42.1 The Contractor shall present to the Works Supervisor monthly accounts for the estimated value of work performed minus the sums previously accumulated certified by the Works Supervisor in accordance with Subclause 42.2. (see appendix A) 42.2 The Works Supervisor shall verify the monthly accounts of work performed by the Contractor and shall certify the sum to be paid to him. 42.3 The value of work performed shall be determined by the Works Supervisor 42.4 The value of work performed shall comprise the value of quantities performed, according to contractual unit prices. 42.5 The value of work performed shall include the estimate of Variations and Compensable Events. 42.6 The Works Supervisor may exclude any item included in a previous estimate or reduce the proportion of any item previously approved in light of more recent information. 43. Payments 43.1 Payments shall be adjusted to deduct advance payments and withholdings. The Contractor shall recognize interest at the average rate corresponding to the month in which the payment is made for active operations of the national banking system, when there are delays in payment of its obligations due to causes attributable to it, for more than forty-five days (45) calendar days counted from the proper presentation of the corresponding collection documents. Interest payment shall be made no later than the date of the following partial payment. The Works Supervisor shall validate the proper presentation of the work estimate within a period not exceeding ten (10) business days

This Decree shall enter into force as of the day of its publication in the Official Gazette "La Gaceta". Given in the city of Choluteca, department of Choluteca, at the Convention Center of the Jicaral Hotel, on the twenty-seventh day of the month of September of the year two thousand seventeen. ANTONIO CÉSAR RIVERA CALLEJAS PRESIDENT MARIO ALONSO PÉREZ LÓPEZ SECRETARY JOSÉ TOMÁS ZAMBRANO MOLINA SECRETARY To the Executive Power Therefore: Execute it Tegucigalpa, M.D.C., November 23, 2017 JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT OF THE REPUBLIC THE SECRETARY OF STATE IN THE OFFICES OF HUMAN RIGHTS, JUSTICE, GOVERNANCE AND DECENTRALIZATION HÉCTOR LEONEL AYALA ALVARENGA WHEREAS: That recently the National Congress approved a New Organic Law of the Secretariat of State in the Office of Security and the National Police of Honduras, as well as a new Police Career Law, which enter into force on January 21, 2018, making it necessary that in order to ensure that they are correctly implemented and that continuity is given to the transformation tasks of the Secretariat and the Police, the Decree No. 21-2016 dated April 7, 2016, reformed by Decree No. 2-2017 dated February 22, 2017, be extended for twelve (12) more months. WHEREAS: That in accordance with Article 205 Attribute 1) it is the power of the National Congress to: create, decree, interpret, reform and repeal laws. THEREFORE, IT DECREES:

Extend the period of effectiveness for the term of twelve (12) months counted from January 21, 2018 to January 21, 2019, of Decree No. 21-2016, dated April 7, 2016, reformed by Decree No. 2-2017 dated February 22, 2017.

During the period of effectiveness the Commission for the Process of Purification and Transformation of the National Police shall continue in the exercise of its functions and shall proceed to monitor the correct execution and implementation of the new Organic Law of the Secretariat of State in the Office of Security and the National Police of Honduras, as well as of the Police Career Law, which enter into force on January 21, 2018.

This Decree shall enter into force as of the day of its publication in the Official Gazette "La Gaceta". Given in the city of Tegucigalpa, municipality of the Central District, in the Hall of Sessions of the National Congress, on the eighteenth day of the month of January of the year two thousand eighteen. ANTONIO CÉSAR RIVERA CALLEJAS PRESIDENT MARIO ALONSO PÉREZ LÓPEZ SECRETARY JOSÉ TOMÁS ZAMBRANO MOLINA SECRETARY To the Executive Power Therefore, Execute it. Tegucigalpa, M.D.C., January 25, 2018 JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT OF THE REPUBLIC THE SECRETARY OF STATE IN THE OFFICE OF SECURITY JULIAN PACHECO