Northport Industries, Inc./Even Flo, Inc.
MANUFACTURING AGREEMENT
This agreement is made and entered into this 21 day of May, 1999, by and
between Northport Industries, Inc., a corporation organized and existing under
the laws of the state of Nevada, hereinafter called "Northport", and Even Flo,
a corporation organized and existing under the laws of the state of Ohio,
hereinafter called "Customer".
Whereas, Customer desires to provide some Equipment and Materials described
herein for use by Northport in the sewing and assembly of Juvenile seats and
pads. Whereas, Northport desires to provide and to arrange to provide the
Services described herein at Northport's Maquiladora facilities (the
"Facilities") located in Ciudad Xxxxx, and Allende, Coahuila, Mexico;
Therefore in consideration of mutual promises herein and other good valuable
consideration received, the parties hereto agree as follows:
1. Northport agrees to perform the Services set forth above for Customer at
the Facility using components, parts, materials (except thread) and special
equipment furnished by and belonging to the Customer. Northport will arrange,
but subject to the approval of Customer, sufficient facilities to perform such
work.
2. Specific Pricing and Terms for this contract Manufacturing Agreement are
set forth in Exhibit "A" attached hereto.
3. Customer shall consign to Northport special equipment required to produce
their products and the first set of cutting dies, and other items/apparatus
listed in Exhibit "B," attached hereto. Northport shall receive such
equipment, transfer such equipment to its Facility, install such equipment,
and make such equipment operational. Northport shall bear all costs required
for the receipt, transportation, installation, and operation of such
equipment. Northport shall provide ongoing preventive maintenance of
Customer's machinery and equipment, the cost of which is included in the
hourly rate. Northport's responsibility shall be limited to following the
Customer-provided preventive maintenance schedule.
4. Northport will provide five thousand (5000) square feet of warehouse
space in Mexico for current production. Additional space will be provided for
obsolete or customer held materials at a cost of .29 cents per square foot per
month.
5. Any additional capital improvements and utilities (inside connections)
required at the Facility specifically for the benefit of Customer, shall be
the responsibility of Customer who shall bear all costs to effect such
improvements and utilities (inside connections).
6. Northport will provide the required services to effect shipment to and
from the Facility of components, materials and equipment, using information
and specifications provided by Customer. Such information and specifications
will be used to secure all necessary permits.
7. For importations too and from Mexico, Northport will be considered the
"Importer of Record" and will bear the responsibility for all records,
submissions, and any other responsibilities associated with that position, and
bear the costs of the U.S. duties, brokerages and document charges. Even Flo
will be responsible for any cost, fines and legal representation that might
arise out of material being shipped to and from Mexico for production of Even
Flo products.
8. Northport agrees to assemble and manufacture using the specifications of
the Customer. Customer reserves the right to change such specifications and
schedule as required, giving Northport thirty (30) days written notice, prior
to specification and schedule changes.
9. The initial term of this Agreement will be for a period of thirty-six
(36) months from the date hereof. Renewals of this Agreement will be in
periods of twenty-four (24) months each and shall be automatic unless written
notice is received at least two hundred seventy-five (275) days prior to the
expiration of this Agreement. Customer may cancel this contract after
twenty-four (24) months if they decide to start their own sewing operation and
275 days written notice is given.
10. Charges by Northport to Customer are subject to change when costs are
increased by mandatory revisions in the Mexican wage provisions, and
subsequent changes that may follow affecting utilities and other operating
expenses. On October 1st of each year of the contract the parties will meet to
determine if there has been a increase or decrease in Mexican wage provisions
and subsequent changes that may follow affecting utilities and other operating
expenses. New pricing will be mutually agreed to by November 1. These new
prices will go into effect January 1, of the next year.
11. Customer agrees to provide timely document information to Northport. All
documents will be available at least ten (10) working days prior to the
production requirements. Such documents include, but are not limited to,
Purchase Orders, Bills of Material, shipping Information, Drawings, Quality
Procedures, Process Requirements, Samples and Pictures. Northport will require
30 days notice to purchase equipment for new programs. On all new cutting
programs the customer will supply cutting markers to determine utilization.
12. Northport will invoice weekly. Terms are net thirty (30) days. Even Flo
understands that prompt payment is important. A 2% late charge will be
assessed after 30 days and in addition Northport will have the right to stop
shipments to Even Flo if payment is not received within 40 days.
13. Customer may terminate this Agreement on ninety (90) days written notice,
("Early Termination") with the obligation to pay Northport the following:
A. Lease severance cost, if any, of the Facility.
B. All outstanding invoices.
C. Personnel severance cost.
D. All outstanding Importation fees
14. In the event that this Agreement is terminated, Northport agrees to
return all materials, components, equipment, and apparatus to a designated
shipping point in Del Rio, Texas. Customer will bear all costs for the
dismantling, packing, preparation, crating, shipping, trucking, brokerage,
document and storage charges associated with returning such items to Customer.
15. Northport may terminate this Agreement on two-hundred and seventy five
(275) days written notice to Customer.
16. This Agreement shall be construed in accordance with the laws of the
State of Texas and Customer consents to submit to the jurisdiction of the
Texas Federal Courts.
17. ARBITRATION. Where any matter in dispute between the parties pursuant to
this Agreement shall be settled by arbitration, such arbitration shall be
conducted pursuant to the provisions of the American Arbitration Association
Commercial Arbitration Rules, in the jurisdiction of Texas and subject to the
substantive laws of the State of Texas.
17.1 The parties shall proceed to arbitration or disputes as a condition
precedent to any civil action being commenced, and any order or award
resulting from arbitration shall be capable of enforcement by the parties as
if it were a judgement of a court of competent jurisdiction in the
jurisdiction where such award or order is to be enforced.
18. All notice required to be sent to either party to this Agreement shall be
in writing and sent by registered or certified mail, postage prepaid, return
receipt requested.
19. Anything herein to the contrary notwithstanding, neither party shall be
required to perform any term, condition or covenant in this Agreement if such
performance is delayed or prevented by force majeure, which, for purposes of
this Agreement, shall mean the following: acts of God, civil strikes, material
or labor restrictions imposed by any governmental authority which prevent
suspension of civil rights, floods and any other costs, not reasonably within
the control of the parties, which, by the exercise of due diligence the
parties are unable wholly or in part to prevent or overcome.
20. Northport makes no warranty of any kind as to the materials supplied by
Even Floused in the manufacturing, processing or assembly of the products for
Customer. Northport will be responsible for scrap in excess of 3% accumulated
and will reimburse Customer for material cost. Customer holds harmless and
indemnifies Northport from any and all claims from third parties arising out
of or in any way associated with this Agreement. This indemnity shall extend
to all costs associated with claims that may be brought against Northport at
any time in the future for product defects, including attorneys fees.
21. The terms, provisions and exhibits contained in this Agreement constitute
the entire Agreement between the parties and supersede all previous
communications, either written or oral. No Agreement or understanding varying
or extending this Agreement will be binding upon the parties unless signed by
the duly authorized officers or representatives of the parties involved.
22. Customer will provide insurance to cover items detailed in Exhibit "B" at
the Facility. Need to discuss
23. In the event that Northport is approached to enter into a contract with
another party for the design, assembly or manufacture of parts similar in
nature of those supplied or manufactured for the customer. Northport agrees
that it shall not enter into any such contract with any party in competition
with the customer.
24. The customer agrees that within the next six- (6) months to allow
Northport a minimum of four (4) turn key products.
Having read this Agreement, and its Exhibits, the parties hereto execute the
entire agreement on the date indicated under their respective signatures.
Even Flo. NORTHPORT INDUSTRIES, INC.
By: By:
Its: Its:
Date: Date:
EXHIBITT "A"
MANUFACTURING AGREEMENT
Pricing and Terms
Billing to Customer is based on hour's equivalent as referenced in Exhibit A,
Paragraph 2. Customer will be billed on a per piece price. The Customer will
be responsible to pay "down time" (see below) charges based on the number of
people employed at the time of the work stoppage. Customer Invoices will be
issued on a weekly basis, and shall be payable net thirty (30) days, by check
or be wire transfer to a specified Northport bank account.
The labor rate used to calculate your piece rate is 5.80 per employed hour.
(45 hour week)
Evenflo piece price
Evenflo Price List
3/15/99 Folio:
Description Code Price
Pad #L4 OMW swas L4 $ 2.107
Pad #L3 OMW st. O/K L3 $ 2.664
Canopy Osh Kosh L3 $ 1.180
Osh Kosh Ultara Pad L3 $ 1.460
Secure Comfort R9 $ 3.420
Secure Comfort S1 $ 3.920
Ultara 5 pt. Pad 19Z1 $ 1.460
Ultara Seat Pad 10Z $ 1.460
Horizon Seat Pad 19 $ 2.770
Discovery Pad A7 $ 1.533
Discovery Canopy A7 $ 0.799
On My Way O4 $ 1.666
On My Way Canopy O4 $ 0.799
Trooper Insert 7 $ 0.734
Xxxxxx Xxxxxx 00X $ 0.399
Trooper Shield 1 $ 0.578
Ultara Insert 10Z $ 0.597
Ultara Pillow 15 $ 0.588
Medallion 15 $ 2.488
Medallion Pillow 15 $ 1.110
Medallion Lumbar 15 $ 1.091
Medallion Insert 15 $ 0.920
Champion 5 pt Seat Pad O1 $ 1.983
Champion Seat 54 $ 1.912
Champion With Pillow 1 $ 2.108
Champion Cutting $ 0.232
Overtime
Any Mexican employees worked over forty five (45) per individual employee per
week will be considered overtime hours and will be charged at the rate of 1.75
times the hourly rate. In addition, any hours over fifty six (56) hours
including holidays for an individual employee will be considered double time
hours and will be charged at the rate of two (2) times the hourly rate.
Overtime and double time will not be worked unless authorized in advance by
Customer. Work during Christmas shut down will be on a voluntary basis and
only with 30 days prior notification.
Special Handling
On any special handling , their will be a flat charge of $150.00. This is for
extra brokerage fees and bridge tolls.
Down Time
Down Time will be billed at eighty (80) percent of the applicable hourly rate,
multiplied by the number of direct laborers employed at the time of the work
stoppage. Northport requires material for production in their warehouse
five(5) days prior to scheduled build.
EXHIBIT "B"
MANUFACTURING AGREEMENT
Equipment, tooling and fixturing, machinery, packaging, materials and other
items/apparatus to manufacture and assemble Evenflo products:
