Document a87aJM0mGD5MM7OQxw6qNRJy

m OPERATIONS MANAGEMENT AGREEMENT Da--: December 30. 1983. ?:r;lea: J'M Manufacturing Company. Inc. , a FVC pipe manu r ac Cur ing company incorpdraccd in Delaware state, USA., and herein referred to as '`Trustee", and j-M A/C Corporation, ac asbescos pipe oamifacturin; company Incorporated In Delaware state. USA. and herein referred to as "Truster", both are headquartered in Stockton. California, have entered into agreement in connection to Che trust of operations management and related cost charges. Recital: l. The Trustee has (i) eighc plants located In Burner, North Carolina; Tjielnison. Texas; Franklin, Pennsy l vania; Crten Cove Springs. Florida; HcNary, Oregon; Pueblo. Colorado; Stockton. California; and Wilton, towi; (2) complete teams of manufacturing management stiff..selling forces, marketing management staff, corporate administration staff including production, engineering and development, accounting, treasury, employee reUtior.s, dsca processing, general affairs, and president office; (3) ccopating facilities, telephone systems, information systems and software systems, telecopier, buildings ana, offices, parking Iocs and scorsge yards; and (<) purchasing functions. 1 3* I I s 3= 2- The i roster has only too plants located in Stockton , California and Denison. Texas, with limiced asbescos pipe production machines and production workers, buC does noc have plant managers ^nd manufacturing management staff, other operations facilities and various manpower and management systems. 3. Since chese two companies are locaced lrx the same place and agree to use the same secs of oinpouer, facilities, and systems belonging Co Che TrusCee. The Truster agrees, befoce it has its own corporate administration staff, selling forces, marketing management staff, plant managers and manufacturing management staff, and ocher necessary facilities, manpower ar.d systems, to be charged by Che Trustee che necessary costs and expenses and agrees Co the related agreements as specified by the following: Section 1. Hjnufacturtng Expenses ( l ) P*tret Costs: The oa intenance labor costs (by wo rk hours basis), utility costs (by meters) and ocher costs directly used foe che asbescos pipe planes will be charged co the Truster. (2-1 Indirect Coses: The salaries, wages and related expenses for plant man.ai; era and Che i r ajjr.agenen c staff, depreciation ex pc nses and general ,, f f a 11 * expenses will be shared by che Trustee and Trusccr on the basis of SOI :'cr production value ratios and 50f for direct labor hou;s rjtlos. EXHIBIT i /> 3 Un '1 ` JMM 00000001 SC-JMM-2565 b rO rs>HRrr Section 2. Selling expenses . (1-) Direct Cos ts~- Freight, insurance expenses for exports and sales tonaijsion for asbestos pipe selling will be directly charged to the Truster. (2.) Indirect Costs: Salaries, wages and related expenses for salesmen and sales managers. sales expenses and ocher related selling expenses will be proport ioca l ly charged to the Truster based on che racio of monthly sales amounts. Section 3- Coroorace Adoinistretton Exnenses All the salaries, wages and related expenses for corporate adminisCrstion staff including production, engineering apd development. accounting, treasury, employee relations, data processing, general affairs and president office will _ be equally (SOT - SOT.} shared by the Trustee and the Truster - Seccion 4. Financial Expenses The interest expenses will be charged to Truster by the Trustee based on Che oonchly balances of tncer-company accouncs due Co the Troscee multiplied by the average hank loan interesc races. Section 5- lease Expenses ' (l.) The Trustee will charge che Truster $50,000 per month for the unlimited uses of computer relaced equipment, telephone sysceo. telecopier, information sysceas and sofeware systems. . (Z-) The Trustee will charge the Truster S3,000 per month for che unlimited uses of Headquarters building a-d parking lot. (3.) The Trustee will charge the Truster $13,000 per aonth for che unlimited uses of scorage yards, including Denison plane's $5,000 pec month. Stockton plane's $5,000 pec month and Buena Park's $3,000 per month. is Section 6. Purchasing Charge The Trustee will charge che Truscer 1.7c per pound of the ashes coo pipe materials purchased by Che Truscee's purchasing department based on che actual receiving quantity ac che year end for chac year. Section 7- Written Notice This agreement contemplates the highest good faith and fair dealing CCn t*1C Parc^rs- All .evasions on chis agreement in connection to che cost charges should be agreed by both parties. All notices hereunder shall be in writing and delivered by person or sene to b. registered mail to the Truster: ' aiVTumuTilin -2- JMM 00000002 6o 1 ! / . j-H A/C Corporation ''1051 Sperry Road Scockton, California 95206 and to Che Trustee: J-M Manufacturing Coopany, Inc. 1051 Sperry Road Stockton, California 95206 ' Section 8. California Laos This agreeoenc is executed under and in conforming vi:h the laus of the state of California and is co be governed hereby. IK WITNESS WHSRfOF, the parties hereto have executed this agreement in duplicate as of the day and year first above '-ritten. /Seal) (Seal) 3- JMM 00000003 3 3 ft m m fi20