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EXHIBIT 10.3
INFORMATION TECHNOLOGY TRANSITION SERVICES AGREEMENT
THIS INFORMATION TECHNOLOGY TRANSITION SERVICES AGREEMENT (this
"Agreement") dated as of January 26, 2001, is made by and between Ayrshire
Electronics LLC, a Kentucky limited liability company ("Buyer"), and Xxxxxxx
Piano & Organ Company, a Delaware corporation ("Xxxxxxx").
RECITALS
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Buyer is purchasing substantially all of the business assets of
Xxxxxxx'x contract electronics division located in Fayetteville, Arkansas, (the"
Contract Electronics Business"), pursuant to that certain Asset Purchase
Agreement of even date herewith (the "Purchase Agreement") by and between
Xxxxxxx and Buyer.
WHEREAS, for a limited period of time after the Closing of the Purchase
Agreement Buyer would like Xxxxxxx to continue to provide certain information
technology services on behalf of Buyer in connection with its operation of the
Contract Electronics Business.
WHEREAS, Xxxxxxx is willing to provide such information technology
services for the benefit of Buyer pursuant to the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties intending to be legally bound, hereby agree as
follows:
1. GENERAL. All capitalized terms not otherwise defined in this
Agreement shall have the meaning ascribed to them in the Purchase Agreement.
Whenever this Agreement requires the parties to take any action, such
requirements shall be deemed to include an undertaking on the part of such party
to cause any Subsidiary or successor thereof to take such action.
2. ACCESS RIGHTS. During the term of this Agreement, Buyer shall be
entitled to have access to and use the following computer hardware, software and
data in a manner substantially similar to the manner in which Xxxxxxx accessed
and used such items to operate the Contract Electronics Business prior to the
Closing:
X. Xxxxxxx'x AS/400 computer (the "AS/400"), located at
Xxxxxxx'x corporate headquarters in Mason, Ohio, via the associated data
communication line and equipment for the limited purpose of storing, retrieving
and processing data related to the Contract Electronics Business and to use
certain software as more fully described in this Agreement.
B. The Computer Associates, Inc. PRMS Business Software Suite
(Version
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8.4) as currently maintained on the AS/400 (the "Business Software"); provided,
however, that Buyer enters into a Term License Agreement with Computer
Associates, Inc. permitting such use of the Business Software. Such Business
Software includes the following modules or functions: Financials, Material
Management, Manufacturing, Accounts Receivable, Accounts Payable, General
Ledger, and Sales and Order Entry and the fees associated with the Business
Software shall be paid by Xxxxxxx.
X. Xxxxxxx will continue to use the Cyborg Payroll and Human
Resource Software (version 3.0) on the AS 400 to process data and information in
connection with the employees of the Contract Electronics Business.
X. Xxxxxxx'x Custom Application written in RPG/400 language.
3. ADDITIONAL SERVICES. During the term of this Agreement, Xxxxxxx
agrees to provide the following related services in connection with the AS/400
and Business Software:
A. Routine programming, support and maintenance of the AS/400
and the Business Software in a manner substantially similar to the manner in
which Xxxxxxx performed such services to operate the Contract Electronics
Business prior to the Closing.
B. Disaster recovery services in the event of a failure of or
damage to the AS/400 and/or data maintained thereon.
C. On a time and materials basis, Xxxxxxx will help train
Buyer personnel and provide programming and other conversion services to
facilitate the ultimate transition of the Business Software and related data to
a computer owned or leased by Buyer. Xxxxxxx agrees to provide such programming
services at a $60/hour rate.
4. FEES. In exchange for the access rights in Section 2 and the
Additional Services in Section 3 A & B, Buyer will pay Xxxxxxx a monthly fee of
$22,500. Such monthly fee shall be payable in advance on or before the first day
of each calendar month hereunder. Within 30 days after receipt of an invoice
from Xxxxxxx, Buyer shall reimburse Xxxxxxx for its costs and services provided
under Section 3 C above and for any other travel or other out-of-pocket expenses
incurred by Xxxxxxx in connection with providing such transition services.
5. CONFIDENTIALITY AND SECURITY. Xxxxxxx intends to put certain
controls in place so that Buyer's access to the AS/400 will be limited to only
the data and software as authorized under this Agreement. Xxxxxxx anticipates
that such security features will be in place on or about January 31, 2001. Until
such time as such security restrictions are in place, and continuing thereafter,
Buyer will not process certain transactions currently performed by Xxxxxxx'x
corporate shared services nor disclose any Xxxxxxx information or software
products not otherwise explicitly authorized under this Agreement. Buyer's
obligations under this Section shall survive the termination of this Agreement.
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6. EXCLUSIONS.
A. As more fully described in the Purchase Agreement, Buyer is
purchasing and/or assuming the following items located at the Fayetteville,
Arkansas, location: (i) LAN and work stations; (ii) PBX and voice mail; (iii)
Microsoft Office application software; and (iv) Files and data associated with
Internet/E-mail/Web page for the Contract Electronics Business. After the
Closing, Buyer will at all times be solely responsible for the support and
maintenance of such items.
B. Until such time that Xxxxxxx is able to establish the
security features described in Section 5 above, Xxxxxxx will support and
maintain the accounts receivable (collections and cash posting), accounts
payable (check processing and account reconciliation) and general ledger
(reconciliation and reporting) data and functions associated with Buyer's
operation of the Contract Electronics Business. After such time, however, Buyer
will be responsible for supporting and maintaining its own data and operations
with respect to such business functions. Xxxxxxx will provide Buyer with a one
time training session for its employees at Xxxxxxx'x headquarters at no
additional cost so that Buyer will be able to provide and maintain such business
functions.
X. Xxxxxxx will forward to Buyer via wire transfer in same day
funds the proceeds of any accounts receivable of Buyer that are received by
Xxxxxxx, on the day such funds become available to Xxxxxxx. Buyer shall forward
to Xxxxxxx via wire transfer in same day funds the amount of accounts payable
that are paid by Xxxxxxx on behalf of and approved by Buyer for that given day.
All payments by Buyer to Xxxxxxx shall be made to account number 000-000-00 in
the name of General Electric Capital Corporation at Bankers Trust Company in New
York, New York or at such other account as General Electric Capital Corporation
(or a successor lender to Xxxxxxx) shall specify.
7. TERM AND TERMINATION.
A. This Agreement shall commence upon the date first written
above and continue until July 31, 2002.
B. Buyer may terminate this Agreement at any time after July
31, 2001 upon thirty (30) days prior written notice to Xxxxxxx. In addition,
either party may terminate this Agreement in the event that the other party
commits a material breach of this Agreement and such breach is not completely
cured within seven (7) days after receiving written notice of such breach from
the non-breaching party.
8. INDEMNIFICATION AND LIMITATIONS OF LIABILITY.
X. Xxxxxxx shall release, indemnify, defend and hold harmless
Buyer against any claims, attorneys fees, costs, liability or damages arising in
connection with any failure of Xxxxxxx to perform its duties and
responsibilities pursuant to the terms of this Agreement.
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B. Buyer shall release, indemnify, defend and hold harmless
Xxxxxxx against any claims, attorneys fees, costs, liability or damages arising
in connection with any failure of Buyer to perform its duties and
responsibilities pursuant to the terms of this Agreement.
9. FORCE MAJEURE. Failure of Xxxxxxx to perform any of the provisions
of this Agreement by reason of any of the following shall not constitute an
event of default or breach of this Agreement: strikes, picket lines, boycotts,
fires, floods, freezes, accidents, war (whether or not declared), revolution,
riots, insurrections or other civil disturbance, acts of God, or other causes
which are beyond the control of Xxxxxxx.
10. INDEPENDENT CONTRACTOR STATUS. Xxxxxxx shall always be deemed to be
an independent contractor and not an employee, joint venture, single or joint
employer, partner or agent of or with Buyer and shall not hold itself out as
anything other than an independent contractor of Buyer and the employer of the
Contract Employees. Xxxxxxx may not, without the prior written approval of
Buyer, assign, transfer or convey any of its rights, duties and obligations or
commitments under this Agreement.
11. NOTICES. Any notice required to be given under this Agreement shall
be deemed given upon deposit in the United States mail by registered or
certified mail, postage prepaid and return receipt requested, or by national
overnight courier, sent to the following address:
"Buyer"
Ayrshire Electronics LLC
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: W. Xxxxx Xxxxxx
"Xxxxxxx"
Xxxxxxx Piano & Organ Company
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Attn: Xxxxx X. Xxxx
12. GOVERNING LAW. The rights and obligations of the parties and the
validity, construction, and interpretation of this Agreement shall be governed
in all respects by the laws of the State of Ohio.
13. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect any other provision hereof, and if any
particular provision is determined to be invalid or unenforceable, the remainder
of this Agreement shall be interpreted and construed as if such provision were
omitted.
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14. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties with respect to the subject matter hereof and supersedes any prior
or contemporaneous agreements, negotiations or understandings. This Agreement
may not be amended except by written agreement among each of the parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
XXXXXXX PIANO & ORGAN COMPANY
By: /s/ XXXXX X. XXXXXX, XX.
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Title: EVP, CFO
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AYRSHIRE ELECTRONICS LLC
By: CDR Manufacturing, Inc., sole member
By: /s/ XXXX X. XXXXXX
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Title: Chairman, CEO
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