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EXHIBIT 10.36
ASSET TRANSFER AGREEMENT
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THIS ASSET TRANSFER AGREEMENT (the "Agreement") is entered into by and
between MAGNETEC CORPORATION, a Connecticut corporation ("Magnetec"), and TRIDEX
CORPORATION, a Connecticut corporation ("Tridex").
WHEREAS, Tridex desires to transfer to Magnetec and Magnetec desires to
acquire from Tridex all of the assets owned and used by Tridex in its ribbon
business (the "Ribbon Business").
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Transfer of Assets. (a) Tridex hereby agrees to transfer to Magnetec,
at the Closing (as defined in Section 7.1), all of Tridex's right, title and
interest in and to all of the equipment, inventory (whether components, work-in
progress or finished goods), technical drawings and associated intellectual
property, unfilled customer purchase orders, accounts receivable, packaging,
sales literature and other supplies used by Tridex exclusively in the conduct of
the Ribbon Business (the "Assets"). A preliminary estimate of the composition of
the assets as of the Closing is set forth on Schedule 1 hereto.
(b) Except as set forth in Section 4, the Assets are being transferred
to Magnetec "as is" and "where is" without any warranties of quality or fitness
except as hereinafter set forth.
2. Assumption of Liabilities. Magnetec hereby agrees to assume (a) all
liabilities and obligations of Tridex under the purchase orders which relate to
the Ribbon Business and remain unperformed or unfilled at the time of the
Closing, (b) all trade accounts payable with respect to the Ribbon Business, and
(c) all accrued but unpaid sales commissions due with respect to sales of Ribbon
Business products. A preliminary estimate of the purchase orders, trade accounts
payable and accrued but unpaid sales commissions which relate to the Ribbon
Business and remain unperformed, unfilled or unpaid at the time of the Closing
is set forth on Schedule 2 hereto.
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3. Consideration for Transfer of Assets.
(a) Tridex and Magnetec agree that Magnetec shall pay Tridex by wire
transfer, in consideration for the transfer of the Assets, a total purchase
price (the "Purchase Price") equal to (i) $180,000 at the time of Closing plus
(ii) after the Closing, an amount equal to the Book Value of the Assets at the
date of the Closing. For purposes of this Agreement, the term "Book Value" of
the Assets means the value of (i) inventories, (ii) accounts receivable and
(iii) fixed assets, minus the balance of (A) trade accounts payable and (B)
accrued but unpaid sales commissions. Tridex and Magnetec acknowledge that such
Book Value was approximately $120,000 at April 30, 1998
(b) Not later than June 4, 1999, Magnetec will prepare and deliver to
Tridex revised copies of Schedules 1 and 2 hereto, together with revised
versions of the Exhibits to the Assignment and Assumption Agreement and the
Instrument of Transfer, reflecting Magnetec's revised determination of (i) the
Assets as of the Closing and (ii) the unperformed and unfilled Ribbon Business
purchase orders, the trade accounts payable and accrued but unpaid sales
commissions as of the Closing. Magnetec shall also deliver to Tridex Magnetec's
calculation of the Book Value of the Assets at the date of the Closing. If
Tridex does not deliver to Magnetec by June 11, 1999, a written notice objecting
to Magnetec's calculations, such calculations shall be deemed final and binding
on the parties. If Tridex delivers such a notice of objection to Magnetec by
June 11, 1999, and the parties are unable to resolve their disagreement by June
18, 1999, then the parties hereto may refer the dispute to a mutually acceptable
independent accounting firm which shall render a final and binding ruling in the
matter not later than July 19, 1999. The parties shall share the costs and
expenses of such accounting firm on an equal basis. Upon the earlier of (A) the
close of business on June 11, 1999 in the event Tridex does not deliver to
Magnetec by June 11, 1999, a written notice objecting to Magnetec's
calculations, (B) the date on which the parties hereto resolve any dispute as to
such calculations, or (C) the date on which the independent accounting firm
renders its final ruling as to any such dispute, Xxxxxx, Xxxxx & Xxxxxxxx shall,
in accordance with the terms of the Escrow Letter referred to in Section 6.1,
deliver the Termination Statement to Magnetec (or its designee) and Magnetec
shall pay to Tridex by wire transfer an amount equal to the Book Value of the
Assets.
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4. Representations and Warranties of Tridex. Tridex represents and
warrants to Magnetec as follows:
(a) Corporate Status. Tridex is a corporation duly organized, validly
existing and in good standing under the laws of the State of Connecticut.
(b) Due Authorization. The entry by Tridex into this Agreement and
the transfer of the Assets to Magnetec hereunder have been duly authorized by
all requisite corporate action.
(c) Title to Assets. Tridex has good and marketable title to the
Assets free and clear of all liens and encumbrances (except for a lien on the
Assets held by Fleet National Bank, pursuant to an Amended and Restated Credit
Agreement dated as of April 17, 1998 and last amended on March 26, 1999.
(d) Condition of Assets. The inventory included in the Assets is of a
quality useable and saleable in the ordinary course of business. All other
tangible personal property, including manufacturing equipment, transferred
hereunder is in reasonably good operating condition and repair, subject to
normal wear.
(e) Sufficiency of Assets. The Assets transferred by Tridex to
Magnetec pursuant to this Agreement constitute all of the assets used by Tridex
exclusively in the conduct of the Ribbon Business and, in combination with the
services previously provided by Magnetec to Tridex pursuant to the Amended and
Restated Manufacturing Support Services Agreement, dated as of June 1, 1998 (the
"Manufacturing Agreement"), are sufficient to conduct the Ribbon Business as
presently conducted by Tridex.
5. Representations and Warranties of Magnetec.
(a) Corporate Status. Magnetec is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Connecticut.
(b) Due Authorization. The entry by Magnetec into this Agreement and
the transfer of the Assets from Tridex to Magnetec hereunder has been duly
authorized by all requisite corporate action.
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6. Conditions Precedent to Closing.
6.1 Conditions Precedent to Magnetec's Closing.
The obligations of Magnetec under this Agreement are subject to the
satisfaction, at or before the Closing, of the conditions set out below.
(a) Accuracy of Representations. All representations and warranties
made by Tridex in this Agreement will be true as of the Closing as though made
at that time.
(b) Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or its consummation, will have been instituted or
threatened as of the Closing.
(c) Bank Consent. Fleet National Bank shall have consented in writing
(the "Fleet Consent") to the transactions contemplated by this Agreement and
shall have (i) agreed in writing to release any liens on the Assets and (ii)
delivered signed UCC-3 termination statements for filing to terminate such
liens, (the "Termination Statements") to be held by Xxxxxx, Xxxxx & Spellecy
pursuant to the terms of an escrow letter ("Escrow Letter") addressed to the
parties hereto.
6.2 Conditions Precedent to Tridex's Closing.
The obligations of Tridex under this Agreement are subject to the
satisfaction, at or before the Closing, of the conditions set out below.
(a) Accuracy of Representations. All representations and warranties
made by Magnetec in this Agreement will be true as of the Closing as though made
at that time.
(b) Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or its consummation, will have been instituted or
threatened as of the Closing.
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(c) Bank Consent. Fleet National Bank shall have delivered the Fleet
Consent.
7. Closing.
7.1 Time and Place.
The transfer of the Assets by Tridex to Magnetec (the "Closing") shall
be effective on May 28, 1999 at the offices of Magnetec in Wallingford,
Connecticut. Tridex and Magnetec shall exchange executed copies of all closing
documents and take all necessary steps to complete the Closing.
7.2 Tridex's Obligations at Closing.
Prior to the Closing, Tridex will deliver to Magnetec the following
documents:
(a) An Assignment and Assumption Agreement, in substantially the form
attached hereto as Exhibit 7.2(a) (the "Assignment and Assumption Agreement"),
duly executed by Tridex, assigning and transferring to Magnetec all of Tridex's
right, title and interest in and to the customer purchase orders which remain
unfilled or unperformed as of the date of the Closing.
(b) An Instrument of Transfer, in substantially the form attached
hereto as Exhibit 7.2(b), transferring the Assets from Tridex to Magnetec.
(c) The Fleet Consent.
(d) Termination Statements signed by Fleet National Bank relating to
its lien on the Assets, to be held by Xxxxxx, Xxxxx & Xxxxxxxx pursuant to the
terms of the Escrow Letter.
(e) Written termination of the Manufacturing Agreement.
7.3 Magnetec's Obligation at Closing.
At the Closing, Magnetec will deliver to Tridex the following:
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(a) The Assignment and Assumption Agreement, duly executed by
Magnetec.
(b) The wire transfer of $180,000.
(c) Written termination of the Manufacturing Agreement.
7.4 Post-Closing Obligations.
(a) The parties will comply with their respective obligations under
Section 3(b) hereof.
(b) Tridex and Magnetec will execute and deliver such additional
documents and take such additional actions as may be necessary to carry out the
transactions contemplated by this Agreement.
(c) For a period of three years after the Closing, Magnetec will
provide Tridex with reasonable access during normal business hours to its books
and records related to the operation of the Ribbon Business through the date of
the Closing, to enable Tridex to comply with accounting, tax and other
obligations.
7.5 Titles. The title of this Agreement and the titles of sections
and subsections, and of exhibits, are for convenience of reference only and will
not be considered in the construction or interpretation hereof.
7.6 Survival. All representations, warranties and agreements
contained in this Agreement will survive for six (6) months from the date of the
Closing.
7.7 Entire Agreement. This Agreement, the schedules hereto, the
Instrument of Transfer and the Assignment and Assumption Agreement constitute
the entire agreement and understanding between the parties in respect of the
subject matter hereof and supersede any prior or contemporaneous agreement or
understanding between the parties, written or oral, which relates to the subject
matter hereof.
7.8 Successors and Assigns. References in this Agreement to the
parties hereto will be deemed to include their successors and permitted assigns
and
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this Agreement will be binding upon and inure to the benefit of the parties
hereto and their successors and permitted assigns.
7.9 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Connecticut.
7.10 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.
7.11 Amendments. This Agreement may be amended or modified only by a
written instrument signed by the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
28th day of May, 1999.
TRIDEX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
MAGNETEC CORPORATION
By: /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Title: Vice President
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SCHEDULE 1
LIST OF ASSETS
May 28,
1999
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Accounts Receivable, Less Than
60 days old $80,694.48
Inventory 37,974.36
Fixed Assets, Net 8,661.85
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SCHEDULE 2
UNFILLED AND UNPERFORMED PURCHASE ORDERS,
AND TRADE ACCOUNTS PAYABLE
AND
ACCRUED BUT UNPAID SALES COMMISSIONS
May 28,
1999
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Open Purchase Orders $99,676.16
Accounts Payable (including accrued but unmatched invoices of
$2,288.16) 11,834.23
Accrued Sales Commissions 703.07
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