Exhibit 10(o)
TRANSACTION AGREEMENT
TRANSACTION AGREEMENT, dated as of March 24, 2000, between Xxxxxxx
Xxxxxxx Electronic Assembly Services, Inc., a Florida corporation ("JMEASI"),
Honeywell International Inc., a Delaware corporation and the ultimate parent
corporation of JMEASI ("HII"), and RELM Communications of Florida, Inc., a
Florida corporation ("RELM Communications"), RELM Communications, Inc., a
Florida corporation ("RELMCI") and RELM Wireless Corporation, a Nevada
corporation and the parent corporation of RELM Communications and RELMCI ("RELM
Wireless") (RELM Communications, RELMCI and RELM Wireless collectively being
referred to herein as "RELM").
RECITALS
WHEREAS, the overall intent of the transaction described herein (the
"Transaction") is for the Parties to exchange facilities and to have JMEASI
offer employment to certain personnel currently employed by RELMCI, and for
JMEASI to become the primary manufacturing source for RELMCI;
WHEREAS, JMEASI is the tenant at the property located at 0000
Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxxxxx ("Facility A"), which Facility A
includes a building with approximately 54,000 square feet divided approximately
80% for manufacturing and 20% for administrative offices.
WHEREAS, RELM Communications is the owner of the property located at
0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxxxxx ("Facility B"), which Facility B
includes a parcel of land having two buildings thereon that have approximately
141,000 gross square feet divided approximately 75% for manufacturing and 25%
for administrative offices.
WHEREAS, JMEASI is currently in the business of manufacturing and
assembling for original equipment manufacturers ("OEMs") electronic products and
components that are used in electronic products;
WHEREAS, RELMCI is an OEM in the business of designing, manufacturing
and marketing electronic products, and desires to restructure its business to
focus on marketing and design and outsource its manufacturing and assembly
business to JMEASI;
WHEREAS, in connection with the proposed outsourcing of RELMCI's
manufacturing and assembly business to JMEASI, the parties propose to exchange
facilities and enter into certain other agreements relating to certain affected
employees of RELMCI, the sale of certain equipment, the use of inventory and
equipment, the orderly relocation of each party into the other's facility, the
smooth transition of RELMCI's manufacturing and assembly business to
JMEASI and such other matters as the parties shall agree, all on the terms and
subject to the conditions set forth in this Agreement and the Ancillary
Agreements;
WHEREAS, JMEASI and RELM Wireless desire to enter into a Sublease (the
"Sublease") subleasing Facility A to RELM Wireless, conditional upon the Closing
(as defined in Section 2.1 hereof), and American Equities Limited, No. 4, a
Florida limited partnership ("AEL"), JMEASI's landlord under its lease for
Facility A, has indicated it will consent to the Sublease;
WHEREAS, pursuant to a Contract for Sale and Purchase dated by Xxxxxx
Properties, a Florida partnership ("Xxxxxx") on November 15, 1999, and by RELM
Communications on November 16, 1999, as amended by Addendum dated November 16,
1999 (the "Addendum"), Modification to Contract for Sale and Purchase dated
December 15, 1999, Second Modification to Contract for Sale and Purchase dated
January 14, 2000 (the "Second Modification"), Third Modification to Contract for
Sale and Purchase dated January 25, 2000, Fourth Modification to Contract for
Sale and Purchase dated January 31, 2000, Fifth Modification to Contract for
Sale and Purchase dated February 16, 2000, Sixth Modification to Contract for
Sale and Purchase dated Xxxxx 0, 0000, Xxxxxxx Modification to Contract for Sale
and Purchase dated Xxxxx 00, 0000, Xxxxxx Modification to Contract for Sale and
Purchase dated March 17, 2000, and Ninth Modification to Contract for Sale and
Purchase dated March 22, 2000 (collectively, the "Facility B Contract"), RELM
Communications has arranged to sell Facility B to Xxxxxx (the "Facility B
Sale").
WHEREAS, HII, RELM and Xxxxxx desire to have Xxxxxx assign its rights
under, and HII assume Xxxxxx'x obligations under, the Facility B Contract, and
whereas HII desires to reassign its rights to BMO Global Capital Solutions, Inc.
("BMO"), to enable BMO to close the Facility B Sale and lease Facility B to HII
in a synthetic leasing transaction.
NOW THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein and in the Ancillary
Agreements, the Parties hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1 For purposes of this Agreement, the following terms shall have the
meaning set forth below:
1. "Agreement" means this Transaction Agreement together with
all Schedules hereto, as modified or amended from time-to-time.
2. "Ancillary Agreements" means, collectively, (i) the
Sublease, (ii) the Facility B Contract, (iii) the First Assignment,
(iv) the Second Assignment, (v) the Synthetic Lease Documents, (vi) the
Manufacturing Agreement, (vii) the Purchase Order,
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(viii) the RELM Xxxx of Sale, and (ix) the JMEASI Xxxx of Sale. When
used in the singular, such term means each of the foregoing.
3. "Commission Agreement" means as defined in Section 2.2(b).
4. "Facility B Contract" means as defined hereinabove.
5. "Facility B Sale" means as defined hereinabove.
6. "First Assignment" means the Assignment of Contract for
Sale and Purchase, of even date herewith, between Xxxxxx and HII,
assigning Xxxxxx'x rights under the Facility B Contract to HII.
7. "JMEASI Xxxx of Sale" means the Xxxx of Sale, of even date
herewith, for certain equipment being sold by JMEASI to RELMCI.
8. "Manufacturing Agreement" means the Manufacturing
Agreement, of even date herewith, between RELMCI and JMEASI, providing
for contract manufacturing by JMEASI for RELMCI for five (5) years.
9. "Parties' Agreement" means as defined in Section 9.1
hereof.
10. "Party" means JMEASI, HII or RELM, and "Parties" means
JMEASI, HII and RELM.
11. "Purchase Order" means the Purchase Order, of even date
herewith, from RELMCI to JMEASI for the initial forecast of product
needed under the Manufacturing Agreement, as listed in Exhibit C to the
Manufacturing Agreement.
12. "RELM Xxxx of Sale" means the Xxxx of Sale, of even date
herewith, for certain equipment being sold by RELMCI to JMEASI.
13. "Second Assignment" means the Assignment of Contract for
Sale and Purchase, of even date herewith, between HII and BMO assigning
HII's rights under the Facility B Contract to BMO.
14. "Synthetic Lease Documents" means those agreements and
documents necessary for HII to induce BMO to enter into the Second
Assignment and complete the Facility B Sale, including a Secretary
Certificate, a Certificate of Good Standing in Delaware for HII, an
Opinion of HII Counsel, a Funding Notice, a Participation Agreement
Amendment, a Responsible Employee Certificate, a Deed executed by RELM
Communications (the "Deed"), an Appraisal of Facility B showing a fair
market value of at least $6,300,000, a Xxxx of Sale and Assignment of
Leases and Contracts from RELM Communications to BMO (the "Xxxx of Sale
and Assignment"), a Supplement No. 3 to Assignment of Leases and Rents,
a Lease Supplement No. 3, a Phase I Environmental Audit issued in the
name of BMO, a Reliance Letter issued to BMO, a Master Lease and
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Deed of Trust, an ALTA As-Built Survey, a Zoning Certification Letter
reissued in the name of BMO, UCC-1's for existing and new properties, a
Title Insurance Policy acceptable to HII and BMO, a Seller's Affidavit
and Solicitation from RELM Communications (the "Affidavit"), an Opinion
of Florida counsel satisfactory to HII and BMO, Insurance Certificates,
an Acquisition Closing Statement executed by HII, Xxxxxx and RELM
Communications (the "Closing Statement"), a Settlement Statement, a
Disbursement Statement, Escrow Instructions to a title company, a
DR-219 form executed by RELM Communications (the "DR-219 Form"), and
Resolutions of Xxxxxx and RELM acceptable to BMO authorizing the
Facility B Sale.
15. "Sublease" means as defined hereinabove, along with
associated estoppel certificates.
Other capitalized terms are used as defined elsewhere herein.
ARTICLE 2
CLOSINGS
2.1 Closing. The actions referred to in Section 2.2(a) shall be taken
at a closing (the "Closing") to be held at Facility A at 8:00 AM local time on
the date hereof, and the actions referred to in Section 2.2(b) shall be taken by
execution of documents at the Chicago, Illinois offices of BMO, on the date
hereof subsequent to the Closing (the "Second Closing").
2.2 Actions to be Taken at the Closing. (a) At the Closing, each of the
parties shall take or cause to be taken, the following actions:
(i) RELM Wireless will pay to JMEASI $28,621.11 for the
security deposit due under the Sublease and $7,386.00 for the prorated
rent due under the Sublease, and such payment shall be made by wire
transfer of immediately available funds to a bank account designated by
JMEASI;
(ii) RELMCI will pay to JMEASI $38,391.60 for amounts
currently due and owing to JMEASI and $19,000.00 for Transferred
Employee medical deductible payments pursuant to Section 4.3(e) hereof,
and such payment shall be made by wire transfer of immediately
available funds to a bank account designated by JMEASI;
(iii) Xxxxxx and HII will execute and deliver the First
Assignment;
(iv) RELMCI and JMEASI will execute and deliver the
Manufacturing Agreement, RELM Wireless and JMEASI will execute and
deliver the Sublease, and AEL will consent to the Sublease;
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(v) RELMCI will execute and deliver to JMEASI the Purchase
Order and the RELM Xxxx of Sale; and
(vi) JMEASI will execute and deliver to RELMCI the JMEASI Xxxx
of Sale and a purchase order for the RELM Parts (as defined in the
Manufacturing Agreement;
(vii) HII, JMEASI and RELM will execute and deliver this
Agreement; and
(viii) JMEASI will pay to RELM Wireless $100,000.00 for
leasehold improvements pursuant to the Sublease, and to RELMCI
$25,000.00 for the purchase price differential for the items of
personal property sold pursuant to the RELM Xxxx of Sale and the JMEASI
Xxxx of Sale, and such payments shall be made by wire transfer of
immediately available funds to a bank account designated by RELM
(b) At the Second Closing, each of the parties shall take or cause to
be taken, the following actions:
(i) HII and BMO will execute and deliver the Second
Assignment;
(ii) HII and BMO will execute and deliver the Synthetic Lease
Documents, and RELM Communications will execute and deliver the Deed,
the Xxxx of Sale and Assignment, the Affidavit and the DR-219;
(iii) BMO will pay to RELM Communications $ 5,433,555.56 for
Facility B, and such payment shall be made by wire transfer of
immediately available funds to a bank account designated by RELM;
(iv) BMO will pay to Xxxxxx $ 710,000.00 as additional
purchase price for Facility B, and such payment shall be made by wire
transfer of immediately available funds to a bank account designated by
Xxxxxx; and
(v) RELM Communications will pay to Coldwell Banker Commercial
Sun Land Realty of Florida, Inc. ("Coldwell Banker") $224,000.00 as
commission for the sale of Facility B pursuant to the Exclusive Right
of Sale Listing Agreement between RELM Communications and Coldwell
Banker (the "Commission Agreement"), and such payment shall be made by
wire transfer of immediately available funds to a bank account
designated by Coldwell Banker.
2.3 Other Actions and Deliveries. In addition, the parties shall take
such action and execute and deliver such other documents at the Closing and the
Second Closing as the Parties, with the advice of their counsel, shall deem to
be necessary or appropriate to evidence or give effect to the transactions
contemplated hereby, including without limitation board resolutions certified by
each Party's secretary approving the execution, delivery and performance of this
Agreement and each Ancillary Agreement to which it is a party, and certificates
of incumbency and signatures of the officers executing documents on behalf of
such Party.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 RELM hereby represents and warrants to JMEASI and HII as follows:
(a) Due Incorporation. RELM was duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with the corporate power to own
and operate its property and to carry on its businesses as now being
conducted.
(b) Power and Authority. RELM has all necessary corporate
power and authority to enter into, and to carry out its obligations
under, this Agreement and each Ancillary Agreement to which it is a
party. The execution and delivery of this Agreement and each Ancillary
Agreement to which RELM is a party, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized
by all necessary corporate action on the part of RELM. This Agreement
and each Ancillary Agreement have been duly executed and delivered by
RELM.
(c) No Default. The execution, delivery and performance by
RELM of this Agreement and of each Ancillary Agreement to which it is a
party will not, (i) conflict with or contravene the Certificate of
Incorporation or By-Laws (or other comparable governing instruments
with different names) of RELM or (ii) conflict with, result in a breach
of or entitle any party to terminate or call a default with respect to,
any material agreement or instrument to which RELM is a party or by
which RELM or any of its properties or assets are bound.
(d) Enforceability of Obligations. This Agreement and each
Ancillary Agreement to which RELM is a party constitute the valid and
binding obligations of RELM and shall be enforceable against RELM in
accordance with their respective terms, subject, however, to any
limitations with respect to enforcement which may be imposed in
connection with bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors' rights generally,
and except that no representation or warranty is made as to the
availability of any equitable remedy in connection with the enforcement
of any term hereof or thereof.
(e) Consents, Etc. No consent, license, permit, approval,
order or authorization of, or registrations, declaration, qualification
or filing with, any foreign, federal, state or local governmental
authority or any person is required to be obtained or made by RELM on
or prior to the date of this Agreement in connection with the
execution, delivery or performance by RELM of this Agreement or any
Ancillary Agreement to which RELM is a party.
(f) Absence of Litigation. There is no action, suit,
litigation, claim, governmental or other proceeding or investigation
pending or, to the best knowledge of RELM, threatened against RELM
which might materially affect (i) the consummation of
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the transactions contemplated by this Agreement or any Ancillary
Agreement to which RELM is a party or (ii) the full performance of the
obligations of RELM hereunder or thereunder.
(g) Environmental Matters.
RELM hereby represents and warrants that, to the actual
knowledge of Xxxx Xxxxxx, Executive Vice President and Chief Operating
Officer of RELM Wireless, after reasonable inquiry, and except as set
forth in Schedule 3.1(g):
(1) no Hazardous Substances are now or have been located,
produced, treated, stored, transported, incorporated, discharged,
emitted, released, deposited or disposed of in, upon, under, over or
from Facility B;
(2) no threats exist of a discharge, release or emission of
Hazardous Substances in, upon, under, over or from Facility B into the
environment;
(3) Facility B has not been used as or for a mine, a landfill,
a dump or other disposal facility, auto repair, a dry cleaner, or a
gasoline service station;
(4) as of the date of this Agreement, neither Facility B nor
any part thereof is in violation of any Environmental Law, no notice of
any such violation or any alleged violation thereof has been issued or
given by any governmental entity or agency, and there is not now nor
has there been any investigation or report involving Facility B by any
governmental entity or agency which is in any way related to Hazardous
Substances;
(5) no person, party or private or governmental agency or
entity has given any notice of or asserted any claim, cause of action,
penalty, cost or demand for payment or compensation, directly or
indirectly, resulting from or allegedly resulting from any activity or
event described in (1) above;
(6) there are not now, nor have there been, any actions,
suits, proceedings or damage settlements relating in any way to
Hazardous Substances in, upon, under, over or from Facility B;
(7) Facility B is not listed in the United States
Environmental Protection Agency's National Priorities List of Hazardous
Waste Sites, CERCLIS, or any other list of hazardous sites maintained
by any federal, state or local governmental agency;
(8) Facility B is subject to no lien or claim for lien in
favor of any governmental entity or agency as a result of any release
or threatened release of any Hazardous Substances;
(9) no aboveground or underground tanks are located under, in,
on or about Facility B, or have been located under, in, on or about
Facility B and have been subsequently removed or filled;
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(10) all sewers, sumps and drains are in good working order;
and
(11) Facility B does not include any equipment, machinery,
device, or other apparatus that contains polychlorinated biphenyls that
is now or has been leaking, nor any asbestos that is or reasonably may
be anticipated to become in friable condition within the next five
years.
The representations and warranties contained in this Section 3.1(g) shall
replace and supersede those contained in Special Clauses 6 and 7 of the Addendum
in their entirety.
For the purposes of this Section 3.1(g):
(i) the term "Environmental Law" shall mean and refer to the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), 42 U.S.C.ss.9601, et seq.; the Federal Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C.ss.6901, et
seq.; the Federal Water Pollution Control Act, 33 U.S.C.ss.1251, et
seq.; the Clean Air Act, 42 U.S.C.ss.7401, et seq.; all as the same may
be from time to time amended, and any other federal, state, county,
municipal, local or other statute, law, ordinance or regulation which
relates to or deals with human health or the environment, including,
without limitation, all regulations promulgated by a regulatory body
pursuant to any such statute, law, ordinance or regulation; and
(ii) the terms "Hazardous Substance" and "Hazardous
Substances" shall mean and refer to asbestos, radon, urea-formaldehyde,
polychlorinated biphenyls ("PCBs"), or substances containing PCBs,
nuclear fuel or materials, radioactive materials, explosives, known
carcinogens, petroleum products and bi-products, and any substance
defined as hazardous or toxic or as a contaminant or pollutant in, or
the release or disposal of which is regulated by any Environmental Law.
(h) Title to and Condition of Equipment. RELMCI has good,
valid and marketable title to all of the equipment listed on the RELM
Xxxx of Sale free and clear of all liens. The equipment listed on the
RELM Xxxx of Sale is in good repair and good condition, except for
ordinary wear and tear and the need for normal maintenance.
(i) Employees; Labor Relations.
(a) Schedule 3.1(i) contains a true and complete list of the following:
(i) All arrangements, written or oral, which compel the
employment of any person in the status of "employee" or "employees" in
the manufacturing of Products (as defined in the Manufacturing
Agreement) (the "Employees");
(ii) All agreements, written or oral, and letters of
understanding with labor unions or associations representing the
Employees;
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(iii) Consulting relationships with the Products business;
(iv) Strikes, slowdowns, picketing, work stoppages, threats to
organize non-union Employees or other labor issues, or other
occurrences, events or conditions of a similar character in which any
of the Employees are participating or have threatened to participate
since January 1, 1997;
(v) Any charges or complaints or petitions filed with or by
the N.L.R.B., the O.F.C.C.P. of the United States Department of Labor,
the Occupational Safety and Health Administration, the E.E.O.C. or any
similar foreign, state or local agency or commission, including charges
of race, sex, national origin, religious, handicap or age
discrimination or similar complaints against the Products business,
grievance and arbitration proceedings and litigation matters including
breach of contract/wrongful discharge, and other personnel related
actions, from January 1, 1997 to Closing;
(vi) Any claims by the Employees made to applicable state or
local agencies or other organizations for workers compensation benefits
or payments from January 1, 1997 to Closing;
(vii) Any commitment or agreement to increase wages or modify
the conditions or terms of employment of the Employees;
(viii) The names and current salary rates of all Employees and
their hourly or yearly salary, together with a summary of all bonus,
incentive compensation or other additional compensation or similar
benefits paid to such persons for the 1999 calendar year and estimated
for the 2000 calendar year;
(ix) Each contract, bonus, deferred compensation, incentive
compensation, stock purchase, stock option, supplemental retirement,
severance or termination pay, salary continuation, hospitalization,
medical, dental, life insurance, disability, sick leave or other leave
of absence, vacation, defined benefit, defined contribution, profit
sharing, stock bonus, retirement, pension, supplemental unemployment
benefit plan, union contracts, and each other employee benefit plan,
policy or arrangement maintained, contributed to, or required to be
contributed to, by RELM with respect to any Employee, beneficiary,
former Employee, retiree or other worker of RELM, whether or not any of
the foregoing is funded, subject to ERISA, or legally binding
(collectively referred to as the "Benefit Plans"); and
(x) Employee lease agreements relating to the Product
business.
(b) Except as provided in Schedule 3.1(i),
(i) the Benefit Plans have been established and maintained in
all material respects in accordance with their terms and in compliance
with all applicable laws, including, to the extent applicable, but not
limited to, the requirements of ERISA and the Code;
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(ii) none of the Benefit Plans subject to Part 3 Subtitle B of
Title I or Title II of ERISA has incurred any "accumulated funded
deficiency" within the meaning of Section 302 of ERISA or Section 412
of the Code (whether or not waived);
(iii) no liability to the Pension Benefit Guaranty Corporation
has been incurred with respect to any of the Benefit Plans subject to
Title IV of ERISA;
(iv) RELM has not incurred liability for any tax imposed under
Section 4975 of the Code or Part 5 Subtitle B of Title I of ERISA with
respect to any of the Benefit Plans;
(v) none of the Benefit Plans is a multiemployer plan within
the meaning of Section 3(37)(A) of ERISA;
(vi) no "reportable event" (within the meaning of Section 4043
of ERISA) has occurred with respect to any of the Benefit Plans since
the effective date of said Section 4043;
(vii) each Benefit Plan which is a "group health plan", as
defined in Section 607(1) of ERISA, has been administered in material
compliance with the continuation coverage requirements of Part 6
Subtitle B of Title I of ERISA;
(viii) no suit, action, litigation or claim (excluding claims
for benefits incurred in the ordinary course of plan activities) has
been brought against or with respect to any of the Benefit Plans.
Except as otherwise provided in this Agreement, all contributions to
the Benefit Plans that were required to be made under such Benefit
Plans as of the Closing have been (or will have been by the Closing)
paid, accrued or otherwise fully reserved as of such date, and RELM has
performed (or will have performed by the Closing) all obligations
required to be performed as of such date under such plans;
(ix) no event has occurred which provides a basis for the
Pension Benefit Guaranty Corporation to assert a lien on the assets of
any Benefit Plan;
(x) each individual who is characterized by RELM as an
independent contractor for employment tax and Benefit Plan purposes has
been appropriately classified as an independent contractor under
Revenue Ruling 87-41 or Section 530 of the Revenue Act of 1978 and has
been properly taken into account under the eligibility or participation
provisions of the Benefit Plans; and
(xi) RELM has paid or made provision for the payment of all
salaries, accrued wages and benefits and has complied with all
applicable laws, rules and regulations relating to the employment of
the Employees, including those relating to wages, hours, collective
bargaining and the payment and withholding of taxes, and has withheld
and paid to the appropriate governmental authority, or is holding for
payment
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not yet due to such governmental authority, all amounts required by law
or agreement to be withheld from the wages or salaries of the
Employees.
(j) Brokers or Finders. No broker or finder is entitled to any
brokerage or other fee from RELM based upon arrangements made by or on
behalf of any of RELM in connection with the transactions contemplated
hereby or by the Ancillary Agreements, except for the commission fee of
$224,000.00 due pursuant to the Commission Agreement.
(k) Accuracy of Information. The information furnished by RELM
to JMEASI and HII with respect to Facility B, the Facility B Contract
and the Commission Agreement is true, complete and accurate.
(l) Information. RELM has disclosed or provided to JMEASI and
HII all information and documents directly or indirectly relating to
the Facility B Contract, and the Commission Agreement. RELM has
delivered or will deliver to HII within five (5) days of date of this
Agreement copies of all plans, permits, drawings, studies, tests,
development orders and other reports and information in RELM's
possession concerning Facility B including, without limitation,
environmental reports, soil test reports, zoning and wetlands
information, development orders and other regulatory requirements
concerning land use affecting Facility B or the development of which
Facility B is a part, surveys, title reports, covenants and
restrictions, easements and plats. Prior to Closing, HII may, at HII's
sole cost and expense, obtain such additional reports and information
as it deems necessary to fully evaluate Facility B.
(m) Facility B Contract. The Facility B Contract sets forth
all of the agreements and understandings of Xxxxxx and RELM with
respect to Facility B, there are no other written or oral agreements or
understandings between Xxxxxx and RELM with respect to Facility B, the
Facility B Contract is in full force and effect in accordance with its
terms, there are no defaults (either by RELM or Xxxxxx) under the
Facility B Contract or facts or circumstances which with the passage of
time or giving of notice would constitute a default, and the Facility B
Contract is unmodified (except as described above).
3.2 JMEASI and HII Represent and Warrant to RELM.
(a) Due Incorporation. JMEASI and HII were duly incorporated
and are validly existing as corporations in good standing under the
laws of the jurisdiction of their incorporations, and JMEASI has the
corporate powers to lease and operate its property and to carry on its
business as now being conducted.
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(b) Power and Authority. JMEASI and HII have all necessary
corporate power and authority to enter into, and to carry out their
obligations under, this Agreement and each Ancillary Agreement to which
they are parties. The execution and delivery of this Agreement and each
Ancillary Agreement to which JMEASI and HII are parties, and the
consummation of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action on the part of
JMEASI and HII. This Agreement and each Ancillary Agreement have been
duly executed and delivered by JMEASI and HII.
(c) No Default. The execution, delivery and performance by
JMEASI and HII of this Agreement and of each Ancillary Agreement to
which they are parties will not, (i) conflict with or contravene the
Certificate of Incorporation or By-Laws (or other comparable governing
instruments with different names) of JMEASI or HII or (ii) conflict
with, result in a breach of or entitle any party to terminate or call a
default with respect to, any material agreement or instrument to which
JMEASI or HII is a party or by which JMEASI or HII or any of its
properties or assets are bound.
(d) Enforceability of Obligations. This Agreement and each
Ancillary Agreement to which JMEASI and HII are parties constitute the
valid and binding obligations of JMEASI and HII and shall be
enforceable against JMEASI and HII in accordance with their respective
terms, subject, however, to any limitations with respect to enforcement
which may be imposed in connection with bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally, and except that no representation or
warranty is made as to the availability of any equitable remedy in
connection with the enforcement of any term hereof or thereof.
(e) Consents, Etc. No consent, license, permit, approval,
order or authorization of, or registrations, declaration, qualification
or filing with, any foreign, federal, state or local governmental
authority or any person is required to be obtained or made by JMEASI or
HII on or prior to the date of this Agreement in connection with the
execution, delivery or performance by JMEASI and HII of this Agreement
or any Ancillary Agreement to which JMEASI and HII are parties.
(f) Absence of Litigation. There is no action, suit,
litigation, claim, governmental or other proceeding or investigation
pending or, to the best knowledge of JMEASI and HII, threatened against
JMEASI or HII which might materially affect (i) the consummation of the
transactions contemplated by this Agreement or any Ancillary Agreement
to which JMEASI and HII are parties, or (ii) the full performance of
the obligations of JMEASI and HII hereunder or thereunder.
(g) Title to and Condition of Equipment. JMEASI has good,
valid and marketable title to all of the equipment listed on the JMEASI
Xxxx of Sale free and clear of all liens. The equipment listed on the
JMEASI Xxxx of Sale is in good repair and good condition, except for
ordinary wear and tear and the need for normal maintenance.
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(h) Brokers or Finders. No broker or finder is entitled to any
brokerage or other fee from JMEASI or HII based upon arrangements made
by or on behalf of JMEASI or HII in connection with the transactions
contemplated hereby or by the Ancillary Agreements.
3.3 Survival of Representations and Warranties. The
representations and warranties contained in this Agreement and any
Ancillary Agreement shall survive (and not be affected in any respect
by) the Closing for the time periods stated in Section 7.1(c) and any
investigation conducted by any Party or any information which any Party
may have from time-to-time.
ARTICLE 4
EMPLOYEE MATTERS
4.1 Scope of Article. This Article 4 contains the covenants
and agreements of the parties with respect to (a) the status of
employment of the Employees upon the Transaction, and (b) the employee
benefits and employee benefit plans provided or covering such Employees
and former employees of RELM who terminated employment or retired from
employment with RELM prior to the Closing ("Former Employees"). Nothing
herein expressed or implied confers upon any Employee or Former
Employee of RELM any rights or remedies of any nature or kind by reason
of this Article 4.
4.2 Employment.
(a) JMEASI shall offer employment at a rate of pay at least
equal to that in effect immediately prior to the Closing, subject to
JMEASI's employment conditions of a completed employment application,
background investigation, drug screen and confidentiality agreement,
effective as of the Closing to (i) each Employee who is actively at
work and capable of performing work duties satisfactory to JMEASI on
the Closing or who is not actively at work due solely to vacation
("Active Employees") and (ii) to each Employee who is not actively at
work on the Closing due solely to leave of absence, sick leave, short
or long-term disability leave, military leave and who returns to active
employment immediately following such absence and within 180 days of
the Closing or such later date as required under applicable law
("Inactive Employees"), as listed on the attached Schedule 3.1(i).
Notwithstanding the preceding sentence, JMEASI shall not be required to
make any offer of employment to any Inactive Employee until RELM
notifies JMEASI that such Inactive Employee's leave, disability or
other absence has terminated and the Inactive Employee is capable of
commencing work duties satisfactory to JMEASI. Subject to Section
4.2(e) below, the period of such employment shall, in the case of
Active Employees, begin on the Closing and, in the case of Inactive
Employees, on the date that they first commence employment with JMEASI.
For purposes of this Agreement, Active Employees and Inactive Employees
who accept the JMEASI's offer of employment, who satisfy JMEASI's
employment conditions and who
13
become employees of JMEASI shall be referred to herein collectively as
the "Transferred Employees." RELM shall be responsible for any
obligation to provide employee benefits to a Transferred Employee prior
to such employee's date of hire by JMEASI.
(b) RELM agrees to use reasonable efforts to facilitate the
transition of Employees to employment with JMEASI. Such reasonable
efforts shall include affording JMEASI reasonable opportunities to
review employment and personnel records of Employees, to discuss with
Employees terms and conditions of employment that will exist with
JMEASI as of the Closing and to distribute to Employees forms and
documents relating to employment with JMEASI.
(c) Except to the extent prohibited by law, RELM shall deliver
to JMEASI originals of all personnel files and records relating to
Employees, and RELM shall have reasonable continuing access to such
files and records thereafter as such files and records existed on the
Closing.
(d) It is expressly agreed and understood that nothing in this
Agreement shall, or shall be construed to, limit the ability of JMEASI
to at any time terminate the employment of any Employee or to amend or
terminate any employee benefit plan or arrangement.
(e) Notwithstanding any provision of this Section 4 to the
contrary, Employees who within fifteen (15) business days of the
Closing fail to satisfy JMEASI's employment conditions described in
Section 4.2(a) above shall remain employees of RELM and shall not be
employees or Transferred Employees of JMEASI for any purpose and shall
not be eligible for any employee benefits, compensation or other
remuneration of any kind from JMEASI. JMEASI shall reimburse RELM for
its actual wage costs attributable to any Employee described in the
preceding sentence for the period between the Closing and the date RELM
is notified that such Employee failed to satisfy JMEASI's employment
conditions described in Section 4.2(a) above.
4.3 Employee Benefit Plans.
(a) Except as otherwise specifically provided in this Article
4, effective on the first day of the month coincident with or next
following the Closing (the "Effective Date"), each Transferred Employee
shall cease to be an active participant in RELM's Benefit Plans (other
than "employee pension benefit plans" as defined in Section 3(2) of
ERISA) and shall become eligible to participate in the benefit plans,
policies and arrangements of JMEASI subject to the terms and conditions
of this Agreement and of such plans, policies and arrangements.
(b) RELM shall be responsible for any claims for medical or
dental benefits incurred by an Employee or his or her covered
dependents prior to the Effective Date in accordance with the terms of
RELM's medical and dental plans, and JMEASI shall be responsible for
any medical or dental claims incurred by any Transferred Employee or
his or her covered dependents on or after the Effective Date in
accordance with the terms of
14
JMEASI's medical and dental plans. For purposes of this Section 4.3, a
medical or dental claim shall be deemed to be incurred when the
services giving rise to the claim are performed and not when the
Employee is billed for such services or submits a claim for benefits.
(c) JMEASI shall be responsible in accordance with their
applicable disability plans for all short-term and long-term disability
income benefits payable to any Transferred Employee with respect to a
disability incurred on or after the Effective Date pursuant to
elections made by Transferred Employees under such plans. RELM shall be
responsible in accordance with their applicable disability plans for
all other short-term and long-term disability benefits payable with
respect to a disability incurred by any Employee or Former Employee
prior to the Effective Date.
(d) RELM shall cause each Transferred Employee to become fully
vested in the benefits accrued as of the Closing Date under any
"employee pension benefit plans" maintained by RELM. JMEASI shall grant
to each Transferred Employee credit for his or her service with RELM
prior to the Closing Date for purposes of (i) participation
eligibility, vesting and retirement eligibility, but not for benefit
accrual, under any "employee pension benefit plan" maintained by
JMEASI, and (ii) entitlements under JMEASI's vacation, holiday, sick
pay and severance programs or policies; provided, however, that the
amount of any such service recognized by JMEASI shall not exceed five
(5) years.
(e) RELM shall make a single sum payment of $19,000.00 to HII
at Closing, to be paid by JMEASI to Transferred Employees during the
first three (3) months after Closing by crediting to Transferred
Employees a "Medical Plan Cost Differential" in their wage payments,
and RELM shall have no further liability with respect to the Medical
Plan Cost Differential. The "Medical Plan Cost Differential" shall be
the difference between (i) a Transferred Employee's premium payment
required to participate in JMEASI's medical and dental plans for three
(3) months and (ii) such Transferred Employee's premium payment
required to participate in the RELM medical and dental plans for three
(3) months.
4.4 Health Care Continuation Coverage. RELM shall be
responsible for any continuation of group health coverage required
under Section 4980B of the Code or Sections 601 through 608 of ERISA
with respect to any Transferred Employee or any "qualified beneficiary"
(as defined in Section 4980B of the Code) of any such employee who
incurs a "qualifying event" (as defined in Section 4980B of the Code)
prior to such Transferred Employee's date of hire by JMEASI, including
any such qualifying event incurred by reason of the Transferred
Employee's termination of employment with RELM. JMEASI shall be
responsible for any continuation of group health coverage required
under Section 4980B of the Code or Sections 601 though 608 of ERISA
with respect to any Transferred Employee or any "qualified beneficiary"
(as defined in Section 4980B of the Code) of any such employee who
incurs a "qualifying event" (as defined in Section 4980B of the Code)
after such employee's date of hire by JMEASI.
4.5 Accrued Vacation, Holidays, Sick Pay. and Wages. All
accrued but unpaid holiday, vacation or sick pay of any Transferred
Employee as of the Closing in
15
excess of 120 hours shall be paid in cash by RELM to such Transferred
Employee within thirty (30) days of Closing, and JMEASI shall have no
liability or obligation with respect to any such pay to any Transferred
Employee. All accrued but unpaid holiday, vacation or sick pay of any
Transferred Employee as of the Closing equal to or less than 120 hours
shall be credited and available to Transferred Employees under JMEASI's
holiday, vacation, or sick pay policies or arrangements made available
to such Transferred Employees. RELM shall pay JMEASI an amount equal to
the aggregate amount of Transferred Employees' accrued but unpaid
holiday, vacation or sick pay described in the preceding sentence
within thirty (30) days of the Closing and RELM shall have no further
liability or obligation with respect to any such pay to any Transferred
Employee. All unpaid wages, salaries and bonuses earned for periods
prior to the Closing shall be paid by RELM after the Closing in
accordance with Seller's normal pay practices.
4.6 Severance and WARN Act Liability. As JMEASI will offer
employment to the Employees, the parties do not expect or contemplate
any WARN Act obligations in connection with this transaction. RELM
agrees to pay and be responsible for all liability, cost or expense for
severance, termination indemnity payments, salary continuation, special
bonuses and like costs, with respect to any of the Employees or Former
Employees, including any Employees described in Section 4.2(e), and
agrees to pay and be responsible for all liability, cost, expense and
sanctions resulting from any failure to comply with the WARN Act, or
any similar state or local law, to the extent attributable to the
events or occurrences on or prior to the Closing. JMEASI agrees to pay
and be responsible for all such liability, costs, expense or sanctions
with respect to any Transferred Employee to the extent attributable to
events or occurrences following the Closing.
4.7 Workers Compensation. RELM shall be responsible for all
workers compensation claims filed by or on behalf of a Transferred
Employee to the extent attributable to events, occurrences or exposures
prior to the Closing. JMEASI shall be responsible for all workers
compensation claims filed by or on behalf of a Transferred Employee to
the extent attributable to events, occurrences or exposures following
the Closing.
4.8 Cooperation; Employment Records. The parties agree to
furnish each other with such information concerning employees and
employee benefit plans, and to take all such other action, as is
necessary and appropriate to effect the transactions contemplated by
this Article 4.
4.9 Excluded Employee Liabilities. Except as otherwise
provided in the Agreement, RELM retains all liabilities or obligations
of any nature to any of RELM's Employees or Former Employees, including
without limitation (a) workers compensation, disability and medical
benefits payable as a matter of law, contract or pursuant to benefit
programs or otherwise with respect to any injury, illness or medical
conditions arising out of events or exposures prior to Closing, (b) any
wages, vacations, severance pay or other benefits under any Benefit
Plan, contract, bonus, deferred compensation, incentive compensation,
stock purchase, stock option, supplemental retirement, severance or
termination pay, sick leave or other leave of absence, vacation,
16
and each other employee benefit plan, policy or arrangement maintained,
contributed to, or required to be contributed to, by RELM with respect
to any Employee, beneficiary, Former Employee, or other worker of RELM,
whether or not any of the foregoing is funded, subject to ERISA, or
legally binding, (c) withholding tax liabilities or unemployment
compensation premiums attributable to services performed by Employees
or Former Employees prior to Closing, and (d) claims for
discrimination, unfair labor practices, violations of the collective
bargaining agreements or wrongful discharge which are attributable to
events occurring prior to Closing. Except as otherwise provided in this
Agreement, JMEASI shall be liable for all liabilities or obligations of
any nature to any Transferred Employee which are attributable to events
following the Closing.
ARTICLE 5
CERTAIN COVENANTS OF THE PARTIES
5.1 Confidential Information.
(a) General. Except as expressly set forth in this Section,
each Party shall, and shall cause its affiliates and its and their
officers, directors, employees, agents and subcontractors
(collectively, "Representatives") to, keep secret and retain in
strictest confidence any and all technical, commercial and other
documents or other information (whether in oral or written form),
including, without limitation, any trade secrets, which is or has been
disclosed to it by any other Party or any of such other Party's
affiliates or Representatives prior to or after the date of this
Agreement and which relates to (i) such other Party or any of such
other Party's affiliates or their respective businesses or (ii) this
Agreement, any Ancillary Agreement or any of the transactions
contemplated hereby or thereby ("Confidential Information"), and shall
not disclose directly or indirectly, and shall cause its and their
Representatives not to disclose directly or indirectly, any
Confidential Information to anyone outside such Party, such affiliates
and their respective agents. The foregoing obligations shall extend to
copies, if any, of Confidential Information made by any of the persons
or entities referred to in this paragraph (a) and to documents prepared
by such persons or entities which embody or contain Confidential
Information.
(b) Protection of Confidential Information. Each Party shall
deal with Confidential Information so as to protect it from disclosure
with a degree of care not less than that used by it in dealing with its
own information intended to remain exclusively within its knowledge and
shall take reasonable steps to minimize the risk of disclosure of
Confidential Information which shall include, without limitation,
ensuring that only its affiliates and its and their Representatives who
have a bona fide "need to know" such Confidential Information for
purposes permitted or contemplated by this Agreement or any Ancillary
Agreement shall have access thereto. Each Party shall notify all of its
Representatives who have access to Confidential Information of its
confidentiality and
17
the care therefor required, and shall obtain from any third party who
is permitted access to such Confidential Information in accordance with
this Article (other than attorneys and accountants referred to in
Section 4.5 hereof), an agreement of confidentiality incorporating the
restrictions set forth herein.
(c) Exceptions. Notwithstanding the foregoing, the
confidentiality obligations set forth in this Section shall not extend
to Confidential Information which a party (the "Receiving Party") can
show by written documents:
(i) was known to the Receiving Party or was in the
public domain prior to the time that such Confidential
information was disclosed to the Receiving Party by any other
Party (such Party being the "Disclosing Party") or any
affiliate or Representative thereof;
(ii) is or has become generally known to the trade or
public without breach of this Agreement or any Ancillary
Agreement, through no fault of the Receiving Party or any of
its affiliates or Representatives;
(iii) has been made public by the Disclosing Party or
any affiliate or Representative thereof;
(iv) has become available to the Receiving Party on a
non-confidential basis from a third party who has not received
the information directly or indirectly from the Disclosing
Party or any affiliates or Representatives thereof under an
obligation of confidentiality;
(v) was developed by the Receiving Party or any of
its affiliates independently and not as a result of the
disclosure of any Confidential Information hereunder; or
(vi) based on the Receiving Party's good faith
judgment with the advise of counsel, is required to be
disclosed under complusion of law pursuant to oral questions,
interrogatories, subpoena, civil investigative demands or
similar process.
Whenever the Receiving Party becomes aware of any state of facts which
would or might result in disclosure of Confidential Information
pursuant to clause (vi) above, it shall, if possible, promptly notify
the Disclosing Party prior to any such disclosure so that the
Disclosing Party may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Agreement.
In any event, if the Receiving Party is unable to promptly notify the
Disclosing Party or if such protective order or other remedy is not
obtained, or if the Disclosing Party waives compliance with the
provisions of this Agreement, the Receiving Party will furnish only
that portion of the information which it is advised by counsel is
legally required and will exercise reasonable efforts to obtain
assurance that confidential treatment will be accorded the Confidential
Information.
18
(d) Survival of Obligations. The obligations set forth in this
Section shall survive the expiration, termination or assignment of this
Agreement or any Ancillary Agreement.
5.2 Consent to Rights and Remedies Upon Breach. Each Party agrees that
money damages will not be adequate to compensate the other Party for any
violation by such Party of any provision of Section 5.1 hereof , and each Party
hereby agrees that in addition to any legal or other rights that may be
available to the other Parties in the event of such breach, equitable relief may
be sought to enforce such covenants in any court of competent jurisdiction,
including entry of a preliminary injunction, it being acknowledged and agreed
that any such breach or threatened breach will cause irreparable injury to such
other Parties and that money damages will not provide an adequate remedy to such
other Parties.
5.3 Publicity. Neither Party, without the prior written consent of the
other Party, shall issue any press release or make any other public announcement
or furnish any statement to any third party concerning the terms and conditions
of this Agreement or any Ancillary Agreement and the transactions contemplated
hereby and thereby except for (i) disclosures made in compliance with Section
5.1 hereof, (ii) disclosures made on a confidential basis to attorneys,
consultants and accountants retained to represent such Party, or to BMO or the
attorneys, consultants and accountants retained to represent BMO, in connection
with the transactions contemplated hereby or thereby, and (iii) occasional,
brief comments by the respective officers of the Parties consistent with the
press release issued jointly by the Parties on March 29, 2000, and such other
guidelines for public statements as may be mutually agreed by the Parties in
connection with routine interviews with analysts or members of the financial
press. In addition, either Party, after consultation with counsel, in its own
right may make such further announcements and disclosure, if any, as may be
required by applicable law, in which case the Party making the announcement or
disclosure will use its best efforts to give advance notice to, and discuss such
announcement or disclosure, with the other. Once any information is publicly
disclosed in accordance with this Section, it shall no longer be considered
Confidential Information.
5.4 First and Second Assignments. RELM hereby acknowledges and consents
to the First and Second Assignments.
ARTICLE 6
TRANSITION
6.1 Transition Plan. Attached hereto as Exhibit A is a Transition Plan
for the movement of RELMCI employees, furniture and equipment from Facility B to
Facility A, and for the movement of JMEASI's employees, furniture and equipment
from Facility A to Facility B (the "Transition"). JMEASI and RELMCI shall move
all of their personal property out of their respective facilities during the
Transition, unless expressly agreed otherwise by JMEASI and RELMCI, and except
for the items listed in the RELM Xxxx of Sale and the JMEASI Xxxx of Sale. In
the interests of clarity, Exhibit A further lists certain items that will be
moved and thus kept by JMEASI and RELMCI, respectively. The treatment of an item
in Exhibit A shall be
19
conclusive with respect to the Parties' rights to such item. JMEASI and RELMCI
shall cooperate closely and shall use their best efforts to ensure that the
Transition is performed in an orderly manner according to the Transition Plan,
with the minimum amount of disruption to their operations during the Transition.
If JMEASI or RELMCI becomes aware that a particular event or set of
circumstances may delay one or more steps of the Transition Plan, it shall
immediately inform the other and consult with the other to minimize the overall
delay to the Transition Plan and any additional disruption to JMEASI's and
RELMCI's operations. JMEASI and RELMCI shall amend the Transition Plan in
writing to reflect any agreement between them with respect to accommodating and
minimizing any such delay.
6.2 Use of Facilities and Equipment. During the Transition, RELM shall
have such rights of ingress, egress, possession and use of Facility B and the
equipment listed in the RELM Xxxx of Sale, and JMEASI shall have such rights of
ingress, egress, possession and use of Facility A and the equipment listed in
the JMEASI Xxxx of Sale, as is necessary or desirable for each such Party to
continue its operations according to the Transition Plan. The rights granted
under this Section 6.2 shall terminate with the completion of the Transition
Plan, and in any event shall be terminated no later than ninety (90) days after
the date of this Agreement. If after the termination of the Transition Plan an
item of personal property is left by JMEASI or RELMCI in the respective facility
that it is leaving, then the entering Party may provide written notice of such
item to the leaving Party and, if the leaving Party has not removed the item
within ten (10) business days of such notice, the entering Party may at its
option keep the item or arrange for disposal of the item and xxxx the leaving
Party for the cost of such disposal.
6.3 Risk of Loss. As between the Parties, risk of loss with respect to
Facility B and the equipment listed on the RELM Xxxx of Sale shall pass to HII
and JMEASI, and risk of loss with respect to Facility A and the equipment listed
on the JMEASI Xxxx of Sale shall pass to RELM, as of the Closing, provided that
RELM, HII and JMEASI shall care for such respective facilities and equipment on
the same basis as it cared for such facilities and equipment prior to the
Closing until the termination of its rights pursuant to Section 6.2.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification. The Parties shall indemnify each other as set
forth below:
(a) RELM shall indemnify and hold harmless JMEASI and HII and
each of their directors, officers, employees and affiliates from any
and all losses (i) arising out of, based upon or resulting from any
inaccuracy as of the Closing of any representation or warranty, or
breach of any covenant or agreement, of RELM which is contained in this
Agreement or any Ancillary Agreement to which RELM is a party or (ii)
relating to Facility B, the Employees, or the equipment listed on the
RELM Xxxx of Sale, to the extent such losses arise out of, are based
upon or result from any act, omission, event or
20
condition occurring or existing prior to the Closing or during the
Transition (including, without limitation, any environmental
liabilities).
(b) JMEASI and HII shall indemnify and hold harmless RELM and
each of its directors, officers, employees and affiliates from any and
all losses (i) arising out of, based upon or resulting from any
inaccuracy as of the Closing of any representation or warranty, or
breach of any covenant or agreement, of JMEASI or HII which is
contained in this Agreement or any Ancillary Agreement to which JMEASI
or HII is a party or (ii) relating to the equipment listed in the
JMEASI Xxxx of Sale, to the extent such losses arise out of, are based
upon or result from any act, omission, event or condition occurring or
existing prior to the Closing or during the Transition.
(c) The Parties agree that, regardless of any investigation
made at any time by the Parties, (i) the representations and warranties
contained in Section 3.1(g) of this Agreement and Paragraph 29(e) of
the Sublease, shall survive the Closing and shall terminate, and be of
no further force and effect, and no claims with respect thereto may be
made by any Party, after the seventh anniversary of the Closing, and
(ii) all other representations and warranties contained in this
Agreement and the obligations contained in Paragraph 12(b)(i) of the
Sublease, shall survive the Closing and shall terminate, and be of no
further force and effect, and no claims with respect thereto may be
made by any Party, after the first anniversary of the Closing.
7.2 Indemnification Procedures.
(a) General. The provisions of Sections 7.2 - 7.5 hereof shall
govern the procedures to be followed for any indemnification claim
between any two of the Parties arising as a result of an
indemnification contained in this Agreement or any Ancillary Agreement.
Promptly after receipt by any Party of written notice of the
commencement (or threatened commencement) of any civil, criminal,
administrative or investigative claim, action or proceeding involving
this Agreement or any Ancillary Agreement, or any matter contemplated
hereby or thereby, such Party shall notify the other Party or Parties
in writing; provided, however, that no failure to so notify any Party
shall relieve it of its indemnity obligations hereunder except to the
extent that such failure substantially prejudices the rights of such
Party hereunder. Except as provided in paragraph (b) (i) below, the
Indemnifying Party shall be entitled to have sole control over the
defense and/or settlement of such claim, provided that, within 30 days
of receipt of such written notice, the Indemnifying Party acknowledges
responsibility therefor and notifies the Indemnified Party in writing
of its election to so assume full control; provided, however, that:
(i) the Indemnified Party shall be entitled to
participate in the defense of such claim and to employ counsel
at its own expense to assist in the handling of such claim;
(ii) the Indemnifying Party shall obtain the prior
written approval of the Indemnified Party (not to be
unreasonably withheld) before entering into any
21
settlement of such claim or ceasing to defend against such
claim if, pursuant to or as a result of such settlement or
cessation, injunctive or other relief would be imposed against
the Indemnified Party; and
(iii) the Indemnifying Party shall not consent to the
entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by
each claimant or plaintiff to each Indemnified Party and its
directors, officers, employees and affiliates of a release
from all liability in respect of such claim.
The Indemnified Party shall use reasonable efforts to obtain an
extension to the time period for filing an answer or other response to
such claim reasonably requested by the Indemnifying Party. After
written notice by the Indemnifying Party to the Indemnified Party of
its election to assume full control of the defense of any such claim,
(i) the Indemnifying Party shall not be liable to such Indemnified
Party for any further legal expenses incurred by such Indemnified Party
in connection with the defense thereof (other than reasonable costs of
investigation) and (ii) if, prior to such notice, the Indemnified Party
filed an answer or other response by reason of the inability to obtain
an extension referred to in the preceding sentience, such action shall
not affect the Indemnifying Party's obligations hereunder; provided,
however, that the Indemnifying Party shall have a reasonable
opportunity to review such answer or other response prior to the filing
thereof. If the Indemnifying Party does not assume sole control over
the defense of such claim as provided in this paragraph (a), the
Indemnifying Party may participate in such defense at its own expense
and the Indemnified Party shall have the right to defend and/or settle
the claim in such manner as it may deem appropriate at the cost and
expense of the Indemnifying Party, and the Indemnifying Party shall
promptly reimburse the Indemnified Party therefor in accordance with
this Article. In the event that any award or other judgment rendered in
any action, claim or proceeding is appealed by any Party or by any
third party, the party which controlled such action, suit or proceeding
shall be entitled to control the appeal, and the Parties shall
cooperate with each other in connection therewith. The reimbursement of
fees, costs and expenses required by this Article shall be made by
periodic payments during the course of the investigation or defense, as
and when bills are received or expenses incurred.
7.3 Receipt of Information, Etc. The obligations of the Parties under
this Article 7 shall not in any way be affected by any investigation by or on
behalf of any party or any of its affiliates or by any information which any
Party or any of its affiliates may have obtained with respect thereto.
7.4 Tax Effects. All indemnification payments hereunder shall be made
on a net after-tax basis if such payment, or the losses to which such payment
relates, has a tax effect on the Indemnified Party.
7.5 Subrogation. In the event that any Party shall be obligated to
indemnify another Party or its directors, officers, employees or affiliates
pursuant to this Agreement, the Indemnifying Party shall, upon payment of such
indemnity in full, be subrogated to all rights of
22
the Indemnified Party and its directors, officers, employees and affiliates with
respect to the claims to which such indemnification relates.
ARTICLE 8
DISPUTE RESOLUTION/ARBITRATION
8.l Good Faith Settlement; Arbitration. With respect to a dispute
solely between two or more of the Parties, each of the Parties agrees to use
reasonable efforts to resolve amicably any such dispute which arises under this
Agreement or any Ancillary Agreement and will not take any action inconsistent
therewith. If such dispute cannot be resolved amicably, then the dispute shall
be submitted to binding and final arbitration in accordance with the rules of
the American Arbitration Association, as in effect from time-to-time, and this
Article 8. In any arbitration proceeding, there shall be three arbitrators, one
selected by RELM, one selected by HII and one selected by the other two
arbitrators. In the event that the two arbitrators do not select a third
arbitrator within ten (10) business days after the appointment of the second
arbitrator, the third arbitrator shall be selected and appointed by the American
Arbitration Association. The arbitrators shall have full power to resolve the
dispute for which they are appointed; provided, however, that the arbitrators
shall not have the power to expand, amend, modify or otherwise change any
provision of this Agreement or any Ancillary Agreement. The arbitration
proceedings shall be held in Miami, Florida. The decision of the arbitrators
shall be final and binding upon each of the Parties with respect to the matters
submitted to such arbitrators and judgment upon the decision may be entered in,
and enforced by, any court of competent jurisdiction.
8.2 Absence of Material Interest or Relationship. No person may serve
as an arbitrator pursuant to this Article 8 if such person has a material
interest or relationship (through employment, stock ownership, business dealings
or otherwise) in any Party or any of their respective affiliates, directors,
officers or employees.
8.3 Confidentiality. The arbitration shall be confidential and the
arbitrators may issue appropriate protective orders to safeguard the
Confidential Information of any Party. Except as required by law, none of the
parties shall make (or request any arbitrator to make) any public announcement
with respect to the proceedings or decisions of any arbitrators without the
prior written consent of the other Party. The existence of any dispute submitted
to arbitration, and the decision of the arbitrators, shall be kept in strict
confidence by the Parties and the arbitrators, except as required in connection
with the enforcement of such decision or as otherwise required by applicable
law.
8.4 Exceptions to Arbitration Requirement. This Article 8 shall not
limit the rights of the Parties to seek in any court of competent jurisdiction
equitable relief in the event of any violation of the provisions of Section 5.1
and/or such interim relief as may be needed to maintain the status quo, to
prevent irreversible harm or otherwise protect the subject matter of an
arbitration until the arbitrators shall have been appointed and shall have had
an opportunity to
23
act. Any such interim relief so ordered shall not determine or prejudge the
substantive issues to be decided by arbitration.
ARTICLE 9
MISCELLANEOUS
9.1 Assignment. Except for the Second Assignment, no Party shall assign
this Agreement or any Ancillary Agreement to which at least one of RELM and at
least one of JMEASI and HII are parties, including the Manufacturing Agreement
(collectively, the "Parties' Agreements") or any of its rights or obligations
thereunder without the prior written consent of the other Party, and any
purported assignment in violation of the foregoing shall be void.
Notwithstanding the provisions of this Section 9.1, any Party may assign the
Parties' Agreement in connection with the sale of all or substantially all of
its assets to which this Agreement pertains. In any merger with, acquisition by,
acquisition of, or any other business combination between one of RELM or JMEASI
on the one hand, and a third party on the other hand, during the term of the
Manufacturing Agreement, RELM and JMEASI shall use their best efforts to ensure
that the Parties' Agreements remain in full force and effect with the
appropriate entity that survives such combination, and the Parties' Agreements
shall be enforceable against any permitted successor or assign of RELM or JMEASI
including any such entity.
9.2 Entire Agreement. This Agreement and the Ancillary Agreements set
forth the entire agreement and understanding between the Parties as to the
subject matter hereof and merge all prior discussions, negotiations and
agreements between the Parties, and none of the Parties shall be bound by any
conditions, definitions, warranties, understandings or representations with
respect to such subject matter other than as expressly provided herein or
therein or as fully set forth subsequent to the date hereof in a written
instrument signed by a proper and duly authorized officer or representative of
the Party to be bound thereby.
9.3 Binding Effect. This Agreement and the Ancillary Agreements shall
inure to the benefit of and be binding upon each of the Parties upon such
Party's execution and delivery hereof or thereof, and upon its successors and
permitted assigns.
9.4 Force Majeure. No Party shall be responsible or liable to the other
Party for any failure to perform or delay in performing any of its covenants or
obligations under this Agreement or any Ancillary Agreement (other than
obligations regarding payment of money) if such failure or delay results from
events or circumstances reasonably beyond the control of such Party, including,
without limitation, war (whether or not declared) or other national emergency;
riot; fire, explosion, flood or other act of God; strike, lockout or other labor
difficulty; epidemic; any injunction, order, decree, law or regulation of any
court or governmental authority; or inability to obtain electricity or other
fuel, provided such inability is beyond the control of such Party (collectively,
"Events of Force Majeure"); provided, however, that the affected Party shall
exert all reasonable efforts to eliminate, cure or overcome any such Event of
Force Majeure and to resume performance of its covenants with all possible
speed; and provided, further that nothing contained herein shall require any
party to settle on terms unsatisfactory to such Party any strike, lockout or
other labor difficulty, any investigation or proceeding by any governmental
24
authority or any litigation by any third party. Notwithstanding the foregoing,
to the extent that an Event of Force Majeure continues for a period in excess of
six (6) months, the Parties agree to negotiate in good faith either (i) to
resolve the Event of Force Majeure, if possible, (ii) to extend by mutual
agreement the time period to resolve, eliminate, cure or overcome such Event of
Force Majeure or (iii) to terminate the applicable agreement(s).
9.5 Notices. Any notice, request or other communication under or with
respect to any Parties' Agreement shall be in writing and shall be sent by
registered or certified mail, return receipt requested, postage prepaid, or
delivered by hand or by nationally recognized air courier service, or sent by
facsimile transmission directed to the address or facsimile transmission number
of such Party set forth below:
If to JMEASI or HII:
Honeywell International Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Deputy General Counsel, Corporate and Finance
Fax No. 000-000-0000
with a copy to:
Xxxxxxx Xxxxxxx Electronic Assembly Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxxxxxx 00000
Attention: General Manager
Fax No. 000-000-0000
If to RELM:
RELM Wireless Corporation
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxxxxxx 00000
Attention: Vice President and Chief Financial Officer
Fax No. 000-000-0000
Any such notice shall become effective when received by the addressee,
provided that any notice or communication that is received other than during
regular business hours of the recipient shall be deemed to have been given at
the opening of business on the next business day of the recipient. Any of the
addresses set forth above may be changed from time-to-time by written notice
from the Party requesting the change. Notice not given in writing shall be
effective only if acknowledged in writing by a duly authorized representative of
the Party to whom it was given.
9.6 Waiver; Modification.
25
(a) Waiver. Any term or condition of the Parties' Agreements
may be waived or qualified at any time by any Party entitled to the
benefit hereof or thereof by a written instrument executed by such
Party. No omission, delay or failure on the part of any party is
exercising any rights hereunder or thereunder, and no partial or single
exercise hereof or thereof, will constitute a waiver of such rights or
of any other rights hereunder or thereunder.
(b) Modifications. The Parties' Agreements may be amended,
modified or supplemented only by a written instrument duly executed by
each Party thereto, which instrument shall specifically indicate that
it is the desire of such Parties to amend, modify or supplement such
Agreement, as the case may be.
9.7 Governing Law. The Parties' Agreements shall be governed by and
construed in accordance with the laws of the State of Florida, without giving
effect to its conflict of law rules.
9.8 Severability. If any provision of any Parties' Agreement is
ultimately held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof or thereof shall not in
any way be affected or impaired thereby, unless the absence of the invalidated
provision materially adversely affects the substantive rights of a Party. To the
extent permitted by applicable law, each Party waives any provision of law which
renders any provision hereof or thereof invalid, illegal or unenforceable in any
respect. In the event that any provision of any Parties' Agreement shall be held
to be invalid, illegal or unenforceable, the Parties shall in such an instance
use their best efforts to replace the invalidated provision by a valid, legal
and enforceable provision which, insofar as practical, implements the purposes
hereof or thereof.
9.9 No Third Party Beneficiaries. Except as otherwise provided
expressly herein or therein, (i) nothing in any Parties' Agreement is intended
to confer on any person or entity other than the Parties or their respective
successors or permitted assigns, any rights or obligations under or by reason of
the Parties' Agreement, and (ii) there are no third party beneficiaries to any
such agreements.
9.10 Further Assurances. Each Party shall give such further assurances
and perform such further acts as are or may become necessary or appropriate to
effectuate and carry out the provisions of this Agreement and the Ancillary
Agreements.
9.11 Expenses. Except as otherwise expressly provided herein or
therein, each Party shall bear the costs and expenses incurred by it in
negotiating, entering into and performing any of its obligations under this
Agreement or any Ancillary Agreement.
9.12 Execution. This Agreement and the Ancillary Agreements may be
executed in several counterparts, each of which shall be deemed to be an
original.
9.13 Headings. The Article and Section headings in this Agreement and
the Ancillary Agreements are solely for the convenience and reference of the
Parties hereto and thereto and are
26
not intended to be descriptive of the entire contents of, or to affect, any of
the terms or provisions hereof or thereof.
9.14 Relationship of Parties. Nothing herein or in any of the Ancillary
Agreements shall be deemed to create a joint venture, or any employer-employee
relationship or principal-agency relationship, between the Parties. Nothing
under this Agreement or any Ancillary Agreement shall be deemed to authorize any
Party to act for, represent, or bind another or any affiliate thereof.
9.15 Consent to Jurisdiction; Receipt of Process. Each Party hereby
consents to the jurisdiction of, and confers non-exclusive jurisdiction upon,
any federal or state court or tribunal located in the State of Florida over any
action, suit or proceeding arising out of or relating to any Parties' Agreement.
Each Party hereby irrevocably waives, and agrees not to assert as a defense in
any such action, suit or proceeding, any objection which it may now or hereafter
have to venue of any such action, suit or proceeding brought in any federal or
state court or tribunal located in the State of Florida and hereby irrevocably
waives any claim that any such action, suit or proceeding brought in any such
court or tribunal has been brought in an inconvenient forum. Each Party hereby
appoints the Secretary of State of the State of Florida as its agent for receipt
of service of process arising out of or relating to any Parties' Agreement in
any such action, suit or proceeding, and shall at all times maintain such agent
for service of process in the State of Florida so long as any part of any
Parties' Agreement is in full force and effect. Each Party hereby agrees that
service upon such agent in accordance with the laws of the State of Florida
shall be deemed in every respect personal service upon such Party.
9.16 Schedules and Exhibits. All schedules and exhibits are an integral
part of this Agreement and are incorporated in this Agreement by this reference.
[The remainder of this page has been left intentionally blank.]
27
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the date first above written.
XXXXXXX XXXXXXX ELECTRONIC
ASSEMBLY SERVICES, INC.
By:___________________________
Name:
Title
HONEYWELL INTERNATIONAL INC.
By:___________________________
Name:
Title:
RELM WIRELESS CORPORATION
By:___________________________
Name:
Title:
RELM COMMUNICATIONS OF
FLORIDA, INC.
By:___________________________
Name:
Title:
RELM WIRELESS CORPORATION
By:___________________________
Name:
Title:
28
SCHEDULE 3.1(g)
ENVIRONMENTAL MATTERS
The matters referenced on the attached Phase I Environmental Site
Assessment dated January 1, 1997 and the attached Letter dated
February 6, 1997, referencing Additional Assessment Activities.
29
SCHEDULE 3.1(i)
EMPLOYEE MATTERS
30
EXHIBIT A
TRANSITION PLAN
31
