1
EXHIBIT 10.3
ASSET TRANSFER AGREEMENT
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, Magnetec desires to transfer to Tridex and Tridex desires to
acquire from Magnetec all of the assets owned and used by Magnetec in Magnetec's
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) Magnetec hereby agrees to transfer to Tridex,
at the Closing (as defined in Section 7.1) all of Magnetec's right,
title and interest in and to the assets of Magnetec listed on Schedule
1 attached hereto, which constitute all of the equipment, inventory
(whether components, work-in progress or finished goods), unfilled
customer purchase orders, accounts receivable, packaging, sales
literature and other supplies used by Magnetec exclusively in the
conduct of the Ribbon Business (the "Assets") and (b) The Assets are
being transferred to Tridex "as is" and "where is" without any
warranties of quality or fitness except as hereinafter set forth.
2. Assumption of Liabilities. Tridex hereby agrees to assume all
liabilities and obligations of Magnetec (a) for accrued but unused
vacation days as set forth on Schedule 2(a) attached hereto, due to
employees engaged in the Ribbon Business who, in connection with the
Closing, cease to be employees of Magnetec and become employed by
Tridex and (b) under any purchase orders submitted by customers of
Magnetec as set forth on Schedule 2(b) attached hereto which remain
unperformed or unfilled at the time of the Closing and are assigned to
Tridex by Magnetec.
3. Consideration for Transfer of Assets. Tridex and Magnetec agree that,
at Closing, Magnetec shall accept, in consideration for the transfer of
the Assets, cancellation of intercompany indebtedness, owed by Magnetec
to Tridex, in an amount equal to the book value of the Assets at the
date of the closing. Tridex and Magnetec acknowledge that such book
value was approximately $228,000 at June 29, 1995.
4. Representations and Warranties of Magnetec. Magnetec represents and
warrants to Tridex as follows:
4.1 Corporate Status. Magnetec is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Connecticut.
4.2 Due Authorization. The entry by Magnetec into this Agreement
and the transfer of the Assets to Tridex hereunder have been
duly authorized by all requisite corporate action.
4.3 Title to Assets. Magnetec 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 Bank, National
Association pursuant to an Amended and Restated Credit
Agreement dated as of December 15, 1995 and last amended on
March 15, 1996 (the "Credit Agreement")).
4.4 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.
4.5 Sufficiency of Assets. The Assets transferred by Magnetec to
Tridex pursuant to this Agreement constitute all of the assets
used by Magnetec exclusively in the conduct of the Ribbon
Business and, in combination with the services to be provided
by Magnetec to Tridex pursuant to a Manufacturing Services
Agreement, in the form attached hereto as Exhibit 7.2(b) (the
"Manufacturing Services Agreement"), are sufficient to conduct
the Ribbon Business as presently conducted by Magnetec.
21
2
5. Representations and Warranties of Tridex.
5.1 Corporate Status. Tridex is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Connecticut.
5.2 Due Authorization. The entry by Tridex into this Agreement and
the transfer of the assets from Magnetec to Tridex hereunder
has been duly authorized by all requisite corporate action.
6. Conditions Precedent to Closing.
6.1 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.
(c) Bank Consent. Fleet Bank, National Association shall
have consented to the transactions contemplated by
this Agreement, including but not limited to the
transactions under the Manufacturing Services
Agreement.
6.2 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 Bank, National Association shall
have consented to the transactions contemplated by
this Agreement, including but not limited to the
transactions under the Manufacturing Services
Agreement.
7. Closing.
7.1 Time and Place.
The transfer of the Assets by Magnetec to Tridex (the
"Closing") shall take place on September 27, 1996 at the
offices of Magnetec, 7 Laser Lane, Wallingford, Connecticut at
10:00 a.m., or at such other time and place as the parties
shall mutually agree, but in no event later than December 31,
1996.
7.2 Magnetec's Obligations at Closing.
At the Closing, Magnetec will deliver to Tridex 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 Magnetec, assigning and transferring
to Tridex all of Magnetec's right, title and interest
in and to the customer purchase orders which remain
unfilled or unperformed as of the date of the
Closing.
22
3
(b) The Manufacturing Services Agreement, in
substantially the form attached hereto as Exhibit
7.2(b), duly executed by Magnetec, regarding the
provision of services to Tridex by Magnetec with
respect to the operation of the Ribbon Business.
(c) An Instrument of Transfer, in substantially the form
attached hereto as Exhibit 7.2(c), transferring the
Assets from Magnetec to Tridex.
7.3 Tridex's Obligation at Closing.
At the Closing, Tridex will deliver to Magnetec the following:
(a) The Assignment and Assumption Agreement, duly
executed by Tridex.
(b) The Manufacturing Services Agreement, duly executed
by Tridex.
(c) Proof of cancellation of indebtedness by Tridex.
8. Further Assurances. Magnetec and Tridex 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.
9. 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.
10. Survival. All representations, warranties and agreements contained in
this Agreement will survive for six (6) months from the date of the
Closing.
11. Entire Agreement. This Agreement and the schedules hereto 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.
12. Successors and Assigns. References in this Agreement to the parties
hereto will be deemed to include their successors and permitted assigns
and this Agreement will be binding upon and inure to the benefit of the
parties hereto and their successors and permitted assigns.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
14. 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.
15. 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 on the _______ day
of July, 1996.
MAGNETEC CORPORATION
By:____________________________
Title:_________________________
TRIDEX CORPORATION
By:____________________________
Title:_________________________
23