PRINTER SUPPLY AGREEMENT
THIS MANUFACTURE AND SUPPLY AGREEMENT (the "Agreement") is made by and
between Ithaca Peripherals ("Ithaca"), a division of Magnetec Corporation, a
Connecticut corporation and a wholly owned subsidiary of TransAct Technologies
Incorporated, a Delaware corporation ("TransAct"), and Ultimate Technology
Incorporated, a New York corporation ("Ultimate").
WHEREAS, Ithaca manufactures POS printers and Ultimate wishes to purchase
POS printers from Ithaca, and Ithaca wishes to provide the POS printers to
Ultimate, all on the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto hereby agree as follows:
1. Manufacture and Supply of Product.
During the term of this Agreement, Ithaca will manufacture and sell to
Ultimate and Ultimate will purchase from Ithaca, subject to the terms and
conditions contained herein, no less than 75% of Ultimate's total requirements
for POS printers, calculated on a unit basis (the "Required Percentage"). The
POS printers will be manufactured and supplied to Ultimate pursuant to written
purchase orders submitted by Ultimate to Ithaca from time to time which,
promptly upon receipt, will be acknowledged and accepted or rejected by Ithaca
pursuant to article 4.2 of this Agreement.
2. List Price Discount; Verification of Minimum Percentage.
2.1 In consideration for Ultimate's purchase of the Required
Percentage, Ithaca shall sell POS printers to Ultimate at prices equal to the
discount from Ithaca's published list prices as set forth on Exhibit 2.1
attached hereto. Ithaca will sell to Ultimate options, accessories and supplies
at Ithaca's published maximum discounts and will sell spare parts at a 20%
discount from Ithaca's list prices for spare parts, subject to adjustment by
mutual agreement on a case by case basis. Ithaca retains the right to increase
its list prices from time to time in its sole discretion, but agrees that during
the term of this Agreement no other distributor of Ithaca products whose volume
of POS printer purchases is greater than 1,000 units per year will receive
discounts greater than the discounts provided to Ultimate.
2.2 Ultimate shall provide to Ithaca, no more than thirty (30) days
after the end of a quarter, a quarterly report of all POS printers purchased by
Ultimate from all sources in the quarter just ended. In order to confirm that
Ultimate is fulfilling its obligations under this Agreement, Ithaca and its
representatives shall have the right, upon reasonable notice and during normal
business hours, to have access to Ultimate's purchasing and related records and
to otherwise conduct a reasonable audit of Ultimate's purchases of POS printers.
The cost of any such audit shall be paid by Ithaca unless an audit reveals that
Ultimate is not purchasing the Minimum Percentage, in which case Ultimate shall
reimburse Ithaca for the full cost of such audit.
3. Effective Date and Term.
The term of this Agreement shall commence as of the effective date of
the Registration Statement on Form S-1 of TransAct Technologies Incorporated
(Registration No. 333-06895) and ending on December 31, 1999.
4. Estimates; Ordering; Shipment.
4.1 Beginning on September 28, 1996 and thereafter on or before the
last day of every accounting month, Ultimate shall provide Ithaca with a written
estimate in the form attached hereto as Exhibit 4.1.
4.2 Purchase orders for POS printers shall reference this Agreement
and be submitted by Ultimate on its regular purchase order forms. Purchase
orders will be deemed accepted by Ithaca unless rejected in writing by Ithaca
specifying the reasons for rejection within fourteen (14) calender days after
receipt of the purchase order. Purchase orders may be rejected by Ithaca if a
purchase order (i) does not comply with the terms and conditions of this
Agreement, or (ii) proposes new or additional terms that are not acceptable to
Ithaca or requires modifications to the POS printers which Ithaca, in its sole
discretion, is unwilling to make. The delivery date, quantity, payment terms and
other terms and conditions of sale set forth in any such purchase order shall,
to the extent not inconsistent with this Agreement, govern.
4.3 Unless otherwise agreed, purchase orders shall specify a delivery
date with the normal lead time of forty-five (45) days. If no lead time is
specified, the POS Printers will be delivered within forty-five (45) days of
Ithaca's receipt of the purchase order.
2
4.4 Expedited delivery will be available for an additional charge to
be agreed to by Ithaca and Ultimate on a case by case basis.
4.5 Title to the equipment shall pass to Ultimate only upon Ithaca's
receipt of payment of the full purchase price. Ithaca warrants title to be
clear, free and unencumbered. Ithaca reserves, and Ultimate hereby grants to
Ithaca, a purchase money security interest in each unit of the equipment in the
amount of its purchase price, and such security interest shall be satisfied by
payment in full of the purchase price. Ithaca may file a financing statement
with any appropriate state or local authorities in order to perfect Ithaca's
security interest. Ultimate hereby appoints Ithaca as its agent and attorney in
fact with full power to sign in Ultimate's name any financing statements. No
authorization is given to resell any unit of equipment or sublicense any program
unless the price, charge or fee shall have been paid to Ithaca, or unless
Ultimate has protected Ithaca's security interest by the appropriate filings
otherwise.
4.6 In the event Ultimate (a) cancels any order or portion thereof,
(b) fails to meet any obligation hereunder, causing cancellation or rescheduling
of any order or portion thereof, or (c) requests a rescheduling of scheduled
orders and such request is accepted by Ithaca, Ultimate agrees to pay to Ithaca
cancellation or rescheduling charges based on a percentage of the current price
to Ultimate of the cancelled or rescheduled POS printers. Such changes are as
follows:
Cancellation or Reschedule Reschedule Cancellation
Notice Received Charge Charge
-------------------------- ---------- ------------
61-90 days prior to 5% 10% or $200 whichever
scheduled delivery month is greater
31-60 days prior to 10% 15% or $200 whichever
scheduled delivery month is greater
30 days or less prior to 15% Non-cancelable
scheduled delivery month
During scheduled delivery Non-reschedulable Non-cancelable
month
The third request for rescheduling an order constitutes an automatic
cancellation of that order. Ultimate may not cancel or reschedule any order or
portion thereof after delivery.
3
5. Payment.
Ithaca may issue invoices no earlier than the shipping date of the POS
printers. Payment will be made within thirty (30) calender days of the date of
shipment.
6. POS printers Warranty.
Ithaca shall provide warranties on the POS printers as set forth in
its warranty policy, as in effect from time to time. A copy of Ithaca's current
warranty policy is attached as Schedule 6 hereto. Ithaca reserves the right to
revise its warranty policy from time to time, and shall promptly provide any
revisions to Ultimate.
7. Corporate Authorization. Ithaca and Ultimate each represent to the other
that: (a) it has the right to enter into this Agreement; (b) all necessary
actions, corporate and otherwise, have been taken to authorize the execution and
delivery of this Agreement and the same is a valid and binding obligation of
such party; (c) all licenses, consents and approvals necessary to carry out all
of the transactions contemplated in this Agreement have been obtained by such
party; and (d) such party's performance of this Agreement will not violate the
terms of any license, contract, note or other obligation to which such party is
a party.
8. Changes, Amendments and Waivers.
This Agreement may not be amended or modified, nor any of its terms
waived, except by a written instrument duly executed by the parties hereto. When
used herein, the term "Agreement" will include any amendments or modifications
made in accordance herewith. A waiver by either party of a breach of any
provision of this Agreement by the other party, or any right hereunder, will not
operate to waive or excuse any subsequent breach or waive any other right.
9. No Assignment.
This Agreement may not be assigned or transferred by either Party
hereunder without prior written consent of the non-assigning party.
4
10. Notice.
Any notice or other communication required or permitted hereunder will
be in writing and will be given (i) by delivery in person, (ii) by certified
mail, return receipt requested, (iii) by commercial overnight courier, or (iv)
by facsimile transmission (telecopy) (with telephone confirmation of receipt),
as follows:
(a) If to Ithaca, to:
Ithaca Peripherals, a division of
Magnetec Corporation
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx,
Senior Vice President
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
(b) If to Ultimate, to:
Ultimate Technology Corporation
0000 Xxxxx 00 Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, President
Facsimile number: (000) 000-0000
Telephone number: (000) 000-0000
Any such notice or other communication will be deemed to have been given (i) on
the date of delivery in person, (ii) on the fifth day after mailing by certified
mail, provided that receipt of delivery is confirmed in writing, (iii) on the
first Business Day following delivery to a commercial overnight courier, or (iv)
on the day of facsimile transmission (telecopy) provided that telephone
confirmation of receipt is obtained.
11. Governing Law.
This Agreement will be governed by the laws of the State of
Connecticut without reference to its conflict of laws rules.
12. Arbitration; Venue and Jurisdiction.
Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination or validity thereof will be settled by
arbitration in accordance with the Rules of the American Arbitration
Association. The
5
number of arbitrators will be one. The place of arbitration will be Hartford,
Connecticut, or at such other place as the parties may mutually agree in
writing. The award or determination made by the arbitrators will be final and
binding upon the parties and judgment thereon may be entered in any court of
competent jurisdiction. The parties consent to and accept the jurisdiction of
such courts and waive any objection (including any objection to venue or any
objection based upon the grounds of forum non convenience) which might be
asserted to the entering of the judgment in such courts.
13. Termination.
13.1 This Agreement and the obligations of the parties hereunder will
terminate upon the expiration of the term set forth in Section 3 or earlier, at
the option of the party which is affected adversely by any of the following and
upon the occurrence thereof:
(a) If either party fails to observe or perform or breaches any
material term or obligation contained herein and fails to cure the
non-observance or non-performance or breach within fifteen (15) days after being
given notice by the other party of the existence thereof or, as to failures
which cannot reasonably be cured within fifteen (15) days, fails within fifteen
(15) days to begin the curing thereof and thereafter diligently prosecutes the
same to completion within thirty (30) days after being given the notice. Without
limiting the generality of the foregoing, Ultimate hereby acknowledges and
confirms that its obligation to purchase the Minimum Percentage of its POS
printer requirements from Ithaca is a material obligation of this Agreement.
(b) The dissolution, insolvency (in the sense of being unable to pay
debts as they mature), making of an assignment for the benefit of creditors, the
filing of an involuntary petition under the United States Bankruptcy Code or the
bankruptcy laws of any other country which is not dismissed within sixty (60)
days, or the appointment of a receiver (or similar official) of the assets of,
by or against either party.
13.2 Either party's termination of this Agreement pursuant to Sections
13 hereof will be without prejudice to its legal remedies for non-observance,
non-performance or breach of this Agreement.
14. Sole Understanding.
This Agreement is the entire agreement and understanding of the
parties related to the subject matter hereof
6
and supersedes all other prior agreements, understandings and communications,
whether oral or written.
15. Headings.
The headings of the sections and subsections of this Agreement have
been added for convenience only and will not be deemed to be a part of this
Agreement.
16. Counterparts.
This Agreement may be executed in any number of counterparts, but all
counterparts hereof will together constitute but one agreement. In proving this
Agreement, it will not be necessary to produce or account for more than one
counterpart signed by both of the parties.
THIS AGREEMENT has been executed by the duly authorized representative of
each of the parties hereto this 30th day of July, 1996.
ITHACA PERIPHERALS, a division of
MAGNETEC CORPORTION
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Print Name:
--------------------------
Title: President
------------------------------
ULTIMATE TECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Print Name:
--------------------------
Title: President
------------------------------
7
