EXHIBIT 10.3
EXECUTION COPY
AMENDED AND RESTATED LABOR POOL AGREEMENT
AMENDED AND RESTATED LABOR POOL AGREEMENT made as of this 18th
day of December, 1997 (the "Agreement"), by and between XXXXXXXXXXX ELECTRIC
COMPANY, INC. (NY) ("KEC-NY"), of 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
and IPC INFORMATION SYSTEMS, INC. ("IPC") of 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000.
WHEREAS, KEC-NY and IPC heretofore were both signatories to
separate collective bargaining agreements with Local 3 IBEW, pursuant to which
agreements both corporations employed technicians who were members of said
local; and
WHEREAS, KEC-NY is a domestic corporation controlled by Xxxxxxx
Xxxxxxxxxxx and Xxxxx Xxxxxxxxxxx and their respective children; and
WHEREAS, in October of 1991, the stock of IPC was acquired by
Knight Ventures, Inc., a corporation also controlled by Xxxxxxx Xxxxxxxxxxx and
Xxxxx Xxxxxxxxxxx; and
WHEREAS, after such acquisition it was determined to be in the
best interests of both IPC and KEC-NY to continue to employ workers represented
by Local 3 and Local 3 (White Plains) on a pooled basis, and under the terms of
KEC-NY's collective bargaining agreement; and
WHEREAS, Local 3 has orally agreed to the institution and
maintenance of such a pooling arrangement; and
WHEREAS, the parties desire to memorialize their pooling
arrangement and wish to provide for its continuance for an extended period of
time.
NOW, THEREFORE, the parties agree as follows:
1. KEC-NY and IPC acknowledge their continued intention to employ
on a pooled basis only those employees engaged by IPC and performing work for
IPC who are represented by IBEW Local 3 and Local 3 (White Plains) ("Pooled
Employees") pursuant to all of the terms and conditions of KEC-NY's collective
bargaining agreement, including, without limitation, the continued payment of
fringe benefit contributions provided for in such collective bargaining
agreement.
2. It is the intention of the parties that, as to Pooled
Employees while engaged in IPC work, IPC shall have the same obligations and
duties with regard to such employees as if IPC continued to have a direct
contract with Local 3 and Local 3 (White Plains). Accordingly, it is
acknowledged by IPC that it is familiar with, and has a copy of, KEC-NY's
collective bargaining agreement. IPC agrees, as to its Pooled Employees, to
assume and abide by all of the terms and conditions of such collective
bargaining agreement and, together with KEC-NY, to do all things required by
such agreement, and not to take any action which would be a breach thereof.
3. KEC-NY agrees to be responsible for the preparation, on behalf
of IPC, of all payrolls, payroll tax returns and union reports and fringe
benefits and for the timely making of all appropriate payments to Pooled
Employees, governmental agencies, insurance carriers, if applicable, and to
trustees of the Local 3 and Local 3 (White Plains) fringe benefit funds
(collectively, the "Payroll") for Pooled Employees engaged in IPC work under
KEC-NY's collective bargaining agreement and as to whom KEC-NY has been notified
by IPC to make such payments. The parties shall promptly supply each other with
all accurate and relevant
2
information and shall maintain such information for their mutual benefit in such
form as shall be required by law and/or appropriate.
4. (a) KEC-NY shall, after the preparation of each Payroll,
invoice IPC on a weekly basis for all appropriate payments for labor
compensation and benefits related to Pooled Employees employed by IPC pursuant
to this Agreement.
(b) Invoices evidencing appropriate payments shall be paid
by IPC by wire transfer within one business day of receipt by IPC of such
invoice, time being of the essence. IPC shall pay to KEC-NY a total fee of
$45,000 per month during the Term (or on a pro rata basis for any partial month
during the Term based on the proportion that the number of days in such partial
month bears to a 30-day calendar month) to be paid to KEC-NY on the first
business day of each calendar month for services rendered during each such month
during the Term for maintaining such pooling arrangement and performing its
obligations related to all Pooled Employees represented by IBEW Local 3 and
Local 3 (White Plains) and as otherwise provided herein.
5. IPC agrees to obtain a standby letter of credit, effective as
of the date hereof, in the aggregate amount of $1.5 million with respect to the
payments of (a) KEC-NY, pursuant to Section 3 of this Agreement, for labor
compensation and benefits related to Pooled Employees and (b) Xxxxxxxxxxx
Electric Company, Inc. (NJ) ("KEC-NJ") pursuant to Section 3 of the Amended and
Restated Labor Pool Agreement, dated the date hereof, between KEC-NJ and IPC
(the "KEC-NJ Labor Pool Agreement") for labor compensation and benefits related
to Pooled Employees (as such term is defined in the KEC-NJ Labor Pool
Agreement).
3
6. IPC shall continue to be the employer of Pooled Employees
while engaged in IPC's work and IPC shall continue to be solely responsible for
the direction of its own work and for the performance of all work undertaken by
the Pooled Employees while engaged in its work, and shall, at its own cost and
expense, obtain and maintain customary insurance coverage consistent with prior
practice, which insurance shall name KEC-NY as an additional insured.
7. In this pooling arrangement, IPC specifically acknowledges
that it will comply with all legal requirements relating to the terms and
conditions of employment of any Pooled Employee employed pursuant to this
pooling arrangement, including, without limitation, the applicable provisions of
OSHA, the Fair Labor Standards Act, the Fair Employment Practices law and the
Equal Pay Act. In addition, IPC agrees not to discriminate against any employee
or applicant for employment because of race, creed, color, sex, affectional
preference, or national origin. IPC shall take affirmative action to afford
equal employment opportunities without such discrimination. Such action shall be
taken with reference to recruitment, employment, job assignment, promotion,
demotion, transfer, layoff, termination, rates of pay and other forms of
compensation and selection for training, including apprenticeship and on-the-job
training.
8. To the maximum extent permitted by law, IPC hereby assumes and
agrees to indemnify and hold KEC-NY harmless against the entire responsibility
and liability for fines, penalties, and any and all damage (direct and
consequential) and injury (including death) of any kind or nature whatsoever, to
all persons, whether or not employees of KEC-NY or IPC, and all property,
tangible and intangible, and damage thereto, caused by, resulting from or
arising out of, or in connection with the following:
(a) the information supplied hereunder by IPC;
4
(b) the work performed by its employees, including any
Pooled Employees for IPC as provided hereunder;
(c) any occurrence which happens in or about the area
where the IPC work is performed and related to the
performance of work for IPC by the Pooled Employees as
provided hereunder; and
(d) any breach of the obligations of IPC under this
Agreement by IPC.
Excluded from IPC's responsibility and liability shall be such fines, penalties
and other damage caused by KEC-NY's negligence or breach hereof, or any claim
related to the work performed by KEC-NY with its employees, including, without
limitation, any Pooled Employee to the extent that any such Pooled Employee is
performing services for KEC-NY.
9. To the maximum extent permitted by law, KEC-NY hereby assumes
and agrees to indemnify and hold IPC harmless against the entire responsibility
and liability for fines, penalties, and any and all damage (direct and
consequential) and injury (including death) of any kind or nature whatsoever, to
all persons, whether or not employees of IPC or KEC-NY, and all property,
tangible and intangible, and damage thereto, caused by or resulting from or
arising out of, or in connection with
(a) the information supplied hereunder by KEC-NY;
(b) the work performed by the employees of KEC-NY,
including, without limitation, any Pooled Employee to
the
5
extent that any such Pooled Employee is performing
services for KEC-NY;
(c) any occurrences which happen in or about the area
where KEC-NY work is performed and related to the
performance of work for KEC-NY by its employees;
(d) any breach of the obligations of KEC-NY under this
Agreement by KEC-NY.
Excluded from KEC-NY's responsibility and liability shall be such fines,
penalties and other damage caused by IPC's negligence or breach hereof or any
claim related to the work performed for IPC by Pooled Employees employed
hereunder.
10. (a) IPC shall indemnify, defend and hold harmless, to the
fullest extent permitted under applicable law, the individual shareholders of
KEC-NY (for purposes of this Agreement, collectively referred to as the "KEC-NY
Indemnitees") from and against each Loss that arises from a reduction in the
value of the capital stock of such KEC-NY Indemnitees because of a final
determination that the KEC-NY Indemnitees are subject to multiemployer pension
plan withdrawal liability under Title IV of the Employee Retirement Income
Security Act of 1974, as amended (and the rules and regulations promulgated
thereunder) ("ERISA"), due solely to actions taken by IPC, including, without
limitation, IPC's failure, in whole or in part, to employ members of IBEW Local
3 or Local 3 (White Plains), as the case may be, or the termination or breach by
IPC of this Agreement (it being understood that such reduction in the value of
such capital stock shall be deemed not to have occurred if and to the extent
that any such withdrawal liability shall have been satisfied by IPC); provided,
however, that the
6
maximum amount of Losses for which IPC shall have an obligation to indemnify
under this Agreement and the KEC-NJ Labor Pool Agreement shall not exceed $5
million in the aggregate (the "Cap"). All Losses arising from this Agreement
that exceed the Cap shall be the sole responsibility of the KEC-NY Indemnitees.
For purposes of this Section, "Losses" means any actual losses, damages,
liabilities, costs or expenses (including reasonable attorneys' fees and
disbursements), judgments, fines, penalties, and amounts paid in settlement; it
being expressly understood that Losses shall not include any fines, penalties,
interest payments, attorney's fees and disbursements, court costs or liquidated
damages assessed as a result of any failure of KEC-NY to comply with the
requirements of ERISA or cooperate with IPC in compromising or defending such
Loss in a timely and reasonable manner (unless such fines, penalties, interest
payments, attorney's fees and disbursements, court costs or liquidated damages
are due to IPC's failure to make payments under this Section 10(a) in a timely
manner). Notwithstanding anything to the contrary contained in this Agreement,
the obligations of IPC to indemnify the KEC-NY Indemnitees under this Section 10
shall terminate on the date on which the statute of limitations under applicable
law expires with respect to any applicable claim for a Loss hereunder. KEC-NY
hereby represents and warrants to IPC that, other than Xxxxxxx Xxxxxxxxxxx and
Xxxxx Xxxxxxxxxxx and their respective children, there are no owners of capital
stock of KEC-NY.
(b) Promptly after receipt by the KEC-NY Indemnitees of
notice of any demand, claim or circumstance received by the KEC-NY Indemnitees
on or after the date on which this Agreement became effective that, with or
without the lapse of time, the KEC-NY Indemnitees have reason to believe may
result in any such Losses described in Section 10(a), the
7
KEC-NY Indemnitees shall give notice thereof to IPC, which notice shall describe
such demand, claim or circumstance in reasonable detail and shall indicate the
amount (estimated, if necessary) of the Losses that have been or may be suffered
by the KEC-NY Indemnitees . To the extent any such demand, claim or circumstance
relates to Losses within the Cap, IPC shall have the exclusive right to
compromise or defend, by its own counsel, any such demand, claim or circumstance
and all fees and expenses related thereto shall be borne by IPC. The KEC-NY
Indemnitees shall cooperate in the compromise of, or defense against, such
demand, claim or circumstance and shall make available to IPC and its counsel
any books, records or other documents within its control that are necessary or
appropriate for such compromise or defense.
11. The term of this Agreement (the "Term") shall be for a
period of twenty years from the date hereof, except that this Agreement may be
terminated as provided below:
(a) IPC may terminate this Agreement at any
time, with or without cause, upon ninety
days' prior notice to KEC-NY.
(b) Either party may terminate this Agreement
upon thirty (30) days' notice upon the
happening of any of the following
conditions:
(i) In the event of IPC's failure to
reimburse KEC-NY for Payroll and such
failure continues for 3 business days
after IPC's actual receipt of KEC-NY's
written notice of such failure to pay;
(ii) In the event of a material default by
the other party in the performance of
its obligations hereunder,
8
which default is not cured within
ten days after the giving of
written notice thereof;
(iii) In the event the other party files
a voluntary petition under the
Bankruptcy Code, or for other
debtor or insolvency relief;
(iv) In the event Local 3 and/or Local 3
(White Plains) IBEW withdraws its
consent to or objects to the
continuation of the pooling
arrangement.
The termination or expiration of this Agreement under this
Section or under Section 14 shall not affect the rights and obligations
previously accrued.
The foregoing notwithstanding, this Agreement may be
terminated by either party on 90 days' prior notice without cost or penalty in
the event KEC-NY shall determine to cease those operations which require that it
maintain a collective bargaining agreement.
12. Any notice required under this Agreement shall be in
writing and shall be served by certified mail, return receipt requested,
directed to the parties, as follows:
IF TO KEC-NY:
Xxxxxxxxxxx Electric Company, Inc. (NY)
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman or President
with copy to:
Chief Financial Officer
IF TO IPC:
9
IPC Information Systems, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chairman and General Counsel
Notices otherwise validly given shall be effective two days after the mailing
notwithstanding the date of actual receipt, or the failure or refusal of a party
to sign the return receipt. The address of either party may be changed by such
party giving notice to the other.
13. This is an agreement which is intended to be applicable
solely to the sharing of a common pool of skilled labor. By virtue of this
pooling agreement, the parties hereto do not intend to create any partnership or
joint venture and neither party shall have any interest in the other party's
work, business or opportunities. It is further agreed that by virtue of this
pooling agreement KEC-NY is not to be deemed or held out to be a subcontractor
of IPC with regard to IPC's work unless otherwise agreed to in writing by the
parties.
14. IPC agrees during the term of this Agreement to be bound
by industry-wide modifications and extensions of the KEC-NY collective
bargaining agreement, provided that no such modification or extension limits the
continued use or benefit of this Agreement. Any modifications of the KEC-NY
collective bargaining agreement which are individually bargained with Local 3 or
Local 3 (White Plains) shall be first subject to prior consultation with IPC to
the extent that such modifications affect IPC and its Pooled Employees and/or
the continued use or benefit of this Agreement. IPC shall have the right to
terminate this Agreement in the event that any modifications of the collective
bargaining agreement between KEC-NY and each of Local 3 and Local 3 (White
Plains) adversely affect IPC's continued use of the rights under this Agreement
or the substantive and/or economic benefits provided therein. Such right
10
to terminate by IPC shall be exercised by written notice to KEC-NY within 30
days after the later to occur of (a) receipt of written notice by IPC of such
modifications, (b) the applicable parties have agreed to such modifications or
(c) such modifications have become effective.
15. In the event that an arbitration or legal proceeding is
initiated between KEC-NY and Local 3, then, to the extent that such proceeding
affects the IPC employees or IPC's rights or obligations hereunder, IPC shall be
given notice of the filing of such grievance or legal proceeding in accordance
with the notice provisions hereof and shall be given the opportunity to
participate in and defend its interests. If such notice and opportunity are
provided, IPC shall be bound by the determination made in such proceeding as if
IPC were a party.
16. Except with regard to Local 3 and Local 3 (White Plains)
IBEW and the Trustees of the affiliate Local 3 and Local 3 (White Plains) Fringe
Benefit Funds, this Agreement is not intended to create any rights in any
person, firm or corporation not a party to this Agreement.
17. The rights and obligations of this Agreement are not
assignable. In the event of any merger or consolidation of either party, or upon
the appointment of a receiver for the property of either of the parties hereto,
this Agreement shall, at the option of the other party, immediately terminate.
18. The failure to insist upon strict compliance with any of
the terms, covenants or conditions hereof shall not be deemed a waiver of such
term, covenant or condition. A waiver of any provision must be made in writing
and signed by the party against whom its enforcement is sought. A waiver at any
one or more times shall not be deemed a waiver at any other time or times.
11
19. A determination that any provision of this Agreement is
invalid shall not affect the validity or enforceability of any other provision.
20. This Agreement contains the entire understanding of the
parties relating to the subject matter hereof and supersedes all prior
agreements relating to the subject matter hereof. No modifications of this
Agreement shall be valid unless made in writing and signed by the parties.
21. This Agreement shall be governed by and construed pursuant
to the laws of the State of New York as an agreement made and performed in the
State of New York, without regard to any principle of conflicts of law that
would cause the application of the laws of any jurisdiction other than the State
of New York.
22. It is a condition precedent to the effectiveness of this
Agreement that the "Merger" under and as defined in the Agreement and Plan of
Merger, dated the date hereof, 1997, by and between Arizona Acquisition Corp.
and IPC shall have been consummated.
12
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized officers the day and year first
above written.
XXXXXXXXXXX ELECTRIC COMPANY, INC. (NY)
By: /s/ Xxxxx X. Xxxxxxxxxxx
----------------------------
Xxxxx X. Xxxxxxxxxxx, President
IPC INFORMATION SYSTEMS, INC.
By: /s/ S.T. Xxxxxx
----------------------------
S.T. Xxxxxx, President
13
