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EXHIBIT 10.31
AMENDED AND RESTATED
MANUFACTURING SUPPORT SERVICES AGREEMENT
THIS AMENDED AND RESTATED MANUFACTURING SUPPORT SERVICES AGREEMENT (the
"Agreement") is dated as of June 1, 1998 by and between Tridex Corporation, a
Connecticut corporation ("Tridex"), and Magnetec Corporation, a Connecticut
corporation ("Magnetec").
WHEREAS, Magnetec and Tridex entered into a Manufacturing Support
Services Agreement dated as of September 28, 1996 (the "Original Agreement"),
under which Magnetec has provided certain services to Tridex in connection with
Tridex's conduct of the ribbon business (the "Ribbon Business"); and
WHEREAS, Tridex and Magnetec wish to amend and restate such Original
Agreement to reflect their revised agreement;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Staffing: Management Supervision and Control by Tridex.
(a) No Magnetec employees will engage directly in the
manufacturing operations of the Ribbon Business. Tridex shall employ all
personnel required to be directly engaged in such operations, and only the
individuals employed by Tridex for the Ribbon Business shall be permitted to
operate Ribbon Business equipment.
(b) Tridex shall maintain managerial supervision and control
of the Ribbon Business manufacturing operations and shall exercise final
approval authority over all Tridex purchase orders and Tridex checks prepared by
Magnetec in connection with the manufacturing support services rendered
hereunder. The designated Tridex employee (the "Ribbon Line Supervisor") will
supervise the Ribbon Business manufacturing line employees and serve as
day-to-day on-site representative of Tridex for Ribbon Business matters.
(c) The Ribbon Line Supervisor, or another Tridex employee (as
designated by Tridex in writing to Magnetec), shall: (i) forecast annual
materials requirements; (ii) develop material requirements planning ("MRP") data
for input to Magnetec's automated manufacturing and inventory control systems;
(iii) develop a production schedule and determine quantities and delivery dates
required for periodic materials requirements; (iv) issue Tridex purchase orders
for delivery of such materials in the appropriate quantities on the delivery
dates; (v) supervise Tridex employees engaged in the manufacturing operations of
the Ribbon Business; (vi) collect Ribbon Business receivables; (vii) authorize
payment of invoices; and (viii) supervise third-party payroll service and
provide Tridex federal taxpayer identification number for payroll purposes.
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2. Insurance. Tridex agrees to obtain and maintain all necessary
insurance, including but not limited to, property, casualty, liability and
workers' compensation with respect to the Ribbon Business and the Tridex
employees engaged in Ribbon Business operations at Magnetec's facility. Tridex
shall provide proof of coverage upon request by Magnetec.
3. Space Provided. Magnetec hereby agrees to provide Tridex up to
approximately 2,200 square feet of floor space including, to the extent
practicable, manufacturing, stockroom, finished goods warehouse, and shipping
and receiving space. Space provided to Tridex shall, to the extent practicable,
be clearly marked as separate areas designated for the Ribbon Business.
4. Ribbon Business Products Sold to Magnetec. Tridex agrees to sell
Ribbon Business products to Magnetec at prices no higher than ten percent (10%)
below the lowest price paid by any other customer of Tridex for the same
products. This price is subject to annual adjustment upon the mutual agreement
of the parties hereto, with annual increases not to exceed five percent (5%) of
then current prices.
5. Manufacturing Support Services Provided by Magnetec.
Magnetec will provide the following services to Tridex for the
conduct of the Ribbon Business:
(a) Purchasing and Manufacturing Processing Services: receive
at the Magnetec receiving dock materials ordered by Tridex for Ribbon Business
operations; generate list of goods received and cross-check against vendor's
packing list and Tridex purchase order; spot inspect such materials upon
receipt; store materials in the Magnetec stockroom in a separate area designated
for the Ribbon Business; move materials to manufacturing area according to
manufacturing schedule; and move finished goods to a separate area designated
for Ribbon Business finished goods.
(b) Sales Order Processing and Customer Billing Services:
promptly after the date hereof, notify all Ribbon Business customers to submit
orders to Tridex in care of Magnetec Sales Department; receive and, after
acceptance of order by Ribbon Line Supervisor (as defined below), enter customer
orders into order processing system, including scheduling shipment date;
generate shipping documents; package and prepare finished goods for shipment;
ship finished goods and generate invoice on Tridex form.
(c) Accounts Payable Processing Services: promptly after the
date hereof, notify Ribbon Business suppliers to submit invoices to Tridex in
care of Magnetec Accounts Payable; match suppliers invoices with Tridex purchase
orders and receiving department records and enter verified invoices onto
accounts payable system; and prepare Tridex checks to suppliers for signature by
Tridex authorized signatory. (Tridex will in all cases make the final decision
regarding payment of any invoice submitted by a Ribbon Business supplier.)
(d) Payroll Processing Services: maintain Ribbon Business
employee files, including hours worked and payroll records. (Using the Tridex
employer identification number,
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Tridex will establish with a third party payroll service provider a separate
payroll for all Ribbon Business employees, including the Ribbon Line Supervisor.
Tridex will be solely responsible for all Ribbon Business wages, salaries,
insurance and other benefits, and all withholding or other taxes due thereon.)
(e) Accounting and Data Processing Services: establish within
the Magnetec accounting system separate accounts for all activity of the Ribbon
Business; provide Tridex with a monthly trial balance, detailed general ledger
and subledgers for all transactions. (All general ledger accounts will be
controlled by Tridex. Tridex will provide a Ribbon Business cash receipt journal
to Magnetec on a monthly basis to update the accounts receivable on the Ribbon
Business records maintained by Magnetec.)
6. Tridex Payment to Magnetec.
(a) Magnetec shall xxxx Tridex in arrears, as of the last day
of Magnetec's accounting month, and Tridex shall pay Magnetec no later than
thirty (30) days after the date of the invoice, as compensation for
manufacturing support services provided, for Magnetec's overhead attributable to
general and administrative expenses (e.g., expenses incurred to provide order
processing, customer billing and accounting services), and for Magnetec's fixed
employment costs for sales employees, a fixed fee of $11,000 per month.
(b) For other costs incurred and paid by Magnetec on behalf of
Tridex which are not included in Section 6(a) but are directly related to the
conduct of the Ribbon Business, including but not limited to sales commissions
paid on Ribbon Business sales, temporary labor, the direct cost of engineering
labor costs, benefits, and manufacturing equipment maintenance and repair, and
shipping costs, Tridex shall reimburse Magnetec for the actual cost of such
goods or services. Tridex shall reimburse Magnetec for the full cost of such
goods or services, when all such goods or services have been or will be used for
the Ribbon Business.
7. Goodwill of Common Customers. Magnetec has invested
substantial time, effort and expense in developing its goodwill and reputation
for providing to its customers quality printer products, including Ribbon
Business products, at competitive prices. Magnetec will continue to sell
printers to such customers, many of whom are and will be Ribbon Business
customers. As a material inducement to Magnetec to enter into this Agreement,
Tridex agrees not to take any action during the term of this Agreement which is
intended to have, or which would have a reasonable likelihood of having, a
material adverse effect on the relationship of Magnetec with its customers or
end users of its products.
8. Liabilities; Disclaimer. In furnishing the other party with services
as herein provided, Tridex, Magnetec and their respective officers, directors,
employees or agents (collectively, "Representatives") shall not be liable to the
other party or its respective Representatives, creditors or shareholders for any
action or failure to act except willful malfeasance, bad faith or gross
negligence in the performance of their duties or reckless disregard of their
obligations and duties under the terms of this Agreement. The provisions of this
Agreement are for the sole benefit of Tridex, Magnetec and their respective
Representatives
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and will not, except to the extent otherwise expressly stated herein, inure to
the benefit of any third party. Neither Tridex nor Magnetec makes any express or
implied warranty or representation with respect to the quality of the services
provided hereunder.
9. Term. The term of this Agreement shall begin as of the date hereof
and continue for two (2) years, unless terminated sooner. Either Magnetec or
Tridex may terminate this Agreement without cause upon ninety (90) days prior
written notice.
10. Status of Relationship. Magnetec shall be deemed to be an
independent contractor and, except as expressly provided or authorized in this
Agreement, shall have no authority to act for or bind Tridex.
11. Notices. All notices, xxxxxxxx, requests, demands, approvals,
consents, and other communications which are required or may be given under this
Agreement will be in writing and will be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid to the parties at their respective addresses set
forth below:
If to Magnetec:
Magnetec Corporation
0 Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
If to Tridex:
Tridex Corporation
00 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
12. Confidentiality. Tridex and Magnetec hereby agree to hold, and
cause their respective employees, agents and authorized representatives to hold,
in strict confidence, all information concerning the other party furnished
pursuant to this Agreement.
13. No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and shall not be deemed to confer upon any third
party and right, remedy or claim in excess of those existing without reference
to this Agreement.
14. Access to Information. During the term of this Agreement and for
one (1) year thereafter, Tridex shall afford to Magnetec and its authorized
representatives, agents and employees, and Magnetec shall afford to Tridex and
its authorized representatives, agents and employees, access during normal
business hours to all records, books, contracts and other data,
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including but not limited to corporate, financial, accounting, personnel and
other business records, related to the Ribbon Business.
15. No Assignment. This Agreement shall not be assignable except with
the prior written consent of the other party to this Agreement.
16. Applicable Law. This Agreement shall be governed by and construed
under the laws of the State of Connecticut applicable to contracts made and to
be performed therein.
17. Section Headings. The section headings used in this Agreement are
for convenience of reference only and will not be considered in the
interpretation or construction of any of the provisions thereof.
18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
19. Entire Agreement; Amendments. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes any prior or contemporaneous agreement between the parties, written
or oral (including but not limited to the Original Agreement), which relates to
the subject matter hereof. This Agreement may be amended or modified only by a
written instrument signed by the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Manufacturing Support Services Agreement to be executed as a sealed instrument
by their duly authorized officers as of the date first above written.
TRIDEX CORPORATION
By: /s/ X.X. Xxxxxxxx
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Title: VP/CFO
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MAGNETEC CORPORATION
By: /s/ Xxxxxxx X. Xxxx
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Title: Secretary - Treasurer
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