EXHIBIT 10.16
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this "Agreement") is made and
entered into as of __________, 1995 by and between Datamax Corporation, a
Delaware corporation ("Datamax"), and Unimark, Inc. a Kansas corporation
("Unimark").
WHEREAS, contemporaneously with the execution and delivery hereof,
Unimark is acquiring certain assets related to the operation of Datamax's
automated ticketing and boarding pass ("ATB") business for the airline and
travel industry (the "Business") pursuant to that certain 1995 between Datamax
and Unimark (the "Purchase Agreement"); and
WHEREAS, Datamax and Unimark desire to make certain arrangements for
the provision of certain services (as more fully described below) by Datamax to
Unimark following the closing (the "Closing") of the transactions contemplated
by the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and upon the terms and subject to the conditions
hereinafter set forth, the parties hereby agree as follows:
1. Services. The parties agree that, subject to the terms and
conditions of this Agreement, Datamax shall provide to Unimark the following
services (the 'Transition Services").
(a) Employment Matters.
(i) Datamax and Unimark shall mutually agree on those
current employees of Datamax to whom Unimark shall offer
permanent employment and those who may be utilized by Datamax
to provide Transition Services under this Agreement Purchase
agrees not to make an offer of employment or enter into
discussions concerning employment with any of Seller's
employees other than the mutually agreed employees without
Seller's prior consent. Seller shall use reasonable efforts
to cause such mutually agreed employees who are offered
permanent employment by Purchaser to make available their
employment services to Purchaser Unimark shall be responsible
for all payroll and benefit obligations for such employees
who accept Unimark's offer of employment (the "Hired
Employees") as of the later of the Closing Date or the date
of Unimark's receipt of acceptance. Any Hired Employee may
work out of Datamax's facility during the Transition Period
and Unimark shall pay or reimburse Datamax for all direct
costs for telephone usage, supplies and the like associated
therewith, excluding base rental.
(ii) During the Transition Period (as hereinafter defined),
Datamax shall cause its employees assigned to the Business as
of the Closing Date
(other than the Hired Employees) (collectively, the "Service Personnel") to
provide Unimark with the Transition Services. Unimark shall reimburse
Datamax for the payroll cost and associated benefits of such employees and
any direct costs such as travel expenses, telephone charges, supplies and
the like, until the earliest to occur of the date on which such employee
becomes a Hired Employee, the termination of the Transition Period or the
date on which the service of such Employee is no longer required to perform
Transition Services.
(b) ATB Product Transition.
(i) During the Transition Period, Datamax shall manufacture the ATB
products identified on Exhibit A for Unimark upon the terms and conditions
described in subsection (c) below and at the respective price(s) set forth
in Exhibit A. Datamax warrants to Unimark that with respect to any specific
ATB product manufactured by Datamax hereunder the cost of such product to
Unimark, which includes the price therefor set forth in Exhibit A plus the
cost of materials and supplies therefor pursuant to Section 1(c)(ii) below,
shall in no event exceed the price, if any, at which Datamax has previously
committed to sell such specific product to the customer.
(ii) At Unimark's sole discretion, Unimark shall be permitted to send its
employees to Datamax during the Transition Period for training by Datamax's
Service Personnel, which training shall include ATB product assembly and
testing. Each party shall be responsible for its own labor costs
associated with such training. At Unimark's request Datamax shall send to
Unimark, for initial pilot builds, selected Datamax Service Personnel as
mutually agreed upon by both parties and Unimark shall pay all reasonable
travel expenses related thereto.
(iii) Datamax shall provide Unimark with documentation in current format
for the ATB products, parts and assemblies, which documentation shall
include assembly drawings, assembly procedures, test procedures, test
programs, source code for all firmware, software test and debug routines,
engineering drawings, schematics for all printed circuit boards,
specifications and user and maintenance documentation.
(iv) Datamax shall, at its own cost and expense, use its best efforts to
(A) assist Unimark in the transfer of all of Datamax's domestic and
international agency transferable approvals/certifications to Unimark for
its use, and (B) transfer Datamax's existing vendor relationships (except
as to the products described in Exhibit B and the products discussed in
Section VII.E. of the Purchase Agreement) and purchase order obligations
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to Unimark as requested by Unimark (including, without limitation,
assistance in the transfer of tools and fixtures located at vendors and
purchased by Unimark at the Closing pursuant to the Purchase Agreement).
(v) Datamax shall, at its own cost and expense, be responsible for
adequately packaging the Assets (as defined in the Purchase Agreement) and
Unimark shall ship such Assets to Unimark's designated facility at the
conclusion of the Transition Period. The parties shall cooperate with each
other to make this relocation of Assets as smooth as possible.
(vi) Datamax shall repair any ATB product(s) manufactured by it which
experience an out-of-box failure due to defects in material or workmanship
and which are returned to Datamax's factory within the Transition Period
for the applicable product(s). Datamax may use consignment inventory to
perform any such repair(s). Return of all repaired products to the customer
shall be the responsibility of Unimark. Except as specifically set forth
above, ALL PRODUCTS ARE AND SHALL BE SOLD BY DATAMAX "AS IS." ALL EXPRESS
WARRANTIES AND ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR PURPOSE, ARE HEREBY EXPRESSLY
DISCLAIMED.
(vii) Notwithstanding Section 1(b)(vi) above, during the Transition Period
Datamax shall honor any warranty on ATB Products manufactured or repaired
by it as is necessary to meet a customer commitment made by Seller prior to
the Closing Date.
(c) Manufacturing Services.
(i) Datamax shall provide manufacturing services for the ATB products
listed Exhibit A hereto, including, without limitation, configurations and
options thereof, until completion of the transfer of the manufacturing of
ATB products to Unimark's facility. The Transition Period may be extended,
at Unimark's sole discretion, for two months beyond the Transition Period
provided that Unimark pays Datamax an additional 10% more than the amounts
specified on Exhibit A hereto for all ATB products manufactured beyond the
end of the originally scheduled termination date of the Transition Period.
(ii) Datamax shall be responsible for all of its expenses incurred in
providing such manufacturing services (which expenses shall include all
costs associated with the planning, procurement, storage, material
handling, production, cost accounting and assembly of such ATB
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products, as well as labor and overhead costs, and which expenses shall be
reflected in the prices set forth on Exhibit A hereto); provided, however,
that Unimark shall pay for all materials and parts for such ATB products,
however, that Unimark shall pay for all materials and parts for such ATB
products, and shall, at Unimark's option, either provide to Datamax the
required parts and materials (other than the parts and materials referenced
in Exhibit B and Section VII.E of the Purchase Agreement) or reimburse
Datamax for the cost thereof if supplied by Datamax.
(iii) All inventory related to such ATB products purchased by Unimark will
be maintained by Datamax in its facility as consignment inventory of
Unimark during the Transition Period. At the conclusion of the Transition
Period Datamax shall pack and Unimark shall ship such inventory to
Unimark's facility, each at its own cost and expense. At Datamax's own cost
and expense, Datamax shall be responsible for insuring such ATB product
inventory and reimbursing Unimark for insurable losses as well as losses
due to theft or shrinkage. Datamax and Unimark shall reconcile perpetual
inventory records of consignment inventory on a monthly basis. At Unimark's
sole discretion, any of the Hired Employees or any other employees of
Unimark shall be permitted to conduct inventory cycle counts at Datamax at
any time during the Transition Period.
(iv) Unimark shall be responsible for sales order administration and
Datamax shall build and stock finished ATB products based upon and subject
to the terms and conditions of purchase orders delivered by Unimark to
Datamax. If Unimark requests Datamax to ship finished products, Datamax
shall do so at Unimark's risk, cost and expense. Datamax's standard sixty
(60) day manufacturing and shipping lead times shall apply.
(v) Datamax shall review any manufacturing quality improvements
suggested by Unimark during the Transition Period and shall advise Unimark
of the related recurring and/or non-recurring cost(s), if any, of
implementing such improvements. If, after such review, implementation of
such improvement(s) is determined by Datamax to be feasible, and if Unimark
so requests, Datamax shall implement such improvements and may invoice
Unimark and/or adjust the prices in Exhibit A to cover such cost(s).
(d) DMX Service.
(i) Datamax shall rent to Unimark the present DMX Serve facilities in
Orlando, Florida at the current base rent from the Closing until March 15,
1996, and, provided that the current space or alternate suitable space in
the
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Orlando area can be obtained by Seller beyond March 15, 1996, thereafter
through May 1, 1996. In connection therewith, Unimark will be permitted
to use the related furniture, fixtures and equipment, including phones,
computers and software free of charge, except for charges for phone use and
supplies. All costs associated with DMX Serve for the ATB Business shall
be paid or reimbursed by Unimark.
(ii) During the Transition Period, Unimark shall be permitted to send its
employees to Datamax's DMX Service facility for training. Such training
will include phone support, trouble shooting and repair of printers.
Unimark shall pay all associated travel costs.
(iii) Unimark shall share the leased space in Maidenhead, UK, currently
housing DMX Serve, with Datamax through the Transition Period. Unimark
shall reimburse Datamax for Unimark's pro rata share of the current base
rent and utilities and other costs based upon the current space allocation
between ATB repair and Datamax Bar Code sales and repair. Unimark shall
assume the current lease of the DMX Serve facility in Dallas, Texas during
the Transition Period.
(e) Other Technical Assistance and Transition Support.
(i) During the Transition Period, Datamax shall cause Xxx Xxxxxxxxxx,
Xxx Xxxxxxx, or Xxxx Xxxxxxx (or any combination thereof) to provide
Unimark with a maximum aggregate of 120 hours of consulting services in
connection with the transfer of technical, manufacturing and marketing
information to Unimark, Unimark shall pay for all reasonable travel-related
costs associated with such consulting services.
(ii) During the Transition Period, Datamax shall make available in
current format the following files associated with the ATB products listed
on Exhibit A hereto (and related configurations and options): inventory
master file information, bills of material, assembly routers with time
standards, perpetual inventory records, vendor file information, including
quality and delivery performance, payroll information, including quality
and delivery performance, payroll information for employees being hired by
Unimark, customer file information including sales and credit history,
historical sales/usage information for each item, open sales order
information, open purchase order information, historical product serial
number and manufacturing data for service use, outstanding service
contracts, any additional computer files necessary for the successful
transition of the inventory, planning, sales order processing, purchasing
and MRP functions to Unimark. Unimark may copy any or all of the foregoing
files for Unimark's own use.
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(iii) Datamax and Unimark shall mutually agree on the
announcement of the acquisition to customers and jointly contact
all key customers. Datamax shall assist in the transfer of all
outstanding sales orders and contracts to Unimark.
2. Cost of Services. In exchange for the Transition Services provided by
Datamax under this Agreement, Unimark shall pay Datamax the amounts specified in
Section 1 hereof. Invoices for all amounts shall be rendered monthly by Datamax
and shall be due and payable net fifteen (15) days following Unimark's receipt
of invoice from Datamax.
3. Term and Termination; Default.
(a) The term of this Agreement shall commence on the date hereof and
shall continue for seven (7) months from the date hereof, (the
"Transition Period"); provided, however, that (i) the Transition
Period for the DMX 4000 Products shall be three (3) months, or such
shorter period as Unimark may determine, and (ii) at the end of such
seven (7) month period Unimark shall begin to relocate ATB products
and related Assets to Unimark's facility and shall complete such
relocation for all ATB products and related Assets during the ensuing
two months.
(b) Notwithstanding the foregoing, the termination of this Agreement
pursuant to any of the provisions of this Agreement shall be without
prejudice to any rights, or diminution of any obligation or liability
of either party, that may have accrued prior to the effective date of
such termination. In addition, the provisions of Section 5 shall
survive the termination of this Agreement.
4. Force Majeure. Performance by Datamax and/or Unimark under this
Agreement may be suspended without liability to the other party to the extent,
and for so long as, any event which is beyond the reasonable control of the
party claiming suspension, ("Force Majeure Events"), prevents or makes
commercially impracticable the performance of any obligation hereunder of such
party.
5. Dispute Resolution.
(a) Any and all disputes or differences which may arise between
Datamax and Unimark with respect to this Agreement, including
performance hereunder or the interpretation, breach or termination
hereof (collectively, "Disputes") shall be resolved pursuant to this
Section 5, which the parties hereby agree is the sole method for
resolving Disputes under this Agreement.
(b) Any and all Disputes shall first be discussed by Unimark and
Datamax in a good faith attempt to resolve the Disputes.
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(c) If, in spite of such discussions, no mutually agreeable solution
is reached within 30 calendar days of the delivery of one party's
written request to the other party to discuss such Dispute pursuant to
Section 5(b) hereof, then the parties shall attempt to settle the
Dispute by non-binding mediation under the Center for Public Resources
Model Procedure for Mediation of Business Disputes. The neutral in any
such proceeding will be selected by and agreed to by both parties and
shall be available to serve on short notice throughout the term of
this Agreement. The mediation process shall continue until the first
to occur of (i) resolution of the Dispute, (ii) the 45th day after
such Dispute is referred for mediation, or (iii) the neutral
determines that resolution is not reasonably possible in a mediation
proceeding. Each party shall bear its own costs of attending and
participating in such mediation proceeding.
(d) In the event that pursuant to Sections 5(b) and 5(c) hereof, the
parties fail to resolve any Dispute arising under this Agreement, the
parties agree that thereafter either party shall be free to exercise
whatever rights or remedies it may then have at law or in equity, but
in connection with any judicial proceeding with respect to such
matter, both parties agree to waive their rights, if any, to a jury
trial and further agree that any applicable statute of limitations or
repose or claim of laches will be tolled from the date either party
commences the dispute resolution procedures provided in this Section 5
until conclusion of any non-binding mediation conducted pursuant to
Section 5(c) hereof.
6. Successor and Assigns. Except as otherwise expressly provided in this
Agreement, this Agreement may not be assigned by any party hereto without the
prior written consent of the other party.
7. Governing Law. The validity, interpretation and performance of this
Agreement and nay dispute connected herewith shall be governed and construed in
accordance with the laws of the State of Florida.
8. Notice. Any notice or other communication required or permitted to be
given under this Agreement shall be in writing and shall be deemed sufficiently
given when delivered in person by one party to the other party at the address
for notice as herein provided, or by overnight delivery service, or transmitted
by telecopier (confirmed by delivery in person or by overnight delivery
service), addressed as follows:
If Datamax: Datamax Corporation
0000 Xxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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If Unimark: Unimark Inc.
0000 Xxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other persons and addresses as may be specified
from time to time in a notice given by such party. Both
parties agree to acknowledge in writing the receipt of any
such notice delivered in person. Any notice required or
permitted hereunder shall be deemed given upon its date of
receipt on a normal work day by the party to whom it was
directed or if received on a holiday or weekend the next
normal work date thereafter.
9. Entire Agreement. This Agreement constitutes the full understanding of
the parties, a complete allocation of risks between them and a complete and
exclusive statement of the terms and conditions of their agreement relating to
the subject matter hereof and supersedes any and all prior agreements, whether
written or oral, that may exist between the parties with respect thereto;
provided, that this provision is not intended to abrogate or superseded the
Purchase Agreement or to abrogate any other written agreement between the
parties executed on or after the date of this Agreement. No waiver by either
party with respect to any breach or default or of any right or remedy and no
course of dealing or performance, shall be deemed to constitute a continuing
waiver of any other breach or default or of any other right or remedy, unless
such waiver be expressed in writing signed by the party to be bound. Failure of
a party to exercise any right shall not be deemed a waiver of such right or
rights in the future.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which taken together shall constitute one and the same
Agreement.
11. Severability. All provisions of this Agreement are severable and
any provision which may be prohibited by law shall be ineffective to the extent
of such prohibition without invalidating the remaining provisions of this
Agreement.
12. Binding Effects; Benefits. This Agreement shall inure to the benefit
of, and be binding upon, the parties to it and their respective successors,
permitted assigns and other permitted transferees. Nothing contained in this
Agreement, express or implied, is intended to confer upon any person other than
the parties to it and their respective successors, permitted assigns and other
permitted transferees, any rights or remedies under or by reason of this
Agreement.
13. Independent Contractor Status. Datamax shall be deemed to be an
independent contractor to Unimark. Nothing contained in this Agreement shall
create or be deemed to create the relationship of employer and employee between
Datamax and Unimark. The relationship created between Datamax and Unimark
pursuant to or by this Agreement is not and shall not be
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one of partnership or joint venture. No party to this Agreement shall, by
reason hereof, be deemed to be a partner or a joint venturer of any other party
hereto in the conduct of their respective businesses and/or the conduct of the
activities contemplated by this Agreement. Except as specifically and explicitly
provided in this Agreement, and subject to and in accordance with the provision
hereof, no party to this Agreement is now, shall become, or shall be deemed to
be a principal, agent or representative or any other party hereto. Except as
herein explicitly and specifically provided, neither party shall have any
authority or authorization, of any nature whatsoever, to speak for or bind the
other party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
DATAMAX CORPORATION
By:
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Title:
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UNIMARK INC.
By:
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Title:
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EXHIBIT A
ATB PRODUCT TRANSITION AND PRICING
PRODUCT PRICE*
--------------- -------
DMX 625 $39.53
DMX 1500 $257.31
DMX 2500 D-WS $759.20
DMX 2500 D-SI $758.84
DMX 2500 MS $718.69
DMX 2500 MD $961.92
DMX 0000 XX $600.93
DMX 4000 $490.62
DMX 4000 T $555.14
DMX 4500 $678.28
DMX 4500 DL $647.75
DMX 8500 $360.90
THE ABOVE PRODUCTS INCLUDE ALL FINISHED GOODS CONFIGURATIONS AND RELATED OPTIONS
AND ACCESSORIES FOR THE DESIGNATED PRODUCT.
*ALL PRICES ARE FOB DATAMAX'S FACILITY. ANY SHIPPING CHARGES PAID OR INCURRED
BY DATAMAX SHALL BE ADDED TO THE PRICE AND INVOICED TO UNIMARK.
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EXHIBIT B
The following components and assemblies, and the vendor relationships associated
therewith, are not being transferred to Unimark pursuant to this Agreement.
Datamax shall supply these components and assemblies to Unimark in accordance
with the provisions of Paragraph VII.D. of the Purchase Agreement.
ITEM PART #
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Print control Gate Array 00-0000-00
Printhead Control Pick 00-0000-00
Printhead-Thermo Plus 220039
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