UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2 )(1)
IPC Information Systems, Inc.
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(NAME OF ISSUER)
Common Stock, par value $0.01 per share
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(TITLE OF CLASS OF SECURITIES)
44980K107
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(CUSIP NUMBER)
Daniel Utevsky, Esq., General Counsel and Secretary
IPC Information Systems, Inc.
Wall Street Plaza, 88 Pine Street,
New York, New York 10005 (212) 825-9060
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS)
December 18, 1997
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(continued on following pages)
(Page 1 of 8 Pages)
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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<TABLE>
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SCHEDULE 13D
<S> <C> <C>
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CUSIP No. 44980K107 Page 2 of 8 Pages
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1. NAME OF REPORTING PERSON..............................................................Peter J. Kleinknecht
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON..............................................###-##-####
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
PF, 00
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) / /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER 7. SOLE VOTING POWER
OF 23,107
SHARES -----------------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED 2,852,348
BY -----------------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------------------------
WITH: 10. SHARED DISPOSITIVE POWER
2,852,348
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,875,455
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/X/
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.8%
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14. TYPE OF REPORTING PERSON*
IN
</TABLE>
(Page 2 of 8 Pages)
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SCHEDULE 13D
AMENDMENT NO. 2 FOR PETER J. KLEINKNECHT
This Amendment No. 2 to Schedule 13D relating to the common stock, par
value $.01 per share of IPC Information Systems, Inc. (the "Company") ("Common
Stock") is being filed by Peter J. Kleinknecht pursuant to Section 13(d)(2) of
the Securities Exchange Act of 1934 to amend Schedule 13D originally filed
October 13, 1994, as amended by Amendment No. 1 filed October 20, 1995. Unless
otherwise indicated, all capitalized terms used herein but not defined herein
shall have the same meaning as set forth on Schedule 13D, as amended.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 is hereby amended by deleting the first paragraph and replacing
it as follows:
This Schedule 13D is filed by Peter J. Kleinknecht (the "Reporting
Person"), the Vice Chairman and Director (and formerly President) of IPC
Information Systems, Inc., 88 Pine Street, Wall Street Plaza, New York, New York
10005.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER COMPENSATION
Item 3 is hereby amended by deleting the last sentence from the first
paragraph and replacing it as follows:
The purchase money note of $4,548,000 guaranteed by the Reporting
Person and Richard P. Kleinknecht, his brother, in connection with the
acquisition of all of the shares of the Issuer in October 1991 by the Reporting
Person, together with Richard P. Kleinknecht, their respective children and
other individuals has been satisfied in full.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is hereby amended by deleting the second paragraph and replacing
it as follows:
On December 18, 1997, the Reporting Person, the PJK Trust (as defined
below), the MK Trust (as defined below), the Reporting Person's three children,
Sabrina Kleinknecht, Gavin Kleinknecht and Keir Kleinknecht, and the other
stockholders named therein entered into a Stockholders Agreement (the
"Stockholders Agreement") with Arizona Acquisition Corp., a Delaware corporation
("AAC"), pursuant to which each such stockholder agreed to vote its shares of
Common Stock, and to grant AAC an irrevocable proxy to vote such shares of
Common Stock, in favor of a proposed merger between AAC and the Company (the
"Merger") and against certain actions which can reasonably be expected to impede
or adversely affect the Merger. The Stockholders Agreement also restricts the
ability of such stockholders to dispose of their shares of Common Stock other
than in accordance with the provisions of the Stockholders Agreement. The
Stockholders Agreement and the associated irrevocable proxies will automatically
terminate if the Merger is not consummated or the agreement with respect to the
Merger is terminated in accordance with its terms.
(Page 3 of 8 Pages)
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 is hereby amended by deleting the second, third and fourth
paragraphs and replacing them as follows:
The Reporting Person is currently the beneficial owner of 2,875,455
shares of Common Stock, representing 26.8% of the shares of Common Stock based
on 10,715,119 shares of Common Stock outstanding on December 17, 1997. This
includes (a) 2,240,999 shares owned directly by the Reporting Person, (b)
155,637 shares in the PJK Trust, (c) 155,637 shares in the MK Trust, (d) 300,075
shares held as custodian for Gavin Kleinknecht, the Reporting Person's minor
son, and (e) 23,107 shares pursuant to an irrevocable proxy given by Jeffrey M.
Gill, the former chief operating officer of the Company.
The Reporting Person disclaims beneficial ownership of 600,150 shares
owned by his major children, Sabrina Kleinknecht and Keir Kleinknecht. These
shares are excluded from the shares reported above as beneficially owned by the
Reporting Person.
The Reporting Person has the sole power (a) to vote or to direct the
vote with respect to 23,107 shares of Common Stock and (b) to dispose or to
direct the disposition with respect to 0 shares of Common Stock. The Reporting
Person shares the power to vote or to direct the vote, or to dispose or to
direct the disposition, of 2,852,348 shares of Common Stock.
Item 5 is hereby further amended by adding the following language after
the seventh paragraph:
The Reporting Person, in his capacity as grantor pursuant to an
Agreement of Trust dated August 5, 1996 (the "PJK Trust Agreement"), contributed
300,000 shares of Common Stock owned by Reporting Person, in an amount equal to
2.8% of the outstanding shares of Common Stock, to a grantor retained annuity
trust created by the PJK Trust Agreement (the "PJK Trust"). Pursuant to the
terms of the PJK Trust Agreement, 144,363 shares were distributed to the
Reporting Person as of August 5, 1997. The Reporting Person has the power to
reacquire the trust principal at his option, as well as the power to vote and to
dispose of the 155,637 shares of Common Stock currently remaining in the PJK
Trust, subject to the terms of the Stockholders Agreement described below.
The Reporting Person gave 300,000 shares of Common Stock to his wife,
Maureen, as a gift on or about October 16, 1996. She contributed such 300,000
shares of Common Stock, in an amount equal to 2.8% of the outstanding shares of
Common Stock, to a grantor retained annuity trust created by an Agreement of
Trust dated August 5, 1996 (the "MK Trust Agreement") (the "MK Trust"). Pursuant
to the terms of the MK Trust Agreement, 144,363 shares were distributed to
Maureen Kleinknecht as of August 5, 1997; Maureen Kleinknecht gave the 144,363
shares to the Reporting Person as a gift on December 18, 1997. The Reporting
Person's wife has the power to reacquire the trust principal at her option, as
well as the power to vote and to dispose of the 155,637 shares of Common Stock
currently remaining in the MK Trust, subject to the terms of the Stockholders
Agreement.
As custodian for his nephew, Mark Kleinknecht, the Reporting Person
held 298,075 shares of Common Stock. On July 31, 1996, the custodianship of such
shares was terminated and such shares were transferred to a trust established
pursuant to a trust agreement dated November 22, 1995 for the benefit of Mark
Kleinknecht. The Reporting Person no longer has the power to vote or dispose
such shares. Coincident with such transfer, Richard P. Kleinknecht transferred
to the Reporting Person, as custodian for the Reporting Person's minor son,
Gavin Kleinknecht, 298,075 shares of Common Stock which Richard P. Kleinknecht
had been holding as custodian for his nephew.
(Page 4 of 8 Pages)
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The Reporting Person holds an irrevocable proxy from Jeffrey M. Gill,
the former chief operating officer of the Company, with respect to one-half of
all shares of Common Stock acquired by Mr. Gill pursuant to the terms of his
employment agreement with the Company. This proxy currently applies to one-half
of the 30,000 shares acquired by Mr. Gill upon consummation of the Company's
initial public offering on October 3, 1994 and one half of 31,857 shares
acquired by Mr. Gill in each of 1995 and 1996 under his employment agreement.
Mr. Gill has sold 47,500 shares and, upon information and belief, currently owns
46,214 shares, one-half of which are subject to the terms of the irrevocable
proxy. Mr. Gill ceased to be an employee of the Company on January 22, 1997.
Nevertheless, under his employment agreement, Mr. Gill was entitled to acquire
an additional 31,857 shares on September 30, 1997. Upon satisfaction of certain
loans and advances made by the Company to Mr. Gill, the Company intends to issue
the 31,857 shares to Mr. Gill. If and when they are issued to Mr. Gill, the
irrevocable proxy also would permit the Reporting Person to vote one-half of
such shares. The proxy, which permits the Reporting Person to vote one-half of
the 46,214 shares Mr. Gill owns and one-half of the 31,857 shares which may be
issued to him in the future, will continue until January 16, 1998.
On December 18, 1997, the PJK Trust, the MK Trust, the Reporting
Person's three children, Sabrina Kleinknecht, Gavin Kleinknecht and Keir
Kleinknecht, and the other stockholders named therein entered into the
Stockholders Agreement with AAC pursuant to which each such stockholder agreed
to vote its shares of Common Stock, and to grant AAC irrevocable proxies to vote
such shares of Common Stock, in favor of the Merger and against certain actions
which can reasonably be expected to impede or adversely affect the Merger. The
Stockholders Agreement also restricts the ability of the such stockholders to
dispose of their shares of Common Stock other than in accordance with the
provisions of the Stockholders Agreement. The Stockholders Agreement and the
associated irrevocable proxies will automatically terminate if the Merger is not
consummated or the agreement with respect to the Merger is terminated in
accordance with its terms.
AAC is a Delaware corporation with its principal place of business at:
c/o Cable Systems Holding, LLC, 505 North 51st Avenue, Phoenix, Arizona
85044-2701.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Item 6 is hereby amended by deleting the last two sentences of the
second paragraph and replacing them with the following language:
The 425,221 shares of Common Stock, in an amount equal to 4.0% of the
outstanding shares of Common Stock on December 17, 1997, pledged to Chase by the
Reporting Person (along with a like amount of shares pledged by Richard P.
Kleinknecht) in connection with the Refinancing effective on October 6, 1995
continue to be pledged to secure the debt of the Reporting Person and Richard P.
Kleinknecht and certain companies controlled by them. The Reporting Person
continues to fulfill one-half of this security interest obligation.
Upon the sale of certain property owned by the Reporting Person and
Richard P. Kleinknecht on or about October 1, 1997 and after the satisfaction of
a mortgage thereon (in an original principal amount of $2,000,000), the pledge
of 65,000 shares of Common Stock by the Reporting Person (along with a like
amount of shares pledged by Richard P. Kleinknecht) to Fleet Bank, as successor
to National Westminister Bank NJ, was released.
Item 6 is further amended by deleting the last three sentences of the
third paragraph and the entire fourth paragraph and replacing them with the
following language:
(Page 5 of 8 Pages)
<PAGE>
This indebtedness consists of (i) a term loan in the amount of
$2,000,000 due Chase and secured by a first and second mortgage of which
approximately $1,400,000 was outstanding as of December 17, 1997; and (ii) a
revolving credit facility in the amount of $2,500,000 from Chase of which
approximately $1,430,000 was borrowed as of December 17, 1997. The Borrowers are
indebted to Chase in the aggregate of approximately $2,830,000 which may
increase to a maximum of $3,900,000.
The term loan from Chase is payable in installments at a rate of 1.5%
over Chase's prime rate. The final installment of the term loan is due in
October 1998. The revolving credit facility from Chase is at a rate of 1.5% over
Chase's prime rate. Each of the above described obligations is current as of
December 17, 1997.
Pursuant to a pledge agreement dated April 16, 1996 (the "Pledge
Agreement') made by the Reporting Person and Smith Barney Inc., 425,000 shares
of Common Stock of the Issuer owned by Reporting Person, in an amount equal to
approximately 4.0% of the outstanding shares of Common Stock, are subject to a
first priority interest given to Smith Barney Inc. to secure a $4,000,000 debt
of the Reporting Person.
Item 6 is hereby further amended by adding the following language after
the eighth paragraph:
Pursuant to the Stockholders Agreement, the Reporting Person, the PJK
Trust, the MK Trust, the Reporting Person's three children, Sabrina Kleinknecht,
Gavin Kleinknecht and Keir Kleinknecht and the other stockholders named therein
each agreed to vote its shares of Common Stock and to grant AAC irrevocable
proxies to vote such shares of Common Stock, in favor of the Merger and against
certain actions which can reasonably be expected to impede or adversely affect
the Merger.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following documents are filed as Exhibits to this Schedule 13D:
EXHIBIT DESCRIPTION
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A Stockholders Agreement, dated as of
December 18, 1997, among Arizona Acquisition
Corp., Peter J. Kleinknecht and other
stockholders named therein.
B Pledge Agreement dated April 16, 1996 with
Smith Barney Inc.
(Page 6 of 8 Pages)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Date: December 26, 1997
/s/ Peter J. Kleinknecht
-------------------------------
Peter J. Kleinknecht
(Page 7 of 8 Pages)
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EXHIBITS
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EXHIBIT DESCRIPTION
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A Stockholders Agreement, dated as of
December 18, 1997, among Arizona Acquisition
Corp., Peter J. Kleinknecht and other
stockholders named therein.
B Pledge Agreement dated April 16, 1996 with
Smith Barney Inc.
(Page 8 of 8 Pages)
<PAGE>
Exhibit A
EXECUTION COPY
STOCKHOLDERS AGREEMENT
AGREEMENT, dated as of December 18, 1997 by and between Arizona
Acquisition Corp., a Delaware corporation ("Merger Subsidiary"), and the other
parties signatory hereto (each, a "Stockholder"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Agreement and Plan of
Merger, dated the date hereof (as such agreement may be amended from time to
time, the "Merger Agreement").
WHEREAS, concurrently herewith, Merger Subsidiary and IPC Information
Systems, Inc., a Delaware corporation (the "Company"), are entering into a
Merger Agreement, pursuant to which Merger Subsidiary will be merged with and
into the Company (the "Merger"), whereby each share of common stock, par value
$.01 per share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time will be converted into either (A) the
right to retain at the election of the holder thereof and subject to the terms
of the Merger Agreement, common stock, par value $.01 per share, of the Company
or (B) the right to receive cash, other than (i) shares of Company Common Stock
owned, directly or indirectly, by the Company or any Subsidiary of the Company
or by Merger Subsidiary and (ii) Dissenting Shares.
WHEREAS, as a condition to Merger Subsidiary's entering into the Merger
Agreement, Merger Subsidiary requires that each Stockholder enter into, and each
such Stockholder has agreed to enter into, this Agreement with Merger
Subsidiary.
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual agreements contained herein, the parties hereby
agree as follows:
Section 1. CERTAIN DEFINITIONS. The following terms, when used in this
Agreement, shall have the following meanings (such definitions to be equally
applicable to both singular and plural terms of the terms defined):
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, provided that no securityholder of the Company shall be deemed an
Affiliate of any other securityholder solely by reason of any investment in the
Company. For the purpose of this definition, the term "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of stock,
as a trustee or executor, by contract or credit arrangement or otherwise.
<PAGE>
"AMENDED AND RESTATED LABOR POOLING AGREEMENTS" has the meaning
ascribed thereto in Section 5(e) of this Agreement.
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
all other Persons with whom such Person would constitute a "group" as described
in Section 13(d)(3) of the Exchange Act.
"BUSINESS" means (i) the design, manufacture, sale, distribution and/or
maintenance of voice and/or data communications products, including, but not
limited to, turret or dealerboard systems used within the financial services,
energy, transportation or emergency services industries, Private Branch Exchange
(PBX) and/or key telephone systems, voice recording systems and video
teleconferencing products; (ii) the furnishing of communications cabling or
voice or data communications products, including the design and/or installation
of local and wide area networks or the provision of maintenance services for
said communications cabling or products; (iii) the design, furnishing,
installation and/or maintenance of low voltage cabling systems (such as would
not require an electrical license for the installation thereof); and (iv) the
provision of long distance telecommunications network services.
"COMPANY" has the meaning ascribed thereto in the recitals of this
Agreement.
"COMPANY COMMON STOCK" has the meaning ascribed thereto in the recitals
of this Agreement.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") means the possession, directly or indirectly or as a trustee or
executor, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of stock, as a trustee or
executor, by contract or credit arrangement or otherwise.
"EXISTING SHARES" has the meaning ascribed thereto in Section 2(a)(i).
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"KEC-NY" means Kleinknecht Electric Company, Inc., a New York
corporation.
"KEC-NJ" means Kleinknecht Electric Company, Inc., a New Jersey
corporation.
"KLEINKNECHTS" means Richard Kleinknecht and Peter Kleinknecht.
"MERGER" has the meaning ascribed thereto in the recitals of this
Agreement.
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<PAGE>
"MERGER SUBSIDIARY" has the meaning ascribed thereto in the
introductory paragraph of this Agreement.
"PERSON" means an individual, corporation, partnership, limited
liability company, limited partnership, association, trust, unincorporated
organization or other entity or group (as defined in Section 13(d)(3) of the
Exchange Act).
"ROLLOVER STOCKHOLDER" means Richard Kleinknecht.
"SHARES" means the Existing Shares, together with any shares of Company
Common Stock acquired of record or beneficially by such Stockholder in any
capacity after the date hereof and prior to the termination hereof, whether upon
exercise of options, conversion of convertible securities, purchase, exchange or
otherwise; PROVIDED, HOWEVER, that in the event of a stock dividend or
distribution, or any change in the Company Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.
"STOCKHOLDER" has the meaning ascribed thereto in the introductory
paragraph to this Agreement.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"TERMINATION DATE" has the meaning ascribed thereto in Section 12 of
this Agreement.
"TRUSTEE" has the meaning ascribed thereto in Section 2(a)(i) of this
Agreement.
Section 2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each
Stockholder hereby, severally and not jointly, represents and warrants to Merger
Subsidiary as follows:
(a) (i) Such Stockholder is either (A) the record holder or
beneficial owner of the number of, or (B) trustee of a trust
that is the record holder or beneficial owner of, and whose
beneficiaries are the beneficial owners (such trustee, a
"Trustee"), shares of Company Common Stock as is set forth
opposite such Stockholder's
name on Schedule I hereto (the "Existing Shares").
(ii) On the date hereof, the Existing Shares set
forth opposite such Stockholder's name on Schedule I hereto
constitute all of the outstanding shares of Company Common
Stock owned of record or beneficially by such Stockholder.
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<PAGE>
Such Stockholder does not have record or beneficial ownership
of any Shares not set forth on Schedule I hereto.
(iii) Such Stockholder has sole power of disposition
with respect to all of the Existing Shares set forth opposite
such Stockholder's name on Schedule I and sole voting power
with respect to the matters set forth in Section 4 hereof and
sole power to demand dissenter's or appraisal rights, in each
case with respect to all of the Existing Shares set forth
opposite such Stockholder's name on Schedule I, with no
restrictions on such rights, subject to applicable federal
securities laws and the terms of this Agreement.
(iv) Such Stockholder will have sole power of
disposition with respect to Shares other than Existing Shares,
if any, which become beneficially owned by such Stockholder
and will have sole voting power with respect to the matters
set forth in Section 4 hereof and sole power to demand
dissenter's or appraisal rights, in each case with respect to
all Shares other than Existing Shares, if any, which become
beneficially owned by such Stockholder with no restrictions on
such rights, subject to applicable federal securities laws and
the terms of this Agreement.
(b) Such Stockholder has the legal capacity, power and
authority to enter into and perform all of such Stockholder's
obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Stockholder will not violate any
other agreement to which such Stockholder is a party or by which such
Stockholder is bound including, without limitation, any trust
agreement, voting agreement, stockholders agreement, voting trust,
partnership or other agreement. This Agreement has been duly and
validly executed and delivered by such Stockholder and constitutes a
valid and binding agreement of such Stockholder, enforceable against
such Stockholder in accordance with its terms, except as limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditor's rights generally, (b) general principles of
equity, whether such enforceability is considered in a proceeding in
equity or at law, and to the discretion of the court before which any
proceeding therefore may be brought, or (c) public policy
considerations or court decisions which may limit the rights of the
parties thereto for indemnification. All necessary consents of any
beneficiary of or holder of interest in any trust of which a
Stockholder is Trustee to the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been
obtained. If such Stockholder is married and such Stockholder's Shares
constitute community property, this Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such
person in accordance with its terms.
(c) Except for filings under the HSR Act, if applicable, (i)
no filing with, and no permit, authorization, consent or approval of,
any state or federal public body or
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<PAGE>
authority is necessary for the execution of this Agreement by such
Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby and (ii) neither the execution and
delivery of this Agreement by such Stockholder nor the consummation by
such Stockholder of the transactions contemplated hereby nor compliance
by such Stockholder with any of the provisions hereof shall (x)
conflict with or result in any breach of any applicable trust,
partnership agreement or other agreements or organizational documents
applicable to such Stockholder, (y) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or
other instrument or obligation of any kind to which such Stockholder is
a party or by which such Stockholder or any of such Stockholder's
properties or assets may be bound or (z) violate any order, writ,
injunction, decree, judgment, statute, rule or regulation applicable to
such Stockholder or any of such Stockholder's properties or assets.
(d) Except for the shares of Company Common Stock owned by the
Kleinknechts identified in Schedule II hereto (the "Pledged Shares"),
such Stockholder's Shares and the certificates representing such Shares
are now and at all times during the term hereof will be held by such
Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or
any other encumbrances whatsoever, except for any such encumbrances or
proxies arising hereunder.
(e) No broker, investment banker, financial adviser or other
person is entitled to any broker's, finder's, financial adviser's or
other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of
such Stockholder in his or her capacity as such.
(f) Such Stockholder understands and acknowledges that Merger
Subsidiary is entering into the Merger Agreement in reliance upon such
Stockholder's execution and delivery of this Agreement with Merger
Subsidiary.
Section 3. REPRESENTATIONS AND WARRANTIES OF MERGER SUBSIDIARY. Merger
Subsidiary hereby represents and warrants to each Stockholder as follows:
(a) Merger Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation.
(b) Merger Subsidiary has all necessary power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Merger
Subsidiary of this Agreement and the
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<PAGE>
consummation by Merger Subsidiary of the transactions contemplated
hereby have been duly and validly authorized and approved by all
required corporate action other than shareholder approval which shall
be effected prior to the Effective Time. This Agreement has been duly
executed and delivered by Merger Subsidiary, and (assuming due
authorization, execution and delivery by the Stockholders) constitutes
a valid and binding obligation of Merger Subsidiary, enforceable
against it in accordance with its terms, except as limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditor's rights generally, (b) general principles of
equity, whether such enforceability is considered in a proceeding in
equity or at law, and to the discretion of the court before which any
proceeding therefor may be brought, or (c) public policy considerations
or court decisions which may limit the rights of the parties thereto
for indemnification.
(c) Except for the filing of a pre-merger notification and
report form under the HSR Act, the execution and delivery of this
Agreement do not, and the consummation by Merger Subsidiary of the
transactions contemplated by this Agreement and compliance by Merger
Subsidiary with the provisions of this Agreement will not, conflict
with, or result in any breach or violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of or "put" right
with respect to any obligation or to loss of a material benefit under,
or result in the creation of any lien upon any of the properties or
assets of Merger Subsidiary under, (i) any charter or by-laws of Merger
Subsidiary, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to Merger Subsidiary or its properties
or assets or (iii) any judgment, order, decree, statute, law,
ordinance, rule, regulation or arbitration award applicable to Merger
Subsidiary or its properties or assets. No consent, approval, order or
authorization of, or registration, declaration or filing with, or
notice to, any state or federal public body or authority is required by
or with respect to Merger Subsidiary in connection with the execution
and delivery of this Agreement by Merger Subsidiary or the consummation
by Merger Subsidiary of any of the transactions contemplated by this
Agreement.
Section 4. AGREEMENT TO VOTE; PROXY
(a) Each Stockholder hereby, severally and not jointly, agrees
that, until the Termination Date (as defined in Section 12), at any
meeting of the Company Stockholders, however called, or in connection
with any written consent of the Company Stockholders, such Stockholder
shall vote (or cause to be voted) the Shares held of record or
beneficially by such Stockholder (i) in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the
approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and this Agreement and any actions
required in furtherance hereof and thereof; (ii) against any action or
agreement that would result in a breach of any covenant, representation
or warranty or any other
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<PAGE>
obligation or agreement of the Company under the Merger Agreement or
this Agreement; (iii) in favor of the incentive stock option plan
referred to in Section 5(l) of the Merger Agreement; and (iv) against
the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement or any such actions identified in
writing by Merger Subsidiary in advance): (A) any extraordinary
corporate transaction, including, without limitation, a merger,
consolidation or other business combination involving the Company or
its Subsidiaries; (B) a sale, lease or transfer of a material amount of
assets of the Company or its Subsidiaries or a reorganization,
recapitalization, dissolution or liquidation of the Company or its
Subsidiaries; (C) any change in the majority of the board of directors
of the Company; (D) any material change in the present capitalization
of the Company or any amendment of the Company's Certificate of
Incorporation or By-Laws; (E) any other material change in the
Company's corporate structure or business; or (F) any other action
which is intended, or could reasonably be expected, to impede,
interfere with, delay, postpone, discourage or materially adversely
affect the Merger or the transactions contemplated by the Merger
Agreement or this Agreement. Such Stockholder shall not enter into any
agreement or understanding with any person or entity to vote or give
instructions in any manner inconsistent with clauses (i), (ii) or (iii)
of the preceding sentence.
(b) EACH STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS, MERGER
SUBSIDIARY AND ANY DESIGNEE OF MERGER SUBSIDIARY, EACH OF THEM
INDIVIDUALLY, SUCH STOCKHOLDER'S IRREVOCABLE (UNTIL THE TERMINATION
DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO
VOTE THE SHARES AS SET FORTH IN SECTION 4.1 ABOVE. EACH STOCKHOLDER
INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE) AND
COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION AND EXECUTE
SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF
THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH
STOCKHOLDER WITH RESPECT TO SUCH STOCKHOLDER'S SHARES.
Section 5. CERTAIN COVENANTS OF STOCKHOLDERS. Except in accordance with
the terms of this Agreement, each Stockholder hereby severally covenants and
agrees as follows:
(a) Prior to the Termination Date, no Stockholder shall, in
its capacity as such, directly or indirectly (including through
advisors, agents or other intermediaries), solicit (including by way of
furnishing information) or respond to any inquiries or the making of
any proposal by any person or entity (other than Merger Subsidiary or
any Affiliate thereof) with respect to the Company that constitutes or
could reasonably be expected to lead to an Acquisition Proposal (as
defined in Section 5(j) of the Merger Agreement), provided, however,
that the foregoing shall not restrict a Stockholder who is also a
director of the Company from taking any actions in such Stockholder's
capacity as a
-7-
<PAGE>
director. If any Stockholder in its capacity as such receives any such
inquiry or proposal, then such Stockholder shall promptly inform Merger
Subsidiary of the material terms and conditions, if any, of such
inquiry or proposal and the identity of the person making it. Each
Stockholder, in its capacity as such, will immediately cease and cause
to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the
foregoing.
(b) Prior to the Termination Date, no Stockholder shall,
directly or indirectly (i) except pursuant to the terms of the Merger
Agreement or this Agreement, offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, enforce or permit the
execution of the provisions of any redemption agreement with the
Company or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, sale,
transfer, tender, pledge, encumbrance, assignment or other disposition
of, or exercise any discretionary powers to distribute, any or all of
such Stockholder's Shares or any interest therein, including any trust
income or principal, except in each case to a Permitted Transferee who
is or agrees to become bound by this Agreement; (ii) except as
contemplated hereby, grant any proxies or powers of attorney with
respect to any Shares, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares; or (iii) take any
action that would make any representation or warranty of such
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling such Stockholder from performing such
Stockholder's obligations under this Agreement.
(c) Each Stockholder hereby waives any rights of appraisal or
rights to dissent from the Merger that such Stockholder may have. Each
Trustee represents that no beneficiary who is a beneficial owner of
Shares under any trust has any right of appraisal or right to dissent
from the Merger which has not been so waived.
(d) Subject to the terms and provisions of the Merger
Agreement, in connection with the Merger, the Rollover Stockholder
hereby agrees to elect to retain an aggregate of 380,952 shares of
Surviving Corporation Common Stock upon conversion of, and with respect
to, 380,952 of such Rollover Stockholder's Shares (the "Rollover
Shares") unless otherwise agreed with Merger Subsidiary.
(e) The Kleinknechts shall cause (i) KEC-NY to enter into the
Amended and Restated Labor Pooling Agreement between KEC-NY and the
Company, substantially in the form of Exhibit A-1 attached to the
Merger Agreement, and (ii) KEC-NJ to enter into the Amended and
Restated Labor Pooling Agreement between KEC-NJ and the Company,
substantially in the form of Exhibit A-2 attached hereto (collectively,
the "Amended and Restated Labor Pooling Agreements").
-8-
<PAGE>
(f) Richard Kleinknecht shall enter into the Investors
Agreement among the Company, Cable Systems Holding LLC, Cable Systems
International Inc. and certain other parties named therein.
(g) Unless, in connection therewith, the Shares held by any
trust which are presently subject to the terms of this Agreement are
transferred to one or more Stockholders and remain subject in all
respects to the terms of this Agreement, or other Permitted Transferees
who upon receipt of such Shares become signatories to this Agreement,
the Stockholders who are Trustees shall not take any action to
terminate, close or liquidate any such trust and shall take all steps
necessary to maintain the existence thereof at least until the first to
occur of (i) the Effective Time and (ii) the Termination Date.
(h) The Rollover Stockholder shall take all actions necessary
to cause any Rollover Shares that constitute Pledged Shares, prior to
the Effective Time, to be free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or
arrangements or any other encumbrances whatsoever, except for any such
encumbrances or proxies arising hereunder.
Section 6. NON-COMPETITION.
(a) For a period of three years after the Effective Time,
except as contemplated or permitted under the Merger Agreement, the
Amended and Restated Labor Pooling Agreements, the Corporate
Opportunity Agreement, the Investors Agreement, dated the date hereof,
among the Company and the other parties named therein, the Amended and
Restated Employment Agreement, dated as of the Effective Date between
Richard Kleinknecht and the Company (the "Richard Kleinknecht
Employment Agreement"), or the Amended and Restated Employment
Agreement, dated the Effective Date, between Peter Kleinknecht and the
Company (the "Peter Kleinknecht Employment Agreement" and, together
with the Richard Kleinknecht Employment Agreement, the "Amended and
Restated Employment Agreements") each of the Kleinknechts severally
agrees, and shall cause each of their respective Affiliates, including,
without limitation, KEC-NY and KEC-NJ, to agree, that any such Person
shall not, directly or indirectly, through any Person Controlled by
either of the Kleinknechts in any form or manner within any
jurisdiction in which the Company or any of its Affiliates are doing
business: (i) engage in the Business (as defined herein) for his or
their own account or for the account of any other Person, or (ii)
become interested in any Person engaged in the Business as a partner,
shareholder, member, principal, agent, employee, trustee, consultant or
in any other relationship or capacity; PROVIDED, HOWEVER, that either
of the Kleinknechts may own, directly or indirectly, solely as a
passive investment, securities of any Person if either of the
Kleinknechts or any of their respective Affiliates, as the case may be
(1) is not a Person in Control of, or a member of a group that
Controls, such Person and (2) does not, directly or indirectly, own 5%
or more of any voting class of securities of such Person.
-9-
<PAGE>
(b) In perpetuity and on a worldwide basis, except as
contemplated or permitted under the Merger Agreement, each of the
Kleinknechts severally agrees, and shall cause each of their respective
Affiliates including, without limitation, KEC-NY or KEC-NJ to agree,
that such Person shall not, directly or indirectly, disclose to any
other party, unless required to do so by law or court order, any
confidential, non-public or proprietary information relating to the
Company or to any Subsidiary or joint venture thereof which information
was acquired during the course of such Person's relationship with the
Company, except information which (i) becomes known to such Person from
a source other than the Company, its directors, officers or employees,
which source is not obligated to the Company to keep such information
confidential or (ii) becomes generally available to the public through
no breach of this Agreement by the Kleinknechts.
(c) For a period ending on the later to occur of (i) three
years after the Effective Time and (ii) the expiration or termination
of the Amended and Restated Labor Pooling Agreements, on a worldwide
basis, except as contemplated or permitted under the Merger Agreement
or the Amended and Restated Labor Pooling Agreements, each of the
Kleinknechts severally agrees that, without the prior written consent
of the Company, the Kleinknechts, any of their Affiliates or any
business or enterprise with which either of the Kleinknechts is
associated as an officer, director or controlling shareholder or other
investor with the power to direct or cause the direction of the
management of such business or enterprise shall not employ or attempt
to employ an employee of the Company or any of its subsidiaries or
joint ventures (other than, with respect to Richard Kleinknecht, his
executive assistant).
(d) If either of the Kleinknechts breaches, or threatens to
commit a breach of, any of the provisions contained in this Section 6,
the Company shall have the following rights and remedies with respect
to Richard or Peter Kleinknecht, as the case may be, each of which
rights and remedies shall be independent of the others and severally
enforceable, and each of which is in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or in
equity:
(i) the right and remedy to have the provisions of
this Section 6 specifically enforced by any court of competent
jurisdiction and Merger Subsidiary shall be entitled to apply
for and receive injunctive relief in order to prevent the
continuation of any existing breach or the occurrence of any
threatened breach, it being agreed that any breach or
threatened breach of the provisions of this Section 6 would
cause irreparable injury to the Company and that money damages
would not provide an adequate remedy to the Company.
(e) Each of the Kleinknechts agrees that the provisions of
this Section 6 are reasonable and valid in geographical and temporal
scope and in all other respects. If any court determines that the
provisions of this Section 6, or any part thereof, is unenforceable
because of the duration or geographical scope of such provision, such
court
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<PAGE>
shall have the power to reduce the duration or scope of such provision,
as the case may be, and, in its reduced form, such provision shall be
enforceable.
(f) If any court determines that the provisions of this
Section 6, or any part thereof, is invalid or unenforceable, the
remainder of the provisions of this Section 6 shall not thereby be
affected and shall be given full effect without regard to invalid
portions.
Section 7. TERMINATION OF CERTAIN AGREEMENTS. Effective immediately
prior to the Effective Time and without further action by the parties hereto,
each of (a) the Employment Agreement, dated May 9, 1994, between the Company and
Peter Kleinknecht, (b) the Employment Agreement, dated May 9, 1994, between the
Company and Richard Kleinknecht, (c) Registration Rights Agreement, dated as of
May 9, 1994, between the Company, Richard Kleinknecht and Peter Kleinknecht and
(d) all special compensation arrangements for the Kleinknechts (other than those
set forth in the Amended and Restated Employment Agreements), in each case shall
terminate without any obligation or liability to the Company and shall be of no
further force and effect.
Section 8. FURTHER ASSURANCES. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
Section 9. CERTAIN EVENTS. Each Stockholder agrees that this Agreement
and the obligations hereunder shall attach to such Stockholder's Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Shares shall pass, whether by operation of law or otherwise,
including without limitation such Stockholder's heirs, guardians, administrators
or successors or as a result of any divorce.
Section 10. STOP TRANSFER. Each Stockholder agrees with, and covenants
to, Merger Subsidiary that such Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Stockholder's Shares, unless
such transfer is made in compliance with this Agreement.
Section 11. RULE 145 AFFILIATES. Each Stockholder who is an "affiliate"
of the Company for purposes of Rule 145 under the Securities Act of 1933, as
amended, hereby agrees to deliver to Merger Subsidiary, on or prior to the
Closing Date (as defined in the Merger Agreement) a written agreement as
contemplated by Section 5(o) of the Merger Agreement.
Section 12. TERMINATION. The obligations of the Stockholders and the
irrevocable proxy contained in Section 4(b) of this Agreement shall terminate
upon the first to occur of (a) the Effective Time and (b) the date the Merger
Agreement is terminated in accordance with its terms (the "Termination Date");
provided that the provisions of Sections 2, 3 and 13 and any
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<PAGE>
claim for breach of any representation, warranty, covenant or other agreement
under this Agreement shall survive the Effective Time and/or the Termination
Date, as applicable.
Section 13. MISCELLANEOUS.
(a) All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly received if so given) by hand
delivery, telegram, telex or telecopy, or by mail (registered or
certified mail, postage prepaid, return receipt requested) or by any
courier service providing proof of delivery. All communications
hereunder shall be delivered to the respective parties at the following
addresses:
If to the Stockholders: Richard Kleinknecht
15 Banbury Lane
Huntington, NY 11743
copy to: White & Case
1155 Avenue of the Americas
New York, NY 10036
Attn: Edward F. Rover, Esq.
Telecopier: (212) 354-8113
If to Merger Subsidiary: Arizona Acquisition Corp.
c/o Cable Systems Holding LLC
505 North 51st Avenue
Phoenix, Arizona 85043-2701
Attn: President
Telecopier: 602-233-5782
copy to: Citicorp Venture Capital, Ltd.
399 Park Avenue
14th Floor, Zone 4
New York, NY 10043
Attn: Richard M. Cashin, Jr.
Telecopier: 212-888-2940
and: Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attn: Philip H. Werner, Esq.
Telecopier: 212-309-6273
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<PAGE>
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
(b) At any time prior to the Effective Time, any party hereto
may, with respect to any other party hereto, (i) extend the time for
the performance of any of the obligations or other acts, (ii) waive any
inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto or (iii) waive compliance
with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby.
(c) The headings contained in this Agreement are for the
convenience of reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
(d) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated by the
Merger Agreement is not affected in any manner adverse to any party.
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable
manner.
(e) This Agreement, including all exhibits, disclosure
schedules and schedules hereto, constitutes the entire agreement and
supersedes all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject
matter hereof and except as otherwise expressly provided herein.
(f) Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party (whether by
operation of law or otherwise) without the prior written consent of the
other parties hereto. Subject to the preceding sentence, this Agreement
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, and no other
Person shall have any right, benefit or obligation under this Agreement
as a third party beneficiary or otherwise.
(g) The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms. It is
accordingly agreed that the parties hereto shall be entitled to
specific performance of the terms hereof, this being in addition to any
other remedy to which they are entitled at law or in equity.
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<PAGE>
(h) No failure or delay on the part of any party hereto in the
exercise of any right hereunder shall impair such right or be construed
to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or
partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
(i) Notwithstanding anything herein to the contrary, no Person
executing this Agreement who is, or becomes during the term hereof, a
director of the Company makes any agreement or understanding herein in
his or her capacity as such director, and the agreements set forth
herein shall in no way restrict any director in the exercise of his or
her fiduciary duties as a director of the Company. Each Stockholder has
executed this Agreement solely in his or her capacity as the record or
beneficial holder of such Stockholder's Shares or as the trustee of a
trust whose beneficiaries are the beneficial owners of such
Stockholder's Shares.
(j) Each party agrees to bear its own expenses in connection
with the transactions contemplated hereby.
(k) This Agreement shall be governed and construed in
accordance with the laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than
the State of New York, except to the extent that the General
Corporation Law of the State of Delaware applies as a result of the
Company being incorporated in the State of Delaware, in which case such
General Corporation Law shall apply.
(l) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND
FOR ANY COUNTERCLAIM THEREIN.
(m) This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement.
(n) Each of the Stockholders hereby acknowledges that, for
purposes of Title IV of the Employee Retirement Income Security Act of
1974, as amended, IPC and IXNET may become members of a controlled
group of corporations that includes Citicorp Venture Capital, Ltd. and
its Affiliates.
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<PAGE>
[Signature Page to Follow]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ARIZONA ACQUISITION CORP.
By: /s/ Peter A. Woog
---------------------------
Name: Peter A. Woog
Title: President
STOCKHOLDERS:
/s/ Richard Kleinknecht
---------------------------
Richard Kleinknecht
/s/ Peter Kleinknecht
---------------------------
Peter Kleinknecht
KLEINKNECHT 1997 ANNUITY TRUST
By: /s/ Richard Kleinknecht
---------------------------
Name: Richard Kleinknecht
Title: Agent
ERIC KLEINKNECHT
REVOCABLE TRUST
By: /s/ Richard Kleinknecht
---------------------------
Name: Richard Kleinknecht
Title: Agent
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<PAGE>
MARK KLEINKNECHT
REVOCABLE TRUST
By: /s/ Richard Kleinknecht
---------------------------
Name: Richard Kleinknecht
Title: Agent
LISA KLEINKNECHT
REVOCABLE TRUST
By: /s/ Richard Kleinknecht
---------------------------
Name: Richard Kleinknecht
Title: Agent
/s/ Lisa Kleinknecht
---------------------------
Lisa Kleinknecht
PETER J. KLEINKNECHT 1996
GRANTOR RETAINED
ANNUITY TRUST
By: /s/ Peter Kleinknecht
---------------------------
Name: Peter Kleinknecht
Title:
MAUREEN KLEINKNECHT 1996
GRANTOR RETAINED
ANNUITY TRUST
By: /s/ Maureen Kleinknecht
---------------------------
Name: Maureen Kleinknecht
Title:
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<PAGE>
/s/ Sabrina Kleinknecht
---------------------------
Sabrina Kleinknecht
/s/ Gavin Kleinknecht
---------------------------
Gavin Kleinknecht
/s/ Keir Kleinknecht
---------------------------
Keir Kleinknecht
/s/ Russell G. Kleinknecht
---------------------------
Russell G. Kleinknecht
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<PAGE>
SCHEDULE I
EXISTING SHARES
---------------
SHAREHOLDER NO. OF EXISTING SHARES
- ----------- ----------------------
Richard P. Kleinknecht 1,552,273
Peter J. Kleinknecht 2,240,999
Kleinknecht 1997 Annuity Trust 1,000,000
Eric Kleinknecht 1997 Revocable Trust 300,575
Mark Kleinknecht Revocable Trust 300,275
Lisa Kleinknecht Revocable Trust 300,275
Lisa Kleinknecht 298
Peter J. Kleinknecht 1996 Grantor Retained Annuity Trust 155,637
Maureen Kleinknecht 1996 Grantor Retained Annuity Trust 155,637
Sabrina Kleinknecht 300,075
Gavin Kleinknecht 300,075
Keir Kleinknecht 300,075
Russell G. Kleinknecht 46,574
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<PAGE>
SCHEDULE II
PLEDGED SHARES
--------------
Any and all shares of Existing Shares pledged by the Kleinknechts pursuant to
(a) the Pledge Agreement, dated April 28, 1994, by the Kleinknechts and
Citibank, N.A. and National Westminster Bank NJ, (b) the Pledge Agreement, dated
October 6, 1995, between the Kleinknechts and The Chase Manhattan Bank (National
Association) and (c) the Pledge Agreement, dated April 15, 1996, between Peter
J. Kleinknecht and Maureen Kleinknecht and Smith Barney Inc.
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<PAGE>
Exhibit B
PLEDGE AGREEMENT
SMITH BARNEY INC.
388 GREENWICH STREET - 18TH FLOOR
NEW YORK, NEW YORK 10013
ATTN: LOUIS A. KORAHAIS
EXECUTIVE FINANCIAL SERVICES DIVISION
This agreement made the 16th day of April, 1996 between Peter J.
Kleinknecht and Maureen Kleinknecht residing at 23 Ruscoe Road, Wilton,
Connecticut, 06897 (the Pledgor), and Smith Barney Inc. (the Pledgee).
In consideration of Pledgee's initial extension of the loan made by the
Pledgee to the Pledgor in the sum of $4 million and in consideration of the
Pledgee accepting for the Pledgor one or more accounts in Smith Barney Inc., at
the election of the Pledgee, the Pledgee agree(s) to the following:
1. PLEDGE AGREEMENT CONTROLLING
----------------------------
A form of "customer agreement" between the Pledgor and the Pledgee
dated March 10, 1995 and executed by the Pledgor is hereby incorporated by
reference as a part of this agreement ("Pledge Agreement") except that in the
event of conflict, the express terms of the Pledge Agreement shall prevail over
any contrary terms in the customer agreement.
2. PLEDGE
------
The Pledgor agrees to pledge the securities hereinafter mentioned to
the Pledgee as security for the repayment of the aforementioned loan.
3. DELIVERY OF THE SECURITIES PLEDGED
----------------------------------
The Pledgor herewith delivers to the Pledgee the following collateral,
duly endorsed in blank:
<PAGE>
Page 2.
425,000 shares of the Common (class) of IPC Information (the
Corporation) represented by certificate(s) ________________ (the Collateral).
4. MANNER IN WHICH THE PLEDGED SECURITIES WERE OBTAINED AND FULLY
--------------------------------------------------------------
PAID FOR
--------
The Pledgor represents that he obtained the securities pledged herein
as follows:
(a) acquired on October 30, 1991
(b) fully paid for on October 31, 1991
(c) nature of acquisition: Stock Purchase Thru XVI
5. NUMBER OF SHARES OWNED BY PLEDGOR
---------------------------------
The Pledgor represents that:
(a) the total number of shares that he owns of the class of security of
the Corporation hereby being pledged is _____________, and
(b) the total number of all other classes of the securities of the
Corporation owned by the Pledgor is 2,552,273.
6. DIVIDENDS AND SPLITS
--------------------
The Pledgor:
(a) shall be entitled to receive all cash dividends paid by the
Corporation to its security holders during the term of the loan, unless cash
dividend or payment represents a dividend or payment resulting from a corporate
restructuring, reorganization or like corporate event; and
(b) shall not be entitled to receive any stock dividends or stock split
of any type declared, granted or made by the Corporation during the term of the
loan and Pledgor shall pay
<PAGE>
Page 3.
over and deliver such distribution to the Pledgee unless Pledgee shall have
received such distribution directly from the Corporation.
7. SALES BY PLEDGOR
----------------
The Pledgor represents to the Pledgee that during the last three months
he, or any person(s) who Pledgor must aggregate his sales with under applicable
SEC regulations,
(a) has sold -0- shares of Corporation; and
(b) has sold -0- convertible which are convertible into the shares of
the Corporation.
In addition, the Pledgor and such person(s) currently have no sale
orders open with any broker and that he and they will not place any such sale
orders to sell shares of the Corporation or such convertible securities without
the express written consent of the Pledgee.
8. NO SHARES PLEDGED ELSEWHERE
---------------------------
The Pledgor further represents that there are no shares of the
Corporation that the Pledgor, or any person(s) whose sales must be aggregated
with Pledgor's under applicable SEC regulations, which are currently pledged as
security for the payment of a loan elsewhere, and that he and they will not
pledge any shares of the Corporation as security for the repayment of a loan
elsewhere without the express written consent of the Pledgee.
9. REDUCED LINE OF CREDIT
----------------------
In the event of a sale of any class of security of the Corporation by
or on behalf of the Pledgor or a party specified in paragraph 8, the Pledgor
agrees and acknowledges that the Pledgee may reduce the line of credit given
pursuant to this Pledge Agreement in the same proportion as the number of shares
sold bears to the number of shares carried in all accounts with the Pledgee to
secure a line of credit immediately prior to such sale. However, the preceding
sentence,
<PAGE>
Page 4.
notwithstanding, if the applicable margin maintenance requirements would
preclude such a line of credit after such sale, the line of credit shall be
reduced below the maximum line of credit permitted by such margin maintenance
requirements.
10. ADDITIONAL COLLATERAL TO MEET MARGIN CALLS
------------------------------------------
The Pledgor may not meet margin calls by depositing additional Rule
145, control, restricted or shelf registered securities into the account without
the prior express written consent of the Pledgee. The Pledgor guarantees that
all pledged shares sold to satisfy outstanding margin calls will readily
transfer into "street name" in good deliverable form.
11. INTERCHANGEABLE TERMS
---------------------
Whenever the term "his" is used herein, it shall be deemed to refer to
"her" or "they" where applicable.
12. HEADINGS ARE DESCRIPTIVE
------------------------
The heading of each provision hereof is for descriptive purposes only
and shall not be deemed to modify or qualify any of the rights or obligations
set forth in each such provision.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hand(s)
the day and year first above written.
Dated: May 2, 1996 ACCOUNT NO.: 062-30192-1-3-095
BY: /s/ Peter J. Kleinknecht
-------------------------------------
/s/ Maureen Kleinknecht
-------------------------------------
<PAGE>
Page 5.
ACCEPTED AND AGREED:
SMITH BARNEY INC.
BY:___________________________
<PAGE>
ATTACHMENT "A"
There are shares pledged, to Chase Bank guaranteeing a line of credit for
Kleinknecht Electric and a mortgage on a building at 940 8th Avenue owned by
Knight Maintenance Corporation. Also, other shares are guaranteeing a mortgage
at 2 Ninth Avenue, a building owned by Peter and Richard Kleinknecht.
