Exhibit 10.7
***: CERTAIN MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES EXCHANGE
COMMISSION.
SERVICE AND SUPPORT AGREEMENT
AGREEMENT, made this 14 day of December, 1999 by and between The
▇▇▇▇▇▇▇ Corporation, Greene, New York (hereinafter "▇▇▇▇▇▇▇") and NDC
Automation, Inc., Charlotte, North Carolina (hereinafter "NDC").
WHERAS, ▇▇▇▇▇▇▇ in the past manufactured and sold Automated Guided
Vehicle Systems to a variety of end-users; and
WHEREAS, ▇▇▇▇▇▇▇ no longer manufactures Automated Guided Vehicle
Systems, but has and continues to provide parts and service support to existing
▇▇▇▇▇▇▇ Automated Guided Vehicle System's Customer and Dealers; and
WHEREAS, ▇▇▇▇▇▇▇ wishes to transfer to NDC the responsibility for all
future parts and service support of Automated Guided Vehicle Systems previously
sold by ▇▇▇▇▇▇▇.
NOW, THERFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, receipt of which is
acknowledged, the parties agree as follows:
1. Definitions
For the purposes of this Agreement, the following terms shall have the
definitions set forth below:
1.1 "AGVS" shall mean the Automated Guided Vehicle and Systems
manufactured by ▇▇▇▇▇▇▇ and designated as Models 55, 56, 57,
58 and Load Transfer Stations and including, among other
things, line drivers, vehicles, floor controllers, station
controllers, remote address terminals, function controllers
and interface boxes associated therewith.
1.2 "AGVS Service and Support" shall mean after market support and
service including, but not limited to, providing repair parts, technical
support, and training to Dealers and Customers for all AGVS.
1.3 "Customer" shall mean any end-user of an AGVS during the term of
this Agreement whether acquired from a Dealer, directly from ▇▇▇▇▇▇▇ or
otherwise.
1.4 "List Price" shall mean the customer list price for repair parts as
shown on Exhibit A.
1.5 "Dealer" shall mean the ▇▇▇▇▇▇▇ dealers with AGVS installed in
their territory as shown on Exhibit B.
1.6 "Dealer Net" shall mean the dealer net price for repair parts as
shown on Exhibit A.
2. Assumption of Support Obligations
2.1 NDC agrees to provide all agreed to AGVS Service to Customers and
Dealers during the term of this agreement.
2.2 NDC shall use its best efforts to maintain a reasonable inventory
of service parts that will allow it to supply most parts ordered by Dealers or
Customers within 24 hours after the receipt of an order and to respond in a
reasonable manner to all requests from Dealers or Customers for technical
support within four (4) hours during normal business hours.
2.3 As a part of AGVS Service and Support hereunder, NDC shall use its
best commercial efforts to manufacture or obtain parts of the quantity and
quality necessary to allow each Customer to maintain their AGVS in good
operating condition.
2.4 NDC agrees to provide AGVS Service and Support hereunder in a
professional manner at least equivalent in quality to that provided by NDC to
its AGVS customers during the twelve- (12) months prior to the date of this
Agreement.
2.5 NDC shall assume the responsibility to administer warranty claims
for replacement service parts sold by ▇▇▇▇▇▇▇ and for which a ▇▇▇▇▇▇▇
Replacement Parts warranty is still effect.
3. Obligations of ▇▇▇▇▇▇▇
3.1 ▇▇▇▇▇▇▇ will deliver to NDC after the date of this Agreement
according to a mutually agreed time schedule for the following information, to
the extent it exists and is in the
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possession of ▇▇▇▇▇▇▇, related to AGVS Service and Support (hereinafter to as
the "AGVS Material"):
(a) all unique manufacturing documentation including vehicle
drawings, together with copies of drawings used in AGVS which are common with
other ▇▇▇▇▇▇▇ vehicles;
(b) prints;
(c) Bills of Material;
(d) Manufacturing tooling;
(e) Service manuals;
(f) Parts manuals;
(g) Service bulletins;
(h) Software source code; and
(i) Software development notes.
3.2 ▇▇▇▇▇▇▇ agrees to transfer its entire AGVS service parts inventory
to NDC pursuant to section 6 of this Agreement.
3.3 ▇▇▇▇▇▇▇ agrees to provide up to a five- (5) day training course for
NDC free of charge at Raymond's facility in Greene, New York at a mutually
convenient time and date. NDC shall have to right to select up to 6 NDC
personnel to attend such training. The training shall pertain to the basic
technology of AGVS and relevant aspects of AGVS parts sales administration. The
specific contents of the training course shall be as set forth in Exhibit "C".
3.4 ▇▇▇▇▇▇▇ shall use its best efforts to provide telephone support to
NDC at no charge for twelve (12) months after the date of this Agreement
("Initial Support Period"). After the Initial Support Period, ▇▇▇▇▇▇▇ agrees to
provide telephone service for the remainder of the term of this Agreement at a
rate of *** per hour based upon the actual hours or any fraction thereof used.
Telephone support shall be available only during business hours for Raymond's
facility in Greene, New York. Notwithstanding , any provisions to the contrary,
▇▇▇▇▇▇▇ shall only render such telephone support 1) as reasonably necessary to
facilitate NDC's performance of its obligations hereunder, 2) that does not
interfere with the operation of Raymond's other business, 3) is of a
non-repetitive nature, or 4) does not pertain to information already in the
possession of NDC, the significance and location of which has been the subject
of a prior request for telephone support by NDC.
3.5 During the term of this Agreement, and so long a NDC is not in
material breach of this Agreement, ▇▇▇▇▇▇▇ shall not sell or offer for sale to
third parties any AGVS products of this Agreement, ▇▇▇▇▇▇▇ not sell or offer for
sale to third parties any AGVS products
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or services.
3.6 ▇▇▇▇▇▇▇ agrees to use its best efforts to encourage its Dealers to
continue to market AGVS parts and services to AGV Customers. Within thirty (30)
days after the date of this Agreement, ▇▇▇▇▇▇▇ shall inform each of its dealers
that AGVS Service and Support is available from NDC. ▇▇▇▇▇▇▇ will use its best
efforts to encourage Dealers to work with NDC in regard to AGVS Service and
Support and to forward all sales leads in regard to new AGVS requirements to
NDC.
4. Obligations of NDC
4.1 NDC shall provide AGVS Service and Support in accordance with
Section 2 hereof.
4.2 NDC shall pay ▇▇▇▇▇▇▇ for the AGVS service parts inventory received
from ▇▇▇▇▇▇▇ in accordance with Section 6 of this Agreement.
4.3 With respect to inventory supplied to NDC by ▇▇▇▇▇▇▇, NDC agrees to
charge Dealers only the Dealer Net current as of the time of transfer and agrees
to charge Customers no more than list price current of the time of transfer for
those parts. With respect to parts not received from ▇▇▇▇▇▇▇ and procured
separately by NDC, NDC agrees that it will follow commercially reasonable
pricing practices, and will exercise prudent business judgment to avoid price
increases not required by the necessities of the business.
4.4 NDC shall be responsible for designing and implementing any changes
in the design of AGVS, AGVS components or service parts or for upgrading or
replacing any existing AGVS, as NDC in its sole discretion deems necessary to
provide the AGVS Service and Support during the term of this Agreement, whether
required for field modifications, or due to the unavailability or obsolescence
of one or more parts or components; or the inability of NDC or any third party
to manufacture or supply one or more AGVS, NDC shall assure that all ▇▇▇▇▇▇▇
labels, badging and other methods of identification are removed and replaced
with NDC or a third party's product identification.
4.5 NDC agrees to implement an effective program for processing field
modification request. ▇▇▇▇▇▇▇ agrees to notify its Dealers of the need to
receive approval from NDC for all field modification. Any design or aftermarket
modification to an AGVS during the terms of this Agreement shall be reviewed by
NDC and approved or rejected. If NDC approves a modification of an AGVS, then
before any modified AGVS or component thereof is delivered
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to a third party, NDC shall assure that all ▇▇▇▇▇▇▇ labels, badging and other
methods of identification of the modified AGVS as a ▇▇▇▇▇▇▇ product are removed
and replaced with NDC or a third party's' product identification.
4.6 NDC shall use its best efforts to gain the confidence and support
of the Dealers. NDC will not attempt to recruit Dealers to also become dealers
of NDC products, without the prior written consent of ▇▇▇▇▇▇▇.
4.7 NDC shall not utilize third party service organizations to provide
any part of the AGVS Service and Support hereunder, without the prior written
consent of ▇▇▇▇▇▇▇.
5. Term and Termination
5.1 The term of this Agreement shall be for a period of five (5) years
from the date of this Agreement.
5.2 Either party may immediately terminate this Agreement, if (1) a
Trustee shall be appointed for the other party or its property, (2) the other
party makes an assignment for the benefit of creditors, (3) the other party
becomes the subject of any proceeding under the Bankruptcy Act, (4) the other
party becomes insolvent, (5) a change of control occurs at the other party,
whether by virtue of a sale of assets, stock transaction, or otherwise, or (6)
NDC attempts to sell, transfer, encumber or part with possession of AGVS
Material or its AGVS Service and Support obligation. Further, this Agreement may
be terminated by either party upon ninety (90) days notice if the other party
has breached a material term hereof and failed to cure such breach within ten
(10) days after written notice thereof.
5.2.1 It shall be considered a breach of a material term of the
Agreement if either party fails or refuses to perform any of
its obligations set forth in Section 4.
5.2.2 In the event that ▇▇▇▇▇▇▇ terminates the Agreement for the
reasons set forth in Section 5.2., NDC will cease all AGVS
Service and Support on the date of termination; will not hold
itself out as a provider of AGVS Service and Support
thereafter; will return to ▇▇▇▇▇▇▇ within thirty (30) days
after the date of notice of termination all unsold service
parts received under this Agreement; will return to ▇▇▇▇▇▇▇
within ten (10) days after the date of notice of termination
copies of all information, (and will return any and all copies
of such information within ten (10) days after the date of
termination) received under this Agreement; and will
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pay to ▇▇▇▇▇▇▇ an amount equal to twenty-five percent (25%) of
the difference between the cost to ▇▇▇▇▇▇▇ of all unreturned
service parts and the cost to ▇▇▇▇▇▇▇ of all service parts set
forth on Exhibit A. The payment by NDC to ▇▇▇▇▇▇▇ is designed
to compensate ▇▇▇▇▇▇▇ for damages that are difficult to
calculate and are a reasonable pre-estimate of the Raymond's
Probable loss in the event that the Agreement is terminated as
a result of a material breach of the Agreement by NDC. The
remedies provided to ▇▇▇▇▇▇▇ hereunder are cumulative in
nature and shall be in addition to all other remedies
available to ▇▇▇▇▇▇▇ in law or equity.
6. Service Parts Inventory
▇▇▇▇▇▇▇ shall transfer ownership of its entire AGVS service parts
inventory to NDC on the following terms and conditions.
6.1 ▇▇▇▇▇▇▇ shall identify and inventory the AGVS service parts
inventory maintained at its Syracuse, N.Y. facility within fifteen (15) business
days after the execution of this Agreement by both parties and shall provide an
up to date list of such inventory to NDC, (hereinafter referred to as the
"Inventory List").
6.2 NDC shall have ten (10) business days after receipt thereof to
verify the accuracy of the Inventory List and shall send a written notice to
▇▇▇▇▇▇▇ within this ten (10) day period setting forth any items of inventory
which it disputes. Upon receipt of such notice hereunder, ▇▇▇▇▇▇▇ shall review
the disputed inventory and the parties shall jointly revise the Inventory List,
as necessary.
6.3 All right, title and interest in and to all of the items on the
Inventory List as submitted by ▇▇▇▇▇▇▇ or revised by the parties shall be
transferred from ▇▇▇▇▇▇▇ to NDC upon the later of ten (10) business days after
receipt of the Inventory List by NDC or, if NDC disputes any items on the
Inventory List, the date a revised Inventory List is approved by both parties
("Transfer Date"). NDC shall bear all shipping and freight costs incurred in
transferring such Inventory from ▇▇▇▇▇▇▇ to NDC.
6.4 All risk of loss of the items on the Inventory List shall pass to
NDC on the Transfer Date.
6.5 As the Purchase Price for the items on the Inventory List, NDC
shall pay ▇▇▇▇▇▇▇ an amount equal to *** of the gross sales revenue received by
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NDC from the sale of items on the Inventory List during the first twelve (12)
months after the Transfer Date. NDC agrees that inventory supplied by ▇▇▇▇▇▇▇
shall be sold first, before the same or similar parts obtained from any other
source.
6.6 NDC shall pay ▇▇▇▇▇▇▇ the entire Purchase Price, pursuant to
paragraph 6.5, no later than the last day of the thirteenth month after the
Transfer Date. Any unsold portion of the Service Parts Inventory that remains
after the first twelve (12) months after the Transfer Date will become NDC's
property free of charge, subject to the provisions of Section 5.2.
6.7 NDC shall maintain detailed records of the disposition of each item
on the Inventory List and the revenues resulting from any such disposition for
(12) months after the Transfer Date and shall retain such records for a period
of eighteen (18) months after the Transfer Date, ▇▇▇▇▇▇▇ and/or its designated
representatives shall have the right, upon prior written notice, to audit all
record related to the disposition of items on the Inventory List and any revenue
collected by NDC as a result of such disposition, for the purpose of verifying
the amount owed to ▇▇▇▇▇▇▇ pursuant to Section 6.5 hereof.
7. Year 2000 Statement
AGVS is not equipped with technology that incorporates time-of-day clock and
calendar functions.
8. License
8.1 ▇▇▇▇▇▇▇ hereby grants to NDC a license to use, modify and copy the
AGVS Material for the purpose of performing the AGVS Service and Support under
this Agreement and for no other purpose.
8.2 If this Agreement is not terminated pursuant to section 5.2 prior
to the end to the Term hereof, then all right, title and interest in the AGVS
Material shall automatically be transferred to NDC upon the expiration of this
Agreement, without further action by either party. Notwithstanding this
provision, however, NDC shall retain AGVS Material in perpetuity or until such
time as no AGVS to which it pertains is in operation and ▇▇▇▇▇▇▇ shall have the
right to access AGVS Material and obtain a copy of the same for the limited
purposes of responding to a governmental inquiry or an action at law or in
equity brought against it, its officers, directors, employees, agents,
subsidiaries, affiliates, or parent.
9. Confidentiality
NDC acknowledges and agrees that the AGVS Material received from
▇▇▇▇▇▇▇
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pursuant to section 3.1 is not generally known outside of ▇▇▇▇▇▇▇ and that such
information is both the property of, and proprietary to, ▇▇▇▇▇▇▇.
The parties acknowledge and agree that they may receive additional
information from other party that is not generally known outside of the party
providing the information, including, without limitation, the AGVS Material and
information relating to the disclosing party's products, sales, dealers,
designs, methods, prices, business affairs, or employees (collectively referred
to as "Confidential Information") and that such information is the property of
the disclosing party. The receiving party agrees to receive and maintain all
Confidential Information in the strictest confidence, except as provided herein,
shall not use Confidential Information for its own benefit or disclose it or
otherwise make it available in whole or in part to third parties without the
prior written consent of the disclosing party. Except as specifically provided
in Paragraph 8, nothing in this Agreement nor the furnishing of any confidential
Information by either party shall be construed as granting or conferring any
rights by license or otherwise in any (1) Confidential Information of the
disclosing party except for the limited purposes of performance hereunder, (2)
patents, (3) trademarks or (4) copyrights
10. Indemnification
10.1 NDC hereby indemnifies and holds harmless ▇▇▇▇▇▇▇ and all of its
officers, directors, employees, agents, affiliates, subsidiaries, or parent from
and against any and all actions, causes of action, liabilities, suits, claims,
losses, damages, costs, and expenses (including reasonable attorneys' fees)
arising out of or related to the performance hereunder of the AGVS Service and
Support by NDC, including but not limited to field modifications and design
changes.
10.2 ▇▇▇▇▇▇▇ hereby indemnifies and holds harmless NDC and all of its
officers, directors, employees, agents, affiliates, subsidiaries, or parent from
and against any and all causes of action, liabilities, suits, claims, losses,
damages, costs, and expenses (including reasonable attorneys' fees) arising out
of or related to claims for defective service provided by ▇▇▇▇▇▇▇ up to and
through the date this Agreement is signed. In addition, for a period of three
years from the date of this Agreement, ▇▇▇▇▇▇▇ hereby indemnifies and holds
harmless NDC and all of its officers, directors, employees, agents, affiliates,
subsidiaries, or parent from and against any and all causes of action,
liabilities, suits, claims, losses, damages, costs, and expenses (including
reasonable attorneys' fees) from any product liability claims relating to the
design of AGVS manufactured and sold by ▇▇▇▇▇▇▇, so long as the
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product at issue in the suit has not modified in a manner which is causative of
the underlying accident.
11. Warranty and Limitation of Liability
11.1 ▇▇▇▇▇▇▇ warrants to NDC that the AGVS service parts inventory
transferred to NDC pursuant to section 6 if this agreement
were designed and manufactured to the ▇▇▇▇▇▇▇ specifications
for such parts. In the event that any such service part is
found not to be in compliance with this limited warranty, then
▇▇▇▇▇▇▇ shall not be entitled to compensation for such parts.
NDC shall retain all noncomplying parts for inspection by
▇▇▇▇▇▇▇. THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES
EXPRESSED, IMPLIED OR STATUTORY. THERE ARE NO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ALL
OTHER WARRANTIES ARE HEREBY EXPRESSLY EXCLUDED.
11.2 EXCEPT AS OTHERWISE PROVIDED IN SECTION 5.2.2, NEITHER PARTY SHALL
BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
INCLUDING BUT NOT LIMITED TO COSTS OF PROCURING SUBSTITUTE PRODUCTS OR SERVICES,
LOSS OF USE, OR LOST, OR LOST PROFITS, ARISING FROM OR IN CONNECTION WITH ANY
BREACH OF THIS AGREEMENT.
11.3 As to service parts sold by ▇▇▇▇▇▇▇ and for which Raymond's
limited warranty is still in effect, NDC will honor a bonafide Dealer warranty
claim and be reimbursement by ▇▇▇▇▇▇▇ in accordance with Raymond's usual and
customary warranty reimbursement practices. NDC shall be allowed to use Service
Parts from inventory free of charge to provide such warranty service.
12. Assignment
This agreement shall not be assignable by either party without the
prior written consent of the other party. This agreement will be binding upon
and inure to the benefit of NDC and ▇▇▇▇▇▇▇ and their respective successors and
assigns.
13. Limitation of Authority
This agreement does not constitute NDC or ▇▇▇▇▇▇▇ as the legal
representative of the other for any purpose whatsoever, and neither of them has
the authority to assume or create any
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obligation whatsoever, expressed or implied, on behalf of or in the name of the
other, nor to bind the other, nor to bind the other in any manner whatsoever.
14. Notice
All notices, demands and other communications required hereunder, will
be made in writing and will be deemed to have been duly given if delivered
personally or within three days after being sent by certified mail, return
receipt, requested, postage prepaid to the addressees set forth below:
If to NDC: NDC Automation, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to ▇▇▇▇▇▇▇: The ▇▇▇▇▇▇▇ Corporation
▇▇ ▇▇▇ ▇▇▇
20 south ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
ATTN: General Counsel
15. Entire Agreement
This Agreement represents the entire understanding and agreement
between the parties as to the subject matter hereof, and supersedes all
negotiations, prior discussions, agreements, arrangements and understandings,
written or oral, relating to the subject matter of this Agreement.
16. Waiver
The failure of any party to enforce any provision of this agreement
shall not be construed to be a waiver of such party's right thereafter to
enforce the same, and no waiver of any breach shall be construed as an agreement
to waive any further or subsequent breach of the same or other provisions of
this Agreement.
17. Handling of Disputes, Applicable Law and Forum Selection
To minimize expenses and the impact on each party, the parties agree to
attempt
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to resolve any dispute, controversy or claim arising out of or related to this
Agreement in good faith. For this purpose, each party shall appoint one
representative whose task it will be to come to a mutually agreeable resolution
within (30) days. In the event such attempt fails, the dispute, controversy or
claim shall be submitted to binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association using one
(1) arbitrator acceptable to both parties. In the event ▇▇▇▇▇▇▇ initiates such
proceedings, arbitration shall take place in Charlotte, North Carolina, pursuant
to North Carolina law. In the event NDC initiates such proceedings, arbitration
shall take place in Greene, New York, pursuant to New York law.
Unless otherwise agreed to by the parties, each party shall continue to
perform all of its obligations in accordance with this Agreement during any
dispute resolution and arbitration proceedings.
18. Counterparts
This Agreement may be executed in one or more counterparts, all of
which, when taken together, shall constitute but one and the same instrument.
19. Amendments
No amendment, modification, extension or waiver of any of the
provisions contained herein shall be binding upon any party unless made in a
writing referring to this Agreement and signed by all parties hereto.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
NDC AUTOMATION, INC. THE ▇▇▇▇▇▇▇ CORPORATION
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: President, CEO Title: VP Engineering
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VP Finance & Adm., COO, CFO
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