EXHIBIT 10.3
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MANUFACTURING AGREEMENT
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THIS AGREEMENT, made this 22 day of August, 1996, by and between S & H
ELECTRONICS, INC, a Pennsylvania Corporation having its principal place of
business at 00 Xxxxx Xxxxxx Xxxxxx, X.X. Xxx 00, Xxxxxxxxx, XX 00000,
(hereinafter referred to as "S&H")
AND
TASTY FRIES, INC. a Pennsylvania Corporation having its principal place of
business at 000 Xxxxxx Xxxxxxx, Xxxxx Xxx, Xxxx Xxxx, XX, 00000, (hereinafter
referred to as "Tasty Fries").
CONSIDERATION: In consideration of the mutual promises contained herein
and INTENDING TO LEGALLY BOUND the parties hereto hereby agree as follows:
1. BACKGROUND OF THIS AGREEMENT. Tasty Fries has developed and is the
owner of certain patents, registered trademarks, manufacturing trade secrets,
technical know how and engineering designs relating to the manufacture of a
certain type of french fry vending machine ("The Product"), more specifically
set forth on Exhibit "A" which is attached hereto and incorporated herein.
Included in Exhibit "A" is the design of machinery that S & H will manufacture,
and the engineering drawings, patents, trademarks, specifications, instructions
and other documentary descriptive matter identified in Exhibit "A". S & H
desires to obtain the right to use such information contained in the documents
identified in Exhibit "A" and to manufacture at its principal place of business
the vending machine product described therein.
2. PERMISSION. Tasty Fries does hereby grant to S & H the right to use
all of the information provided to it by Tasty Fries and the license to
manufacture the product at it's manufacturing location in Robesonia,
Pennsylvania. This right to manufacture shall be for the initial quantity of
7,500 product units.
3. PRODUCT. S & H shall manufacture for Tasty Fries a certain French
Fry vending machine as more particularly described in Exhibit "A".
4. FEES. After careful consideration, S & H has estimated that each
vending machine product will require 40 man hours to assemble. S & H will charge
Tasty Fries at a rate between $32.00 and $35.00 per hour per machine. Each
product vending machine will be invoiced to Tasty Fries at a price not to exceed
$1,400.00 for the first 7,500 machines and if built at $32.00 per hour then at
the price of $1,280.00. These figures include internal sub assembly, total
assembly, final testing and preparation for shipment. The parties hereto agree
that this is a fair and reasonable estimated cost and that this estimated cost
may be adjusted, within the perimeter set forth above, based upon the actual
time required to manufacture a single vending machine product by further mutual
agreement of the parties.
5. SCHEDULE: The parties agree that the schedule for production of the
Tasty Fries vending machine product will be as follows:
First month of production.......................100 units
Second month of production......................200 units
Third month of production.......................300 units
Fourth month of production......................500 units
Fifth month of production.......................800 units
After the fifth month S & H will manufacture 800 units per month until
the total requirement of 7,500 units have been manufactured. It is agreed
between the parties that the date for first month of production will be set
between the parties at a mutual agreeable date and time.
After S & H has performed this Agreement to Tasty Fries' satisfaction,
in accordance with established specifications as attached hereto, Tasty Fries
will offer S & H additional purchase orders for the manufacture of 12,000 Tasty
Fries vending machine product units annually. basis in accordance with the terms
and conditions contained herein.
6. RESPONSIBILITY OF PARTIES: Tasty Fries shall supply all materials to
S & H from suppliers of Tasty Fries choice. Said materials shall be purchased
with Tasty Fries purchase orders and shipped directly to S & H without charge to
S & H. S & H shall be responsible for inspecting and verifying the quantity,
count and quality of all incoming parts and shall inform Tasty Fries within five
(5) business days of any deficiency in the quantity, count or quality of any
incoming parts. S & H shall be responsible for all manufacturing functions
however shall not be responsible for purchasing, ordering and delivering the
specified component parts.
7. OFFICES: S & H agrees to provide Tasty Fries with sufficient office
space for a source inspector who will inspect the manufacturing process for
efficiency and quality. The source inspector will have the authority to review
any and all source documents, procedures or techniques employed by S & H in the
manufacturing of the Tasty Fries french fry vending machines product. The
primary function of the source inspector is to inspect the product for quality
and to assure that each unit meets the standards required by Tasty Fries. Said
standards will be developed by Tasty Fries and delivered in writing to S & H.
8. DELIVERY: S & H shall not be responsible for the delivery of the
finished manufactured product to its final destination. Tasty Fries distributors
shall be responsible for the delivery of the Tasty Fries french fry vending
machine to its final destination including payment of all freight charges in
accordance with the terms of the Tasty Fries Distribution agreements.
9. PAYMENT: Tasty Fries shall pay S & H invoices within thirty days of
receipt.
10. ASSIGNMENT: This Agreement shall not be assignable by either party
without the written consent of the other party.
11. SECTION HEADING: All section headings herein are inserted for
convenience of reference only and shall not control, affect or modify the
meaning or construction of any of the terms or provisions hereof.
12. NOTICES: All Notices required by this Agreement to be given to
either party hereto shall be in writing and shall be personally served upon the
duly authorized representative of such party listed below or shall be mailed, by
registered or certified mail, return receipt requested, to the addresses shown
below or such other addresses as are specified by similar Notice:
Tasty Fries, Inc.
000 Xxxxxx Xxxxxxx, Xxxxx Xxx
Xxxx Xxxx, XX 00000
Attn: President
S & H Electronics, Inc.
00 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 00
Xxxxxxxxx, Xx 00000
Attn: President
A Notice shall be effective upon receipt.
13. GOVERNING LAW: This Agreement shall be governed in accordance with
the Laws of the Commonwealth of Pennsylvania.
14. ENTIRE AGREEMENT: This instrument states the entire Agreement
between the parties hereto with respect to the subject matter hereof, and may
not be amended except by written instrument executed by the parties hereto. It
is anticipated that in the course of initially manufacturing the products
involved herein, an additional Agreement may be necessary for purposes of
attending to or working out additional details. Those Agreements must be duly
signed and executed by each party hereto.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound by the
terms and conditions set forth above have executed this Agreement this of
August, 1996
Tasty Fries, Inc.: (SEAL) Attest:
By: /S/XXXXXX X. XXXXX /S/XXXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxx Secretary
President & C.E.O
S & H Electronics, Inc.: (SEAL) Attest:
By: /S/XXXXXXX X. XXXX /S/XXXX XXXX
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Xxxxxxx Xxxx Secretary
President