<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): FEBRUARY 22, 2000
IPC COMMUNICATIONS, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 000-26171 13-4060937
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
IPC INFORMATION SYSTEMS, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 000-25492 58-1636502
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
WALL STREET PLAZA, 88 PINE STREET
NEW YORK, NEW YORK 10005
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (212) 825-9060
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On February 22, 2000, Global Crossing Ltd. ("Global"), Georgia Merger
Sub Corporation ("GC Merger Sub"), IPC Communications, Inc. ("IPC"), IPC
Information Systems, Inc. ("IPC Systems"), Idaho Merger Sub Corporation ("IPC
Merger Sub"), IXnet, Inc. ("IXnet"), entered into an Agreement and Plan of
Merger, a copy of which is attached hereto and incorporated herein by reference
in its entirety.
In connection with the Agreement and Plan of Merger, Global and certain
shareholders of IPC also entered into a Consent and Voting Agreement, a copy of
which is attached hereto and incorporated by reference in its entirety.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
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No. Description
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2.1 Agreement and Plan of Merger, dated as of February 22, 2000,
among Global Crossing Ltd., Georgia Merger Sub Corporation,
IPC Communications, Inc., IPC Information Systems, Inc., Idaho
Merger Sub Corporation and IXnet, Inc.
2.2 Consent and Voting Agreement, dated as of February 22, 2000,
among Global Crossing Ltd., Cable Systems Holding LLC and
Certain Signatories.
99.1 Joint Press Release of Global Crossing Ltd., IPC
Communications, Inc. and IXnet, Inc., dated February 22, 2000.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IPC COMMUNICATIONS, INC.
By: /s/ Alexander Russo
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Name: Alexander Russo
Title: Vice President & General Counsel
Dated: March 6, 2000
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IPC INFORMATION SYSTEMS, INC.
By: /s/ Alexander Russo
----------------------
Name: Alexander Russo
Title: Vice President & General Counsel
Dated: March 6, 2000
4
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EXHIBIT INDEX
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Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated as of February 22, 2000,
among Global Crossing Ltd., Georgia Merger Sub Corporation,
IPC Communications, Inc., IPC Information Systems, Inc., Idaho
Merger Sub Corporation and IXnet, Inc.
2.2 Consent and Voting Agreement, dated as of February 22, 2000,
among Global Crossing Ltd., Cable Systems Holding LLC and
Certain Signatories.
99.1 Joint Press Release of Global Crossing Ltd., IPC
Communications, Inc. and IXnet, Inc., dated February 22, 2000.
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EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
Dated as of February 22, 2000
Among
GLOBAL CROSSING LTD.,
GEORGIA MERGER SUB CORPORATION,
IPC COMMUNICATIONS, INC.,
IPC INFORMATION SYSTEMS, INC.,
IDAHO MERGER SUB CORPORATION
and
IXNET, INC.
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TABLE OF CONTENTS
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ARTICLE I
The Mergers....................................................................................2
SECTION 1.01 The Mergers......................................................................2
SECTION 1.02 Closing..........................................................................3
SECTION 1.03 Effective Time of the Mergers....................................................3
SECTION 1.04 Effects of the Mergers...........................................................3
SECTION 1.05 Certificate of Incorporation; By-Laws............................................3
SECTION 1.06 Directors........................................................................4
SECTION 1.07 Officers.........................................................................4
ARTICLE II
Effect of the Merger on the Capital Stock of the Constituent Corporations......................5
SECTION 2.01 Effect of Intercompany Merger on Capital Stock...................................5
SECTION 2.02 Effect of IPC Merger on Capital Stock............................................6
SECTION 2.03 Effect of IXnet Merger on Capital Stock..........................................7
SECTION 2.04 Stock Plans......................................................................8
SECTION 2.05 Exchange of Certificates.........................................................9
SECTION 2.06 Fractional Shares...............................................................10
SECTION 2.07 Lost, Stolen or Destroyed Certificates..........................................11
SECTION 2.08 Appraisal Rights................................................................11
ARTICLE III
Representations and Warranties................................................................12
SECTION 3.01 Representations and Warranties of IPC and IPC Systems...........................12
SECTION 3.02 Representations and Warranties of IXnet.........................................26
SECTION 3.03 Representations and Warranties of Parent and Sub................................39
SECTION 3.04 Representations of Parent and Sub...............................................43
ARTICLE IV
Covenants Relating to Conduct of Business Prior to Mergers....................................44
SECTION 4.01 Conduct of Business of the Companies............................................44
ARTICLE V
Additional Agreements.........................................................................47
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SECTION 5.01 Preparation of Forms S-4 and the Information
Statement/Prospectuses and Schedules 13E-3; Stockholder Meetings......................47
SECTION 5.02 Letter of the Companies' Accountants............................................50
SECTION 5.03 Letter of Parent's Accountants..................................................50
SECTION 5.04 Access to Information; Confidentiality..........................................50
SECTION 5.05 Reasonable Best Efforts.........................................................51
SECTION 5.06 Benefit Plans...................................................................51
SECTION 5.07 Indemnification.................................................................52
SECTION 5.08 Expenses........................................................................54
SECTION 5.09 Public Announcements............................................................54
SECTION 5.10 Affiliates......................................................................54
SECTION 5.11 Listing of Parent Common Stock..................................................54
SECTION 5.12 No Solicitation.................................................................55
SECTION 5.13 Certain Agreements..............................................................56
SECTION 5.14 Stop Transfer...................................................................56
SECTION 5.15 Compliance with Section 228 of the DGCL.........................................56
ARTICLE VI
Conditions Precedent..........................................................................56
SECTION 6.01 Conditions to Each Party's Obligation To Effect the Mergers.....................56
SECTION 6.02 Conditions to Obligations of Parent and GC Merger Sub...........................57
SECTION 6.03 Conditions to Obligation of the Companies and IPC Systems.......................58
ARTICLE VII
Termination, Amendment and Waiver.............................................................60
SECTION 7.01 Termination.....................................................................60
SECTION 7.02 Effect of Termination...........................................................60
SECTION 7.03 Amendment.......................................................................61
SECTION 7.04 Extension; Waiver...............................................................61
ARTICLE VIII
General Provisions............................................................................61
SECTION 8.01 Nonsurvival of Representations and Warranties...................................61
SECTION 8.02 Notices.........................................................................61
SECTION 8.03 Definitions.....................................................................62
SECTION 8.04 Interpretation..................................................................63
SECTION 8.05 Counterparts....................................................................63
SECTION 8.06 Entire Agreement; No Third-Party Beneficiaries..................................63
SECTION 8.07 Governing Law...................................................................63
SECTION 8.08 Assignment......................................................................63
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SECTION 8.09 Enforcement; Jurisdiction.......................................................64
SECTION 8.10 Severability....................................................................64
EXHIBITS
Exhibit A Form of Stockholder Consent
Exhibit B Form of Affiliate Letter
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AGREEMENT AND PLAN OF MERGER dated as of February 22, 2000 among
GLOBAL CROSSING LTD., a company formed under the laws of Bermuda
("Parent"), GEORGIA MERGER SUB CORPORATION, a Delaware
corporation and a wholly owned subsidiary of Parent ("GC Merger
Sub"), IPC COMMUNICATIONS, INC., a Delaware corporation ("IPC"),
IPC INFORMATION SYSTEMS, INC., a Delaware corporation and a
wholly owned subsidiary of IPC ("IPC Systems"), IDAHO MERGER SUB
CORPORATION, a Delaware corporation and a wholly owned
subsidiary of IPC Systems ("IPC Merger Sub" and, together with
GC Merger Sub, "Subs"), IXNET, INC., a Delaware corporation
("IXnet" and, together with IPC, the "Companies")
WHEREAS, the respective Boards of Directors of Parent, GC Merger
Sub, IPC and IPC Systems have determined that the merger of IPC with and into
IPC Systems (the "Intercompany Merger"), and the immediately subsequent merger
of GC Merger Sub with and into IPC Systems (the "IPC Merger"), each upon the
terms and subject to the conditions set forth in this Agreement, would be fair
to and in the best interests of their respective stockholders, and such Boards
of Directors have approved (a) the Intercompany Merger, pursuant to which each
share of Common Stock, par value $0.01 per share, of IPC ("IPC Common Stock")
issued and outstanding immediately prior to the Effective Time of the
Intercompany Merger (as defined in Section 1.03), other than shares of IPC
Common Stock owned, directly or indirectly, by IPC or any wholly owned
subsidiary (as defined in Section 8.03) of IPC or held by IPC as treasury shares
or owned by Parent, GC Merger Sub or any other wholly owned subsidiary of
Parent, will be converted into the right to receive one share of Common Stock,
par value $0.01 per share, of IPC Systems ("IPC Systems Common Stock") and (b)
the IPC Merger, pursuant to which each share of IPC Systems Common Stock issued
and outstanding immediately prior to the Effective Time of the IPC Merger (as
defined in Section 1.03), other than shares of IPC Systems Common Stock owned,
directly or indirectly, by IPC Systems or any wholly owned subsidiary of IPC
Systems or held by IPC Systems as treasury shares or owned by Parent, GC Merger
Sub or any other wholly owned subsidiary of Parent, will be converted into the
right to receive shares of Common Stock, par value $0.01 per share, of Parent
("Parent Common Stock");
WHEREAS, the respective Boards of Directors of Parent, IPC
Merger Sub, IPC, IPC Systems and IXnet have determined that the merger of IPC
Merger Sub with and into IXnet (the "IXnet Merger", together with the IPC Merger
and the Intercompany Merger, the "Mergers"), upon the terms and subject to the
conditions set forth in this Agreement, would be fair to and in the best
interests of their respective stockholders, and such Boards of Directors have
approved the IXnet Merger, pursuant to which each share of Common Stock, par
value $0.01 per share, of IXnet ("IXnet Common Stock") issued and outstanding
immediately prior to the Effective Time of the IXnet Merger (as defined in
Section 1.03), other than shares of IXnet Common Stock owned, directly or
indirectly, by IPC Systems or IXnet or any of their respective wholly owned
subsidiaries or held by IXnet as treasury shares or owned by Parent or any
wholly owned subsidiary of Parent, will be converted into the right to receive
shares of Parent Common Stock;
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WHEREAS, (i) the affirmative vote, by ballot or written consent,
of a majority of the outstanding shares of the IPC Common Stock is required for
the adoption of this Agreement (the "IPC Stockholder Approval") and (ii) the
affirmative vote, by ballot or written consent, of a majority of the outstanding
shares of the IXnet Common Stock is required for the adoption of this Merger
Agreement (the "IXnet Stockholder Approval" and, together with the IPC
Stockholder Approval and the IPC Systems Stockholder Approval (as defined
herein), the "Stockholder Approvals");
WHEREAS, as a condition to its willingness to enter into this Agreement,
Parent has required that Cable Systems Holding, LLC and the other stockholders
of IPC party thereto (the "IPC Stockholders") enter into, and the IPC
Stockholders have agreed to enter into, the Consent and Voting Agreement with
Parent dated of even date herewith (as amended from time to time in accordance
with its terms, the "Voting Agreement") relating to, among other things, the
agreement of the IPC Stockholders to execute and deliver the IPC Stockholder
Consent (as defined herein) immediately following the execution and delivery of
this Agreement; and, in order to induce Parent to enter into this Agreement, the
Board of the Directors of IPC has approved the entering into by Parent and the
IPC Stockholders of the Voting Agreement and the consummation of the
transactions contemplated thereby;
WHEREAS, the parties hereto desire to make certain
representations, warranties, covenants and agreements in connection with the
Mergers and also to prescribe various conditions to the Mergers; and
WHEREAS, for Federal income tax purposes, it is intended that
each of the Mergers qualify as a reorganization under the provisions of Section
368 of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
ARTICLE I
The Mergers
SECTION 1.01 The Mergers. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), (a) IPC shall be merged with and into IPC
Systems at the Effective Time of the Intercompany Merger, (b) following the
Intercompany Merger, GC Merger Sub shall be merged with and into IPC Systems at
the Effective Time of the IPC Merger and (c) following the IPC Merger, IPC
Merger Sub shall be merged with and into IXnet at the Effective Time of the
IXnet Merger. Upon the Effective Time of the Intercompany Merger, the separate
existence of IPC shall cease, and IPC Systems shall continue as the surviving
corporation (the "Intercompany Merger Surviving Corporation") of the
Intercompany Merger. Upon the Effective Time of the IPC Merger, the separate
existence of GC Merger Sub shall cease, and IPC Systems shall continue as the
surviving corporation (the "IPC Merger Surviving
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3
Corporation") of the IPC Merger. Upon the Effective Time of the IXnet Merger,
the separate existence of IPC Merger Sub shall cease, and IXnet shall continue
as the surviving corporation (the "IXnet Merger Surviving Corporation" and,
together with the Intercompany Merger Surviving Corporation and the IPC Merger
Surviving Corporation, the "Surviving Corporations") of the IXnet Merger.
SECTION 1.02 Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.01 and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the Mergers (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties (the
"Closing Date"), which date shall be no later than the second business day after
satisfaction of the conditions set forth in Article VI, at the offices of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017,
unless another date, time or place is agreed to in writing by the parties
hereto.
SECTION 1.03 Effective Time of the Mergers. Upon the Closing,
the parties shall cause each Surviving Corporation to file a certificate of
merger relating to its Merger (the "Certificates of Merger") with the Secretary
of State of the State of Delaware and shall make all other filings or recordings
required under the DGCL. The Intercompany Merger shall become effective at such
time as the Certificate of Merger for the Intercompany Merger shall have been
duly filed with the Secretary of State of the State of Delaware, or at such
later time as is agreed by Parent and IPC and specified in such Certificate of
Merger (the time the Intercompany Merger becomes effective being the "Effective
Time of the Intercompany Merger"). The IPC Merger shall become effective at such
time as the Certificate of Merger for the IPC Merger shall have been duly filed
with the Secretary of State of the State of Delaware, or at such later time as
is agreed by Parent and IPC and specified in such Certificate of Merger (the
time the IPC Merger becomes effective being the "Effective Time of the IPC
Merger"). The IXnet Merger shall become effective at such time as the
Certificate of Merger for the IXnet Merger shall have been duly filed with the
Secretary of State of the State of Delaware, or at such later time as agreed by
Parent and IXnet and specified in such Certificate of Merger (the time the IXnet
Merger becomes effective being the "Effective Time of the IXnet Merger"; and the
time by which all the Mergers have become effective being the "Effective Time").
The parties shall cause the IPC Merger to become effective immediately following
the Effective Time of the Intercompany Merger and the IXnet Merger to become
effective immediately following the Effective Time of the IPC Merger.
SECTION 1.04 Effects of the Mergers. The Mergers shall have the
effects set forth in Section 259 of the DGCL (or any successor provision).
SECTION 1.05 Certificate of Incorporation; By-Laws. (a) (i) The
certificate of incorporation of IPC Systems, as in effect immediately prior to
the Effective Time of the Intercompany Merger, shall be the certificate of
incorporation of the Intercompany Merger Surviving Corporation, except that at
the Effective Time of the Intercompany Merger such certificate of incorporation
shall be amended as follows: Article Four shall be amended to read in its
entirety as follows: "The total number of shares of stock which the Corporation
shall have the authority to issue is 25,000,000 shares, each having a par value
of one cent ($0.01).".
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(ii) The By-laws of IPC Systems as in effect at the Effective
Time of the Intercompany Merger shall be the By-laws of the Intercompany Merger
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
(b) (i) The certificate of incorporation of IPC Systems, as in
effect immediately prior to the Effective Time of the IPC Merger, shall be the
certificate of incorporation of the IPC Merger Surviving Corporation, except
that at the Effective Time of the IPC Merger such certificate of incorporation
shall be amended as follows: Article Four shall be amended to read in its
entirety as follows: "The total number of shares of stock which the Corporation
shall have the authority to issue is 1,000 shares, each having a par value of
one cent ($0.01)."
(ii) The By-laws of IPC Systems as in effect at the Effective
Time of the IPC Merger shall be the By-laws of the IPC Merger Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(c) (i) The certificate of incorporation of IXnet, as in effect
immediately prior to the Effective Time of the IXnet Merger, shall be the
certificate of incorporation of the IXnet Merger Surviving Corporation, except
that at the Effective Time of the IXnet Merger such certificate of incorporation
shall be amended as follows: Article Four shall be amended to read in its
entirety as follows: "The total number of shares of stock which the Corporation
shall have the authority to issue is 1,000 shares, each having a par value of
one cent ($0.01)."
(ii) The By-laws of IXnet as in effect at the Effective Time of
the IXnet Merger shall be the By-laws of the IXnet Merger Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06 Directors. (a) The directors of IPC at the
Effective Time of the Intercompany Merger shall be the directors of the
Intercompany Merger Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
(b) The directors of GC Merger Sub at the Effective Time of the
IPC Merger shall be the directors of the IPC Merger Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
(c) The directors of IPC Merger Sub at the Effective Time of the
IXnet Merger shall be the directors of the IXnet Merger Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
SECTION 1.07 Officers. (a) The officers of IPC at the Effective
Time of the Intercompany Merger shall be the officers of the Intercompany Merger
Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be.
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(b) The officers of GC Merger Sub at the Effective Time of the
IPC Merger shall be the officers of the IPC Merger Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
(c) The officers of IPC Merger Sub at the Effective Time of the
IXnet Merger shall be the officers of the IXnet Merger Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations
SECTION 2.01 Effect of Intercompany Merger on Capital Stock. As
of the Effective Time of the Intercompany Merger, by virtue of the Intercompany
Merger and without any action on the part of the holder of any shares of IPC
Common Stock or any shares of capital stock of IPC Systems:
(a) Common Stock of IPC Systems. Each share of IPC Systems
Common Stock issued and outstanding immediately prior to the Effective
Time of the Intercompany Merger shall automatically be cancelled and
retired and shall cease to exist, and no consideration shall be
delivered or deliverable in exchange therefor.
(b) Conversion of IPC Common Stock. Except as otherwise provided
herein, each issued and outstanding share of IPC Common Stock shall be
converted into one fully paid and nonassessable share of the common
stock ("Intercompany Merger Surviving Corporation Common Stock") of the
Intercompany Merger Surviving Corporation (the "Intercompany Merger
Exchange Ratio").
(c) Cancellation and Retirement of IPC Common Stock. Except as
otherwise provided herein, from and after the Effective Time of the
Intercompany Merger, all shares of IPC Common Stock issued and
outstanding immediately prior to the Effective Time of the Intercompany
Merger shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each certificate
which immediately prior to the Effective Time of the Intercompany Merger
represented shares of IPC Common Stock (an "IPC Share Certificate")
shall automatically be deemed to represent the number of shares of
Intercompany Merger Surviving Corporation Common Stock to be issued to
the holder of such IPC Share Certificate pursuant to Section 2.01(b)
(the "Intercompany Merger Consideration").
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SECTION 2.02 Effect of IPC Merger on Capital Stock. As of the
Effective Time of the IPC Merger, by virtue of the IPC Merger and without any
action on the part of the holder of any shares of IPC Systems Common Stock or
any shares of capital stock of GC Merger Sub:
(a) Common Stock of GC Merger Sub. Each share of common stock,
par value $0.01 per share, of GC Merger Sub issued and outstanding
immediately prior to the Effective Time of the IPC Merger shall be
converted into one share of the common stock of the IPC Merger Surviving
Corporation and shall constitute the only issued and outstanding capital
stock of the IPC Merger Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Intercompany
Merger Surviving Corporation Common Stock. Each share of Intercompany
Merger Surviving Corporation Common Stock that is owned by the
Intercompany Merger Surviving Corporation or held by the Intercompany
Merger Surviving Corporation as treasury shares or owned by any direct
or indirect wholly owned subsidiary of the Intercompany Merger Surviving
Corporation and each share of Intercompany Merger Surviving Corporation
Common Stock that is owned by Parent, GC Merger Sub or any other direct
or indirect wholly owned subsidiary of Parent shall automatically be
cancelled and retired and shall cease to exist, and no Parent Common
Stock or other consideration shall be delivered or deliverable in
exchange therefor.
(c) Conversion of Intercompany Merger Surviving Corporation
Common Stock. Except as otherwise provided herein, each issued and
outstanding share of Intercompany Merger Surviving Corporation Common
Stock shall be converted into the right to receive from Parent 5.417
fully paid and nonassessable shares of Parent Common Stock (the "IPC
Merger Exchange Ratio"); provided, however, that, in any event, if
between the date of this Agreement and the Effective Time of the IPC
Merger the outstanding shares of Parent Common Stock or IPC Common Stock
shall have been changed into a different number of shares or a different
class (other than pursuant to the Intercompany Merger), by reason of any
stock dividend, subdivision, reclassification, recapitalization,
redenomination, split, combination or exchange of shares, the IPC Merger
Exchange Ratio shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization,
redenomination, split, combination or exchange of shares.
(d) Cancellation and Retirement of Intercompany Merger Surviving
Corporation Common Stock. From and after the Effective Time of the IPC
Merger, all shares of Intercompany Merger Surviving Corporation Common
Stock issued and outstanding immediately prior to the Effective Time of
the IPC Merger shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of an
IPC Share Certificate shall cease to have any rights with respect to the
common stock formerly represented thereby, except the right to receive
the consideration to be issued to holders of Intercompany Merger
Surviving Corporation Common Stock in the IPC Merger pursuant to Section
2.02(c) (the "IPC Merger Consideration"), any cash in lieu of fractional
shares of Parent Common Stock to be paid in consideration therefor
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upon surrender of such certificate in accordance with Section 2.06 and
any dividends payable pursuant to Section 2.05(f).
SECTION 2.03 Effect of IXnet Merger on Capital Stock. As of the
Effective Time of the IXnet Merger, by virtue of the IXnet Merger and without
any action on the part of the holder of any shares of IXnet Common Stock or any
shares of capital stock of IPC Merger Sub:
(a) Common Stock of IPC Merger Sub. Each share of common stock,
par value $0.01 per share, of IPC Merger Sub issued and outstanding
immediately prior to the Effective Time of the IXnet Merger shall be
converted into one share of the common stock of the IXnet Merger
Surviving Corporation and shall constitute the only issued and
outstanding capital stock of the IXnet Merger Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent- and IPC Merger
Surviving Corporation-Owned IXnet Common Stock. Each share of IXnet
Common Stock that is owned by IXnet or held by IXnet as treasury shares
or owned by any direct or indirect wholly owned subsidiary of IXnet, and
each share of IXnet Common Stock that is owned by Parent, the IPC Merger
Surviving Corporation or any of their direct or indirect wholly owned
subsidiaries shall automatically be cancelled and retired and shall
cease to exist, and no Parent Common Stock or other consideration shall
be delivered or deliverable in exchange therefor.
(c) Conversion of IXnet Common Stock. Except as otherwise
provided herein, each issued and outstanding share of IXnet Common Stock
shall be converted into the right to receive from Parent 1.184 fully
paid and nonassessable shares of Parent Common Stock (the "IXnet Merger
Exchange Ratio"); provided, however, that, in any event, if between the
date of this Agreement and the Effective Time of the IXnet Merger the
outstanding shares of Parent Common Stock or IXnet Common Stock shall
have been changed into a different number of shares or a different
class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, redenomination, split, combination or exchange of
shares, the IXnet Merger Exchange Ratio shall be correspondingly
adjusted to reflect such stock dividend, subdivision, reclassification,
recapitalization, redenomination, split, combination or exchange of
shares.
(d) Cancellation and Retirement of IXnet Common Stock. From and
after the Effective Time of the IXnet Merger, all shares of IXnet Common
Stock issued and outstanding immediately prior to the Effective Time of
the IXnet Merger shall no longer be outstanding and shall automatically
be cancelled and retired and shall cease to exist, and each holder of a
certificate which immediately prior to the Effective Time of the IXnet
Merger represented shares of IXnet Common Stock (an "IXnet Share
Certificate" and, together with the IPC Share Certificates, "Share
Certificates") shall cease to have any rights with respect thereto,
except the right to receive the consideration to be issued to holders of
IXnet Common Stock in the IXnet Merger pursuant to Section 2.03(c) (the
"IXnet Merger Consideration" and, together with the IPC Merger
Consideration, the
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"Merger Consideration"), any cash in lieu of fractional shares of Parent
Common Stock to be paid in consideration therefor upon surrender of such
certificate in accordance with Section 2.06 and any dividends payable
pursuant to Section 2.05(f).
SECTION 2.04 Stock Plans. (a) Prior to the Effective Time of the
Mergers, each of IPC and IXnet (x) shall take all action necessary (including
obtaining any necessary consents and/or waivers) to ensure that from and after
the Effective Time of the Mergers, all options granted to Employees to purchase
shares of IPC Common Stock ("IPC Options") or IXnet Common Stock ("IXnet
Options" and, together with IPC Options, "Options"), which are then outstanding
and unexercised (whether or not vested or exercisable), shall, without any
further action on the part of the holders thereof, be converted into and become,
respectively, options to purchase shares of Parent Common Stock on terms
substantially identical to those in effect immediately prior to the Effective
Time of the Mergers under the terms of the stock option plan or other agreement
or award pursuant to which such Options were granted (collectively, such plans,
agreements and awards of IPC or IXnet being hereinafter referred to as the
"Stock Plans") and Parent shall assume the Stock Plans with respect to then
outstanding options (but taking into account any changes thereto, including the
acceleration thereof, provided for in the applicable Stock Plans resulting from
the Mergers) as limited by the Agreement entered into February 22, 2000, among
Parent, IPC, IXnet and certain holders of Options ("Option Limitation
Agreement") and (y) shall amend Section 5(c) of each Stock Plan to provide that
vesting of any Option thereunder held by a party to the Option Limitation
Agreement in connection with or relating to a change of control (as such term is
defined in the Stock Plans) shall be limited in accordance with the Option
Limitation Agreement, and shall amend Section 5(d)of the IXnet Stock Plan to
provide that 25% of IXnet Options held by a person who is not a party to the
Option Limitation Agreement or held by William Adiletta or Richard Farrell shall
become exercisable upon a Change in Control; provided, however, that from and
after the Effective Time of the Mergers (i) each such Option assumed by Parent
may be exercised solely to purchase shares of Parent Common Stock, (ii) the
number of shares of Parent Common Stock purchasable upon exercise of such Option
shall be equal to, in the case of IPC Options, the number of shares of Parent
Common Stock subject to such Option multiplied by the IPC Merger Exchange Ratio,
rounded, if necessary, to the nearest whole share of Parent Common Stock, at a
price per share (rounded to the nearest one-hundredth of a cent) equal to the
per share exercise price specified in such Option divided by the IPC Merger
Exchange Ratio and, in the case of IXnet Options, the number of shares of Parent
Common Stock subject to such Option multiplied by the IXnet Merger Exchange
Ratio, rounded, if necessary, to the nearest whole share of Parent Common Stock,
at a price per share (rounded to the nearest one-hundredth of a cent) equal to
the per share exercise price specified in such Option divided by the IXnet
Merger Exchange Ratio.
(b) Neither the vesting nor the exercisability of any Option
shall accelerate as a result of, or in connection with, the transactions
contemplated hereby, except to the extent required by the existing terms of the
Stock Plan or stock option agreement pursuant to which such Option was granted,
as in effect on the date hereof and as limited or as adjusted pursuant to the
amendments referred to in Section 2.04(a) and the Option Limitation Agreement.
Notwithstanding the foregoing, the number of shares and the per share exercise
price of each Option which is intended to be an "incentive stock option" (as
defined in Section 422 of the Code) shall be adjusted in accordance with the
requirements of Section 424 of the Code.
<PAGE> 13
9
(c) Parent shall, as of the Effective Time of the Mergers,
reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of Options assumed by it in accordance with this Section
2.04, such number not to be reduced except to the extent such Options are
exercised, canceled or terminated pursuant to their terms. Upon the Effective
Time of the Mergers or as soon as reasonably practicable thereafter, Parent
shall file, or cause to be filed, a registration statement(s) on Form S-3 or
Form S-8, as the case may be (or any successor or other appropriate forms), with
respect to the shares of Parent Common Stock subject to such Options and shall
cause such registration statement(s) to remain effective (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such Options remain outstanding.
(d) At least ten days prior to the Effective Time of the
Mergers, the Companies shall notify each grantee under every Stock Plan that
such plan is to be assumed by Parent as of the Effective Time of the Mergers,
and that, to the extent not exercised prior to the Effective Time of the
Mergers, each outstanding Option thereunder will be assumed by Parent and
thereafter may be exercised solely to purchase shares of Parent Common Stock in
accordance with Section 2.04(a) hereof.
SECTION 2.05 Exchange of Certificates. (a) Prior to the
Effective Time of the Mergers, Parent shall appoint an agent (the "Exchange
Agent") for the purpose of exchanging Share Certificates for the applicable
Merger Consideration. Immediately following the Effective Time of the Mergers,
Parent shall deposit with the Exchange Agent, for the benefit of the holders of
Share Certificates, certificates representing the Parent Common Stock issuable
pursuant to Section 2.02 or 2.03 in exchange for Share Certificates. Promptly
after the Effective Time of the Mergers, Parent will send, or will cause the
Exchange Agent to send, to each holder of a Share Certificate at the Effective
Time of the Mergers (i) a letter of transmittal for use in such exchange which
shall specify that delivery of the applicable Merger Consideration shall be
effected, and risk of loss and title to the certificates representing Parent
Common Stock and Share Certificates shall pass, only upon proper delivery of the
Share Certificates to the Exchange Agent and (ii) instructions for use in
effecting the surrender of such Share Certificates in exchange for the
certificates representing Parent Common Stock.
(b) Each holder of Share Certificates that formerly represented
shares of IPC Common Stock, IPC Systems Common Stock or IXnet Common Stock which
have been converted into a right to receive Merger Consideration, upon surrender
to the Exchange Agent of such Share Certificates, together with a properly
completed letter of transmittal covering such Share Certificates, will be
entitled to receive the applicable Merger Consideration payable in respect of
such Share Certificates and any dividends payable pursuant to Section 2.05(f).
Until so surrendered, each such Share Certificate shall, after the Effective
Time of the Mergers, represent for all purposes only the right to receive the
applicable Merger Consideration, any cash payable in lieu of fractional shares
pursuant to Section 2.06 and any dividends payable pursuant to Section 2.05(f).
(c) If any portion of the applicable Merger Consideration is to
be paid to a person other than the registered holder of a Share Certificate, it
shall be a condition to such
<PAGE> 14
10
payment that such Share Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the person requesting such
payment shall pay to the Exchange Agent any transfer or other taxes required by
reason of the issuance of shares of Parent Common Stock in exchange for the
Share Certificate so surrendered or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable.
(d) After the Effective Time of the Mergers, there shall be no
further registration of transfers of shares of IPC Common Stock, IPC Systems
Common Stock or IXnet Common Stock. If, after the Effective Time of the Mergers,
Share Certificates are presented to a Surviving Corporation, they shall be
cancelled and exchanged for the applicable Merger Consideration provided for,
and in accordance with the procedures set forth, in this Article II.
(e) Any portion of the applicable Merger Consideration made
available to the Exchange Agent pursuant to Section 2.05(a) that remains
unclaimed by the holders of Share Certificates six months after the Effective
Time of the Mergers shall be returned to Parent, upon demand, and any such
holder who has not exchanged his Share Certificates for the applicable Merger
Consideration in accordance with this Section 2.05 prior to that time shall
thereafter look only to Parent for payment of the applicable Merger
Consideration, any cash payable in lieu of fractional shares pursuant to Section
2.06 and any dividends payable pursuant to Section 2.05(f) in respect of his
shares. Notwithstanding the foregoing, Parent shall not be liable to any holder
of Share Certificates for any amount paid to a public official pursuant to
applicable abandoned property laws. Any amounts remaining unclaimed by holders
of Share Certificates seven years after the Effective Time of the Mergers (or
such earlier date immediately prior to such time as such amounts would otherwise
escheat to or become property of any governmental entity) shall, to the extent
permitted by applicable law, become the property of Parent free and clear of any
claims or interest of any person previously entitled thereto.
(f) No dividends or other distributions with respect to Parent
Common Stock issued in the Mergers shall be paid, and no voting rights with
respect to Parent Common Stock issued in the Mergers will be accorded, to the
holder of any unsurrendered Share Certificates until such certificates are
surrendered as provided in this Section 2.05. Subject to the effect of
applicable laws, following the surrender of such certificates, there shall be
paid, without interest, to the record holder of the Parent Common Stock issued
in exchange therefor at the time of such surrender, the amount of dividends or
other distributions with a record date after the Effective Time of the Mergers
payable prior to or on the date of such surrender with respect to such whole
shares of Parent Common Stock and not previously paid, less the amount of any
withholding taxes (if any) which may be required thereon.
SECTION 2.06 Fractional Shares. (a) No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Share Certificates and such fractional share interests
will not entitle the owner thereof to vote or to have any rights of a holder of
Parent Common Stock.
(b) Notwithstanding any other provision of this Agreement, each
holder of shares of IPC Systems Common Stock or IXnet Common Stock exchanged
pursuant to the Mergers
<PAGE> 15
11
who would otherwise have been entitled to receive a fraction of a share of
Parent Common Stock (after taking into account all Share Certificates delivered
by such holder) shall be entitled to receive, in lieu thereof, cash (without
interest) in an amount equal to the product of (i) such fractional part of a
share of Parent Common Stock and (ii) the average closing price of the Parent
Common Stock on NASDAQ for the 20 trading days prior to and ending on the
trading day immediately preceding the Closing Date (the "Average Price"). As
promptly as practicable after the determination of the amount of cash, if any,
to be paid to holders of fractional interests, the Exchange Agent shall so
notify Parent, and Parent shall deposit such amount with the Exchange Agent and
shall cause the Exchange Agent to forward payments to such holders of fractional
interests subject to and in accordance with the terms hereof.
SECTION 2.07 Lost, Stolen or Destroyed Certificates. If any
Share Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming such certificate to be lost,
stolen or destroyed and, if requested by Parent, the posting by such person of a
bond in such reasonable amount as Parent may direct as indemnity against any
claim that may be made against it or its subsidiaries with respect to such
certificate, the Exchange Agent will deliver in exchange for such lost, stolen
or destroyed certificate the applicable Merger Consideration with respect to the
shares of capital stock formerly represented thereby, any cash in lieu of
fractional shares of Parent Common Stock, and any unpaid dividends or
distributions in respect of or on Parent Common Stock deliverable in respect
thereof pursuant to this Agreement.
SECTION 2.08 Appraisal Rights. (a) Notwithstanding anything in
this Agreement to the contrary, if provided for by applicable law, shares of IPC
Common Stock that are issued and outstanding immediately prior to the Effective
Time of the Intercompany Merger and that are owned by stockholders who have
properly perfected their rights of appraisal within the meaning of Section 262
of the DGCL (the "IPC Dissenting Shares") shall not be converted into the right
to receive the Intercompany Merger Consideration with respect thereto, unless
and until such stockholders shall have failed to perfect their right of
appraisal under applicable law, but, instead, if provided by applicable law, the
holders thereof shall be entitled to payment of the appraised value of such IPC
Dissenting Shares in accordance with Section 262 of the DGCL. If any such holder
shall have failed to perfect or shall have effectively withdrawn or lost such
right of appraisal, each share of IPC Common Stock held by such stockholder
shall thereupon be deemed to have been converted into the right to receive and
become exchangeable for, at the Effective Time of the Intercompany Merger, the
Intercompany Merger Consideration with respect thereto, in the manner provided
for in Section 2.01.
(b) IPC shall give Parent (i) prompt notice of any demands for
appraisal filed pursuant to Section 262 of the DGCL received by IPC, withdrawals
of such objections and any other instruments served or delivered in connection
with such demands pursuant to the DGCL and received by IPC and (B) the
opportunity to participate in all negotiations and proceedings with respect to
demands under the DGCL consistent with the obligations of IPC thereunder. IPC
shall not, except with the prior written consent of Parent, (x) make any payment
with respect to any such demand, (y) offer to settle or settle any such demand
or (z) waive any failure to timely
<PAGE> 16
12
deliver a written demand for appraisal or timely take any other action to
perfect appraisal rights in accordance with the DGCL.
ARTICLE III
Representations and Warranties
SECTION 3.01 Representations and Warranties of IPC and IPC
Systems. Each of IPC and IPC Systems represents and warrants to Parent and GC
Merger Sub as follows:
(a) Organization, Standing and Corporate Power. IPC and each of
its subsidiaries is duly organized, validly existing and in good
standing (with respect to jurisdictions which recognize the concept of
good standing) under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to
carry on its business as now being conducted, except where the failure
to have such power and authority could not reasonably be expected to
have an IPC Material Adverse Effect or an IXnet Material Adverse Effect
(each as defined in Section 8.3). IPC and each of its subsidiaries is
duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate) would not be
reasonably expected to have an IPC Material Adverse Effect. The Recent
SEC Documents (as defined in Section 3.01(e) contain as exhibits
complete and correct copies of the Certificate of Incorporation and
By-laws of each of IPC and IXnet, in each case as amended to the date of
this Agreement.
(b) Subsidiaries. The only direct or indirect subsidiaries of
IPC are those listed in Section 3.01(b) of the disclosure schedule
("Disclosure Schedule") delivered to Parent by IPC at the time of
execution of this Agreement. All the outstanding shares of capital stock
of each such subsidiary have been validly issued and are fully paid and
nonassessable and are owned (of record and beneficially) by IPC, by
another subsidiary (wholly owned) of IPC or by IPC and another such
subsidiary (wholly owned), free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"), except as set forth in Section
3.01(b) of the Disclosure Schedule. Except for the ownership interests
set forth in Section 3.01(b) of the Disclosure Schedule or in the Recent
SEC Documents, IPC does not own, directly or indirectly, any capital
stock or other ownership interest, and does not have any option or
similar right to acquire any assets or equity or other ownership
interest, in any corporation, partnership, business association, joint
venture or other entity. IPC directly owns all the issued and
outstanding capital stock of IPC Systems and IPC Systems directly owns
all the issued and outstanding shares of capital stock of IXnet that are
beneficially owned by IPC.
<PAGE> 17
13
(c) Capital Structure. As of February 21, 2000, the authorized
capital stock of IPC consists of (i) 25,000,000 shares of IPC Common
Stock, and (ii) 10,000,000 shares of preferred stock, each having a par
value of one cent ($0.01) ("IPC Preferred Stock"). As of the close of
business on February 21, 2000, there were (i) 8,823,151 shares of IPC
Common Stock and 0 shares of IPC Preferred Stock issued and outstanding;
(ii) 0 shares of IPC Common Stock held in the treasury of IPC; (iii) 40
shares of IPC Common Stock reserved for issuance upon exercise of
authorized but unissued IPC Options pursuant to the Stock Plans; and
(iv) 1,132,793 shares of IPC Common Stock issuable upon exercise of
outstanding IPC Options. Section 3.01(c) of the Disclosure Schedule sets
forth the name of each holder of outstanding options to acquire shares
of IPC Common Stock, the number of options held and the exercise prices
of such options. Except as set forth above, as of the date hereof, no
shares of capital stock or other equity securities of IPC are issued,
reserved for issuance or outstanding. All outstanding shares of capital
stock of IPC are, and all shares which may be issued pursuant to the
Stock Plans will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. Other than
IPC Options, there are no outstanding bonds, debentures, notes or other
indebtedness or other securities of IPC having the right to vote (or
convertible into, or exchangeable or exercisable for, securities having
the right to vote) on any matters on which stockholders of IPC may vote.
Except as set forth above, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which IPC or any of its subsidiaries is a
party or by which any of them is bound obligating IPC or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other equity or voting
securities of IPC or of any of its subsidiaries or obligating IPC or any
of its subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. Except as set forth in the Recent SEC
Documents and except for such indebtedness which is not material to IPC,
IPC and its subsidiaries have no indebtedness. Other than the Options,
(i) there are no outstanding contractual obligations, commitments,
understandings or arrangements of IPC or any of its subsidiaries to
repurchase, redeem or otherwise acquire or make any payment in respect
of any shares of capital stock of IPC or any of its subsidiaries and
(ii) there are no irrevocable proxies with respect to shares of capital
stock of IPC or any subsidiary of IPC. Except as set forth above or in
Section 3.01(c) of the Disclosure Schedule or in the Recent SEC
Documents, there are no agreements or arrangements pursuant to which IPC
is or could be required to register shares of IPC Common Stock or other
securities under the Securities Act of 1933, as amended (the "Securities
Act"), or other agreements or arrangements with or among any
securityholders of IPC with respect to securities of IPC. The authorized
capital stock of IPC Merger Sub consists of 100 shares of common stock,
par value $0.01 per share, all of which have been validly issued, are
fully paid and nonassessable and are owned directly by IPC, free and
clear of any Lien.
(d) Authority; Noncontravention. Each of IPC, IPC Systems and
IPC Merger Sub has the requisite corporate and other power and authority
to enter into this Agreement and, subject to the Stockholder Approvals,
each of which is being obtained by written
<PAGE> 18
14
consent immediately following the execution of this Agreement, each of
them has the requisite corporate and other power and authority to
consummate the transactions contemplated hereby and thereby. After the
delivery of the Stockholder Consents, no vote, approval or other action
on the part of any holder of IPC Common Stock, IPC Systems Common Stock
or IXnet Common Stock shall be required to adopt this Agreement and
consummate the transactions contemplated hereby, including the Mergers.
No corporate action is required to be taken by IXnet or its stockholders
in connection with the consummation of the Intercompany Merger or the
IPC Merger. The execution and delivery of this Agreement by IPC, IPC
Systems, IXnet and IPC Merger Sub and the consummation by them of the
transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action on the part of IPC, IPC Systems and
IPC Merger Sub, subject, in the case of the IPC Merger and the
Intercompany Merger to the IPC Systems Stockholder Approval and the IPC
Stockholder Approval, respectively. This Agreement has been duly
executed and delivered by each of IPC, IPC Systems, IXnet and IPC Merger
Sub and constitutes a valid and binding obligation of IPC, IPC Systems,
IXnet and IPC Merger Sub, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or
affecting creditors generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law) or by an implied covenant of good faith and fair
dealing. Except as disclosed in Section 3.01(d) of the Disclosure
Schedule, the execution and delivery of this Agreement and the Voting
Agreement do not, and the consummation of the transactions contemplated
hereby and thereby and compliance with the provisions hereof and thereof
will not (including the delivery of the Stockholder Consents), 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 IPC or any of its subsidiaries under, (i) the Certificate of
Incorporation or By-laws of IPC or the comparable charter or
organizational documents of any of its subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license
applicable to IPC or any of its subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and
other matters referred to in the following sentence, any judgment,
order, decree, statute, law, ordinance, rule, regulation or arbitration
award applicable to IPC or any of its subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii),
any such conflicts, breaches, violations, defaults, rights, losses or
Liens that individually or in the aggregate could not be reasonably
expected to have an IPC Material Adverse Effect. No consent, approval,
order or authorization of, or registration, declaration or filing with,
or notice to, any Federal, state or local government or any court,
administrative agency or commission or other governmental authority or
agency, domestic or foreign (a "Governmental Entity"), is required by or
with respect to IPC or any of its subsidiaries in connection with the
execution and delivery of this Agreement by IPC, IPC Systems, IXnet or
IPC Merger Sub, as applicable, or the consummation by IPC, IPC Systems,
IXnet or IPC Merger Sub of the
<PAGE> 19
15
transactions contemplated hereby or thereby (including the delivery of
the Stockholder Consents), except, with respect to this Agreement, for
(i) the filing of a premerger notification and report form by IPC and
IXnet under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) the filing with the SEC of (y) Information
Statements (as defined herein) relating to each of the Mergers, and (z)
such reports under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with this Agreement,
the Voting Agreement and the transactions contemplated hereby and
thereby, (iii) the filing of the Certificates of Merger with the
Secretary of State of the State of Delaware and the filing of
appropriate documents with the relevant authorities of other states in
which IPC or IXnet is qualified to do business and (iv) such other
consents, approvals, orders, authorizations, registrations,
declarations, filings or notices as are set forth in Section 3.01(d) of
the Disclosure Schedule.
(e) SEC Documents; Undisclosed Liabilities. IPC and, to the
extent applicable, its subsidiaries have filed all required reports,
schedules, forms, statements and other documents with the Securities and
Exchange Commission (the "SEC") since October 1, 1998, and IPC has
delivered or made available to Parent all reports, schedules, forms,
statements and other documents filed by IPC and, to the extent
applicable, its subsidiaries with the SEC since such date (collectively,
and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "SEC Documents"). As of
their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and none of the
SEC Documents (including any and all financial statements included
therein) as of such dates (and, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing)
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The consolidated financial statements
(including the related notes) of IPC and of IXnet included in all SEC
Documents filed since October 1, 1998 (the "SEC Financial Statements")
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited
consolidated quarterly statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may
be indicated in the notes thereto) and fairly present the consolidated
financial position of IPC and its consolidated subsidiaries or IXnet and
its consolidated subsidiaries as the case may be as of the dates thereof
and the consolidated results of their respective operations and cash
flows for the periods then ended (subject, in the case of unaudited
quarterly statements, to normal year-end audit adjustments that have not
been and are not expected to be material in amount). Except as set forth
in Schedule 3.01(e), at the date of the most recent audited financial
statements of IPC included in the SEC Documents filed by IPC or its
subsidiaries since October 1, 1998 and prior to the date of this
Agreement (the "Recent SEC Documents"), neither IPC nor any
<PAGE> 20
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of its subsidiaries had, and since such date neither IPC nor any of such
subsidiaries incurred, any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which, individually
or in the aggregate, would reasonably be expected to have an IPC
Material Adverse Effect. To the best of IPC's knowledge, (i) all
historical financial statements supplied to Parent by IPC for periods
subsequent to December 31, 1999 have been prepared in accordance with
generally accepted accounting principles (except as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of IPC and its consolidated
subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject to
normal year-end adjustments that have not been and are not expected to
be material in amount) and (ii) all financial data so supplied for such
periods is true and accurate in all material respects.
(f) Information Supplied. None of the information supplied or to
be supplied by IPC for inclusion or incorporation by reference in (i)
the Forms S-4 (as defined in Section 5.01) will, at the time each Form
S-4 is filed with the SEC, and at any time it is amended or supplemented
or at the time it becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) each Information Statement/Prospectus
(as defined in Section 5.01(a)) will, at the date it is first mailed to
IPC's stockholders or IXnet's stockholders, as the case may be, or at
the time of the IPC Stockholder Meeting (as defined in Section 5.01(b))
or the IXnet Stockholder Meeting, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Forms S-4 and the Information Statement/Prospectuses
will comply as to form in all material respects with the requirements of
the Exchange Act and the Securities Act and the rules and regulations
promulgated thereunder, except that no representation is made by IPC
with respect to statements made or incorporated by reference therein
based on information supplied by Parent or its subsidiaries for
inclusion or incorporation by reference in the Forms S-4 and the
Information Statement/Prospectuses.
(g) Absence of Certain Changes or Events. Except as disclosed in
Section 3.01(g) of the Disclosure Schedule or except as included in the
Recent SEC Documents, since October 1, 1998, IPC has conducted its
business in all material respects only in the ordinary course consistent
with past practice and there is not and has not been any condition,
event or occurrence which, individually or in the aggregate, would
reasonably be expected to have an IPC Material Adverse Effect or an
IXnet Material Adverse Effect.
(h) Litigation; Labor Matters; Compliance with Laws. (i) Except
as disclosed in the Recent SEC Documents, there are no suits, actions,
complaints, charges, arbitrations, inquiries, counterclaims, proceedings
or governmental or internal investigations pending
<PAGE> 21
17
or, to the knowledge of IPC, threatened in writing against or affecting
IPC or any of its subsidiaries which, individually or in the aggregate,
would reasonably be expected to have an IPC Material Adverse Effect; in
addition, there is not any judgment, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding against IPC or any
of its subsidiaries having, or which could reasonably be expected to
have any such effect.
(ii) Except as disclosed in Section 3.01(h)(ii) of the
Disclosure Schedule, (A) neither IPC nor any of its subsidiaries is a
party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor
organization, (B) neither IPC nor any of its subsidiaries is the subject
of any proceeding asserting that it or any subsidiary has committed an
unfair labor practice or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment nor is such unfair
labor practice threatened or otherwise affecting IPC or any of its
subsidiaries, (C) there is not any strike, work stoppage, dispute,
lockout or other labor controversy involving it or any of its
subsidiaries pending or, to its knowledge, threatened, any of which
would reasonably be expected to have an IPC Material Adverse Effect; (D)
no representation question exists or has been raised respecting any of
the Company's employees or any of its subsidiaries' employees within the
past three years, nor to the knowledge of IPC are there any campaigns
being conducted to solicit cards from employees of IPC or any of its
subsidiaries to authorize representation by any labor organization; (E)
neither IPC nor any of its subsidiaries has closed any plant or
facility, effectuated any layoffs of employees or implemented any early
retirement, separation or window program within the past three years,
nor has IPC or any of its subsidiaries planned or announced any such
action or program for the future; (F) neither IPC nor any of its
subsidiaries shall, at any time within the 90-day period prior to the
Closing Date, effectuate a "plant closing" or "mass layoff", as those
terms are defined in the Worker Adjustment and Retraining Notification
Act of 1988, as amended ("WARN"), or any state law, affecting in whole
of in part any site of employment, facility, operating unit or employee;
and (G) the Company and its subsidiaries are in compliance with their
obligations pursuant to WARN, and all other notification and bargaining
obligations arising under any collective bargaining agreement, statute
or otherwise.
(iii) The conduct of the business of each of IPC and each of its
subsidiaries and, to the knowledge of IPC, its contractors complies with
all statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees or arbitration awards applicable thereto, including the Foreign
Corrupt Practices Act, except for violations or failures so to comply,
if any, that, individually or in the aggregate, could not reasonably be
expected to have an IPC Material Adverse Effect.
(i) Absence of Changes with respect to Employees and Employee
Benefit Plans. Except as set forth in Section 3.01(i) of the Disclosure
Schedule or in the Recent SEC Documents, since September 1, 1999, there
has not been any (i) increase in the compensation or fringe benefits of
any present or former director or Employee (as defined in Section
3.01(j) hereof) whose base salary equals or is in excess of $100,000 per
annum
<PAGE> 22
18
as of September 1, 1999, of IPC or any subsidiary thereof (except for
increases in salary or wages in the ordinary course of business
consistent with past practice), (ii) grant of any severance or
termination pay to any present or former director or Employee whose base
salary equals or is in excess of $100,000 per annum as of September 1,
1999, of IPC or any subsidiary thereof (except in the ordinary course of
business consistent with past practice or as required by law or
agreements or plans in effect as of September 1, 1999), (iii) loan or
advance of money or other property by IPC or any subsidiary thereof to
any of their present or former directors or Employees which is
outstanding as of the date hereof; or (iv) establishment, adoption,
entrance into, amendment or termination of any IPC Plan (as defined in
Section 3.01(j) hereof).
(j) (i) Except as set forth therein, Section 3.01(j)(i) of the
Disclosure Schedule contains a true and complete list of each "employee
benefit plan" (within the meaning of section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), including,
without limitation, multiemployer plans within the meaning of ERISA
section 3(37)), and all stock purchase, stock option, consulting,
severance, employment, change-in-control, termination, indemnification,
fringe benefit, collective bargaining, bonus, incentive, deferred
compensation and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in
the future as a result of the transactions contemplated by this
Agreement or otherwise), whether formal or informal, oral or written,
legally binding or not, under which any current or former director or
any employee or former employee of IPC or any subsidiary thereof (the
"Employees") has any present or future right to benefits, sponsored or
maintained by IPC or its subsidiaries or under which IPC or any
subsidiary thereof has had or has any present or future liability. All
such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "IPC Plans".
(ii) Except as set forth in Section 3.10(j)(ii) of the
Disclosure Schedule, with respect to each IPC Plan, IPC has made
available to Parent a current, accurate and complete copy (or, to the
extent no such copy exists, an accurate description) thereof and, to the
extent applicable: (A) any related trust agreement or other funding
instrument; (B) the most recent determination letter, if applicable; (C)
any summary plan description and other written communications (or a
description of any oral communications) by IPC or any subsidiary thereof
to their employees concerning the extent of the benefits provided under
an IPC Plan; and (D) with respect to each employee pension plan, for the
three (3) most recent years (I) the Form 5500 and attached schedules,
(II) audited financial statements, (III) actuarial valuation reports and
(IV) attorney's response to an auditor's request for information.
(iii) (A) Each IPC Plan has been established and
administered in accordance with its terms, and in compliance with the
applicable provisions of ERISA, the Code and other applicable laws,
rules and regulations; (B) each IPC Plan which is intended to be
qualified within the meaning of Code section 401(a) is so qualified and
has received a favorable determination letter as to its qualification,
and nothing has occurred,
<PAGE> 23
19
whether by action or failure to act, that would reasonably be expected
to cause the loss of such qualification; (C) no event has occurred and
no condition exists that would subject IPC or any subsidiary thereof,
either directly or by reason of their affiliation with any member of
their "Controlled Group" (defined as any organization which is a member
of a controlled group of organizations within the meaning of Code
sections 414(b), (c), (m) or (o)), to any tax, fine, lien, penalty or
other liability imposed by ERISA, the Code or other applicable laws,
rules and regulations; (D) for each IPC Plan with respect to which a
Form 5500 has been filed, no material change has occurred with respect
to the matters covered by the most recent Form since the date thereof;
(E) no "reportable event" (as such term is defined in ERISA section
4043), "prohibited transaction" (as such term is defined in ERISA
section 406 and Code section 4975) or "accumulated funding deficiency"
(as such term is defined in ERISA section 302 and Code section 412
(whether or not waived)) has occurred with respect to any IPC Plan; (F)
no IPC Plan provides retiree welfare benefits and neither IPC nor any
subsidiary thereof has any obligations to provide any retiree welfare
benefits, other than those mandated by the Consolidated Omnibus Budget
Reconciliation Act of 1995; and (G) except as set forth in Section
3.01(j)(iii) of the Disclosure Schedule, all awards, grants or bonuses
made pursuant to any IPC Plan have been, or will be, fully deductible to
IPC or its subsidiaries notwithstanding the provisions of Section 162(m)
of the Internal Revenue Code and the regulations promulgated thereunder;
provided that with respect to each IPC Plan that is a multi-employer
plan, the representations contained in this Section 3.01(j)(iii) are
made to the knowledge of IPC.
(iv) There are no IPC Plans (that are not multiemployer
plans) which are subject to Title IV of ERISA.
(v) With respect to any multiemployer plan (within the
meaning of ERISA section 4001(a)(3)) to which IPC, any subsidiary
thereof, or any member of their Controlled Group has any liability or
contributes (or has at any time contributed or had an obligation to
contribute): (A) none of IPC, any subsidiary thereof, or any member of
their Controlled Group has incurred any withdrawal liability under Title
IV of ERISA, or to the best knowledge of IPC, would be subject to such
liability if, as of the Closing Date, IPC, any of its subsidiaries or
any member of their Controlled Group were to engage in a complete
withdrawal (as defined in ERISA section 4203) or partial withdrawal (as
defined in ERISA section 4205) from any such multiemployer plan; and (B)
to the best knowledge of IPC, no such multiemployer plan is in
reorganization or insolvent (as those terms are defined in ERISA
sections 4241 and 4245, respectively).
(vi) With respect to any IPC Plan other than a
multiemployer plan, and to the best knowledge of IPC with respect to any
multiemployer plan, (A) no actions, suits or claims (other than routine
claims for benefits in the ordinary course) are pending or threatened,
(B) no facts or circumstances exist that could give rise to any such
actions, suits or claims, and (C) no administrative investigation, audit
or other administrative proceeding by the Department of Labor, the
Pension Benefit Guaranty Corporation, the
<PAGE> 24
20
Internal Revenue Service or any other governmental agency is pending,
threatened or in progress.
(vii) Except as set forth in Section 3.01(j)(vii) of the
Disclosure Schedule, no IPC Plan exists that, as a result of the
transaction contemplated by this Agreement, could result in the payment
to any current or former Employee or director of IPC or any subsidiary
thereof of any money or other property or could result in the
acceleration or provision of any other rights or benefits to any current
or former Employee or director of IPC or any subsidiary thereof, whether
or not such payment, right or benefit would constitute a parachute
payment within the meaning of Code section 280G.
(k) Tax Returns and Tax Payments. IPC and each of its
subsidiaries, and any consolidated, combined, unitary or aggregate group
for Tax purposes of which IPC or any of its subsidiaries is or has been
a member (a "Consolidated Group") has timely filed all Tax Returns
required to be filed by it and all such Tax Returns are correct and
complete in all material respects. All Taxes shown on such Tax Returns
have been timely paid, and IPC and each of its subsidiaries has timely
paid or accrued all Taxes for which a notice of assessment or collection
has been received (other than amounts being contested in good faith by
appropriate proceedings). IPC and its subsidiaries have made adequate
provision (to the extent required by, and in accordance with generally
accepted accounting principles ("GAAP")) for all Taxes payable for any
periods that end before the Effective Time of the Mergers for which no
Tax Returns have yet been filed and for any periods that begin before
the Effective Time of the Mergers and end after the Effective Time of
the Mergers to the extent such Taxes are attributable to the portion of
any such period ending at the Effective Time of the Mergers, and the
charges, accruals and reserves for Taxes reflected in the financial
statements of IPC and its subsidiaries are adequate under GAAP to cover
the Tax liability accruing or payable by IPC and its subsidiaries in
respect of periods prior to the date hereof. Except as set forth in
Section 3.01(k) of the Disclosure Schedule: (i) no material claim for
unpaid Taxes has become a lien against the property of IPC or any of its
subsidiaries or is being asserted in writing against IPC or any of its
subsidiaries, (ii) neither IPC nor any of its subsidiaries is delinquent
in the payment of any Tax and have not requested or filed any document
having the effect of causing any extension of time within which to file
any Tax Returns in respect of any fiscal year which have not since been
filed, (iii) no material audit or other proceeding with respect to any
Taxes due from IPC or any of its subsidiaries or any Tax Return of IPC
or any of its subsidiaries is pending, threatened, to IPC's knowledge,
or being conducted by a Tax authority, (iv) no extension of the statute
of limitations on the assessment of any Taxes has been granted by IPC
nor any of its subsidiaries and is currently in effect, (v) neither IPC
or any of its subsidiaries (A) has been a member of a Consolidated Group
filing a consolidated federal income Tax Return (other than a group the
common parent of which was IPC) or (B) has any liability for the Taxes
of any person (other than IPC and its subsidiaries), including liability
arising from the application of Treasury Regulation section 1.1502-6 or
any analogous provision of state, local or foreign law, or as a
transferee or successor, by contract, or otherwise, (vi) no consent
under Section 341(f) of the Code has been filed with respect to IPC or
any of its subsidiaries,
<PAGE> 25
21
and (vii) all Taxes required to be withheld, collected or deposited by
or with respect to IPC and each of its subsidiaries have been timely
withheld, collected or deposited, as the case may be, and, to the extent
required, have been paid to the relevant taxing authority. As used
herein, "Taxes" shall mean all taxes of any kind, including those on or
measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, value added, property or
windfall profits taxes, customs, duties or similar fees, assessments or
charges of any kind whatsoever, together with any interest and any
penalties, additions to tax or additional amounts imposed by any
governmental authority, domestic or foreign. As used herein, "Tax
Return" shall mean any return, report or statement required to be filed
with any Governmental Entity with respect to Taxes.
(l) Board Approval; Section 203 of the DGCL. The Board of
Directors of IPC has, prior to the execution hereof and prior to the
execution of the Voting Agreement, (i) approved the execution and
delivery by IPC of this Agreement, and the execution and delivery by the
parties thereto of the Voting Agreement and the consummation of the
Mergers and the other transactions contemplated by this Agreement and
the Voting Agreement. Section 203 of the DGCL is inapplicable to this
Agreement, the Mergers, the Voting Agreement and the other transactions
contemplated hereby and thereby with respect to both IPC and IXnet. No
state takeover statute or similar statute or regulation of the State of
Delaware or of any other state or jurisdiction applies or purports to
apply to this Agreement, the Mergers, the Voting Agreement, the
Stockholder Consents or any of the other transactions contemplated
hereby or thereby and (z) no provision of the certificate of
incorporation, by-laws or other governing instruments of IPC or any of
its subsidiaries or the terms of any rights plan or preferred stock of
IPC or any of its subsidiaries would, directly or indirectly, restrict
or impair the ability of Parent to vote, or otherwise to exercise the
rights of a stockholder with respect to, securities of IPC and its
subsidiaries that may be acquired or controlled by Parent or permit any
stockholder to acquire securities of IPC, IPC Systems, IXnet or any
Surviving Corporation on a basis not available to Parent in the event
that Parent were to acquire securities of IPC, IPC Systems or IXnet. The
Board of Directors of IPC Merger Sub has duly approved this Agreement
and the IXnet Merger and declared this Agreement advisable.
(m) Environmental Matters. (i) Except as disclosed in Section
3.01(m) of the Disclosure Schedule:
(A) IPC and its subsidiaries including their
predecessors and their properties (I) are in compliance in all
material respects with all applicable Environmental Laws; (II)
hold all material Environmental Permits (each of which is in
full force and effect) required for any of their current or
intended operations or for any property owned, leased, or
otherwise operated by any of them; (III) are in compliance in
all material respects with all of their Environmental Permits;
and (IV) reasonably believe that: each of their Environmental
Permits will be timely renewed and complied with, without
material expense; any additional Environmental Permits that may
be required of any of them will be timely
<PAGE> 26
22
obtained and complied with, without material expense; and
compliance with any Environmental Law that is or is expected to
become applicable to any of them will be timely attained and
maintained, without material expense;
(B) None of IPC and its subsidiaries has received any
Environmental Claim, and none of IPC and its subsidiaries is
aware, after reasonable inquiry, of any threatened Environmental
Claim or of any circumstances, conditions or events that would
reasonably be expected to give rise to an Environmental Claim,
against IPC or any of its subsidiaries, in each case that,
individually or in the aggregate, would reasonably be expected
to have an IPC Material Adverse Effect;
(C) None of IPC and its subsidiaries has entered into or
agreed to any consent decree or order under any Environmental
Law, and none of IPC and its subsidiaries is subject to any
judgment, decree or order of any governmental authority relating
to compliance with any Environmental Law or to investigation,
cleanup, remediation or removal of regulated substances under
any Environmental Law;
(D) There are no (I) underground storage tanks, (II)
polychlorinated biphenyls, (III) asbestos or asbestos-containing
materials or (IV) Hazardous Materials present at any facility
currently or, to the knowledge of IPC, formerly owned, leased or
operated by IPC or any of its subsidiaries that would reasonably
be expected to give rise to material liability of IPC or any of
its subsidiaries under any Environmental Laws;
(E) There are no past (including, to the knowledge of
IPC, with respect to assets or businesses formerly owned, leased
or operated by IPC or any of its subsidiaries) or present
actions, activities, events, conditions or circumstances,
including the release, threatened release, emission, discharge,
generation, treatment, storage or disposal of Hazardous
Materials, that would reasonably be expected to give rise to
material liability of IPC or any of its subsidiaries under any
Environmental Laws or any contract or agreement; and
(F) None of IPC and its subsidiaries has assumed or
retained, by contract or, to the knowledge of IPC, operation of
law, any material liabilities of any kind, fixed or contingent,
under any Environmental Law or with respect to any Hazardous
Material or Environmental Claim.
(ii) The items on Section 3.01(m) of the Disclosure Schedule,
individually and in the aggregate, would not reasonably be expected to
have an IPC Material Adverse Effect.
(iii) IPC has provided or made available to Parent true and
complete copies of all Environmental Reports in its possession or
control.
<PAGE> 27
23
(iv) For purposes of this Agreement, the following terms shall
have the following meanings:
"Environmental Claim" means any written notice,
claim, demand, action, suit, complaint, proceeding or
other communication by any person alleging liability or
potential liability (including liability or potential
liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages,
property damage, personal injury, fines or penalties)
arising out of, relating to, based on or resulting from
(i) the presence, discharge, emission, release or
threatened release of any Hazardous Materials at any
location, whether or not owned, leased or operated by
IPC or any of its subsidiaries, or Parent or any of its
subsidiaries, as the case may be, or (ii) any
Environmental Law or Environmental Permit.
"Environmental Laws" means any and all laws,
rules, orders, regulations, statutes, ordinances,
guidelines, codes, decrees, or other legally enforceable
requirement (including common law) of any foreign
government, the United States, or any state, local,
municipal or other governmental authority, regulating,
relating to or imposing liability or standards of
conduct concerning protection of the environment or of
human health, or employee health and safety, as has
been, is now, or may at any time hereafter be, in
effect.
"Environmental Permits" means any and all
permits, licenses, approvals, registrations,
notifications, exemptions and any other authorization
required under any Environmental Law.
"Environmental Report" means any report, study,
assessment, audit, or other similar document that
addresses any issue of actual or potential noncompliance
with, or actual or potential liability under or cost
arising out of, any Environmental Law that may in any
way affect IPC or any of its subsidiaries.
"Hazardous Materials" means any gasoline or
petroleum (including crude oil or any fraction thereof)
or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or
forces of any kind, whether or not any such substance or
force is defined as hazardous or toxic under any
Environmental Law, that is regulated pursuant to or
could give rise to liability under any Environmental
Law.
(n) Material Contract Defaults; Non-Competes. (i) IPC has
provided or made available to Parent copies, and has provided a true and
correct list to Parent, of all material contracts, agreements,
commitments, arrangements, leases, licenses, policies or
<PAGE> 28
24
other instruments to which it or any of its subsidiaries is a party or
by which it or any such subsidiary is bound ("IPC Material Contracts").
Neither IPC nor any of its subsidiaries is, or has received any notice
or has any knowledge that any other party is, in default or unable to
perform in any respect under any such IPC Material Contract, including
any license or agreement relating to intellectual property, except for
those defaults which could not reasonably be expected, either
individually or in the aggregate, to have an IPC Material Adverse
Effect; and there has not occurred any event that with the lapse of time
or the giving of notice or both would constitute such a material
default.
(ii) Except as disclosed in Section 3.01(n) of the
Disclosure Schedule or in the Recent SEC Documents, neither IPC
nor any of its subsidiaries is a party to any agreement that
expressly limits the ability of IPC or any of its subsidiaries
to compete in or conduct any line of business or compete with
any person in any geographic area or during any period of time.
(o) Brokers. No broker, investment banker, financial advisor or
other person other than Salomon Smith Barney Inc. and Donaldson, Lufkin
& Jenrette Securities Corporation is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of IPC.
(p) Opinion of Financial Advisor. IPC has received the opinions
of Salomon Smith Barney Inc. and Donaldson, Lufkin & Jenrette Securities
Corporation, each dated the date of this Agreement, to the effect that,
as of the date thereof, the IPC Merger Exchange Ratio is fair, from a
financial point of view, to the holders of IPC Common Stock.
(q) Board Recommendation. The Board of Directors of IPC, at a
meeting duly called and held, has (i) determined that this Agreement and
the transactions contemplated hereby, including the Mergers, and the
Voting Agreement and the transactions contemplated thereby, taken
together, are fair to and in the best interests of the stockholders of
IPC, and (ii) declared this Agreement advisable and resolved to
recommend that the holders of the shares of IPC Common Stock adopt this
Agreement.
(r) Required Votes. The IPC Stockholder Approval, being the
affirmative approval, by vote or written consent, of a majority of the
outstanding shares of IPC Common Stock, is the only vote of the holders
of any class or series of IPC's securities necessary to adopt the Merger
Agreement and approve the Mergers and the other transactions
contemplated hereby. There is no vote of the holders of any class or
series of IPC's securities necessary to approve the Voting Agreement or
the transactions contemplated thereby. The affirmative approval, by vote
or written consent, of a majority of the outstanding shares of IPC
Systems Common Stock to adopt this Agreement (the "IPC Systems
Stockholder Approval") is the only vote of the holders of any class or
series of IPC Systems' securities necessary to adopt the Merger
Agreement and approve the Mergers and the other transactions
contemplated hereby.
<PAGE> 29
25
(s) Properties. Except as disclosed in Section 3.01(s) of the
Disclosure Schedule or in the Recent SEC Documents, each of IPC and its
subsidiaries (i) has good and marketable title to all the properties and
assets reflected in the latest audited balance sheet included in the
Recent SEC Documents as being owned by IPC or one of its subsidiaries or
acquired after the date thereof which are, individually or in the
aggregate, material to IPC's business on a consolidated basis (except
properties sold or otherwise disposed of since the date thereof in the
ordinary course of business), free and clear of (A) all Liens except (1)
statutory liens securing payments not yet delinquent and (2) such
imperfections or irregularities of title, or other Liens (other than
real property mortgages or deeds of trust) as do not materially and
adversely affect the current use of the properties or assets subject
thereto or affected thereby or otherwise materially impair business
operations currently conducted at such properties, (B) all real property
mortgages and deeds of trust and (C) the Liens disclosed in Section
3.01(s) of the Disclosure Schedule and (ii) is the lessee of all
leasehold estates reflected in Section 3.01(s) of the Disclosure
Schedule hereto or acquired after the date thereof which are material to
its business on a consolidated basis and is in possession of the
properties purported to be leased thereunder, and each such lease is in
full force and effect and is valid without material default (and the
lessee has not received any written notice of default, whether or not
material) thereunder by the lessee or, to IPC's knowledge, the lessor.
(t) Intellectual Property. (i) Except as disclosed in the Recent
SEC Documents, IPC has heretofore made available to Parent, with respect
to the Intellectual Property owned, held or used by IPC or its
subsidiaries ("IPC IP"), all material patents, registrations and
applications relating thereto, all material unregistered copyrights,
trademarks, service marks, brand names, corporate names, technology and
inventions and each and every material license, sublicense,
consent-to-use agreement and other agreement granting or obtaining any
right to use or practice any rights under any IPC IP to which IPC and/or
any of its subsidiaries is a party ("IPC IP Licenses").
(ii) Except as disclosed on Section 3.01(t)(ii) of the
Disclosure Schedule, (1) IPC and/or any of its subsidiaries own or has
the right to use all the Intellectual Property necessary for IPC and its
subsidiaries to conduct their businesses as is currently conducted and
consistent with past practice; (2) all of the material owned IPC IP is
valid, enforceable and unexpired, is free of Liens, and has not been
abandoned; (3) to IPC's knowledge, the IPC IP does not infringe or
otherwise impair the Intellectual Property of any third party and is not
being infringed or impaired by any third party; (4) no judgment, decree,
injunction, rule or order has been rendered or, to the knowledge of IPC,
is threatened by any Governmental Entity which would limit, cancel or
question the validity of (or IPC or any subsidiary's right to own or
use) any material IPC IP; (5) IPC takes all reasonable steps to protect,
maintain and safeguard the material IPC IP, including executing all
appropriate confidentiality agreements; (6) neither IPC and its
subsidiaries, nor, to IPC's knowledge, any other party to an IP License,
is alleged n writing to be, in breach or default thereunder, and IPC and
its subsidiaries have not received any written notification from any
third party that there is any such breach or default; (7) the
transactions contemplated by this Agreement shall in no material way
impair or limit the
<PAGE> 30
26
rights of IPC or any of its subsidiaries under any IP License, or cause
any material payments to be due thereunder.
For the purposes of this Agreement, "Intellectual
Property" shall mean all U.S., state and foreign intellectual property,
including without limitation all (1) (A) inventions, discoveries,
processes, designs, techniques, developments, technology, and related
improvements and know-how, whether or not patented or patentable; (B)
copyrights and works of authorship in any media, including computer
programs, software programs, databases and related items, advertising
and promotional materials (including graphics and text), and Internet
site content; (C) trademarks, service marks, trade names, brand names,
corporate names, domain names, logos, trade dress and all elements
thereof, the goodwill of any business symbolized thereby, and all
common-law rights relating thereto; (D) trade secrets and other
confidential information; (2) all registrations, applications,
recordings, and licenses or other agreements related thereto; (3) all
rights to obtain renewals, extensions, continuations,
continuations-in-part, reissues, divisions or similar legal protections
related thereto; and (4) rights to bring an action at law or in equity
for the infringement or other impairment of the foregoing before the
Closing Date, including the right to receive all proceeds and damages
therefrom.
(u) Transactions with Affiliates. Except as disclosed in the
Recent SEC Documents and as set forth on Section 3.01(u) of the
Disclosure Schedule and in the SEC Documents, from October 1, 1998
through the date of this Agreement, there has been no transaction,
agreement, arrangement or understanding, or any related series thereof,
between IPC or its subsidiaries or contractors, on the one hand, and
IPC's affiliates (other than wholly-owned (excluding directors' and
nominee shares) subsidiaries of IPC), on the other hand, in which the
amount or value involved exceeded $60,000.
SECTION 3.02 Representations and Warranties of IXnet. IXnet
represents and warrants to Parent and GC Merger Sub as follows:
(a) Organization, Standing and Corporate Power. Each of IXnet
and each of its subsidiaries is duly organized, validly existing and in
good standing (with respect to jurisdictions which recognize the concept
of good standing) under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to
carry on its business as now being conducted, except where the failure
to have such power and authority could not reasonably be expected to
have an IXnet Material Adverse Effect. Each of IXnet and each of its
subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure
to be so qualified or licensed (individually or in the aggregate) would
not be reasonably expected to have an IXnet Material Adverse Effect. The
Recent IXnet SEC Documents (as defined in Section 3.02(e)) contain as
exhibits complete and correct copies of the Certificate of Incorporation
and By-laws of IXnet, in each case as amended to the date of this
Agreement.
<PAGE> 31
27
(b) Subsidiaries. The only direct or indirect subsidiaries of
IXnet are those listed in Section 3.01(b) of the Disclosure Schedule.
All the outstanding shares of capital stock of each such subsidiary have
been validly issued and are fully paid and nonassessable and are owned
(of record and beneficially) by IXnet, by another subsidiary (wholly
owned) of IXnet or by IXnet and another such subsidiary (wholly owned),
free and clear of all Liens, except as set forth in Section 3.01(b) of
the Disclosure Schedule. Except for the ownership interests set forth in
Section 3.01(b) of the Disclosure Schedule or in the Recent IXnet SEC
Documents, IXnet does not own, directly or indirectly, any capital stock
or other ownership interest, and does not have any option or similar
right to acquire any assets or equity or other ownership interest, in
any corporation, partnership, business association, joint venture or
other entity.
(c) Capital Structure. As of February 21, 2000, the authorized
capital stock of IXnet consists of 100,000,000 shares of IXnet Common
Stock. As of the close of business on February 21, 2000, there were (i)
51,148,867 shares of IXnet Common Stock were issued and outstanding;
(ii) 0 shares of IXnet Common Stock held in the treasury of IXnet; (iii)
907,557 shares of IXnet Common Stock reserved for issuance upon exercise
of authorized but unissued IXnet Options pursuant to the Stock Plans;
and (iv) 9,053,409 shares of IXnet Common Stock issuable upon exercise
of outstanding IXnet Options. Section 3.01(c) of the Disclosure Schedule
sets forth the name of each holder of outstanding options to acquire
shares of IXnet Common Stock, the number of options held and the
exercise prices of such options. Except as set forth above, no shares of
capital stock or other equity securities of IXnet are authorized,
issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of IXnet are, and all shares which may be issued pursuant
to the Stock Plans will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights. Other than the IXnet Options, there are no outstanding bonds,
debentures, notes or other indebtedness or other securities of IXnet
having the right to vote (or convertible into, or exchangeable or
exercisable for, securities having the right to vote) on any matters on
which stockholders of IXnet may vote. Except as set forth above, there
are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to
which IXnet or any of its subsidiaries is a party or by which any of
them is bound obligating IXnet or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other equity or voting securities of IXnet or
of any of its subsidiaries or obligating IXnet or any of its
subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. Except as set forth in the Recent IXnet SEC Documents and
except for such indebtedness which is not material to IXnet, IXnet and
its subsidiaries have no indebtedness. Other than the IXnet Options, (i)
there are no outstanding contractual obligations, commitments,
understandings or arrangements of IXnet or any of its subsidiaries to
repurchase, redeem or otherwise acquire or make any payment in respect
of any shares of capital stock of IXnet or any of its subsidiaries and
(ii) there are no irrevocable proxies with respect to shares of capital
stock of IXnet or any subsidiary of IXnet. Except as set forth above or
in Section 3.01(c) of the Disclosure Schedule or in the Recent IXnet SEC
Documents, there
<PAGE> 32
28
are no agreements or arrangements pursuant to which IXnet is or could be
required to register shares of IXnet Common Stock or other securities
under the Securities Act or other agreements or arrangements with or
among any securityholders of IXnet with respect to securities of IXnet.
(d) Authority; Noncontravention. IXnet has the requisite
corporate and other power and authority to enter into this Agreement
and, subject to the IXnet Stockholder Approval with respect to the
consummation of the IXnet Merger, which is being obtained by written
consent immediately following the execution of this Agreement, to
consummate the transactions contemplated hereby. Other than in its
capacity as a stockholder of IXnet, no corporate action is required to
be taken by IPC or its stockholders in connection with the consummation
of the IXnet Merger. The execution and delivery of this Agreement by
IXnet and the consummation by IXnet of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on
the part of IXnet, subject, in the case of the IXnet Merger, to the
IXnet Stockholder Approval. This Agreement has been duly executed and
delivered by IXnet and constitutes a valid and binding obligation of
IXnet, enforceable against IXnet in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law) or by an implied covenant of good faith and fair dealing. Except
as disclosed in Section 3.01(d) of the Disclosure Schedule, the
execution and delivery of this Agreement do not, and the consummation of
the transactions contemplated by this Agreement and compliance with the
provisions hereof 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 IXnet or any of its subsidiaries
under, (i) the Certificate of Incorporation or By-laws of IXnet or the
comparable charter or organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to IXnet or any of its subsidiaries or
their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule,
regulation or arbitration award applicable to IXnet or any of its
subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, breaches,
violations, defaults, rights, losses or Liens that individually or in
the aggregate could not be reasonably expected to have an IXnet Material
Adverse Effect. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any Governmental
Entity, is required by or with respect to IXnet or any of its
subsidiaries in connection with the execution and delivery of this
Agreement by IXnet or the consummation by IXnet of the transactions
contemplated hereby, except, with respect to this Agreement, for (i) the
filing of a premerger notification and report form by IXnet under the
HSR Act, (ii) the filing with the SEC of (y) Information Statements
relating to the Mergers, and (z) such
<PAGE> 33
29
reports under the Exchange Act, as may be required in connection with
this Agreement and the transactions contemplated by this Agreement,
(iii) the filing of the Certificates of Merger with the Secretary of
State of the State of Delaware and the filing of appropriate documents
with the relevant authorities of other states in which IXnet is
qualified to do business and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations, filings or notices
as are set forth in Section 3.01(d) of the Disclosure Schedule.
(e) SEC Documents; Undisclosed Liabilities. IXnet and, to the
extent applicable, its subsidiaries have filed all required reports,
schedules, forms, statements and other documents with the SEC since
October 1, 1998, and IXnet has delivered or made available to Parent all
reports, schedules, forms, statements and other documents filed by IXnet
and, to the extent applicable, its subsidiaries with the SEC since such
date (collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference therein, the
"IXnet SEC Documents"). As of their respective dates, the IXnet SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such
IXnet SEC Documents, and none of the IXnet SEC Documents (including any
and all financial statements included therein) as of such dates (and, if
amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
consolidated financial statements (including the related notes) of IXnet
included in all IXnet SEC Documents filed since October 1, 1998 (the
"IXnet SEC Financial Statements") comply as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the
case of unaudited consolidated quarterly statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of IXnet and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited quarterly statements, to normal
year-end audit adjustments that have not been and are not expected to be
material in amount). Except as set forth in Schedule 3.01(e), at the
date of the most recent audited financial statements of IXnet included
in the IXnet SEC Documents filed by IXnet or its subsidiaries since
October 1, 1998 and prior to the date of this Agreement (the "Recent
IXnet SEC Documents"), neither IXnet nor any of its subsidiaries had,
and since such date neither IXnet nor any of such subsidiaries incurred,
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which, individually or in the aggregate, would
reasonably be expected to have an IXnet Material Adverse Effect. To the
best of IXnet's knowledge, (i) all historical financial statements
supplied to Parent by IXnet for periods subsequent to December 31, 1999
have been prepared in accordance with generally accepted accounting
principles (except as permitted by Form 10-Q of the
<PAGE> 34
30
SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present the
consolidated financial position of IXnet and its consolidated
subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject to
normal year-end adjustments that have not been and are not expected to
be material in amount) and (ii) all financial data so supplied for such
periods is true and accurate in all material respects.
(f) Information Supplied. None of the information supplied or to
be supplied by IXnet for inclusion or incorporation by reference in (i)
the Forms S-4 will, at the time each Form S-4 is filed with the SEC, and
at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(ii) each Information Statement/Prospectus will, at the date it is first
mailed to IXnet's stockholders or IPC's stockholders, as the case may
be, at the time of the IXnet Stockholder Meeting or the IPC Stockholder
Meeting, as the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Forms S-4
and the Information Statement/Prospectuses will comply as to form in all
material respects with the requirements of the Exchange Act and the
Securities Act and the rules and regulations promulgated thereunder,
except that no representation is made by IXnet with respect to
statements made or incorporated by reference therein based on
information supplied by Parent or GC Merger Sub for inclusion or
incorporation by reference in the Forms S-4 and the Information
Statement/Prospectuses.
(g) Absence of Certain Changes or Events. Except as disclosed in
Section 3.01(g) of the Disclosure Schedule or except as included in the
Recent IXnet SEC Documents, since October 1, 1998, IXnet has conducted
its business in all material respects only in the ordinary course
consistent with past practice and there is not and has not been any
condition, event or occurrence which, individually or in the aggregate,
would reasonably be expected to have an IXnet Material Adverse Effect.
(h) Litigation; Labor Matters; Compliance with Laws. (i) Except
as disclosed in the Recent SEC Documents, there are no suits, actions,
complaints, charges, arbitrations, inquiries, counterclaims, proceedings
or governmental or internal investigations pending or, to the knowledge
of IXnet, threatened in writing against or affecting IPC or any of its
subsidiaries which, individually or in the aggregate, would reasonably
be expected to have an IXnet Material Adverse Effect; in addition, there
is not any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against IXnet or any of
its subsidiaries having, or which could reasonably be expected to have
any such effect.
<PAGE> 35
31
(ii) Except as disclosed in Section 3.01(h)(ii) of the
Disclosure Schedule, (A) neither IXnet nor any of its subsidiaries is a
party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor
organization, (B) neither IPC nor any of its subsidiaries is the subject
of any proceeding asserting that it or any subsidiary has committed an
unfair labor practice or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment nor is such unfair
labor practice threatened or otherwise affecting IXnet or any of its
subsidiaries, (C) there is not any strike, work stoppage, dispute,
lockout or other labor controversy involving it or any of its
subsidiaries pending or, to its knowledge, threatened, any of which
would reasonably be expected to have an IXnet Material Adverse Effect;
(D) no representation question exists or has been raised respecting any
of the Company's employees or any of its subsidiaries' employees within
the past three years, nor to the knowledge of IXnet are there any
campaigns being conducted to solicit cards from employees of IXnet or
any of its subsidiaries to authorize representation by any labor
organization; (E) neither IXnet nor any of its subsidiaries has closed
any plant or facility, effectuated any layoffs of employees or
implemented any early retirement, separation or window program within
the past three years, nor has IXnet or any of its subsidiaries planned
or announced any such action or program for the future; (F) neither
IXnet nor any of its subsidiaries shall, at any time within the 90-day
period prior to the Closing Date, effectuate a "plant closing" or "mass
layoff", as those terms are defined in WARN, or any state law, affecting
in whole of in part any site of employment, facility, operating unit or
employee; and (G) the Company and its subsidiaries are in compliance
with their obligations pursuant to WARN, and all other notification and
bargaining obligations arising under any collective bargaining
agreement, statute or otherwise.
(iii) The conduct of the business of each of IXnet and
each of its subsidiaries and, to the knowledge of IXnet, its contractors
complies with all statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees or arbitration awards applicable thereto,
including the Foreign Corrupt Practices Act, except for violations or
failures so to comply, if any, that, individually or in the aggregate,
could not reasonably be expected to have an IXnet Material Adverse
Effect.
(i) Absence of Changes with respect to Employees and Employee
Benefit Plans. Except as set forth in Section 3.01(i) of the Disclosure
Schedule or in the Recent IXnet SEC Documents, since September 1, 1999,
there has not been any (i) increase in the compensation or fringe
benefits of any present or former director or IXnet Employee (as defined
below) whose base salary equals or is in excess of $100,000 per annum as
of September 1, 1999 (except for increases in salary or wages in the
ordinary course of business consistent with past practice), (ii) grant
of any severance or termination pay to any present or former director or
IXnet Employee whose base salary equals or is in excess of $100,000 per
annum as of September 1, 1999 (except in the ordinary course of business
consistent with past practice or as required by law or agreements or
plans in effect as of September 1, 1999), (iii) loan or advance of money
or other property by IXnet or any subsidiary thereof to any of their
present or former directors or IXnet Employees
<PAGE> 36
32
which is outstanding as of the date hereof or (iv) establishment,
adoption, entrance into, amendment or termination of any IXnet Plan (as
defined below).
(j) (i) Except as set forth therein, Section 3.01(j)(i) of the
Disclosure Schedule contains a true and complete list of each "employee
benefit plan" (within the meaning of section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), including,
without limitation, multiemployer plans within the meaning of ERISA
section 3(37)), and all stock purchase, stock option, consulting,
severance, employment, change-in-control, termination, indemnification,
fringe benefit, collective bargaining, bonus, incentive, deferred
compensation and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in
the future as a result of the transaction contemplated by this Agreement
or otherwise), whether formal or informal, oral or written, legally
binding or not, under which any current or former director or any
employee or former employee of IXnet or any subsidiary thereof (the
"IXnet Employees") has any present or future right to benefits,
sponsored or maintained by IXnet or its subsidiaries or under which
IXnet or any subsidiary thereof has had or has any present or future
liability. All such plans, agreements, programs, policies and
arrangements shall be collectively referred to as the "IXnet Plans".
(ii) Except as set forth in Section 3.01(j)(ii) of the
Disclosure Schedule, with respect to each IXnet Plan, IXnet has made
available to Parent a current, accurate and complete copy (or, to the
extent no such copy exists, an accurate description) thereof and, to the
extent applicable: (A) any related trust agreement or other funding
instrument; (B) the most recent determination letter, if applicable; (C)
any summary plan description and other written communications (or a
description of any oral communications) by IXnet or any subsidiary
thereof to their employees concerning the extent of the benefits
provided under a IXnet Plan; and (D) with respect to each employee
pension benefit plan, for the three (3) most recent years (I) the Form
5500 and attached schedules, (II) audited financial statements, (III)
actuarial valuation reports and (IV) attorney's response to an auditor's
request for information.
(iii) (A) Each IXnet Plan has been established and
administered in accordance with its terms, and in compliance with the
applicable provisions of ERISA, the Code and other applicable laws,
rules and regulations; (B) each IXnet Plan which is intended to be
qualified within the meaning of Code section 401(a) is so qualified and
has received a favorable determination letter as to its qualification,
and nothing has occurred, whether by action or failure to act, that
would reasonably be expected to cause the loss of such qualification;
(C) no event has occurred and no condition exists that would subject
IXnet or any subsidiary thereof, either directly or by reason of their
affiliation with any member of their "Controlled Group" (defined as any
organization which is a member of a controlled group of organizations
within the meaning of Code sections 414(b), (c), (m) or (o)), to any
tax, fine, lien, penalty or other liability imposed by ERISA, the Code
or other applicable laws, rules and regulations; (D) for each IXnet Plan
with respect to which a Form 5500 has been filed, no material change has
occurred with respect to the matters
<PAGE> 37
33
covered by the most recent Form since the date thereof; (E) no
"reportable event" (as such term is defined in ERISA section 4043),
"prohibited transaction" (as such term is defined in ERISA section 406
and Code section 4975) or "accumulated funding deficiency" (as such term
is defined in ERISA section 302 and Code section 412 (whether or not
waived)) has occurred with respect to any IXnet Plan; (F) no IXnet Plan
provides retiree welfare benefits and neither IXnet nor any subsidiary
thereof has any obligations to provide any retiree welfare benefits,
other than those mandated by the Consolidated Omnibus Budget
Reconciliation Act of 1995; and (G) except as set forth in Section
3.01(j)(iii) of the Disclosure Schedule, all awards, grants or bonuses
made pursuant to any IXnet Plan have been, or will be, fully deductible
to IXnet or its subsidiaries notwithstanding the provisions of Section
162(m) of the Code and the regulations promulgated thereunder; provided
that with respect to each IXnet Plan that is a multi-employer plan, the
representations contained in this Section 3.02(j)(iii) are made to the
knowledge of IXnet.
(iv) There are no IXnet Plans that are not multiemployer
plans which are subject to Title IV of ERISA.
(v) With respect to any multiemployer plan (within the
meaning of ERISA section 4001(a)(3)) to which IXnet, any subsidiary
thereof, or any member of their Controlled Group has any liability or
contributes (or has at any time contributed or had an obligation to
contribute): (A) none of IXnet, any subsidiary thereof, or any member of
their Controlled Group has incurred any withdrawal liability under Title
IV of ERISA or, to the best knowledge of IXnet, would be subject to such
liability if, as of the Closing Date, IXnet, any of its subsidiaries or
any member of their Controlled Group were to engage in a complete
withdrawal (as defined in ERISA section 4203) or partial withdrawal (as
defined in ERISA section 4205) from any such multiemployer plan; and (B)
to the best knowledge of IXnet, no such multiemployer plan is in
reorganization or insolvent (as those terms are defined in ERISA
sections 4241 and 4245, respectively).
(vi) With respect to any IXnet Plan other than a
multiemployer plan, and to the best knowledge of IXnet with respect to
any multiemployer plan, (A) no actions, suits or claims (other than
routine claims for benefits in the ordinary course) are pending or
threatened, (B) no facts or circumstances exist that could give rise to
any such actions, suits or claims, and (C) no administrative
investigation, audit or other administrative proceeding by the
Department of Labor, the Pension Benefit Guaranty Corporation, the
Internal Revenue Service or any other governmental agency is pending,
threatened or in progress.
(vii) Except as set forth in Section 3.01(j)(vii) of the
Disclosure Schedule, no IXnet Plan exists that, as a result of the
transaction contemplated by this Agreement, could result in the payment
to any current or former Employee or director of IXnet or any subsidiary
thereof of any money or other property or could result in the
acceleration or provision of any other rights or benefits to any current
or former Employee or director of
<PAGE> 38
34
IXnet or any subsidiary thereof, whether or not such payment, right or
benefit would constitute a parachute payment within the meaning of Code
section 280G.
(k) Tax Returns and Tax Payments. IXnet and each of its
subsidiaries, and any Consolidated Group for Tax purposes of which IXnet
or any of its subsidiaries is or has been a member (an "IXnet
Consolidated Group") has timely filed all Tax Returns required to be
filed by it and all such Tax Returns are correct and complete in all
material respects. All Taxes shown on such Tax Returns have been timely
paid, and IXnet, each of its subsidiaries and each IXnet Consolidated
Group has timely paid or accrued all Taxes for which a notice of
assessment or collection has been received (other than amounts being
contested in good faith by appropriate proceedings). IXnet, its
subsidiaries and each IXnet Consolidated Group have made adequate
provision (to the extent required by, and in accordance with GAAP) for
all Taxes payable for any periods that end before the Effective Time of
the Mergers for which no Tax Returns have yet been filed and for any
periods that begin before the Effective Time of the Mergers and end
after the Effective Time of the Mergers to the extent such Taxes are
attributable to the portion of any such period ending at the Effective
Time of the Mergers, and the charges, accruals and reserves for Taxes
reflected in the financial statements of IXnet, its subsidiaries and
each IXnet Consolidated Group are adequate under GAAP to cover the Tax
liability accruing or payable by IXnet and its subsidiaries in respect
of periods prior to the date hereof. Except as set forth in Section
3.01(k) of the Disclosure Schedule: (i) no material claim for unpaid
Taxes has become a lien against the property of IXnet or any of its
subsidiaries or is being asserted in writing against IXnet or any of its
subsidiaries, (ii) neither IXnet nor any of its subsidiaries is
delinquent in the payment of any Tax or has requested or filed any
document having the effect of causing any extension of time within which
to file any Tax Returns in respect of any fiscal year which have not
since been filed, (iii) no material audit or other proceeding with
respect to any Taxes due from IXnet, any of its subsidiaries or any
IXnet Consolidated Group or any Tax Return of IXnet, any of its
subsidiaries or any IXnet Consolidated Group is pending, threatened, to
the best of IXnet's knowledge, or being conducted by a Tax authority,
(iv) no extension of the statute of limitations on the assessment of any
Taxes has been granted by IXnet, any of its subsidiaries or any IXnet
Consolidated Group and is currently in effect, (v) neither IXnet or any
of its subsidiaries (A) has been a member of a Consolidated Group filing
a consolidated federal income Tax Return (other than a group the common
parent of which was IPC) or (B) has any liability for the Taxes of any
person (other than IXnet and its subsidiaries), including liability
arising from the application of Treasury Regulation section 1.1502-6 or
any analogous provision of state, local or foreign law, or as a
transferee or successor, by contract, or otherwise, (vi) no consent
under Section 341(f) of the Code has been filed with respect to IXnet or
any of its subsidiaries, and (vii) all Taxes required to be withheld,
collected or deposited by or with respect to IXnet, each of its
subsidiaries and each IXnet Consolidated Group have been timely
withheld, collected or deposited, as the case may be, and, to the extent
required, have been paid to the relevant taxing authority.
<PAGE> 39
35
(l) Board Approval; Section 203 of the DGCL. The Board of
Directors of IXnet has, prior to the execution hereof, approved the
execution and delivery by IXnet of this Agreement and the consummation
of the Mergers and the other transactions contemplated by this
Agreement. Section 203 of the DGCL is inapplicable to this Agreement,
the Mergers, the Voting Agreement and the other transactions
contemplated hereby and thereby with respect to IXnet. No state takeover
statute or similar statute or regulation of the State of Delaware or of
any other state or jurisdiction applies or purports to apply to this
Agreement, the Mergers, the Voting Agreement, the Stockholder Consents
or any of the other transactions contemplated hereby or thereby and no
provision of the certificate of incorporation, by-laws or other
governing instruments of IXnet or any of its subsidiaries or the terms
of any rights plan or preferred stock of IXnet would, directly or
indirectly, restrict or impair the ability of Parent to vote, or
otherwise to exercise the rights of a stockholder with respect to,
securities of IXnet and its subsidiaries that may be acquired or
controlled by Parent or permit any stockholder to acquire securities of
IXnet or the IXnet Merger Surviving Corporation on a basis not available
to Parent in the event that Parent were to acquire securities of IXnet
or its subsidiaries.
(m) Environmental Matters. (i) Except as disclosed in Section
3.01(m) of the Disclosure Schedule:
(A) IXnet and its subsidiaries including their
predecessors and their properties (I) are in compliance in all
material respects with all applicable Environmental Laws; (II)
hold all material Environmental Permits (each of which is in
full force and effect) required for any of their current or
intended operations or for any property owned, leased, or
otherwise operated by any of them; (III) are in compliance in
all material respects with all of their Environmental Permits;
and (IV) reasonably believe that: each of their Environmental
Permits will be timely renewed and complied with, without
material expense; any additional Environmental Permits that may
be required of any of them will be timely obtained and complied
with, without material expense; and compliance with any
Environmental Law that is or is expected to become applicable to
any of them will be timely attained and maintained, without
material expense;
(B) None of IXnet and its subsidiaries has received any
Environmental Claim, and none of IXnet and its subsidiaries is
aware, after reasonable inquiry, of any threatened Environmental
Claim or of any circumstances, conditions or events that would
reasonably be expected to give rise to an Environmental Claim,
against IXnet or any of its subsidiaries, in each case that,
individually or in the aggregate, would reasonably be expected
to have an IXnet Material Adverse Effect;
(C) None of IXnet and its subsidiaries has entered into
or agreed to any consent decree or order under any Environmental
Law, and none of IXnet and its subsidiaries is subject to any
judgment, decree or order of any governmental authority relating
to compliance with any Environmental Law or to investigation,
<PAGE> 40
36
cleanup, remediation or removal of regulated substances under
any Environmental Law;
(D) There are no (I) underground storage tanks, (II)
polychlorinated biphenyls, (III) asbestos or asbestos-containing
materials or (IV) Hazardous Materials present at any facility
currently or, to the knowledge of IXnet, formerly owned, leased
or operated by IXnet or any of its subsidiaries that would
reasonably be expected to give rise to material liability of
IXnet or any of its subsidiaries under any Environmental Laws;
(E) There are no past (including, to the knowledge of
IXnet, with respect to assets or businesses formerly owned,
leased or operated by IXnet or any of its subsidiaries) or
present actions, activities, events, conditions or
circumstances, including the release, threatened release,
emission, discharge, generation, treatment, storage or disposal
of Hazardous Materials, that would reasonably be expected to
give rise to material liability of IXnet or any of its
subsidiaries under any Environmental Laws or any contract or
agreement; and
(F) To the knowledge of IXnet, none of IXnet and its
subsidiaries has assumed or retained, by contract or operation
of law, any material liabilities of any kind, fixed or
contingent, under any Environmental Law or with respect to any
Hazardous Material or Environmental Claim.
(ii) The items on Section 3.01(m) of the Disclosure Schedule,
individually and in the aggregate, would not reasonably be expected to
have an IXnet Material Adverse Effect.
(iii) IXnet has provided or made available to Parent and GC
Merger Sub true and complete copies of all Environmental Reports in its
possession or control.
(n) Material Contract Defaults; Non-Competes. (i) IXnet has
provided or made available to Parent copies, and has provided a true and
correct list to Parent, of all material contracts, agreements,
commitments, arrangements, leases, licenses, policies or other
instruments to which it or any of its subsidiaries is a party or by
which it or any such subsidiary is bound ("IXnet Material Contracts").
Neither IXnet nor any of its subsidiaries is, or has received any notice
or has any knowledge that any other party is, in default or unable to
perform in any respect under any such IXnet Material Contract, including
any license or agreement relating to intellectual property, except for
those defaults which could not reasonably be expected, either
individually or in the aggregate, to have a material adverse effect with
respect to IXnet; and there has not occurred any event that with the
lapse of time or the giving of notice or both would constitute such a
material default.
(ii) Except as disclosed in Section 3.01(n) of the
Disclosure Schedule or in the Recent IXnet SEC Documents,
neither IXnet nor any of its subsidiaries is a
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37
party to any agreement that expressly limits the ability of
IXnet or any of its subsidiaries to compete in or conduct any
line of business or compete with any person in any geographic
area or during any period of time.
(o) Brokers. No broker, investment banker, financial advisor or
other person other than Salomon Smith Barney Inc. and Donaldson, Lufkin
& Jenrette Securities Corporation is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of IXnet.
(p) Opinion of Financial Advisor. IXnet has received the
opinions of Salomon Smith Barney Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, each dated the date of this Agreement, to the
effect that, as of the date thereof, the IXnet Merger Exchange Ratio is
fair, from a financial point of view, to the holders of IXnet Common
Stock.
(q) Board Recommendation. The Board of Directors of IXnet, at a
meeting duly called and held, has (i) determined that this Agreement and
the transactions contemplated hereby, including the Mergers, and the
Voting Agreement and the transactions contemplated thereby, taken
together, are fair to and in the best interests of the stockholders of
IXnet, and (ii) declared this Agreement advisable and resolved to
recommend that the holders of the shares of IXnet Common Stock adopt
this Agreement.
(r) Required IXnet Vote. The IXnet Stockholder Approval, being
the affirmative approval, by vote or written consent, of a majority of
the outstanding shares of IXnet Common Stock, is the only vote of the
holders of any class or series of IXnet's securities necessary to adopt
the Merger Agreement and approve the Mergers and the other transactions
contemplated hereby. There is no vote of the holders of any class or
series of IXnet's securities necessary to approve the Voting Agreement
or the transactions contemplated thereby.
(s) Properties. Except as disclosed in the Recent IXnet SEC
Documents or in Section 3.01(s) of the Disclosure Schedule hereto, each
of IXnet and its subsidiaries (i) has good and marketable title to all
the properties and assets reflected in the latest audited balance sheet
included in the Recent IXnet SEC Documents as being owned by IXnet or
one of its subsidiaries or acquired after the date thereof which are,
individually or in the aggregate, material to IXnet's business on a
consolidated basis (except properties sold or otherwise disposed of
since the date thereof in the ordinary course of business), free and
clear of (A) all Liens except (1) statutory liens securing payments not
yet delinquent and (2) such imperfections or irregularities of title, or
other Liens (other than real property mortgages or deeds of trust) as do
not materially and adversely affect the current use of the properties or
assets subject thereto or affected thereby or otherwise materially
impair business operations currently conducted at such properties, (B)
all real property mortgages and deeds of trust and (C) the Liens
disclosed in Section 3.01(s) of the Disclosure Schedule and (ii) is the
lessee of all leasehold estates reflected in Section
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38
3.01(s) of the Disclosure Schedule or acquired after the date thereof
which are material to its business on a consolidated basis and is in
possession of the properties purported to be leased thereunder, and each
such lease is in full force and effect and is valid without material
default (and the lessee has not received any notice of default, whether
or not material) thereunder by the lessee or, to IXnet's knowledge, the
lessor.
(t) Intellectual Property. (i) Except as disclosed in the Recent
IXnet SEC Documents, IXnet has heretofore made available to Parent, with
respect to the Intellectual Property owned, held or used by IXnet or its
subsidiaries ("IXnet IP"), all material patents, registrations and
applications relating thereto, all material unregistered copyrights,
trademarks, service marks, brand names, corporate names, technology and
inventions and each and every material license, sublicense,
consent-to-use agreement and other agreement granting or obtaining any
right to use or practice any rights under any IXnet IP to which IXnet
and/or any of its subsidiaries is a party ("IXnet IP Licenses").
(ii) Except as disclosed on Section 3.01(t)(ii) of the
Disclosure Schedule, (1) IXnet and/or any of its subsidiaries own or has
the right to use all the Intellectual Property necessary for IXnet and
its subsidiaries to conduct their businesses as is currently conducted
and consistent with past practice; (2) all of the material IXnet IP is
valid, enforceable and unexpired, is free of Liens, and has not been
abandoned; (3) to IXnet's knowledge, the IXnet IP does not infringe or
otherwise impair the Intellectual Property of any third party and is not
being infringed or impaired by any third party; (4) no judgment, decree,
injunction, rule or order has been rendered or, to the knowledge of
IXnet, is threatened by any Governmental Entity which would limit,
cancel or question the validity of (or IXnet or any subsidiary's right
to own or use) any material IXnet IP; (5) IXnet takes all reasonable
steps to protect, maintain and safeguard the material IXnet IP,
including executing all appropriate confidentiality agreements; (6)
neither IXnet and its subsidiaries, nor, to the best of IXnet's
knowledge, any other party to an IP License, is alleged in writing to
be, in breach or default thereunder, and IXnet and its subsidiaries have
not received any written notification from any third party that there is
any such breach or default; (7) the transactions contemplated by this
Agreement shall in no material way impair or limit the rights of IXnet
or any of its subsidiaries under any IP License, or cause any material
payments to be due thereunder.
(u) Transaction with Affiliates. Except as set forth in Section
3.01(u) of the Disclosure Schedule and in the IXnet SEC Documents, from
October 1, 1997 through the date of this Agreement, there has been no
transaction, agreement, arrangement or understanding, or any related
series thereof, between IXnet or its subsidiaries or contractors, on the
one hand, and IXnet's affiliates (other than IPC and the wholly-owned
(excluding directors' and nominee shares) subsidiaries of IPC or IXnet),
on the other hand, in which the amount or value involved exceeded
$60,000.
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39
SECTION 3.03 Representations and Warranties of Parent and Sub.
Parent and GC Merger Sub represent and warrant to the Companies as follows:
(a) Organization, Standing and Corporate Power. Each of Parent,
GC Merger Sub and the other subsidiaries of Parent is duly organized,
validly existing and in good standing under the laws of its jurisdiction
of incorporation or organization, has all requisite power and authority
to carry on its business as now being conducted and is duly qualified or
licensed and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary other than in
such jurisdictions where the failure so to qualify or to be in good
standing would not, either individually or in the aggregate, reasonably
be expected to have a Parent Material Adverse Effect. The copies of the
memorandum of association and by-laws of Parent which were previously
furnished to IXnet are true, complete and correct copies of such
documents as in effect on the date of this Agreement. For purposes of
this Section 3.03, "subsidiary" shall mean those subsidiaries of Parent
that constitute "Significant Subsidiaries" within the meaning of Rule
1-02 of Regulation S-X of the SEC.
(b) Capital Structure. (i) As of February 18, 2000, the
authorized capital stock of Parent consisted of (a) 3,000,000,000 shares
of Parent Common Stock of which 780,156,745 shares were outstanding (not
including 22,033,758 shares of Parent Common Stock held by a subsidiary
of Parent and considered "treasury stock" for U.S. GAAP purposes) and
(b) 20,000,000 shares of preferred stock of which (A) 10,000,000 shares
of Parent's 6-3/8% Cumulative Convertible Preferred Stock, (B) 400,000
shares of Parent's 6-3/8% Cumulative Convertible Preferred Stock, Series
B, and (C) 2,600,000 shares of Parent's 7% Cumulative Convertible
Preferred Stock (collectively, the "Parent Preferred Stock") were
outstanding. As of February 18, 2000, (a) 2,000,000 shares of Parent
Common Stock were reserved for issuance to pay dividends on the
outstanding shares of Parent Preferred Stock, (b) 43,317,369 shares of
Parent Common Stock were reserved for issuance upon conversion of the
shares of Parent Preferred Stock and (c) 90,000,000 shares of Parent
Common Stock were reserved for issuance pursuant to Parent's 1998 Stock
Incentive Plan (the "Parent Stock Incentive Plan"). Since February
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40
18, 2000 to the date of this Agreement, there have been no issuances of
shares of the capital stock of Parent or any other securities of Parent
other than (a) issuances of shares pursuant to options or rights
outstanding under the stock plans of Parent and (b) issuances of shares
of Parent Common Stock upon conversion of shares of Parent Preferred
Stock. All issued and outstanding shares of the capital stock of Parent
are duly authorized, validly issued, fully paid and non-assessable, and
no class of capital stock is entitled to preemptive rights. There were
outstanding as of February 18, 2000 no options, warrants or other rights
to acquire capital stock from Parent other than (A) options representing
in the aggregate the right to purchase 80,232,932 shares of Parent
Common Stock issued to current or former employees, directors and
consultants of Parent and its subsidiaries pursuant to the Parent Stock
Incentive Plan and (B) (i) warrants to purchase 12,500,012 shares of
Parent Common Stock expiring August 13, 2003, exercisable at $9.50 per
share of Parent Common Stock, and (ii) warrants to purchase 5,108,358
shares of Parent Common Stock expiring August 13, 2008, exercisable at
$9.50 per share of Parent Common Stock (collectively, the "Parent
Warrants"). No options or warrants or other rights to acquire capital
stock from Parent have been issued or granted since February 18, 2000 to
the date of this Agreement.
(ii) As of the date of this Agreement, other than Parent
Common Stock and Parent Preferred Stock, no bonds, debentures, notes or
other indebtedness or other securities of Parent having the right to
vote on any matters on which shareholders may vote ("Parent Voting
Debt") are issued or outstanding.
(iii) Except as otherwise set forth in this Section
3.03(b), as of the date of this Agreement, there are no securities,
options, warrants, calls, rights, commitments, agreements, arrangements
or undertakings of any kind to which Parent or any of its subsidiaries
is a party or by which any of them is bound obligating Parent or any of
its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of Parent or any of its subsidiaries or obligating Parent or
any of its subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the date of this Agreement, there are
no outstanding obligations of Parent or any of its subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of
Parent or any of its subsidiaries, other than with respect to Parent
Preferred Stock and the 10-1/2 % Senior Exchangeable Preferred Stock due
2008 of Global Crossing Holdings Ltd., in each case in accordance with
the terms thereof.
(c) Authority; Noncontravention. (i) Parent has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby, subject to the approval
of the Bermuda Monetary Authority of the issuance of the shares of
Parent Common Stock to be issued in the Mergers (and the subsequent free
transferability of the corresponding shares between nonresident persons
for exchange control purposes). The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part
of Parent. This Agreement has been duly executed and
<PAGE> 45
41
delivered by Parent and constitutes a valid and binding agreement of
Parent, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally, by general equity principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law)
or by an implied covenant of good faith and fair dealing.
(ii) The execution and delivery of this Agreement by
Parent does not or will not, as the case may be, and the consummation by
Parent of the Mergers and the other transactions contemplated hereby
will not, conflict with, or result in a violation of, or constitute a
default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or
acceleration of any obligation or the loss of a material benefit under,
or the creation of a lien, pledge, security interest, charge or other
encumbrance on any assets (any such conflict, violation, default, right
of termination, amendment, cancellation or acceleration, loss or
creation, a "Violation") pursuant to: (A) any provision of the
memorandum of association or by-laws of Parent or any other constituent
document of any subsidiary of Parent, or (B) except as would not,
individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect, subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations
and filings referred to in paragraph (iii) below, any loan or credit
agreement, note, mortgage, bond, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or any subsidiary of Parent or their
respective properties or assets.
(iii) No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity is
required by or with respect to Parent or any subsidiary of Parent in
connection with the execution and delivery of this Agreement by Parent
or the consummation of the Mergers and the other transactions
contemplated hereby, except for (i) the filing of a premerger
notification and report form under the HSR Act, (ii) the filing with the
SEC of (y) the Information Statements relating to the Mergers and, if
applicable, the Schedules 13E-3, and (z) such reports under the Exchange
Act as may be required in connection with this Agreement, the Voting
Agreement and the transactions contemplated hereby and thereby, (iii)
the filing of the Certificates of Merger with the Secretary of State of
the State of Delaware and the filing of appropriate documents with the
relevant authorities of other states in which IPC or IXnet is qualified
to do business, (iv) such other consents, approvals, orders,
authorizations, registrations, declarations, filings or notices as are
set forth in Section 3.01(d) of the Disclosure Schedule, and (vi) the
approval of the issuance of the shares of Parent Common Stock to be
issued in the Mergers (and of the subsequent free transferability of the
corresponding shares between nonresident persons for exchange control
purposes) by the Bermuda Monetary Authority and such consents,
approvals, orders, authorizations, registrations, declarations and
filings the failure of which to make or obtain would not, individually
or in the aggregate, reasonably be expected to have a Parent Material
Adverse Effect.
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42
(d) Reports and Financial Statements. Parent has filed all
required reports, schedules, forms, statements and other documents
required to be filed by it with the SEC since January 1, 1999
(collectively, including all exhibits thereto, the "Parent SEC
Reports"). None of the Parent SEC Reports, as of their respective dates
(and, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing), contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each of the financial statements (including the related
notes) included in the Parent SEC Reports presents fairly, in all
material respects, the consolidated financial position and consolidated
results of operations and cash flows of Parent and its subsidiaries as
of the respective dates or for the respective periods set forth therein,
all in conformity with GAAP consistently applied during the periods
involved except as otherwise noted therein, and subject, in the case of
the unaudited interim financial statements, to normal year-end
adjustments that have not been and are not expected to be material in
amount. All of such Parent SEC Reports, as of their respective dates,
complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the rules
and regulations promulgated thereunder.
(e) Information Supplied. None of the information supplied or to
be supplied by Parent for inclusion or incorporation by reference in (i)
the Forms S-4 will, at the time each Form S-4 becomes effective under
the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) each
Information Statement/Prospectus will, on the date it is first mailed to
IPC's stockholders or IXnet's stockholders, as the case may be, or at
the time of the IXnet Stockholder Meeting or the IPC Stockholder
Meeting, as the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the
Forms S-4 and the Information Statement/Prospectuses will comply as to
form in all material respects with the requirements of the Exchange Act
and the Securities Act and the rules and regulations of the SEC
thereunder. Notwithstanding the foregoing provisions of this Section
3.03(e), no representation or warranty is made by Parent with respect to
statements made or incorporated by reference in the Forms S-4 or the
Information Statement/Prospectuses based on information supplied by
IXnet or IPC or their subsidiaries for inclusion or incorporation by
reference therein.
(f) Board Approval. The Board of Directors of Parent, by
resolutions duly adopted at a meeting duly called and held and not
subsequently rescinded or modified in any way, has approved this
Agreement, the Merger and the Voting Agreement. The Board of Directors
of GC Merger Sub has duly approved this Agreement and the IPC Merger and
declared this Agreement advisable.
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(g) Brokers. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent, except Chase Securities
Inc. ("Chase"), whose fees and expenses will be paid by Parent in
accordance with Parent's agreement with such firm based upon
arrangements made by or on behalf of Parent.
SECTION 3.04 Representations of Parent and Sub. Parent and GC
Merger Sub represent and warrant to the Company as follows:
(a) Organization and Corporate Power. GC Merger Sub is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware. GC Merger Sub is a direct wholly-owned subsidiary of Parent.
(b) Corporate Authorization. GC Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by GC
Merger Sub of this Agreement and the consummation by GC Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of GC Merger Sub. This Agreement has been duly
executed and delivered by GC Merger Sub and constitutes a valid and binding
agreement of GC Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally, by general equity principles (regardless or whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(c) Non-Contravention. The execution, delivery and performance
by GC Merger Sub of this Agreement and the consummation by GC Merger Sub of the
transactions contemplated hereby do not and will not contravene or conflict with
the certificate of incorporation or by-laws of GC Merger Sub.
(d) No Business Activities. GC Merger Sub has not conducted any
activities other than in connection with the organization of GC Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby. GC Merger Sub has no subsidiaries.
(e) Capitalization of GC Merger Sub. The authorized capital
stock of GC Merger Sub consists of 100 shares of common stock, par value $0.01
per share, all of which have been validly issued, are fully paid and
nonassessable and are owned by Parent, free and clear of any Lien.
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ARTICLE IV
Covenants Relating to Conduct of Business Prior to Mergers
SECTION 4.01 Conduct of Business of the Companies. (a) Conduct
of Business by the Companies. During the period from the date of this Agreement
to the Effective Time of the Mergers (except as otherwise specifically required
by the terms of this Agreement), each of the Companies shall, and shall cause
its subsidiaries to, act and carry on their respective businesses in all
material respects in the usual, regular and ordinary course of business
consistent with past practice and, to the extent consistent therewith, use its
reasonable best efforts to preserve intact their current business organizations,
keep available the services of their current officers and employees and preserve
their relationships with customers, suppliers, licensors, licensees,
advertisers, distributors and others having business dealings with them to the
end that their goodwill and ongoing businesses shall be materially unimpaired at
the Effective Time of the Mergers. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the Effective
Time of the Mergers, the Companies shall not, and shall not permit any of their
subsidiaries to, without the prior written consent of Parent:
(i) (x) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other than
dividends and distributions paid by a direct or indirect wholly owned
subsidiary of IPC to its parent, (y) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock, or (z) purchase, redeem or otherwise acquire any
shares of capital stock of the Companies or any of their subsidiaries or
any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities;
(ii) authorize for issuance, issue, deliver, sell, transfer,
pledge or otherwise encumber any shares of its capital stock or the
capital stock of any of its subsidiaries, any other voting securities or
any securities convertible into or exercisable or exchangeable for, or
any rights, warrants, calls, commitments or options to acquire, any such
shares, voting securities or convertible securities or any other
securities or equity equivalents (including stock appreciation rights)
(other than the issuance of IPC Common Stock or IXnet Common Stock upon
the exercise of options to purchase shares of such common stock
outstanding on the date of this Agreement and in accordance with their
present terms);
(iii) amend its certificate of incorporation, by-laws or other
comparable organizational documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets of,
or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof;
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(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of, close or shut down
its properties or assets, other than reasonable sales of inventory in
the ordinary course of business and assets having an aggregate value not
in excess of $500,000;
(vi) (x) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of
the Companies or any of their subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice, (y) amend the
terms of any outstanding security or (z) make any loans, advances or
capital contributions to, or investments in, any other person, other
than by a wholly owned subsidiary to its parent or to any direct or
indirect wholly owned subsidiary;
(vii) acquire or agree to acquire any assets the value of which,
individually or in the aggregate, exceeds $250,000, or make or agree to
make any capital expenditures except for capital expenditures set forth
in the business plans as capital expenditure budgets of the Companies
provided to Parent prior the date hereof;
(viii) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), except for the payment, discharge or satisfaction, (x) of
liabilities or obligations in the ordinary course of business consistent
with past practice, (y) liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or
the notes thereto) included in the Recent IPC SEC Documents or (z) other
claims, liabilities or obligations in the aggregate in an amount (or
having a value in an amount) not in excess of $1,000,000, or waive,
release, grant, or transfer any rights of value or modify or change any
existing license, lease, contract or other document in any manner that
would be material to IPC or enter into any new lease, license or other
contract or document;
(ix) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(x) enter into any new collective bargaining agreement or any
successor collective bargaining agreement to any collective bargaining
agreement or amend any existing collective bargaining agreement;
(xi) change any accounting principle used by it, except for such
changes as may be required to be implemented following the date of this
Agreement pursuant to GAAP or rules and regulations of the SEC
promulgated following the date hereof;
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(xii) settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement), other than litigation
not in excess of amounts reserved for in the most recent consolidated
financial statements of IPC included in the Recent IPC SEC Documents or,
if not so reserved for, in an aggregate amount not in excess of $250,000
(provided in either case such settlement documents do not involve any
material non-monetary obligations on the part of IPC);
(xiii) close, shut down or otherwise eliminate any of its
facilities;
(xiv) enter into any transaction, agreement, arrangement or
understanding, or any related series thereof, between itself or its
subsidiaries, on the one hand, and its affiliates (other than IPC and
the wholly-owned (excluding directors' and nominee shares) subsidiaries
of IPC or IXnet), on the other hand;
(xv) change any Tax election, change any annual Tax accounting
period, change any method of Tax accounting, file any amended Tax
return, enter into any closing agreement relating to any material Tax,
settle any material Tax claim or assessment, surrender any right to
claim a Tax refund or consent to any extension or waiver of the
limitations period applicable to any Tax claim or assessment;
(xvi) change the composition, fill any vacancies or increase the
size of IPC's or IXnet's Board of Directors; or
(xvii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Changes in Employment Arrangements and Severance. Following
the date of this Agreement, none of IPC, IXnet nor any subsidiary thereof shall,
without the Parent's prior written consent, (a) increase the compensation or
fringe benefits of any present or former director, officer or Employee of IPC,
IXnet or any subsidiary thereof (except for increases in salary or wages in the
ordinary course of business consistent with past practice), (b) grant any
severance or termination pay to any present or former director, officer or
Employee of IPC, IXnet or any subsidiary thereof (except in the ordinary course
of business consistent with past practice or as required by law or agreements or
plans in effect as of the date of this Agreement), (iii) loan or advance any
money or other property to any present or former director, officer or Employee
of IPC, IXnet or any subsidiary thereof, (iv) establish, adopt, enter into,
amend or terminate any IPC or IXnet Plan, except as required by law, or (v) take
any action that would accelerate the ability of a holder of any option to
acquire shares of IPC, IXnet or any of their subsidiaries pursuant to the
exercise of such option.
(c) Transition Planning. (i) Parent and IPC shall each appoint
three officers, including in each case its chief financial officer, to serve
from time to time as their respective representatives on a committee that will
be responsible for coordinating transition planning and implementation relating
to the Mergers. Either party may remove and replace its appointees at any time.
During the period between the date of this Agreement and the Effective Time of
the Mergers, such committee shall (A) examine various alternatives regarding the
manner in which
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to best organize and manage the businesses of Parent and the Companies after the
Effective Time of the Mergers and (B) coordinate policies and strategies with
respect to regulatory authorities and bodies, in all cases subject to applicable
law and regulation.
(ii) In order to facilitate an orderly transition of the
business of the Companies to a wholly owned subsidiary of Parent and to permit
the coordination of their related operations on a timely basis, the Companies
shall consult with Parent on all strategic and material operational matters.
Without in any way limiting the provisions of Section 5.04, Parent, its
subsidiaries, officers, employees, counsel, financial advisors and other
representatives shall, upon reasonable notice to either Company, be entitled to
review the operations and visit the facilities of such Company and its
subsidiaries during business hours as may be deemed reasonably necessary by
Parent in order to accomplish the foregoing. Nothing contained in this Agreement
shall give Parent, directly or indirectly, the right to control or direct either
Company's operations prior to the Effective Time of the Mergers.
(iii) Promptly following the date hereof, Parent and the
Companies shall, to the extent not violative in any material respect of any law
or of any contracts or agreements to which any party hereto or any of its
subsidiaries or controlled affiliates is a party, commence to negotiate in good
faith an agreement to transition the Companies' business onto Parent's network
and review Parent's and the Companies' U.S. domestic network to obtain the
maximum network optimization and synergies as necessary for the Companies'
future business plans.
ARTICLE V
Additional Agreements
SECTION 5.01 Preparation of Forms S-4 and the Information
Statement/Prospectuses; Stockholder Meetings. (a) As promptly as practicable
following the date hereof, (i) the parties shall prepare and the Companies shall
file with the SEC transaction or information statements relating to each of the
Mergers, which in each case shall, together with the prospectuses referred to
below, constitute an information statement and prospectus and, if necessary, a
transaction statement on Schedule 13E-3 (such transaction or information
statement/prospectuses, and any amendments or supplements thereto, the
"Information Statement/Prospectuses"), and (ii) Parent shall, in cooperation
with the Companies, prepare and file with the SEC registration statements on
Form S-4 with respect to the issuance of Parent Common Stock in the Mergers
(including any amendments or supplements thereto, the "Forms S-4"). The
Information Statement/Prospectuses will be included in a Form S-4 as Parent's
prospectus. The Forms S-4, the Information Statement/Prospectuses shall comply
as to form in all material respects with the applicable provisions of the
Securities Act and the Exchange Act and the rules and regulations thereunder.
Each of Parent and the Companies shall use all reasonable efforts to have the
Forms S-4 declared effective by the SEC as promptly as practicable after filing
with the SEC and to keep the Forms S-4 effective as long as is necessary to
consummate the
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Mergers. The Companies will use their reasonable best efforts to cause the
Information Statement/Prospectuses to be mailed to each Company's stockholders,
as applicable, as promptly as practicable after the applicable Form S-4 is
declared effective under the Securities Act. The parties shall promptly provide
copies, consult with each other and prepare written responses with respect to
any written comments received from the SEC with respect to each Information
Statement/Prospectus or Form S-4 and advise one another of any oral comments
with respect to each Information Statement/Prospectus, Form S-4 or Schedule
13E-3 received from the SEC. The parties will cooperate in preparing and filing
with the SEC any amendment or supplement to the Information
Statement/Prospectuses or Forms S-4. No amendment or supplement to the
Information Statement/Prospectuses shall be filed without the prior approval of
Parent and the Companies, which approvals shall not be unreasonably withheld or
delayed.
(b) The IPC Stockholders have agreed to execute and deliver, or
cause to be executed and delivered, in accordance with Section 228 of the DGCL,
immediately following execution and delivery of this Agreement, a written
consent with respect to all shares of the IPC Common Stock owned by them or
which they have the right to vote or consent in favor of the adoption of this
Agreement (the "IPC Stockholder Consent"). IPC agrees that immediately following
the execution and delivery of this Agreement, it shall execute and deliver in
accordance with Section 228 of the DGCL, in its capacity as the sole stockholder
of IPC Systems, a Stockholders Consent in the form of Exhibit A hereto (the "IPC
Systems Stockholder Consent") and IPC Systems agrees that immediately following
the execution and delivery of this Agreement, it shall execute and deliver in
accordance with Section 228 of the DGCL, in its capacity as a stockholder of
IXnet, a Stockholders Consent in the form of Exhibit A hereto (the "IXnet
Stockholder Consent" and, together with the IPC Stockholder Consent and the IPC
Systems Stockholder Consent, the "Stockholder Consents"). Each such Stockholder
Consent shall be irrevocable, with respect to all shares of IPC Common Stock or
IXnet Common Stock that are owned beneficially or of record by IPC or IPC
Systems, as the case may be, or as to which they have, directly or indirectly,
the right to vote or direct the voting. Each of IPC and IPC Systems hereby
further agrees that, during the term of this Agreement, it shall, from time to
time, at the request of Parent, at any meeting (whether annual or special and
whether or not an adjourned or postponed meeting) of stockholders of IXnet,
however called, or in connection with any written consent of the holders of
IXnet Common Stock, in either case, prior to the earlier of the Effective Time
of the Mergers and the termination of this Agreement, if a meeting is held,
appear at such meeting or otherwise cause all shares of IXnet Common Stock
beneficially owned by it to be counted as present thereat for purposes of
establishing a quorum, and it shall vote or consent (or cause to be voted or
consented), in person or by proxy, all such shares of IXnet Common Stock, and
any other voting securities of IXnet (whether acquired heretofore or hereafter),
that are beneficially owned by it or its controlled affiliates or as to which it
has, directly or indirectly, the right to vote or direct the voting, (i) in
favor of the IXnet Merger, the adoption of this Agreement and the approval of
the other transactions and other matters contemplated by this Agreement and any
actions required in furtherance hereof; (ii) against any action or agreement
that would result in a breach in any material respect of any covenant,
representation or warranty or any other obligation or agreement of any party
under this Agreement; (iii) except as otherwise agreed to in writing in advance
by Parent, against the
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following actions (other than the IXnet Merger and the transactions and other
matters contemplated by this Agreement): (1) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving IXnet or its subsidiaries; (2) a sale, lease or transfer of a material
amount of assets of IXnet or its subsidiaries or a reorganization,
recapitalization, dissolution or liquidation of IXnet or its subsidiaries; (3)
(A) any change in the majority of the board of directors of IXnet; (B) any
material change in the present capitalization of IXnet or any amendment of its
Certificate of Incorporation or By-laws; (C) any other material change in
IXnet's corporate structure or business; or (D) any other action; which, in the
case of each of the matters referred to in clauses 3(A), (B), (C) or (D), is
intended, or could reasonably be expected, to impede, frustrate, prevent,
interfere with, delay, postpone, discourage or adversely affect the contemplated
economic benefits to Parent of the Mergers or the transactions contemplated by
this Agreement or change in any manner the voting rights of the IXnet Common
Stock. Neither IPC nor IPC Systems shall enter into any agreement or
understanding with any person or entity prior to the termination of this
Agreement to vote or give instructions after such termination in a manner
inconsistent with clauses (i), (ii) or (iii) of the preceding sentence. IPC
Systems hereby grants to, and appoints, Parent and Robert Annunziata, Chief
Executive Officer of Parent, Dan J. Cohrs, Chief Financial Officer of Parent,
and James C. Gorton, Senior Vice President and General Counsel of Parent, in
their respective capacities as officers of Parent, and any individual who shall
hereafter succeed to any such office of Parent, and any other designee of
Parent, each of them individually, its irrevocable proxy and attorney-in-fact
(with full power of substitution) to execute and deliver a written consent and
to vote IPC Systems' shares of IXnet Common Stock as indicated in this Section
5.01(b). IPC Systems intends this proxy to be irrevocable 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 it with respect to its shares of IXnet Common Stock.
(c) Notwithstanding the foregoing, if Parent so requests, each
Company shall, as promptly as practicable following such request, take all
action necessary in accordance with applicable law and its certificate of
incorporation and by-laws to duly call, give notice of and convene a meeting of
its stockholders (in either case, a "Stockholders Meeting") to consider and vote
upon the approval and adoption of this Agreement and the applicable Merger, and
to submit this Agreement to the stockholders of such Company for their approval,
in which case all references in this Agreement to an "Information Statement"
with respect to such Company's Merger shall be deemed to be references to a
"Proxy Statement," and such Company and its Board of Directors shall take all
lawful reasonable action to solicit, and use all reasonable efforts to obtain,
such approval. The Board of Directors of each Company shall recommend approval
of the Merger Agreement to the stockholders of such Company and shall not be
permitted to withdraw, amend or modify in a manner adverse to Parent such
recommendation (or announce publicly its intention to do so).
(d) Each Company will cause its transfer agent to make stock
transfer records relating to such Company available to the extent reasonably
necessary to effectuate the intent of this Agreement.
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(e) Each of the parties hereto shall use commercially reasonable
efforts to cause the Mergers to qualify, and will not take any actions which to
its knowledge would reasonably be expected to prevent the Mergers from
qualifying as reorganizations under the provisions of Section 368 of the Code.
SECTION 5.02 Letter of the Companies' Accountants. Each Company
shall use its reasonable best efforts to cause to be delivered to Parent a
letter of PricewaterhouseCoopers, LLP, the independent public accountants for
both Companies, dated a date within two business days before the date on which
each Form S-4 shall become effective and addressed to Parent, in form and
substance reasonably satisfactory to Parent and customary in scope and substance
for letters delivered by independent public accountants in connection with
registration statements similar to the Forms S-4. In connection with each
Company's efforts to obtain such letter, if requested by PricewaterhouseCoopers
LLP, Parent shall provide a representation letter to PricewaterhouseCoopers, LLP
complying with SAS 72, if then required.
SECTION 5.03 Letter of Parent's Accountants. Parent shall use
its reasonable best efforts to cause to be delivered to each Company a letter of
Arthur Andersen & Co., Parent's independent public accountants, dated a date
within two business days before the date on which each Form S-4 shall become
effective and addressed to the applicable Company, in form and substance
reasonably satisfactory to such Company and customary in scope and substance for
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4. In connection with the Parent's
efforts to obtain such letter, if requested by Arthur Andersen & Co., each
Company shall provide a representation letter to Arthur Andersen & Co. complying
with SAS 72, if then required.
SECTION 5.04 Access to Information; Confidentiality. (a) Each
Company shall, and shall cause its subsidiaries, officers, employees, counsel,
financial advisors and other representatives to, afford to Parent and its
representatives reasonable access during normal business hours during the period
prior to the Effective Time of the Mergers to its properties, books, contracts,
commitments, personnel and records and, during such period, each Company shall,
and shall cause its subsidiaries, officers, employees and representatives to,
furnish promptly to Parent (i) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of Federal or state securities laws, (ii) all other information
concerning its business, properties, financial condition, operations and
personnel as such other party may from time to time reasonably request and (iii)
no later than 15 days following the end of each calendar month, monthly
financial statements prepared on a basis consistent with the quarterly financial
statements referred to in Section 3.01(e) or Section 3.02(e). Parent will hold,
and will cause its directors, officers, employees, accountants, counsel,
financial advisors and other representatives to hold, any nonpublic information
of the Companies in confidence to the extent required by, and in accordance
with, the provisions of the confidentiality letter between Parent and IXnet and
the confidentiality letter between Parent and IPC (collectively, the
"Confidentiality Agreement").
(b) No investigation pursuant to this Section 5.04 shall affect
any representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
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SECTION 5.05 Reasonable Best Efforts. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Mergers and
the other transactions contemplated by this Agreement. Each of the parties
hereto will use its reasonable best efforts and cooperate with one another (i)
in promptly determining whether any filings are required to be made or consents,
approvals, waivers, permits or authorizations are required to be obtained (or,
which if not obtained, would result in an event of default, termination or
acceleration of any agreement or any put right under any agreement) under any
applicable law or regulation or from any governmental authorities or third
parties, including parties to loan agreements or other debt instruments and
including such consents, approvals, waivers, permits or authorizations as may be
required or necessary to transfer any assets and related liabilities of the
Companies to the Surviving Corporations in the Mergers, in connection with the
transactions contemplated by this Agreement, including the Mergers, and the
Voting Agreement and (ii) in promptly making any such filings, in furnishing
information required in connection therewith and in timely seeking to obtain any
such consents, approvals, permits or authorizations. Parent and the Companies
shall mutually cooperate in order to facilitate the achievement of the benefits
reasonably anticipated from the Mergers. In connection with the legal opinions
referred to in Sections 6.02(c) and 6.03(c), Parent, GC Merger Sub, IPC Merger
Sub, IPC Systems and the Companies agree to deliver letters of representation
reasonable under the circumstances as to their present intention and present
knowledge.
(b) The parties hereto shall file as soon as practicable
notifications under the HSR Act with respect to the transactions contemplated
hereby and respond as promptly as practicable to any inquiries received from the
Federal Trade Commission or the Antitrust Division of the Department of Justice
for additional information or documentation and respond as promptly as
practicable to all inquiries and requests received from any State attorney
general or other Governmental Entity in connection with the transactions
contemplated hereby. Concurrently with the filing of notifications under the HSR
Act or as soon thereafter as practicable, the Company and Parent shall each
request early termination of the HSR Act waiting period.
SECTION 5.06 Benefit Plans. (a) Effective as of the Closing,
Parent shall provide that all retained employees of IPC and its subsidiaries,
who are not subject to collective bargaining agreements, shall participate in
IPC's existing employee benefit plans through December 31, 2000, and thereafter,
either shall continue to participate in any or all of such plans or, at the
option of the Parent, shall participate in Parent's benefit plans (other than
those plans that are the subject of collective bargaining) on a basis no less
favorable in the aggregate than similarly situated employees of Parent and its
subsidiaries and, with respect to employees who are the subject of collective
bargaining agreements, all benefits and other terms and conditions of employment
shall be provided in accordance with the applicable collective bargaining
agreement; provided, however, that for purposes of the foregoing, no Stock Plan
or other plan, program or arrangement related to the stock of IPC or its
subsidiaries shall be considered nor shall Parent or any affiliate thereof have
any obligation to issue or provide any benefits related to the stock of IPC or
its subsidiaries, other than as provided in Section 2.03. In the event that any
employee of
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IPC or its affiliates is transferred to Parent or any affiliate of Parent or
becomes a participant in an employee benefit plan, program or arrangement
maintained by or contributed to by the Surviving Corporations or their
affiliates, Parent shall cause such plan, program or arrangement to treat the
prior service of such employee with IPC or its affiliates, to the extent such
prior service is recognized under the comparable plan, program or arrangement of
IPC, as service rendered to the Surviving Corporations or their affiliates, as
the case may be; provided, however, that Parent may cause a reduction of
benefits under any such plans, programs or arrangements to the extent necessary
to avoid duplication of benefits with respect to the same covered years of
service and with respect to any defined benefit pension plan of Parent or any
affiliate of Parent, no such prior service shall be recognized for any purposes
other than eligibility to participate or vesting of benefits.
(b) To the extent that retained employees of IPC and its
subsidiaries become eligible to participate in plans sponsored by Parent and its
subsidiaries (other than Companies' benefit plans), Parent shall (i) waive all
limitations as to preexisting condition exclusions and waiting periods with
respect to participation and coverage requirements applicable to such employees
and their respective dependents under any welfare benefit plans that such
employees and dependents may be eligible to participate in, effective on or
after the Closing Date, but only to the extent that such exclusions and waiting
periods were inapplicable or satisfied under the analogous benefit plan of the
Companies and (ii) provide each such employee or dependent with credit for any
co-payments and deductibles paid prior to the Closing Date in respect of the
plan year in progress at the time such participation begins in satisfying any
applicable co-payment, deductible or out-of-pocket requirement under any
analogous welfare plans that such employees or dependents are eligible to
participate in on or after the Closing Date, but only to the extent such
co-payment, deductible or out-of-pocket requirements would be deemed satisfied
under the analogous benefit plan of the Companies.
(c) Parent shall cause the Surviving Corporations to honor, in
accordance with their terms as in effect on the date hereof, any individual
employment, change in control, severance, retirement or termination agreement
between a Company or any subsidiary thereof, on the one hand, and any current or
former officer, director or employee of such Company or subsidiary, on the other
hand that has been made available to Parent and is listed in Section 5.06(c) of
the Disclosure Schedule. As soon as practicable following the Closing, Parent
will cause to be issued to the officers or employees of IPC and IXnet options to
purchase Parent Common Stock as set forth in Section 5.06(c) of the Disclosure
Schedule.
(d) Parent agrees that subject to the Option Limitation
Agreement and the amendments to the Stock Plans referred to in Section 2.04(a)
hereof, the approval of this Merger Agreement by the Stockholders of IPC and
IXnet shall constitute a "Change of Control" within the meaning of the Stock
Plans, the IXnet Stock Option Certificate for Executives, and the Employment
Agreement dated July 1, 1999 between Gerald Starr and International Exchange
Networks, Ltd.
SECTION 5.07 Indemnification. (a) Commencing at the Effective
Time of the Mergers and for six years thereafter, each Company shall indemnify
all present and former
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directors or officers of it and its subsidiaries for acts or omissions occurring
prior to the Effective Time of the Mergers to the fullest extent now provided in
their respective certificate of incorporation or by-laws, provided such
indemnification is consistent with applicable law, to the extent such acts or
omissions are uninsured; provided that to the extent that during any period
insurance does not fully indemnify any person contemplated to be indemnified in
accordance with the first sentence of this Section 5.07, the applicable Company
shall indemnify such person in accordance with such terms.
(b) Parent will cause to be maintained for a period of not less
than six years from the Effective Time of the Mergers the Companies' current
directors' and officers' insurance and indemnification policies (or at Parent's
option replacement policies having terms no less advantageous than the
Companies' current policies) to the extent that each such policy provides
coverage for events occurring prior to the Effective Time of the Mergers for all
persons who are or were directors and officers of the Companies on the date of
this Agreement, so long as the annual premium therefor would not be in excess of
200% of the last annual premium paid prior to the date of this Agreement for
each such policy (200% of such premium, the "Maximum Premium"), provided that
(i) Parent following the Effective Time of the Mergers shall not be required to
spend an amount in any year in excess of 200% of the annual aggregate premiums
currently paid by the Companies for such insurance; and provided, further, that
if the annual premiums of such insurance coverage exceed such amount, Parent
shall be obligated to cause the Surviving Corporations to obtain policies with
the best coverage available, in the reasonable judgment of the Board of
Directors of Parent following the Mergers, for a cost not exceeding such amount,
and (ii) in the sole discretion of Parent (x) such policies may be one or more
"tail" policies for all or any portion of the full four-year period or (y)
Parent may cause comparable coverage in accordance with the foregoing clauses to
be provided under any policy maintained for the benefit of the directors and
officers of Parent or any of its subsidiaries.
(c) Each indemnified party shall, promptly after receipt of
notice of a claim or action against such indemnified party in respect of which
indemnity may be sought thereunder, notify the applicable Surviving Corporation
or the Parent, as the case may be (each an "indemnifying party") in writing of
the claim or action. If any such claim or action shall be brought against an
indemnified party, and it shall have notified the indemnifying party thereof,
unless based on the written advice of counsel to such indemnified party, a
conflict of interest between such indemnified party and indemnifying parties may
exist in respect of such claim, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 5.07 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof. Any indemnifying party against whom indemnity may be sought
under this Section 5.07 shall not be liable to indemnify an indemnified party if
such indemnified party settles such claim or action without the consent of the
indemnifying party. The indemnifying party may not agree to any settlement of
any such claim or action, other than solely for monetary damages for which the
indemnifying party shall be responsible hereunder, as a result of which any
remedy or relief shall be applied to or against the indemnified party, without
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the prior written consent of the indemnified party, which consent shall not be
unreasonably withheld. In any action hereunder as to which the indemnifying
party has assumed the defense thereof, the indemnified party shall continue to
be entitled to participate in the defense thereof, with counsel of its own
choice, but the indemnifying party shall not be obligated hereunder to reimburse
the indemnified party of the costs thereof.
SECTION 5.08 Expenses.
(a) Except as set forth in this Section 5.08, all fees and
expenses incurred in connection with this Agreement, the Voting Agreement and
the transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses, whether or not the Mergers are consummated; provided,
however, that Parent shall pay all fees and expenses, other than accountants'
and attorneys' fees, incurred in connection with the printing and filing of the
Information Statement/Prospectuses (including any preliminary materials related
thereto) and the Forms S-4 (including financial statements and exhibits).
(b) All transfer, documentary, sales, use, registration, stock
transfer Taxes and other such Taxes (including all applicable real estate
transfer or gains Taxes) and related fees (including any penalties, interest and
additions to Tax) incurred in connection with this Agreement and the
transactions contemplated hereby, shall be paid by the Companies and the
Companies shall timely make all filings, returns, reports and forms as may be
required to comply with the provisions of such Tax laws.
SECTION 5.09 Public Announcements. Parent and GC Merger Sub, on
the one hand, and the Companies and their subsidiaries, on the other hand, will
consult with each other before holding any press conferences or analyst calls
and before issuing any press releases relating to this Agreement or the Mergers.
The parties will provide each other the opportunity to review and comment upon
any press release with respect to the transactions contemplated by this
Agreement and the Voting Agreement, including the Mergers, and shall not issue
any such press release prior to such consultation, except as may be required by
applicable law, court process or by obligations pursuant to any listing
agreement with any national securities exchange. The parties agree that the
initial press release or releases to be issued with respect to the transactions
contemplated by this Agreement shall be mutually agreed upon prior to the
issuance thereof.
SECTION 5.10 Affiliates. Prior to the Closing Date, the
Companies shall deliver to Parent a letter identifying all persons who are, at
the time this Agreement is executed and, if applicable, at the time this
Agreement is submitted for approval to the stockholders of the Companies,
"affiliates" of either Company for purposes of Rule 145 under the Securities
Act. The Companies shall deliver to Parent with respect to each such "affiliate"
on or prior to the Closing a written agreement substantially in the form
attached as Exhibit B hereto.
SECTION 5.11 Listing of Parent Common Stock. Parent shall use
its reasonable best efforts to cause the shares of Parent Common Stock to be
issued in the Mergers and under the Stock Plans to be approved, subject to
official notice of issuance, for quotation on NASDAQ
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or for listing on any other national securities exchange on which the Parent
Common Stock may be listed in lieu NASDAQ.
SECTION 5.12 No Solicitation.
(a) Neither of the Companies shall, directly or indirectly,
through any officer, director, employee, stockholder, financial advisor, agent
or other representative (including any investment banker, attorney or accountant
retained by the Companies or by any of their subsidiaries or stockholders) (i)
solicit, initiate, encourage or facilitate (including by way of furnishing
information) any inquiries or proposals that constitute, or would reasonably be
expected to lead to, (x) a breach of this Agreement or the Voting Agreement or
otherwise interfere in any material respect with the completion of the Mergers
or (y) a proposal or offer for an Alternative Transaction (as defined below)
involving either of the Companies or any of their subsidiaries (any of the
foregoing inquiries or proposals being referred to in this Agreement as an
"Acquisition Proposal"), (ii) participate or engage in negotiations or
discussions concerning, or provide any non-public information to any person
relating to, or otherwise facilitate any effort or attempt to make or implement,
any Acquisition Proposal, or (iii) agree to or recommend to its stockholders any
Acquisition Proposal; provided, however, that nothing contained in this
Agreement shall prevent either Company from complying with Rule 14e-2 under the
Exchange Act with respect to an Acquisition Proposal. The Companies agrees that
they will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any persons (other than Parent and GC Merger
Sub) conducted heretofore with respect to any Acquisition Proposal. The
Companies agrees not to release any other person from, or waive any provision
of, any standstill agreement to which it is a party or any confidentiality
agreement between it and another person who has made or who may reasonably be
considered likely to make an Acquisition Proposal. The Companies agrees that
they will take the necessary steps to inform promptly the individuals or
entities referred to in the first sentence of this Section 5.12 of the
obligations undertaken in this Section 5.12.
(b) The Companies shall notify Parent immediately after receipt
by either Company (or its advisors) of any Acquisition Proposal or any request
for nonpublic information in connection with an Acquisition Proposal or for
access to the properties, books or records of either Company by any person or
entity that informs such party that it is considering making, or has made, an
Acquisition Proposal. Such notice shall be made orally and in writing and shall
indicate in reasonable detail the identity of the person making such Acquisition
Proposal and the terms and conditions of such proposal, inquiry or contact.
(c) As used in this Agreement, "Alternative Transaction" means
(i) a transaction pursuant to which any person or group other than Parent or its
affiliates (a "Third Party") would acquire, directly or indirectly, more than
25% of the outstanding shares of IPC Common Stock or IXnet Common Stock whether
pursuant to a tender offer or exchange offer or otherwise, (ii) a merger or
other business combination involving either Company pursuant to which any person
or group would acquire, directly or indirectly, more than 25% of the outstanding
shares of IPC Common Stock or IXnet Common Stock or shares exercisable or
convertible into or exchangeable for more than 25% of the outstanding shares of
IPC Common
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Stock or IXnet Common Stock, or of the entity surviving such merger or business
combination, (iii) any other transaction pursuant to which any person or group
acquires control of assets or businesses (including for this purpose the
outstanding equity securities of subsidiaries of IPC, and the entity surviving
any merger or business combination including any of them) of IPC or IXnet having
a fair market value equal to more than 25% of the fair market value of all the
assets or businesses of either Company and its subsidiaries, taken as a whole,
immediately prior to such transaction, (iv) any recapitalization, restructuring
or other transaction which would reasonably be expected to prevent or materially
impair or delay the consummation of the Mergers or (v) any public announcement
of a proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
SECTION 5.13 Certain Agreements. Neither Company nor any of
their subsidiaries will waive or fail to enforce any provision of any
confidentiality or standstill or similar agreement to which it is a party
without the prior written consent of Parent.
SECTION 5.14 Stop Transfer. IPC acknowledges and agrees to be
bound by and comply with the provisions of Section 7 of the Voting Agreement as
if a party thereto with respect to transfers of record ownership of shares of
IPC Common Stock, and agrees to notify the transfer agent for any shares of IPC
Common Stock or voting rights certificates and provide such documentation and do
such other things as may be necessary to effectuate the provisions of such
agreement.
SECTION 5.15 Compliance with Section 228 of the DGCL. IPC will
deliver, concurrently with the delivery to it of the IPC Stockholder Consent, a
certificate of its Secretary as to the sufficiency of the IPC Stockholder
Consent to adopt the Merger Agreement by IPC stockholders. IXnet will deliver,
concurrently with the delivery to it of the IXnet Stockholder Consent, a
certificate of its Secretary as to the sufficiency of the IXnet Stockholder
Consent to adopt the Merger Agreement by the IXnet stockholders. In accordance
with Section 228 of the DGCL, each Company shall promptly (but in any event
within 10 days of the date hereof) notify its stockholders who have not
consented in writing to the adoption of the Merger Agreement and who, if such
action had been taken at a meeting, would have been entitled to notice of the
meeting if the record date for such meeting had been the date of the applicable
Stockholder Consent.
ARTICLE VI
Conditions Precedent
SECTION 6.01 Conditions to Each Party's Obligation To Effect the
Mergers. The respective obligation of each party to effect the Mergers is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approvals. The Stockholder Approvals shall have
been obtained.
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(b) Listing. The shares of Parent Common Stock issuable to the
stockholders of the Companies pursuant to this Agreement (including upon
the exercise of options) shall have been approved for listing on the
NASDAQ or on any other national securities exchange on which the Parent
Common Stock may be listed in lieu thereof, subject to official notice
of issuance.
(c) HSR Act. The waiting period (and any extension thereof)
applicable to the Mergers under the HSR Act shall have been terminated
or shall have expired.
(d) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
enjoining or preventing the consummation of the Mergers shall be in
effect.
(e) Forms S-4. The Forms S-4 shall have become effective under
the Securities Act and no stop order suspending the effectiveness
thereof shall be in effect and no procedures for such purpose shall be
pending before or threatened by the SEC.
SECTION 6.02 Conditions to Obligations of Parent and GC Merger
Sub. The obligations of Parent and GC Merger Sub to effect the Mergers are
further subject to the satisfaction (or waiver by Parent) of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of the Companies and IPC Systems set forth in this Agreement,
disregarding all qualifications and exceptions contained therein
relating to materiality or Material Adverse Effect, shall be true and
correct as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except for those
representations and warranties which address matters only as of a
particular date (which shall have been true and correct as of such
date), except where the failure of such representations and warranties
to be true and correct would not, individually or in the aggregate,
reasonably be expected to have an IPC Material Adverse Effect or an
IXnet Material Adverse Effect. Parent shall have received a certificate
signed on behalf of the Companies by the chief executive officer and the
chief financial officer of each of the Companies to the effect set forth
in this paragraph.
(b) Performance of Obligations. The Companies, IPC Systems and
IPC Merger Sub shall have performed in all material respects the
obligations required to be performed by them under this Agreement at or
prior to the Closing Date, and Parent shall have received a certificate
signed on behalf of IPC by the chief executive officer and the chief
financial officer of IPC to such effect.
(c) Tax Opinion. Parent shall have received the opinion of
Simpson Thacher & Bartlett, counsel to Parent, based on appropriate
representations, including representations of Parent, the Companies, IPC
Systems and the Subs, to the effect that (i) the Mergers will be treated
for U.S. federal income tax purposes as reorganizations within
<PAGE> 62
58
the meaning of Section 368(a) of the Code, (ii) Parent, GC Merger Sub,
the Companies, IPC Systems and IPC Merger Sub will each be a party to
the reorganizations within the meaning of Section 368(b) of the Code and
(iii) Section 367 of the Code will not apply to the exchange of IPC
Common Stock or IXnet Common Stock for Parent Common Stock pursuant to
the Mergers, other than with respect to any "five percent transferee
shareholders" who fail to enter into a "gain recognition agreement" in
accordance with applicable treasury regulations.
(d) Consents, etc. Parent shall have received evidence, in form
and substance reasonably satisfactory to it, that such licenses,
permits, consents, approvals, authorizations, qualifications and orders
of Governmental Entities and other third parties as are necessary in
connection with the transactions contemplated hereby have been obtained,
except such licenses, permits, consents, approvals, authorizations,
qualifications and orders which are not, individually or in the
aggregate, material to Parent or the Companies or the failure of which
to have been received would not reasonably be expected to have an IPC
Material Adverse Effect, an IXnet Material Adverse Effect or a Parent
Material Adverse Effect.
(e) No Litigation. There shall not be pending or threatened by
any Governmental Entity any suit, action or proceeding (i) challenging
or seeking to restrain or prohibit the consummation of the Mergers or
any of the other transactions contemplated by this Agreement or the
Voting Agreement or seeking to obtain from Parent or any of its
subsidiaries any damages that are material in relation to Parent and its
subsidiaries taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by the Companies, Parent or any of their
respective subsidiaries of any material portion of the business or
assets of the Companies, Parent or any of their respective subsidiaries,
to dispose of or hold separate any material portion of the business or
assets of the Companies, Parent or any of their respective subsidiaries,
as a result of the Mergers or any of the other transactions contemplated
by this Agreement or the Voting Agreement, (iii) seeking to impose
limitations on the ability of Parent or GC Merger Sub to acquire or
hold, or exercise full rights of ownership of, any shares of IPC Common
Stock, IXnet Common Stock or common stock of the Surviving Corporations,
including the right to vote such common stock on all matters properly
presented to the stockholders of the Companies or the Surviving
Corporations, respectively, or (iv) seeking to prohibit Parent or any of
its subsidiaries from effectively controlling in any material respect
the business or operations of the Companies or their subsidiaries.
SECTION 6.03 Conditions to Obligation of the Companies and IPC
Systems. The obligation of the Companies and IPC Systems to effect the Mergers
is further subject to the satisfaction (or waiver by IPC) of the following
conditions.
(a) Representations and Warranties. The representations and
warranties of Parent set forth in this Agreement, disregarding all
qualifications and exceptions contained therein relating to materiality
or Material Adverse Effect, shall be true and correct as of the date of
this Agreement and as of the Closing Date as though made on and as of
the
<PAGE> 63
59
Closing Date, except for those representations and warranties which
address matters only as of a particular date (which shall have been true
and correct as of such date), except where the failure of such
representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect. IPC shall have received a certificate
signed on behalf of Parent by the chief financial officer of Parent to
the effect set forth in this paragraph.
(b) Performance of Obligations and the Subs. Parent and GC
Merger Sub shall have performed in all material respects the obligations
required to be performed by them under this Agreement at or prior to the
Closing Date, and IPC shall have received a certificate signed on behalf
of Parent by the chief financial officer of Parent to such effect.
(c) Tax Opinion. The Companies shall have received the opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to Companies, based
on appropriate representations, including representations, of Parent,
the Companies, IPC Systems and the Subs, to the effect that (i) the
Mergers will be treated for U.S. federal income tax purposes as
reorganizations within the meaning of Section 368(a) of the Code, (ii)
Parent, GC Merger Sub, IPC Merger Sub, IPC Systems and the Companies
will each be a party to the reorganizations within the meaning of
Section 368(b) of the Code and (iii) Section 367 of the Code will not
apply to the exchange of IPC Common Stock or IXnet Common Stock for
Parent Common Stock pursuant to the Mergers, other than with respect to
any "five percent transferee shareholders" who fail to enter into a
"gain recognition agreement" in accordance with applicable treasury
regulations.
(d) No Litigation. There shall not be pending or threatened by
any Governmental Entity any suit, action or proceeding which would
reasonably be expected, if adversely determined, to result in criminal
or material uninsured and unindemnified or unindemnifiable personal
liability on the part of one or more directors of the Companies, (i)
challenging or seeking to restrain or prohibit the consummation of the
Mergers or any of the other transactions contemplated by this Agreement
or (ii) seeking to prohibit or limit the ownership or operation by the
Companies, Parent or any of their respective subsidiaries of any
material portion of the business or assets of the Companies, Parent or
any of their respective subsidiaries, or to dispose of or hold separate
any material portion of the business or assets of the Companies, Parent
or any of their respective subsidiaries, as a result of the Mergers or
any of the other transactions contemplated by this Agreement or the
Voting Agreement.
<PAGE> 64
60
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01 Termination. This Agreement may be terminated and
abandoned at any time prior to the Effective Time of the Mergers, whether before
or after approval of matters presented in connection with the Mergers by the
stockholders of the Companies:
(a) by mutual written consent of Parent and the Companies; or
(b) by either Parent or the Companies if any Governmental Entity
within the United States or any country or other jurisdiction in which
the Companies or Parent, directly or indirectly, has material assets or
operations shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting
any of the Mergers and such order, decree, ruling or other action shall
have become final and nonappealable; or
(c) by either Parent or the Companies if the Mergers shall not
have been consummated on or before December 31, 2000 (other than due to
the failure of the party seeking to terminate this Agreement to perform
its obligations under this Agreement required to be performed at or
prior to the Effective Time of the Mergers); or
(d) by Parent, if any required approval of the stockholders of
either Company shall not have been obtained by reason of the failure to
obtain the required vote upon a vote held at a duly held meeting of
stockholders, at any adjournment thereof, or by written consent; or
(e) by the Companies, if Parent or GC Merger Sub has breached in
any material respect any representation or warranty, covenant or other
agreement contained in this Agreement which (i) would give rise to a
failure of a condition set forth in clauses (a) or (b) of Section 6.03
and (ii) cannot be or has not been cured prior to the date 20 business
days after the giving of written notice of such breach to Parent; or
(f) by Parent, if either of the Companies, IPC Systems or IPC
Merger Sub has breached in any material respect any representation or
warranty, covenant or other agreement contained in this Agreement which
(i) would give rise to a failure of a condition set forth in clauses (a)
or (b) of Section 6.02 and (ii) cannot be or has not been cured prior to
the date 20 business days after the giving of written notice of such
breach to the Companies.
SECTION 7.02 Effect of Termination. In the event of termination
of this Agreement by the Companies or Parent as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of any party, other than the last sentence of Section
5.04(a), Section 5.08, Section 5.13 and this Section
<PAGE> 65
61
7.02. Nothing contained in this Section 7.02 shall relieve any party for any
breach of the representations, warranties, covenants or agreements set forth in
this Agreement or for fraud.
SECTION 7.03 Amendment. Any provision of this Agreement may be
amended or waived prior to the Effective Time of the Mergers (whether before or
after approval of matters presented in connection with Mergers by stockholders
of the constituent corporations in the Mergers) if, and only if, such amendment
or waiver is in writing and signed, in the case of an amendment, by the
Companies and Parent or, in the case of a waiver, by the party against whom the
waiver is to be effective; provided that after the adoption of this Agreement by
the stockholders of the Companies, there shall be made no amendment that by law
requires further approval by the stockholders of the Companies without the
further approval of such stockholders.
SECTION 7.04 Extension; Waiver. At any time prior to the
Effective Time of the Mergers, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 7.03, waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
ARTICLE VIII
General Provisions
SECTION 8.01 Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time of the
Mergers. This Section 8.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time of
the Mergers.
SECTION 8.02 Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or GC Merger Sub, to
Global Crossing Ltd.
360 N. Crescent Drive
Beverly Hills, CA 90210
Facsimile: 310-281-5820
Attention: James C. Gorton
<PAGE> 66
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Facsimile: 212-455-2502
Attention: D. Rhett Brandon
(b) if to either Company, to
IPC Communications, Inc. or IXnet, Inc., as applicable
Wall Street Plaza
88 Pine Street
New York, New York 10005
Facsimile: 212-509-7888
Attention: Alexander Russo
with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York
Facsimile: 212-735-2000
Attention: Joseph A. Coco; and
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Facsimile: 212-309-6273
Attention: Philip H. Werner
SECTION 8.03 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person; as
used in this definition, the term "control" means possession, directly
or indirectly, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of
voting securities, by contract or otherwise.
(b) "IPC Material Adverse Effect" means any event, change,
occurrence, effect, fact or circumstance that (i) is materially adverse
to, or would prevent or materially delay, the ability of IPC or its
subsidiaries to perform their obligations under this Agreement or to
consummate the transactions contemplated hereby or (ii) the business,
assets, liabilities, results of operations or condition (financial or
otherwise) of IPC and its
<PAGE> 67
63
subsidiaries taken as a whole; "IXnet Material Adverse Effect" means any
event, change, occurrence, effect, fact or circumstance that (i) is
materially adverse to, or would prevent or materially delay, the ability
of IXnet or its subsidiaries to perform their obligations under this
Agreement or to consummate the transactions contemplated hereby or (ii)
the business, assets, liabilities, results of operations or condition
(financial or otherwise) of IXnet and its subsidiaries taken as a whole;
"Parent Material Adverse Effect" means any event, change, occurrence,
effect, fact or circumstance that (i) is materially adverse to, or would
prevent or materially delay, the ability of Parent or its subsidiaries
to perform their obligations under this Agreement or to consummate the
transactions contemplated hereby or (ii) the business, assets,
liabilities, results of operations or condition (financial or otherwise)
of Parent and its subsidiaries taken as a whole;
(c) "person" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other
entity; and
(d) a "subsidiary" of any person means another person, an amount
of the voting securities, other voting ownership, partnership or member
interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body or managing member or partner
(or, if there are no such voting interests, 50% or more of the equity
interests of which) is owned directly or indirectly by such first
person.
SECTION 8.04 Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 8.05 Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 8.06 Entire Agreement; No Third-Party Beneficiaries.
This Agreement and the other agreements referred to herein constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this
Agreement. This Agreement is not intended to confer upon any person other than
the parties any rights or remedies, except Section 5.06(c), Section 5.06(d) and
Section 5.07.
SECTION 8.07 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the state of Delaware.
SECTION 8.08 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation
<PAGE> 68
64
of law or otherwise by any of the parties without the prior written consent of
the other parties. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
SECTION 8.09 Enforcement; Jurisdiction. The parties 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 or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any Federal
court located in the State of Delaware or any Delaware state court, this being
in addition to any other remedy to which they are entitled at law or in equity.
Any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement or the
transactions contemplated by this Agreement may be brought against any of the
parties in any Federal court located in the State of Delaware or any Delaware
state court, and each of the parties hereto hereby consents to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and waives any objection to venue laid
therein. Process in any such suit, action or proceeding may be served on any
party anywhere in the world, whether within or without the State of Delaware.
Without limiting the generality of the foregoing, each party hereto agrees that
service of process upon such party at the address referred to in Section 8.02,
together with written notice of such service to such party, shall be deemed
effective service of process upon such party.
SECTION 8.10 Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
<PAGE> 69
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
GLOBAL CROSSING LTD.
By: /s/ Thomas J. Casey
------------------------------------------
Name: Thomas J. Casey
Title: Vice Chairman of the Board
GEORGIA MERGER SUB CORPORATION
By: /s/ Thomas J. Casey
------------------------------------------
Name: Thomas J. Casey
Title: President
IPC COMMUNICATIONS, INC.
By: /s/ David Walsh
------------------------------------------
Name: David Walsh
Title: Director
IPC INFORMATION SYSTEMS, INC.
By: /s/ David Walsh
------------------------------------------
Name: David Walsh
Title: Director
IXNET, INC.
By: /s/ David Walsh
------------------------------------------
Name: David Walsh
Title: Chief Executive Officer
<PAGE> 70
IDAHO MERGER SUB CORPORATION
By: /s/ David Walsh
------------------------------------------
Name: David Walsh
Title: President
<PAGE> 71
EXHIBIT A
STOCKHOLDER CONSENT
Action Taken by the Written
Consent of Stockholder
of
[Corporation]
February [--], 2000
The undersigned stockholder of [Corporation], a Delaware corporation
(the "Corporation"), acting by written consent in lieu of a meeting pursuant to
Section 228 of the General Corporation Law of the State of Delaware, hereby
irrevocably consents to the adoption of and adopt the following resolution with
respect to the shares of the common stock, par value $.01 per share, of the
Corporation owned of record by such stockholder on the date hereof:
RESOLVED, that the Merger Agreement, dated as of February [--], 2000
(the "Merger Agreement"), among Global Crossing Ltd., a company formed under the
laws of Bermuda ("GC"), Global Crossing Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of GC, IPC Communications, Inc., a
Delaware corporation ("IPC"), IPC Information Systems, Inc., a Delaware
corporation and a wholly owned subsidiary of IPC ("IPC Systems"), IXnet, Inc., a
Delaware corporation and a subsidiary of IPC Systems, and IPC Merger Subsidiary
Corporation, a Delaware corporation and a subsidiary of IPC, a copy of which has
been furnished to the undersigned stockholder, be, and it hereby is, adopted and
approved by the undersigned stockholders.
The action of the stockholders of the Corporation approved pursuant
hereto shall become effective when one or more consents have been (a) signed by
stockholders holding shares having a majority of the voting power of the
outstanding shares of common stock of the Corporation, being not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and (b) delivered to the Corporation at its principal place of business.
[STOCKHOLDER]
By:
------------------------------------------
Name:
Title:
<PAGE> 72
EXHIBIT B
Form of Company Affiliate Letter
Gentlemen:
The undersigned, a holder of shares of Common Stock, par value
$.01 per share ("Company Common Stock"), of [IPC Communications, Inc.][IXnet,
Inc.], a Delaware corporation (the "Company"), is entitled to receive in
connection with the merger (the "Merger") of the Company with [Georgia][IPC]
Merger Sub Corporation, a Delaware corporation, securities (the "Parent
Securities") of Global Crossing Ltd. ("Parent"). The undersigned acknowledges
that the undersigned may be deemed an "affiliate" of the Company within the
meaning of Rule 145 ("Rule 145") promulgated under the Securities Act of 1933,
as amended (the "Act"), although nothing contained herein should be construed as
an admission of such fact.
If in fact the undersigned were an affiliate under the Act, the
undersigned's ability to sell, assign or transfer the Parent Securities received
by the undersigned in exchange for any shares of Company stock pursuant to the
Merger may be restricted unless such transaction is registered under the Act or
an exemption from such registration is available. The undersigned understands
that such exemptions are limited and the undersigned has obtained advice of
counsel as to the nature and conditions of such exemptions, including
information with respect to the applicability to the sale of such securities of
Rules 144 and 145(d) promulgated under the Act.
The undersigned hereby represents to and covenants with the
Company that the undersigned will not sell, assign or transfer any of the Parent
Securities received by the undersigned in exchange for shares of Company stock
pursuant to the Merger except (i) pursuant to an effective registration
statement under the Act, (ii) in conformity with the volume and other
limitations of Rule 145 or (iii) in a transaction which, in the opinion of
independent counsel reasonably satisfactory to Parent or as described in a
"no-action" or interpretive letter from the Staff of the Securities and Exchange
Commission (the "SEC"), is not required to be registered under the Act.
In the event of a sale or other disposition by the undersigned
of Parent Securities pursuant to Rule 145, the undersigned will supply Parent
with evidence of compliance with such Rule, in the form of a letter in the form
of Annex I hereto. The undersigned understands that Parent may instruct its
transfer agent to withhold the transfer of any Parent Securities disposed of by
the undersigned, but that upon receipt of such evidence of compliance the
transfer agent shall effectuate the transfer of the Parent Securities sold as
indicated in the letter.
<PAGE> 73
2
The undersigned acknowledges and agrees that appropriate legends
will be placed on certificates representing Parent Securities received by the
undersigned in the Merger or held by a transferee thereof:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN
A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 APPLIES AND MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT
TO A REGISTRATION STATEMENT UNDER SAID ACT OR AN EXEMPTION FROM
SUCH REGISTRATION."
The undersigned also acknowledges and agrees that unless a sale or transfer of
the Parent Securities received by the undersigned in connection with the Merger
is made in conformity with the provisions of Rule 145 or pursuant to a
registration statement (in which case certificates issued to the transferee
shall not contain any restrictive legend), Parent reserves the right to place
the following legend (or other appropriate legend) on the certificates issued to
any transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES.
THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO,
OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF
WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933."
It is understood and agreed that such legends will be
substituted by delivery of certificates without such legends if (i) one year
shall have elapsed from the date of the effective time of the Merger and the
provisions of Rule 145(d)(2) under the Act are then available to the undersigned
or (ii) Parent shall have received an opinion in form and substance reasonably
satisfactory to Parent from independent counsel reasonably satisfactory to
Parent or a "no-action" or interpretive letter from the Staff of the SEC to the
effect that such legends are not required for purposes of the Act.
<PAGE> 74
3
The undersigned acknowledges that (i) the undersigned has
carefully read this letter and understands the requirements hereof and the
limitations imposed upon the distribution, sale, transfer or other disposition
of Parent Securities and (ii) the receipt by Parent of this letter is an
inducement and a condition to Parent's obligations to consummate the Merger.
Very truly yours,
--------------------------------------
Name:
<PAGE> 75
ANNEX I
TO EXHIBIT B
[Name] [Date]
On __________________ the undersigned sold the securities
("Securities") of Global Crossing Ltd. (the "Company") described below in the
space provided for that purpose (the "Securities"). The Securities were received
by the undersigned in connection with the merger of [IPC][GC] Merger Sub
Corporation with and into [Ixnet, Inc.] [IPC Communications, Inc.]
Based upon the most recent report or statement filed by the
Company with the Securities and Exchange Commission, the Securities sold by the
undersigned were within the prescribed limitations set forth in paragraph (e) of
Rule 144 promulgated under the Securities Act of 1933, as amended (the "Act").
The undersigned hereby represents that the Securities were sold
in "brokers' transactions" within the meaning of Section 4(4) of the Act or in
transactions directly with a "market maker" as that term is defined in Section
3(a)(38) of the Securities Exchange Act of 1934, as amended. The undersigned
further represents that the undersigned has not solicited or arranged for the
solicitation of orders to buy the Securities, and that the undersigned has not
made any payment in connection with the offer or sale of the Securities to any
person other than to the broker who executed the order in respect of such sale.
Very truly yours,
[Space to be provided for description of securities]
<PAGE> 1
EXHIBIT 2.2
EXECUTION COPY
CONSENT AND VOTING AGREEMENT, dated as of February 22, 2000
(the "Agreement"), among GLOBAL CROSSING LTD., a company
formed under the laws of Bermuda ("Parent"), CABLE SYSTEMS
HOLDING, LLC, a Delaware limited liability company ("CSH"),
and each of the other signatories hereto (and together with
CSH, the "Stockholders").
WHEREAS, concurrently herewith, Parent, Georgia Merger Sub
Corporation, a Delaware corporation and a wholly owned subsidiary of Parent ("GC
Merger Sub"), IPC Communications, Inc., a Delaware corporation (the "Company"),
IPC Information Systems, Inc., a Delaware corporation and a wholly owned
subsidiary of the Company ("IPC Systems"), Idaho Merger Sub Corporation, a
Delaware corporation and a wholly owned subsidiary of the Company ("IPC Merger
Sub"), and Ixnet, Inc., a Delaware corporation and a subsidiary of the Company
("IXnet"), are entering into an Agreement and Plan of Merger (as such agreement
may be amended from time to time and whether or not such agreement has been
terminated, the "Merger Agreement"; terms used but not defined herein shall have
the meanings set forth in the Merger Agreement) pursuant to which (i) the
Company will be merged with and into IPC Systems (the "Intercompany Merger"),
(ii) IPC Systems will be merged with and into GC Merger Sub (the "IPC Merger")
and (iii) IPC Sub will be merged with and into IXnet (the "IXnet Merger" and
together with the Intercompany Merger and the IPC Merger, the "Mergers");
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Parent and Sub have required that CSH and the other
Stockholders enter into this Agreement pursuant to which, among other things,
the Stockholders have agreed to certain consent and voting provisions in
connection with and in favor of the Company Merger; and
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
1. Consent and Voting Matters
1.1 Consent and Agreement to Vote. Each Stockholder agrees (for
itself and not as to any other Stockholder) that immediately following the
execution and delivery of this Agreement and the Merger Agreement, it shall
execute and deliver, as the record owner thereof, in accordance with Section 228
of the DGCL, the Stockholders Consent in the form of Exhibit A hereto (the
"Consent"), which shall be irrevocable, with respect to all Shares that are
owned beneficially or of record by such Stockholder or as to which such
Stockholder has, directly or indirectly, the right to vote or direct the voting.
Each Stockholder hereby further agrees (for itself and not as
to any other Stockholder) that, during the term of this Agreement, it shall,
from time to time, at the request of Parent, at any meeting (whether annual or
special and whether or not an adjourned or postponed meeting) of stockholders of
the Company, however called, or in connection with any written consent of the
holders of Common Stock, par value $.01 per share, of the Company ("Company
Common Stock"), in either case, prior to the earlier of the Effective Time of
the Mergers and the termination of this Agreement, if a meeting is held, appear
at such meeting or otherwise cause
<PAGE> 2
2
such Stockholder's Shares to be counted as present thereat for purposes of
establishing a quorum, and it shall vote or consent (or cause to be voted or
consented), in person or by proxy, all such Stockholder's Shares, and any other
voting securities of the Company (whether acquired heretofore or hereafter),
that are beneficially owned by such Stockholder or its subsidiaries or as to
which such Stockholder has, directly or indirectly, the right to vote or direct
the voting, (a) in favor of the Intercompany Merger and the IPC Merger, the
adoption of the Merger Agreement and the approval of the terms thereof and each
of the other transactions and other matters contemplated by the Merger Agreement
and this Agreement and any actions required in furtherance hereof and thereof;
(b) against any action or agreement that would result in a breach in any
material respect of any covenant, representation or warranty or any other
obligation or agreement of the Company or any subsidiary thereof under the
Merger Agreement; (c) except as otherwise agreed to in writing in advance by
Parent, against the following actions (other than the Mergers and the
transactions and other matters contemplated by the Merger Agreement): (1) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or its subsidiaries; (2) 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; (3) (a) any change in the majority of the
board of directors of the Company; (b) any material change in the present
capitalization of the Company or any amendment of the Company's Certificate of
Incorporation or By-laws; or (c) any other material change in the Company's
corporate structure or business or change in any manner of the voting rights of
the Company Common Stock. Such Stockholder shall not enter into any agreement or
understanding with any person or entity prior to the termination of this
Agreement to vote or give instructions in a manner inconsistent with clauses
(a), (b) or (c) of the preceding sentence.
1.2 Proxy. Each Stockholder hereby grants to, and appoints,
Parent and Robert Annunziata, Chief Executive Officer of Parent, Dan J. Cohrs,
Chief Financial Officer of Parent, and James C. Gorton, Senior Vice President
and General Counsel of Parent, in their respective capacities as officers of
Parent, and any individual who shall hereafter succeed to any such office of
Parent, and any other designee of Parent, each of them individually, its proxy
and attorney-in-fact (with full power of substitution) to execute and deliver a
written consent and to vote such Stockholder's Shares as indicated in Section
1.1. Subject to Section 10.5, such Stockholder intends this proxy to be
irrevocable 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 it with respect to
its Shares.
Each Stockholder hereby revokes any and all previous proxies
with respect to such Stockholder's Shares or any other voting securities of the
Company that relate to the approval of the Merger Agreement.
2. Representations and Warranties of the Stockholders.
Each Stockholder, severally but not jointly, makes the following representations
and warranties to the Parent:
2.1 Power; Binding Agreement. Such Stockholder has the
power and authority to enter into and perform all of its obligations under this
Agreement (including the power and authority without further action on the part
of any shareholders, members or partners
<PAGE> 3
3
thereof or any other juridical or nonjuridical person to comply with the consent
and voting requirements of Section 1). The execution, delivery and performance
of this Agreement by such Stockholder will not violate any other agreement to
which such Stockholder is a party (including any trust agreement, voting
agreement, stockholders agreement or voting trust), except to the extent any
such violations, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on Parent or to prevent or materially
delay the consummation of the transactions contemplated by the Merger Agreement.
This Agreement has been duly and validly authorized, executed and delivered by
such Stockholder and constitutes a valid and binding agreement of such
Stockholder, 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
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 hereto for indemnification.
2.2 No Conflict. Other than filings required under the HSR
Act, and the filing of Forms 4 and Schedules 13D under the Securities and
Exchange Act of 1934, as amended, and the rules and regulations thereunder (the
"Exchange Act"), no filing with, and no permit, authorization, consent or
approval of, any state or federal public body or authority is required to be
made or obtained by such Stockholder for the execution of this Agreement by such
Stockholder, except for any such filings the failure of which to be made,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on Parent or to prevent or materially delay the
consummation of the transactions contemplated hereby and filings required in
connection with the consummation of the Mergers. 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 (a) conflict with or result
in any breach of such Stockholder's certificate of incorporation, bylaws,
operating agreement, partnership agreement or other organizational or governing
document or agreement, as the case may be, (b) 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
the Stockholder's properties or assets may be bound or (z) violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to such Stockholder or any of the Stockholder's members, properties
or assets, except to the extent any of the foregoing, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect on
Parent or to prevent or materially delay the consummation of the transactions
contemplated by the Merger Agreement or to prevent such Stockholder from
complying with its obligations hereunder.
2.3 Reliance. Such Stockholder understands and acknowledges
that Parent is entering into, and causing Sub to enter into, the Merger
Agreement in reliance upon such Stockholder's execution and delivery of this
Agreement.
<PAGE> 4
4
2.4 Ownership of Shares. Such Stockholder is the record
owner of the number shares of Company Common Stock set forth opposite its name
on Schedule 2.4 (with respect to each Stockholder and together with any shares
of Company Common Stock with respect to which such Stockholder shall have or
receive record ownership, its "Shares"), free and clear of any Liens other than
restrictions contained in the Amended and Restated Investors Agreement, dated as
of April 9, 1998 (the "Investors Agreement"). Except as otherwise provided in
the Investors Agreement, such Stockholder has sole voting power, and sole power
of disposition, with respect to all of such Stockholder's Shares.
2.5 No Broker. Such Stockholder has not employed any
investment banker, broker, finder, consultant or intermediary in connection with
the transactions contemplated by this Agreement or the Merger Agreement which
would be entitled to any investment banking, brokerage, finder's or similar fee
or commission in connection with this Agreement or the transactions contemplated
by the Merger Agreement.
3. Representations and Warranties of Parent. Parent hereby
represents and warrants to each Stockholder as follows:
3.1 Power; Binding Agreement. Parent has the power and
authority to enter into and perform all of its obligations under this Agreement.
The execution, delivery and performance of this Agreement by Parent will not
violate any other agreement to which Parent is a party (including any trust
agreement, voting agreement, stockholders agreement or voting trust), except to
the extent that any such violations, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on Parent or to prevent
or materially delay the consummation of the transactions contemplated by the
Merger Agreement. This Agreement has been duly and validly executed and
delivered by Parent and constitutes a valid and binding agreement of Parent,
enforceable against Parent in accordance with its terms.
3.2 No Conflict. Other than filings required under the HSR
Act, the filing of a Form 3 and Schedule 13D under the Exchange Act and the
filing of a registration statement under the Securities Act, no filing with, and
no permit, authorization, consent or approval of, any state or federal public
body or authority is necessary for the execution of this Agreement by Parent and
the consummation by Parent of the transactions contemplated hereby, except in
each case for such filings the failure of which to be made, individually or in
the aggregate, would not reasonably be expected to have a material adverse
effect on Parent or to prevent or materially delay the consummation of the
transactions contemplated by the Merger Agreement and filings required in
connection with the consummation of the Mergers. Neither the execution and
delivery of this Agreement by Parent nor the consummation by Parent of the
transactions contemplated hereby nor compliance by Parent with any of the
provisions hereof shall (x) conflict with or result in any breach of any
applicable organizational documents applicable to Parent, (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 Parent is a party or by which Parent or any
of Parent's properties or assets may be bound or (z) violate any order, writ,
injunction, decree,
<PAGE> 5
5
judgment, order, statute, rule or regulation applicable to Parent or any of
Parent's properties or assets, except to the extent that any of the foregoing,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on Parent or to prevent or materially delay the
consummation of the transactions contemplated by the Merger Agreement.
4. Covenants of the Stockholders. The Stockholders,
jointly but not severally, hereby covenant and agree as follows:
4.1 Cooperation in Filing Notification under
Hart-Scott-Rodino. Each of the Stockholders agrees to use reasonable best
efforts to cooperate with Parent and each other to promptly effectuate the
filing of any notification required under the HSR Act.
4.2 Commercially Reasonable Efforts. Subject to the terms
and conditions of this Agreement, the Stockholders each agree to use all
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions provided for by this Agreement.
4.3 No Solicitation. (a) Other than as expressly permitted
under Section 4.4(b), none of the Stockholders, in its capacity as such, shall,
directly or indirectly, through any officer, director, employee, stockholder,
member, partner, financial advisor, agent or other representative (including any
investment banker, attorney or accountant retained by such Stockholder or by any
of such Stockholder's subsidiaries, affiliate or stockholders, members or
partners) (i) solicit, initiate, encourage or facilitate (including by way of
furnishing information) any inquiries or proposals that constitute, or would
reasonably be expected to lead to an Acquisition Proposal or any Transfer (as
defined in Section 4.4) of Shares or (ii) participate or engage in negotiations
or discussions concerning, or provide any non-public information to any person
relating to, or otherwise facilitate any effort or attempt to make or implement,
any Acquisition Proposal or any Transfer of Shares. Other than as expressly
permitted under Section 4.4(b), each Stockholder, in its capacity as such,
agrees that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any persons (other than Parent and
Sub) conducted heretofore with respect to any Acquisition Proposal or any
Transfer of Shares. Each Stockholder agrees that it will take the necessary
steps to inform promptly the individuals or entities referred to in the first
sentence of this Section 4.3 of the obligations undertaken in this Section 4.3.
(b) Other than as expressly permitted under Section 4.4(b),
each Stockholder, in its capacity as such, shall notify Parent immediately after
receipt by such Stockholder (or any of its stockholders, members, partners or
advisors) of any Acquisition Proposal or a proposal or offer for any Transfer of
Shares or any request for nonpublic information in connection with an
Acquisition Proposal or a proposal or offer for any Transfer of Shares or for
access to the properties, books or records of the Company by any person or
entity that informs such Stockholder that it is considering making, or has made,
an Acquisition Proposal or a proposal or offer for any Transfer of Shares. Such
notice shall be made orally and in writing and shall indicate in reasonable
detail the identity of the offeror and the terms and conditions of such
proposal, inquiry or contact.
<PAGE> 6
6
(c) The foregoing provisions of this Section 4.3 shall not
restrict any member of a Stockholder who is also a director of the Company from
taking any actions solely in his capacity as a director.
4.4 Restriction on Transfer of Shares, Proxies and
Non-Interference; Restriction on Withdrawal. (a) No Stockholder shall, directly
or indirectly: (i) except pursuant to or as contemplated hereby by the terms of
this Agreement or the Merger Agreement, offer for sale, sell (including short
sales), transfer, tender, pledge, encumber, assign or otherwise dispose of
(including by gift) or enter into any contract, option, derivative, hedging or
other arrangement or understanding (including any profit-sharing arrangement)
with respect to or consent to the offer for sale, sale, transfer, tender,
pledge, encumbrance, assignment or other disposition of (any of the foregoing, a
"Transfer"), any or all of such Stockholder's Shares or any interest therein;
(ii) except as contemplated hereby, grant any proxies or powers of attorney,
deposit any Shares into a voting trust or enter into any other voting
arrangement with respect to any Shares; (iii) take any action that would make
any representation or warranty of any Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling any Stockholder from
performing such Stockholder's obligations under this Agreement; or (iv) commit
or agree to take any of the foregoing actions.
(b) Notwithstanding the foregoing, CSH may Transfer up to
20% of the Shares set forth next to its name on Schedule 2.4 to its members in
accordance with the terms of its governing operating agreement or otherwise on a
pro rata or other widely distributed basis who shall receive such Shares free
and clear of all obligations imposed on CSH hereunder and none of the
obligations hereunder shall attach to such Shares.
4.5 Transfer of Shares of Parent Common Stock. (a) None of
CSH, its Permitted Transferees (as defined below) or Richard Kleinknecht
(collectively, the "Outside Stockholders") shall directly or indirectly,
Transfer any shares of the Common Stock, par value $.01 per share, of Parent
("Parent Common Stock") until the first anniversary of the Closing, except (i)
in the case of CSH, to Citicorp Venture Capital, Ltd. ("CVC") or another
subsidiary of Citigroup which shall have agreed by reasonably satisfactory
instrument delivered to Parent to be bound by the provisions of Sections 4.5 and
4.6 hereof (collectively, the "Permitted Transferees"), (ii) any Transfer
pursuant to Section 3(a) of the Registration Rights Agreement, or (iii) pursuant
to a tender offer, self tender offer, exchange offer or other transaction
offered generally to stockholders of Parent and approved by Parent's Board of
Directors. Each of David Walsh and Anthony Servidio, individually and for
himself, agrees that he shall not, directly or indirectly, Transfer during the
period commencing on the Closing Date and (a) ending on the first anniversary of
the Closing Date, shares of Parent Common Stock representing more than 25% of
the sum of the shares of Parent Common Stock received by him in the Merger and
shares of Parent Common Stock issuable to him pursuant to options to acquire
Parent Common Stock which have vested and are exercisable as of the Closing
("Vested Shares"), (b) ending on the second anniversary of the Closing Date,
cumulatively, more than 62.5% of his Vested Shares and (c) any time after the
second anniversary of the Closing Date, 100% of his Vested Shares.
<PAGE> 7
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(b) All certificates representing shares of Parent Common
Stock issued to any Stockholder pursuant to the Merger Agreement shall be
endorsed with a legend reading as follows until such time as the shares
represented thereby are no longer subject to the provisions hereof:
"The shares of Common Stock, par value $.01 per share, of
Global Crossing Ltd. (the "Company") represented by this
certificate are subject to a Consent and Voting Agreement
dated as of February 22, 2000, and may not be sold or
otherwise transferred, except in accordance therewith. Copies
of such Agreement may be obtained at the principal executive
offices of the Company."
(c) In the case of the Outside Stockholders, the legend on
the certificates representing any of the shares of Parent Common Stock shall be
removed on the first anniversary of the Closing and such legend shall be removed
from shares of Parent Common Stock Transferred by an Outside Stockholder
pursuant to the Registration Rights Agreement.
4.6 Standstill. None of CSH or its Permitted Transferees
or subsidiaries shall directly or indirectly (a) acting alone or in concert with
others, seek to effect a change in control of Parent or the business, operations
or policies of Parent; (b) initiate or propose any stockholder proposal or make,
or in any way, participate in, directly or indirectly, any "solicitation" of
"proxies" to vote or intentionally seek in an organized fashion to influence any
person with respect to the voting of, any Parent Voting Securities in a manner
inconsistent with the position of the board of directors of Parent or become
"participant" in a "solicitation" (as such terms are defined in Regulation 14A
under the Exchange Act, as in effect on the date hereof) in opposition to the
recommendation of the majority of the directors of Parent with respect to any
matter; (c) propose or seek to effect a merger, consolidation, recapitalization,
reorganization, sale, lease, exchange or other disposition of substantially all
assets or other business combination involving, or a tender or exchange offer
for securities of, Parent or any of its subsidiaries or any material portion of
its or such subsidiary's business or assets, or any similar transaction that has
not been approved by the Board of Directors of Parent; (d) join a partnership,
limited partnership, syndicate or other group (other than a group consisting of
CSH, its Permitted Transferees and any of their subsidiaries), or otherwise act
in concert with any other person, for the purpose of acquiring, holding, voting
or disposing of Parent Voting Securities, or, otherwise become a "person" within
the meaning of Section 13(d)(3) of the Exchange Act relating to any of the
matters set forth in clauses (a), (b), (c) or (d); or (e) request, or induce or
encourage any other person to request, that Parent amend or waive any of the
provisions of this Section 4.6. The provisions of this Section 4.6 shall cease
to apply at such time after the Merger as CSH and its affiliates collectively
cease to beneficially own at least 25% of the Parent Common Stock acquired by
CSH in the Merger.
4.7 CSH Affiliates. It is expressly understood that none of
the provisions of this Agreement shall apply to Citigroup or any of its
affiliates, other than CSH and its Permitted Transferees and their respective
subsidiaries.
<PAGE> 8
8
4.8 Registration Rights. Parent shall enter into the
Registration Rights Agreement, in substantially the form of Exhibit B attached
hereto ("Registration Rights Agreement"), with the Outside Stockholders
immediately prior to the Effective Time of the Mergers.
5. 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 reasonably necessary to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement
and the Merger Agreement.
6. Certain Events. Except as set forth in Section 4.4,
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 the Stockholder's
administrators, successors or receivers.
7. Stop Transfer. Each Stockholder agrees with, and
covenants to, Parent that it shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Shares, unless such transfer is made in compliance with
this Agreement. Such Stockholder agrees, with respect to any Shares in
certificated form, that immediately following the execution hereof, it will
present to the Company, the certificates representing the Shares for inscription
by the Company of the following legend: "The shares of Common Stock, par value
$.01 per share, of IPC Communications, Inc. (the "Company") represented by this
certificate are subject to a Consent and Voting Agreement dated as of February
22, 2000, and may not be sold or otherwise transferred, except in accordance
therewith. Copies of such Agreement may be obtained at the principal executive
offices of the Company." Upon the transfer of any Shares pursuant to Section
4.4(b), such legend shall be removed. Such Stockholder agrees that it will no
longer hold any Shares, whether certificated or uncertificated, in "street name"
or in the name of any nominee. Pursuant to the Merger Agreement, the Company has
agreed to notify the transfer agent for any Shares in uncertificated form of the
provisions set forth in this Section 7 and has agreed to, and such Stockholder
agrees to, provide such documentation and to do such other things as may be
required to give effect to such provisions with respect to such uncertificated
Shares. Parent will not register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any Stockholder's Parent
Common Stock, unless such transfer is made in compliance with this Agreement.
8. Post-Closing Covenants. Each Stockholder agrees to
hold in strict confidence all data and information relating to the business of
the Company and its subsidiaries (the "Proprietary Information") obtained in the
course of its ownership of shares or participation in the management of the
Company or any of its subsidiaries or otherwise which is either non-public,
confidential or proprietary in nature. Each Stockholder agrees that subject to
any requirement of law or tribunal order, it will keep such Proprietary
Information confidential and will not, without the prior written consent of
Parent, be disclosed by any Stockholder to any person. This Agreement shall be
inoperative as to such portions of the Proprietary Information
<PAGE> 9
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which (i) are or become generally available to the public other than as a result
of a disclosure by Parent or any of its representatives, (ii) become available
to any Stockholder or one of its representatives on a nonconfidential basis from
a source other than any of Parent or any of its representatives, which has not
advised such Stockholder that it is bound by a confidentiality agreement with,
or other contractual, legal or fiduciary obligation of confidentiality to, any
of Parent or any of its subsidiaries or affiliates with respect to such portions
of the Proprietary Information, or (iii) were known by any Stockholder on a
nonconfidential basis prior to its commencement of employment with, or ownership
of, the Company or one of its subsidiaries. Each Stockholder agrees that Parent
shall be entitled to equitable relief, including injunction and specific
performance, in the event of any breach of the provisions of this Section 8.
Such remedies shall not be deemed to be the exclusive remedies for a breach of
this Section 8 by any Stockholder but shall be in addition to all other remedies
available at law or equity. It is further understood and agreed that failure or
delay by Parent in exercising any right, power or privilege under this Section 8
shall not operate as a waiver thereof nor shall any single or partial exercise
thereof preclude and other or further exercise of any right, power or privilege
under this Agreement.
9. No Survival of Representations and Warranties. Other
than as expressly set forth herein, the representations, warranties and
covenants of the parties contained herein shall not survive the termination of
this Agreement; provided, however, that an uncured breach by a party of a
representation, warranty or covenant hereunder prior to such termination shall
survive such termination.
10. Miscellaneous.
10.1 Successors and Assigns. Except as expressly provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Other than as set
forth in the immediately succeeding sentence, and except as contemplated hereby,
neither Parent nor any Stockholder may assign any of its rights, or delegate any
of its duties or obligations, hereunder without the prior written consent of
Parent, and any such purported assignment or delegation shall be void ab initio.
Notwithstanding the foregoing, Parent, its affiliates, and its successors and
assigns, may assign their rights and delegate their duties (a) to any successor
entity resulting from any liquidation, merger, consolidation, reorganization, or
transfer of all or substantially all of the assets or stock of Parent, or (b) to
any affiliate of Parent; provided, that in either case, any such assignee shall
expressly assume all of the obligations of Parent hereunder.
10.2 Notices. All notices, demands and other communications
(collectively, "Notices") given or made pursuant to this Agreement shall be in
writing and shall be deemed to have been duly given if sent by registered or
certified mail, return receipt requested, postage and fees prepaid, by overnight
service with a nationally recognized "next day" delivery company such as Federal
Express or United Parcel Service, by facsimile transmission, or otherwise
actually delivered to the following addresses:
(a) If to Parent:
<PAGE> 10
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Global Crossing Ltd.
360 N. Crescent Drive
Beverly Hills, CA 90210
Attention: James C. Gorton
Facsimile: 310-281-5820
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: D. Rhett Brandon
Fax: 212-455-2502
(b) If to CSH:
Cable Systems Holding, LLC
206 East Forest Hills Drive
Phoenix, AZ 85022
Attention: Peter Woog
Fax: 602-789-8847
with copies to:
Citicorp Venture Capital, Ltd.
399 Park Avenue - 14th Floor
New York, New York 10043
Facsimile No.: 212- 888-2940
Attn: Richard M. Cashin, Jr.; and
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Philip H. Werner
Fax: 212-309-6273; and
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Facsimile: 212-735-2000
Attention: Joseph A. Coco, Esq.; and
(c) If to any other Stockholder:
To such person(s) and address(es) set forth
under such Stockholder's signature
<PAGE> 11
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Any Notice shall be deemed duly given when received by the addressee thereof.
Any of the parties to this Agreement may from time to time change its address
for receiving notices by giving written notice thereof in the manner set forth
above.
10.3 Amendment: Waiver. No provision of this Agreement may
be waived unless in writing signed by all of the parties to this Agreement, and
the waiver of any one provision of this Agreement shall not be deemed to be a
waiver of any other provision. This Agreement may be amended, supplemented or
otherwise modified only by a written agreement executed by all of the parties to
this Agreement.
10.4 Enforcement; Jurisdiction. Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated by
this Agreement may be brought against any of the parties in any Federal court
located in the State of Delaware or any Delaware state court, and each of the
parties hereto hereby consents to the exclusive jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and waives any objection to venue laid therein. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the State of Delaware. Without limiting the generality
of the foregoing, each party hereto agrees that service of process upon such
party at the address referred to in Section 10.2 or upon the agent appointed by
the Company for service of process in Delaware, together with written notice of
such service to such party, shall be deemed effective service of process upon
such party.
10.5 Termination. This Agreement and the irrevocable proxy
granted in Section 1.2 hereof will terminate upon the termination of the Merger
Agreement. Sections 1, 2, 3, 4.1, 4.2, 4.3, 4.4, 6 and 7 shall terminate at the
Effective Time of the Mergers. With respect to the Outside Stockholders only,
this Agreement shall terminate in its entirety and the Outside Stockholders
shall no longer be deemed Stockholders hereunder upon the first anniversary of
the Closing.
10.6 Capacity. No member, stockholder, director, partner,
employee, officer, representative or agent of any Stockholder (in each case, in
their capacity as such) has made any (and shall not be deemed to have made any)
representations, warranties or covenants (express or implied) under or in
connection with this Agreement.
10.7 Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
10.8 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become
<PAGE> 12
12
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.
10.9 Entire Agreement; No Third-Party Beneficiaries. This
Agreement and the other agreements referred to herein constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this
Agreement. This Agreement is not intended to confer upon any person other than
the parties any rights or remedies.
10.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
10.11 Headings. The section and subsection headings contained
in this Agreement are included for convenience only and form no part of the
agreement between the parties.
10.12 Expenses. Each party shall pay its own costs, expenses,
including without limitation, the fees and expenses of their respective counsel
and financial advisors.
10.13 Publicity. The initial press release relating to this
Agreement shall be a joint press release, and Parent and the Stockholders shall
use reasonable efforts to agree upon the text of any other press release before
issuing any such press release.
10.14 Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other parties to sustain damages for
which they would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such breach
the aggrieved party or parties shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief, without the posting of bond or other security, in addition to any other
remedy to which it or they may be entitled, at law or in equity.
<PAGE> 13
IN WITNESS WHEREOF, a duly authorized representative of each
of the parties hereto have executed this Agreement as of the date first above
written.
GLOBAL CROSSING LTD.
By: /s/ Thomas J. Casey
-----------------------------------
Name: Thomas J. Casey
Title: Vice Chairman of the Board
CABLE SYSTEMS HOLDING, LLC
By: /s/ Peter A. Woog
-----------------------------------
Name: Peter A. Woog
Title: Manager
By: /s/ Richard Kleinknecht
-----------------------------------
Name: Richard Kleinknecht
Richard P. Kleinknecht
15 Banbury Lane
Huntington, NY 11745
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York 10036
Attention: Edward F. Rover, Esq.
Fax: (212) 354-8113
<PAGE> 14
By: /s/ David Walsh
-----------------------------------
Name: David Walsh
IPC Communications, Inc.
Wall Street Plaza
88 Pine Street
New York, NY 10005
Attention: David Walsh
Fax: (212) 344-5106
<PAGE> 15
By: /s/ Anthony Servidio
-------------------------------------
Name: Anthony Servidio
IPC Communications, Inc.
Wall Street Plaza
88 Pine Street
New York, NY 10005
Attention: David Walsh
Fax: (212) 344-5106
<PAGE> 16
ALLEGRA CAPITAL PARTNERS III, L.P.
Its General Partner:
Allegra Partners III, L.P.
By: /s/ Richard W. Smith
----------------------------------
Name: Richard W. Smith
Title: Managing Partner
Allegra Capital Partners III, L.P.
515 Madison Avenue
New York, NY 10022-5403
Attention: Richard W. Smith
Fax: (212) 759-2561
<PAGE> 17
SCHEDULE 2.4
<TABLE>
<CAPTION>
SHARES OF
COMPANY COMMON STOCK
HELD
------------------------
NAME OF RECORD OWNER
- ---------------------------------------------------------------------
<S> <C>
Cable Systems Holding, LLC........................................... 4,346,033
Richard Kleinknecht.................................................. 761,904
David Walsh.......................................................... 271,617
Anthony Servidio..................................................... 174,730
Allegra Capital Partners III, L.P. .................................. 381,904
===============================================================================================
STOCKHOLDER TOTAL:................................................... 5,936,188
</TABLE>
<PAGE> 18
EXHIBIT A
STOCKHOLDER CONSENT
Action Taken by the Written
Consent of Stockholders
of
IPC Communications, Inc.
February __, 2000
The undersigned stockholders of IPC Communications, Inc., a Delaware
corporation (the "Corporation"), acting by written consent in lieu of a meeting
pursuant to Section 228 of the General Corporation Law of the State of Delaware,
hereby irrevocably consent to the adoption of and adopt the following resolution
with respect to the shares of the common stock, par value $.01 per share, of the
Corporation owned of record by such stockholders on the date hereof:
RESOLVED, that the Agreement and Plan of Merger, dated as of February
22, 2000 (the "Merger Agreement"), among Global Crossing Ltd., a company formed
under the laws of Bermuda ("GC"), Georgia Merger Sub Corporation, a wholly-owned
subsidiary of GC, the Corporation, IPC Information Systems, Inc., a Delaware
corporation and a wholly owned subsidiary of the Corporation, IXnet, Inc., a
Delaware corporation and a subsidiary of the Corporation, and Idaho Merger Sub
Corporation, a Delaware corporation and a wholly owned subsidiary of the
Corporation, a copy of which has been furnished to the undersigned stockholders,
be, and it hereby is, adopted and approved by the undersigned stockholders.
The action of the stockholders of the Corporation approved pursuant
hereto shall become effective when one or more consents have been (a) signed by
stockholders holding shares having a majority of the voting power of the
outstanding shares of the common stock of the Corporation, being not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted and (b) delivered to the Corporation at its principal place of
business.
------------------------------------------
By:
---------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Number of Shares:
-------------------------
Address of the stockholder:
------------------------------------------
------------------------------------------
Date of Execution:
-----------------
<PAGE> 19
EXHIBIT B TO
VOTING AND CONSENT
AGREEMENT
REGISTRATION RIGHTS AGREEMENT
dated as of ___________ __, 2000
among
GLOBAL CROSSING LTD.
CABLE SYSTEMS HOLDING, LLC
and
the other parties named herein
<PAGE> 20
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Definitions.......................................................1
Section 2. Demand Registration...............................................2
(a) Requests for Registration.........................................2
(b) Filing and Effectiveness..........................................3
(c) Priority on Demand Registration...................................4
(d) Postponement of Demand Registration...............................4
Section 3. Piggyback Registration............................................4
(a) Right to Piggyback................................................4
(b) Priority on Piggyback Registrations...............................5
Section 4. Registration Procedures...........................................6
Section 5. Registration Expenses............................................11
Section 6. Indemnification..................................................12
(a) Indemnification by the Company...................................12
(b) Indemnification by Holders.......................................12
(c) Conduct of Indemnification Proceedings...........................12
(d) Contribution.....................................................13
Section 7. Underwritten Registrations.......................................14
Section 8. Miscellaneous....................................................14
(a) Remedies.........................................................14
(b) Amendments and Waivers...........................................14
</TABLE>
<PAGE> 21
<TABLE>
<S> <C>
(c) Notices..........................................................14
(d) Merger, Amalgamation or Consolidation of the Company.............16
(e) Successors and Assigns...........................................16
(f) Counterparts.....................................................16
(g) Titles and Subtitles.............................................16
(h) Governing Law....................................................16
(i) Separability.....................................................16
(j) Entire Agreement.................................................16
(k) Submission to Jurisdiction.......................................17
</TABLE>
<PAGE> 22
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of ___________ __, 2000, among GLOBAL CROSSING LTD., a company
organized under the laws of Bermuda (the "Company"), CABLE SYSTEMS HOLDING, LLC,
a Delaware limited liability company ("CSH") and RICHARD P. KLEINKNECHT
("Kleinknecht", together with CSH, the "Current Holders").
RECITALS
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
February 22, 2000 (the "Merger Agreement"), among the Company, and IPC
Communications, Inc, Georgia Merger Sub Corporation, IXnet, Inc., and Idaho
Merger Sub Corporation, each a Delaware corporation, the Current Holders are
acquiring common shares of the Company, par value 0.01 per share ("Common
Shares") in connection with the Mergers (as defined in the Merger Agreement);
WHEREAS, pursuant to a Consent and Voting Agreement, dated as of the
February 22, 2000 (the "Voting Agreement"), the Current Holders have, on their
own behalf and on behalf of their administrators, successors and receivers,
agreed to certain consent and voting provisions in connection with and in favor
of the Mergers;
WHEREAS, to induce the Current Holders to execute and deliver the
Voting Agreement, the Company has agreed to provide to the Holders certain
registration rights under the Securities Act; and
WHEREAS, the execution and delivery of this Agreement by the parties
hereto is a condition to the closing of the transactions contemplated by the
Merger Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein and in the Merger Agreement, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Definitions. For purposes of this Agreement, the following
capitalized terms have the following meanings:
"Exchange Act": means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder, all
as the same shall be in effect from time to time.
"Holders": means the Current Holders and each of their
respective transferees who agree to be bound by the provisions of this
Agreement in accordance with Section 8(e) hereof.
"Person": means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, governmental authority or
other entity.
<PAGE> 23
"Prospectus": means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Registrable Securities": means all Common Shares held from time
to time by the Holders and any Conversion Securities as defined in Section
8(d).
"Registration Statement": means any registration statement of the
Company under the Securities Act that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related Prospectus,
any preliminary prospectus, all amendments and supplements to such registration
statement (including post-effective amendments), all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"SEC": means the United States Securities and Exchange Commission.
"Securities Act": means the United States Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder, all as
the same shall be in effect from time to time.
"Underwritten Offering": means a distribution, registered
pursuant to the Securities Act, in which securities of the Company are sold
to the public through one or more underwriters.
Unless otherwise defined herein, terms defined in the Merger
Agreement are used herein as therein defined.
Section 2. Demand Registration.
(a) Requests for Registration. At any time after the one year
anniversary of this Agreement, subsequent to the relevant Holder becoming a
direct Holder of Common Shares and subject to the conditions set forth in this
Agreement: (i) the Holders owning in excess of 50% of the Common Shares will
have the right, by written notice delivered to the Company (a "Demand Notice"),
to require the Company to register Registrable Securities under and in
accordance with the provisions of the Securities Act (a "Demand Registration");
provided the Holders may not make more than one (1) Demand Registration and the
Holders must provide to the Company a certificate (the "Authorizing
Certificate") signed by the Holders of more than 50% of the Registrable
Securities held by them and their transferees on the date of such Demand Notice;
and provided, further, that the Company's obligations under this Section 2 shall
terminate from and after the date that the Registrable Securities held by CSH
and its Permitted Transferees (as
2
<PAGE> 24
defined in the Voting Agreement) and Kleinknecht represent less than 1% of all
outstanding Common Shares (the "Termination Date"). The Authorizing Certificate
shall set forth (A) the name of the Holder or Holders signing such Authorizing
Certificate, (B) the number of Registrable Securities held by such Holder or
Holders, and, if different, the number of Registrable Securities such Holder or
Holders have elected to have registered, and (C) the intended methods of
disposition of the Registrable Securities. A Holder may at its option withdraw
Registrable Securities from a registration. In such event (1) any continuing
registration of Registrable Securities shall constitute the Demand Registration
to which such Holder is entitled and (2) the withdrawing Holder shall reimburse
the Company for any registration and filing fees (including any fees payable to
the SEC, the National Association of Securities Dealers, Inc. or any successor
organization) it has incurred with respect to the withdrawn Registrable
Securities (unless all Registrable Securities are withdrawn, in which case the
withdrawing Holder(s) shall reimburse the Company for all costs and expenses
incurred by it in connection with the registration of such Registrable
Securities). Subject to compliance with clause (2) of the preceding sentence, a
registration that is terminated in its entirety prior to the effective date of
the applicable Registration Statement will not constitute a Demand Registration.
If a Demand Registration is not declared and maintained effective
for the period required by Section 2(b) or if the consummation of the offering
of Registrable Securities pursuant to such Demand Registration is interfered
with by any stop order, injunction or other order or requirement of the SEC or
other governmental agency or court which is not due to the act or omission of
any Holder, then the Holders shall be entitled to an additional Demand
Registration in lieu thereof.
(b) Filing and Effectiveness. (i) The Company will file a
Registration Statement relating to any Demand Registration as promptly as
practicable (but in any event within 45 days in the case of any registration
eligible to be made on Form S-3 of F-3 or a comparable successor form, as
applicable) following the date on which the Demand Notice is given and will use
its reasonable best efforts to cause the same to be declared effective by the
SEC as soon as practicable thereafter, but in any event within 180 days
thereafter (the "Effectiveness Date").
(ii) The Company agrees to use its best efforts to comply with all
necessary provisions of the federal securities laws in order to keep each
Registration Statement relating to a Demand Registration effective for a period
of six (6) months from its Effectiveness Date or such shorter period that will
terminate when all Registrable Securities covered by such Registration Statement
have been sold pursuant to such Registration Statement.
Within ten (10) business days after receipt of such Demand Notice,
the Company will serve written notice thereof (the "Notice") to all other
Holders and will, subject to the provisions of Section 2(c), include in any
registration required under this Section 2 all Registrable Securities with
respect to which the Company receives written requests for inclusion therein
within fifteen (15) business days after such Notice to given to the applicable
Holder. The Holder will be permitted, subject to its compliance with the
provisions of Section 2(a) relating to reimbursement of the Company's expenses,
to withdraw in good faith all or part of the Registrable Securities from a
Demand Registration at any time prior to the effective date of such
3
<PAGE> 25
Demand Registration, in which event the Company will promptly amend or, if
applicable, withdraw the related Registration Statement.
(c) Priority on Demand Registration. Notwithstanding the foregoing,
if the managing underwriter or underwriters of an Underwritten Offering to which
such Demand Registration relates advises the Holders that the total amount of
Registrable Securities that such Holders intend to include in such Demand
Registration is in the aggregate such as to materially and adversely affect the
success of such offering, then the number of Registrable Securities to be
included in such Demand Registration will, if necessary, be reduced and there
will be included in such Underwritten Offering the largest number of Registrable
Securities that, in the opinion of such managing underwriter or underwriters,
can be sold without materially and adversely affecting the success of such
Underwritten Offering. The Registrable Securities of the Holder or Holders
initiating the Demand Registration shall receive priority in such Underwritten
Offering to the full extent of the Registrable Securities such Holder or Holders
desire to sell (unless these securities would materially and adversely affect
the success of such offering, in which case the number of such Holder's
Registrable Securities included in the offering shall be reduced to the extent
necessary) and the remaining allocation available for sale, if any, shall be
allocated pro rata among the other Holders on the basis of the number of
Registrable Securities requested to be included therein by each such Holder.
(d) Postponement of Demand Registration. Notwithstanding anything to
the contrary in any other provision of this Agreement, the Company will be
entitled, on no more than one occasion in any 360 day period, to postpone the
filing period of any Demand Registration for a reasonable period of time not in
excess of 90 calendar days if the Board of Directors of the Company determines,
in the good faith exercise of its business judgment, and has delivered to the
Holders written certification to the effect, that such registration and offering
could materially interfere with a bona fide financing transaction of the
Company, including without limitation a primary offering of securities, or any
other material business transaction of the Company, or would require disclosure
of information, the premature disclosure of which could materially and adversely
affect the Company. If the Company postpones the filing of a Registration
Statement, it will promptly notify the Holders in writing when the events or
circumstances permitting such postponement have ended.
Section 3. Piggyback Registration.
4
<PAGE> 26
(a) Right to Piggyback. If at any time after the one year
anniversary of this Agreement the Company proposes to file a Registration
Statement, whether or not for sale for the Company's own account, on a form and
in a manner that would also permit registration of Registrable Securities (other
than in connection with a registration statement on Forms S-4 or S-8 or any
similar or successor form), the Company shall give to Holders holding
Registrable Securities written notice of such proposed filing at least thirty
(30) calendar days before the anticipated filing. The notice referred to in the
preceding sentence shall offer Holders the opportunity to register such amount
of Registrable Securities as each Holder may request (a "Piggyback
Registration"). Subject to Section 3(b), the Company will include in each such
Piggyback Registration (and any related qualification under state blue sky laws
and other compliance filings, and in any underwriting involved therein) all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within fifteen (15) calendar days after the
written notice from the Company is given; provided, that the Company's
obligations under this Section 3 shall terminate from and after the Termination
Date. Each Holder will be permitted, subject to its compliance with the
provisions of Section 2(a) relating to reimbursement of the Company's expenses,
to withdraw all or part of its Registrable Securities from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration.
Notwithstanding the foregoing, the Company will not be obligated to
effect any registration of Registrable Securities under this Section 3 as a
result of the registration of any of its securities solely as direct
consideration for mergers or acquisitions or offered solely in connection with
exchange offers, dividend reinvestment and share purchase plans, rights
offerings or option or other employee benefit plans.
(b) Priority on Piggyback Registrations. The Company will cause the
managing underwriter or underwriters of a proposed Underwritten Offering to
permit Holders holding Registrable Securities requested to be included in the
registration for such offering to include therein all such Registrable
Securities requested to be so included (such securities, together with any other
shares of the same class requested to be included in such registration by any
other Person pursuant to similar registration rights, the "Piggyback Shares") on
the same terms and conditions as any securities of the Company included therein
(other than the indemnification by the Holders, which will be limited as set
forth in Section 6(b) hereof and provided, that the Holders give customary
representations and warranties). Notwithstanding the foregoing, if the managing
underwriter or underwriters of such Underwritten Offering advises the Holders to
the effect that the total amount of securities that such Holders, the Company
and any other Person propose to include in such Underwritten Offering is such as
to materially and adversely affect the success of such offering, then the
Company will include in such registration:
(x) in the case of a registration in connection with a sale
of securities for the Company's own account, (i) first, 100% of the
securities that the Company proposes to sell for its own account, and (ii)
second, to the extent that the number of securities in clause (i) above is
less than the number of securities which the Company has been advised can
be sold in such offering without having the adverse effect referred to
above, the number of Piggyback Shares of each Holder and the number of
Piggyback Shares requested to be included in such offering by any other
Persons pursuant to similar
5
<PAGE> 27
registration rights, determined pro rata on the basis of the number of
shares of the class being sold owned by each Holder requesting
registration and such other Persons requesting registration, collectively;
and
(y) in the case of a registration in connection with a sale of
securities on account of any Person other than the Company (the
"Initiating Party"), other than a Demand Registration, (i) first, 100% of
the securities, if any, that the Initiating Party proposes to sell, (ii)
second, to the extent that the number of securities in clause (i) above is
less than the number of securities which the Company has been advised can
be sold in such offering without having the adverse effect referred to
above, the number of Piggyback Shares of each Holder and the number of
Piggyback Shares requested to be included in such offering by any other
Persons pursuant to similar registration rights, determined pro rata on
the basis of the number of shares of the class being sold owned by each
Holder requesting registration and such other Persons requesting
registration, collectively, and (iii) third, to the extent that the number
of securities in clauses (i) and (ii) above is less than the number of
securities which the Company has been advised can be sold in such offering
without having the adverse effect referred to above, the securities sought
to be included by the Company in the offering.
Section 4. Registration Procedures. In connection with the Company's
registration obligations pursuant to Sections 2 and 3, the Company will effect
such registrations to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible, and in each case
to the extent applicable (it being understood that the obligations of the
Company in clauses (a), (b), (d), (h), (j), (k), (l) and (n) of this Section 4
will be subject to the first sentence of Section 3(b) and, except as provided in
Section 3(b), the Holders will not have any right to effect an underwritten
public offering under Section 3):
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the holders
thereof in accordance with the intended method or methods of distribution
thereof, and cause each such Registration Statement to become effective
and remain effective as provided herein; provided, however, that before
filing a Registration Statement or Prospectus or any amendments or
supplements thereto (including documents that would be incorporated or
deemed to be incorporated therein by reference) the Company will furnish
to the Holders holding Registrable Securities covered by such Registration
Statement, not more than one counsel chosen by Holders holding a majority
of the Registrable Securities being registered ("Special Counsel") and the
managing underwriters, if any, copies of all such documents proposed to be
filed, which documents will be subject to the review of such Holders, such
Special Counsel and such underwriters, and the Company will not file any
such Registration Statement or amendment thereto or any Prospectus or any
supplement thereto (excluding such documents that, upon filing, will be
incorporated or deemed to be incorporated by reference therein) to which
the Holders holding a majority of the Registrable Securities covered by
such Registration Statement or the managing underwriter, if any, shall
reasonably object.
6
<PAGE> 28
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for
the applicable periods specified in Section 2; cause the related
Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement as so amended or
in such Prospectus as so supplemented.
(c) Notify the selling Holders and the managing underwriters,
if any, promptly, and (if requested by any such Person) confirm such
notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the SEC or any other federal or
state governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company contained in any agreement contemplated by
Section 4(n) (including any underwriting agreement) cease to be true and
correct in any material respect, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, (vi) of the occurrence of any event that makes any statement
made in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires the making of any changes in a
Registration Statement, Prospectus or any such document so that, in the
case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading and, in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
(vii) of the Company's reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.
(d) Use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of a Registration Statement, or
the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment.
(e) If requested by the managing underwriters, if any, or
Holders holding a majority of the Registrable Securities being registered,
(i) promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing
7
<PAGE> 29
underwriters, if any, and such Holders agree should be included therein as
may be required by applicable law and (ii) make all required filings of
such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to
be incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company will not be required to take any
actions under this Section 4(e) that are not, in the opinion of counsel
for the Company, in compliance with applicable law.
(f) Furnish to each selling Holder and each managing
underwriter, if any, without charge, at least one conformed copy of the
Registration Statement and any post-effective amendment thereto (but
excluding schedules, all documents incorporated or deemed incorporated
therein by reference and all exhibits, unless requested in writing by such
Holder or underwriter).
(g) Deliver to each selling Holder and the underwriters, if
any, without charge as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such persons may
reasonably request; and, subject to the last paragraph of this Section 4,
the Company hereby consents to the use of such Prospectus or each
amendment or supplement thereto by each of the selling Holders and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States
as any seller or underwriter reasonably requests in writing; use all
reasonable efforts to keep such registration or qualification (or
exemption therefrom) effective during the period the applicable
Registration Statement is required to be kept effective and do any and all
other acts or things necessary or advisable to enable the disposition in
each such jurisdiction of the Registrable Securities covered by the
applicable Registration Statement; provided, however, that the Company
will not be required to (i) qualify to do business in any jurisdiction
where it is not then so qualified or (ii) take any action that would
subject it to taxation or service of process in any such jurisdiction
where it is not then so subject.
(i) Cooperate with the selling Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and enable
such Registrable Securities to be in such denominations and registered in
such names as the managing underwriters, if any, shall request at least
two business days prior to any sale of Registrable Securities to the
underwriters.
(j) Use its reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be
registered with or approved by
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<PAGE> 30
such other governmental agencies or authorities within the United States
except as may be required solely as a consequence of the nature of any
selling Holder's business, in which case the Company will cooperate in all
reasonable respects with the filing of such Registration Statement and the
granting of such approvals as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition
of such Registrable Securities.
(k) Upon the occurrence of any event contemplated by Section
4(c)(vi) or 4(c)(vii), prepare a supplement or post-effective amendment to
each Registration Statement or a supplement to the related Prospectus or
any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(l) If requested by Holders holding a majority of the
Registrable Securities covered by such Registration Statement or the
managing underwriters, if any, use its best efforts to cause all
Registrable Securities covered by such Registration Statement to be (i)
listed on each securities exchange, if any, on which securities issued by
the Company of the same class are then listed or, if no such securities
issued by the Company are then so listed, on the New York Stock Exchange
or another national securities exchange if the securities qualify to be so
listed or (ii) authorized to be quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or the National
Market System of NASDAQ, if the securities qualify to be so quoted.
(m) As needed, (i) engage an appropriate transfer agent and
provide the transfer agent with printed certificates for the Registrable
Securities in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Securities.
(n) Enter into such customary agreements (including, in the
event of an Underwritten Offering, an underwriting agreement in form,
scope and substance as is customary in underwritten offerings) and take
all such other commercially reasonable and customary actions in connection
therewith (including those reasonably requested by the Holders holding a
majority of the Registrable Securities being sold or, in the event of an
Underwritten Offering, those reasonably requested by the managing
underwriters) in order to facilitate the disposition of such Registrable
Securities and in such connection, but only where an underwriting
agreement is entered into in connection with an Underwritten Offering, (i)
make such representations and warranties to the underwriters with respect
to the businesses of the Company and its subsidiaries, the Registration
Statement, Prospectus and documents incorporated by reference or deemed
incorporated by reference therein, if any, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings and confirm the same if and when requested; (ii)
obtain opinions of counsel to the Company and updates thereof, which
counsel and opinions (in form, scope and substance) shall be reasonably
9
<PAGE> 31
satisfactory to the managing underwriters, if any, addressed to each of
the underwriters covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such underwriters; (iii) obtain "comfort" letters
and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other certified public accountants of
any subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data is, or is required to
be, included in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "comfort" letters in connection with
underwritten offerings; (iv) cause the Company's management to be made
available for, and assist in, the marketing and disposition of such
Registrable Securities in the manner and to the extent reasonably
requested by the underwriters including, without limitation, participation
by management in customary road shows, investor conferences and other
similar presentations and (v) deliver such documents and certificates as
may be reasonably requested by the managing underwriters, if any, to
evidence the continued validity of the representations and warranties of
the Company and its subsidiaries made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement entered into by the Company. The foregoing actions
will be taken in connection with each closing under such underwriting
agreement as and to the extent required thereunder.
(o) Make available for reasonable inspection during normal
business hours by a representative of the Holders holding Registrable
Securities being sold, any underwriter participating in any disposition of
Registrable Securities, and any attorney or accountant retained by such
selling Holders or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries,
and cause the officers, directors and employees of the Company and its
subsidiaries to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with
such Registration Statement; provided, however, that any records,
information or documents that are designated by the Company in writing as
confidential at the time of delivery of such records, information or
documents will be kept confidential by such Persons unless (i) such
records, information or documents are in the public domain or otherwise
publicly available, (ii) disclosure of such records, information or
documents is required by court or administrative order; provided, that
such Holder notifies the Company of any such requirement and cooperates
with the Company in seeking a protective or restraining order limiting
such disclosure, or (iii) disclosure of such records, information or
documents, in the reasonable opinion of counsel to such Person, is
otherwise required by law (including, without limitation, pursuant to the
requirements of the Securities Act).
(p) Comply with all applicable rules and regulations of the
SEC and make generally available to its security holders earnings
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 calendar days after the end of any
12-month period (or 90 calendar days after the end of any 12-month period
if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable
10
<PAGE> 32
Securities are sold to underwriters in a firm commitment or best efforts
Underwritten Offering, or (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company, after the effective date of a Registration Statement, which
statements shall cover such 12-month period.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Securities as the
Company may, from time to time, reasonably request in writing, and the Company
may exclude from such registration the Registrable Securities of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
Each Holder will be deemed to have agreed by virtue of its
acquisition of Registrable Securities that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in Section
4(c)(ii), 4(c)(iii), 4(c)(v), 4(c)(vi) or 4(c)(vii) ("Suspension Notice"), such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by such Registration Statement or Prospectus (a "Black-Out") until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(k), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and
such Holder has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus.
Except as expressly provided herein, there shall be no limitation with regard to
the number of Suspension Notices that the Company is entitled to give hereunder;
provided, however, that in no event shall the aggregate number of days the
Holders are subject to Black-Out during any period of 12 consecutive months
exceed 180 days.
Section 5. Registration Expenses. Except as provided in Section 2(a) and
Section 9, all fees and expenses incident to the performance of or compliance
with this Agreement by the Company will be borne by the Company whether or not
any of the Registration Statements become effective. Such fees and expenses will
include, without limitation, (i) all registration and filing fees (including
fees and expenses for compliance with federal or state securities laws or state
"blue sky" laws), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities in a form eligible
for deposit with The Depository Trust Company and of printing a reasonable
number of prospectuses if the printing of such prospectuses is requested by the
Holders holding a majority of the Registrable Securities included in any
Registration Statement), (iii) messenger, telephone and delivery expenses
incurred by the Company, (iv) fees and disbursements of counsel for the Company
incurred by the Company, and (v) fees and disbursements of all independent
certified public accountants referred to in Section 4(n)(iii) (including the
expenses of any special audit and "comfort" letter required by or incident to
such performance) incurred by the Company. In addition, the Company will pay
internal expenses (including without limitation all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection with the listing
of the securities to be registered on any securities exchange on which
securities of the same class issued by the Company are then listed or for
admission of any securities for quotation or an inter-dealer quotation system,
as applied and the fees and expenses of any Person, including special experts,
retained by the Company. In no event, however, will the Company be responsible
for any underwriting discount
11
<PAGE> 33
or selling commission with respect to any sale of Registrable Securities
pursuant to this Agreement, and the Holders shall be responsible on a pro rata
basis for any taxes of any kind (including, without limitation, transfer taxes)
with respect to any disposition, sale or transfer of Registrable Securities and
for any legal, accounting and other expenses incurred by them and not otherwise
reimbursable as provided above.
Section 6. Indemnification.
(a) Indemnification by the Company. The Company will indemnify and
hold harmless, to the fullest extent permitted by law, each Holder holding
Registrable Securities registered pursuant to this Agreement, the officers,
directors, members and agents and employees of each of them, each Person who
controls such a Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, members, agents
and employees of any such controlling person, from and against all losses,
claims, damages, liabilities, costs (including without limitation the costs of
investigation and attorneys' fees) and expenses (collectively, "Losses"),
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or form of
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar and to the extent as the
same are (i) based upon information furnished in writing to the Company by such
Holder specifically for use therein or (ii) made in any preliminary prospectus,
if such untrue statement or omission or alleged omission made in such
preliminary prospectus is eliminated or remedied in the Prospectus relating to
it (as amended or supplemented, as applicable) and a copy of such Prospectus
shall not have been furnished to the person alleging such Loss as required under
applicable law.
(b) Indemnification by Holders. In connection with any Registration
Statement in which a Holder is participating, such Holder will furnish to the
Company in writing such information as the Company reasonably requests for use
in connection with any Registration Statement, Prospectus or preliminary
prospectus and will indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its directors and officers, agents and employees, each
person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
agents or employees of such controlling persons, from and against all Losses
arising out of or based upon any untrue statement of a material fact contained
in any Registration Statement, Prospectus or preliminary prospectus or arising
out of or based upon any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the
Company specifically for use in such Registration Statement, Prospectus or
preliminary prospectus and was relied upon by the Company in the preparation of
such Registration Statement, Prospectus or preliminary prospectus. In no event
will the liability of any selling Holder hereunder be greater in amount than the
dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
12
<PAGE> 34
(c) Conduct of Indemnification Proceedings. If any Person shall
become entitled to indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party from which such
indemnity is sought (the "indemnifying party") of any claim or of the
commencement of any action or proceeding with respect to which such indemnified
party seeks indemnification or contribution pursuant hereto; provided, however,
that the failure to so notify the indemnifying party will not relieve the
indemnifying party from any obligation or liability except to the extent that
the indemnifying party has been prejudiced materially by such failure. All
reasonable fees and expenses (including any reasonable fees and expenses
incurred in connection with investigating or preparing to defend such action or
proceeding) will be paid to the indemnified party (provided appropriate
documentation for such expenses is also submitted with such notice), as
incurred, within five calendar days of written notice thereof to the
indemnifying party (regardless of whether it is ultimately determined that an
indemnified party is not entitled to indemnification hereunder). The
indemnifying party will not consent to entry of any judgment or enter into any
settlement or otherwise seek to terminate any action or proceeding in which any
indemnified party is or could be a party and as to which indemnification or
contribution could be sought by such indemnified party under this Section 6,
unless such judgment, settlement or other termination includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance reasonably satisfactory to
the indemnified party, from all liability in respect of such claim or litigation
for which such indemnified party would be entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this
Section 6 is unavailable to an indemnified party under Section 6(a) or 6(b) in
respect of any Losses or is insufficient to hold such indemnified party
harmless, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, will, severally but not jointly, contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or indemnifying parties, on the one hand, and such indemnified party, on
the other hand, in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party or indemnifying parties, on the
one hand, and such indemnified party, on the other hand, will be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or related to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses will be deemed to include any legal
or other fees or expenses incurred by such party in connection with any action
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), an indemnifying party that
is a selling Holder will not be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities sold by
such
13
<PAGE> 35
indemnifying party and distributed to the public were offered to the public
exceeds the amount of any damages that such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity, contribution and expense reimbursement obligations of
the Company hereunder will be in addition to any liability the Company may
otherwise have hereunder or otherwise. The provisions of this Section 6 will
survive so long as Registrable Securities remain outstanding, notwithstanding
any permitted transfer of the Registrable Securities by any Holder thereof or
any termination of this Agreement.
Section 7. Underwritten Registrations. If any of the Registrable
Securities included in any Demand Registration are to be sold in an Underwritten
Offering, the Holders holding a majority of the Registrable Securities included
in the Demand Notice may select an investment banker or investment bankers and
manager or managers to manage the Underwritten Offering, provided that such
investment banker or bankers is (are) reasonably acceptable to the Company. If
any Piggyback Registration is an Underwritten Offering, the Company will have
the exclusive right to select the investment banker or investment bankers and
managers to administer the offering. The Company and the Holders agree that, in
connection with any Underwritten Offering hereunder, they shall each undertake
to offer customary indemnification, representations and warranties to the
participating underwriters and to agree to any restrictions required by the
underwriters on the sale of Common Shares or other securities by such party
after the completion of the Underwritten Offering; provided, however, that (i)
the period of such restrictions shall not exceed 90 calendar days and (ii) the
restrictions so imposed on the Holders shall be no more onerous than the
restrictions imposed on the Company.
Section 8. Miscellaneous.
(a) Remedies. In the event of a breach by a party of its obligations
under this Agreement, each other party, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Each party
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any provision of this Agreement and
hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it will waive the defense that a remedy at law would
be adequate.
(b) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented without the prior written consent of the
Company and the Holders holding in excess of 50% of the Registrable Securities.
No amendment that materially adversely affects any particular Holder may be
effected to this Agreement without the consent of such Holder.
(c) Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified; (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) upon delivery if sent by registered or certified mail, return
14
<PAGE> 36
receipt requested, postage prepaid; or (iv) upon delivery if deposited with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
If to the Company to:
Global Crossing Ltd.
Wessex House
45 Reid Street
Hamilton HM12 Bermuda
Attention: Secretary of the Company
Facsimile: (441) 296-8606
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: D. Rhett Brandon, Esq.
Facsimile: (212) 455-2502
If to CSH to:
Cable Systems Holding, LLC
206 East Forest Hills Drive
Phoenix, AZ 85022
Attention: Peter Woog
Fax: 602-789-8847
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Philip H. Werner
Fax: 212-309-6273
If to Kleinknecht to:
Richard P. Kleinknecht
15 Banbury Lane
Huntington, NY 11745
with a copy to:
15
<PAGE> 37
White & Case
1155 Avenue of the Americas
New York, New York
Attention: Edward F. Rover, Esq.
Fax: (212) 354-8113
or to such other address or addresses as shall be designated in writing. All
notices shall be effective when received.
(d) Merger, Amalgamation or Consolidation of the Company. If the
Company is a party to any merger, amalgamation, or consolidation pursuant to
which the Registrable Securities are converted into or exchanged for securities
or the right to receive securities of any other person ("Conversion
Securities"), the issuer of such Conversion Securities shall assume (in a
writing delivered to all Holders) all obligations of the Company hereunder. The
Company will not effect any merger, amalgamation, or consolidation described in
the immediately preceding sentence unless the issuer of the Conversion
Securities complies with this Section 8(d).
(e) Successors and Assigns. Subject to the terms and conditions of
the Merger Agreement, any lawful transferee of all or a portion of the
Registrable Securities shall become a Holder hereunder to the extent it agrees
in writing to be bound by all of the provisions applicable hereunder to the
transferring Holder (such acknowledgment being evidenced by execution and
delivery to the Company of a Counterpart and Acknowledgment substantially in the
form of Exhibit A). Subject to the requirements of this Section 8(e), this
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
(g) Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
(h) Governing Law. This Agreement shall be governed in all respects
by the laws of the State of New York.
(i) Separability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
(j) Entire Agreement. This Agreement and the other documents
delivered pursuant hereto, the Merger Agreement and the Voting Agreement
constitute the full and entire understanding and agreement between the parties
with regard to the subjects thereto and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
16
<PAGE> 38
(k) Submission to Jurisdiction. Each party hereto irrevocably
consents to the jurisdiction and venue of the courts of the State of New York
and the courts of the United States for the Northern or Southern Districts of
New York, and in the courts hearing appeals therefrom, for the resolution of any
dispute, action, suit or proceeding arising out of or relating to this
Agreement. Each party hereby irrevocably waives, and agrees not to assert, by
way of motion, as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement, the defense of sovereign immunity,
any claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to serve process in
accordance with this Section 8, that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and to the fullest extent permitted by applicable law, that the suit, action or
proceeding in any such court is brought in an inconvenient forum, that the venue
of such suit, action or proceeding is improper, or that this Agreement, or the
subject matter hereof or thereof, may not be enforced in or by such courts and
further irrevocably waives, to the fullest extent permitted by applicable law,
the benefit of any defense that would hinder, fetter or delay the levy,
execution or collection of any amount to which the party is entitled pursuant to
the final judgment of any court having jurisdiction.
9. Notwithstanding anything herein to the contrary, the Company
shall not have any financial obligation pursuant to this Agreement unless and
until the Company is able to satisfy (after taking into account such obligation)
the requirements of Section 39A(2A) of the Companies Act 1981. For this
purposes, the Company shall be considered to satisfy such requirements if it
receives a written opinion or certificate from its independent auditors to that
effect.
[Signature page follows]
17
<PAGE> 39
IN WITNESS WHEREOF, a duly authorized representative of each of
the parties hereto have executed this Agreement as of the date first written
above.
GLOBAL CROSSING LTD.
By:
--------------------------------
Name:
Title:
CABLE SYSTEMS HOLDING, LLC
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name: Richard Kleinknecht
18
<PAGE> 40
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
COUNTERPART AND ACKNOWLEDGMENT
TO: The Company
RE: The Registration Rights Agreement (the "Agreement") dated as
of _______, 2000, by and among the Company and the Holders (as
defined in the Agreement)
The undersigned hereby agrees to be bound by the terms of the
Agreement as a party to the Agreement, and shall be entitled to all benefits of
the Holders (as defined in the Agreement) and shall be subject to all
obligations and restrictions of the Holders pursuant to the Agreement, as fully
and effectively as though the undersigned had executed a counterpart of the
Agreement together with the other parties to the Agreement. The undersigned
hereby acknowledges having received and reviewed a copy of the Agreement.
DATED this _____ day of ____________, _____
By:
Title:
Number of
Shares of
Registrable Securities:
<PAGE> 1
EXHIBIT 99.1
Global Crossing to Acquire IXnet, a High Growth Provider of IP-based Network
Services to Global Financial Community, and Parent Company, IPC Communications,
for $3.8B in Stock
HAMILTON, Bermuda/NEW YORK--(BUSINESS WIRE)--Feb. 22, 2000--Global Crossing Ltd.
(Nasdaq:GBLX)--
- - IXnet provides single "pipe" IP connectivity to more than 600 financial
institutions for global trading and communications.
- - IXnet hosts and distributes market data, news, streaming video,
research and analytics for more than 30 leading content providers to
the global financial community.
- - IXnet has points of presence in 37 countries, 1,450 customer access
nodes, and a strong management and sales force experienced in serving
multinational financial institutions.
- - Expands Global Crossing's customer relationships in the financial
community, adding such premier clients as Citigroup, Chase, Goldman
Sachs, Merrill Lynch, Morgan Stanley, Bear Stearns, Deutsche Bank, ABN
AMRO, NatWest, HSBC, and Nomura.
- - IXnet will use Global Crossing Network instead of leased lines to
provide global bandwidth, substantially reducing costs and creating new
growth opportunities.
- - IPC Communications is the No. 1 provider of sophisticated desktop
trading systems to financial institutions, with a 60% share of the
worldwide market.
Global Crossing Ltd. (Nasdaq:GBLX), which is building and operating the
world's most advanced global IP-based fiber optic network, and IXnet, Inc.
(Nasdaq:EXNT), the leading provider of specialized IP-based network services to
the global financial services community, today announced a definitive agreement
for Global Crossing to acquire IXnet, Inc.
Founded in 1995, IXnet provides desktop-to-desktop broadband data and
voice services to more than 600 leading financial institutions worldwide,
including investment and commercial banks, asset managers, broker/dealers, and
trading firms. IXnet also hosts and distributes market data, news, streaming
video, research and analytics for more than 30 leading content providers to the
global financial community. IXnet has points of presence in 37 countries, 1,450
customer access nodes (intelligent network gateways), and a strong management
team and sales force with unparalleled experience serving the data, voice and
video needs of global financial institutions.
Global Crossing will acquire both IXnet and its parent company, IPC
Communications, Inc. (AMEX:IPI), which owns approximately 73% of IXnet's fully
diluted shares. IPC is the leading provider of sophisticated desktop trading
systems to the global financial community with a market share estimated at 70%
of the U.S. market and 60% worldwide.
Under the terms of the definitive merger agreement, 1.184 Global
Crossing shares will be exchanged for each IXnet share not owned by IPC and
5.417 Global Crossing shares will be exchanged for each share of IPC. Based on
Friday's closing price of Global Crossing shares, the
<PAGE> 2
2
transaction is valued at approximately $62.03 for each of IXnet's 59.2 million
fully diluted shares, and $283.71 for each of IPC's 10.1 million IPC fully
diluted shares, or a total of approximately $3.8 billion. This transaction
values IXnet at a total of approximately $3.65 billion, and values IPC shares --
excluding the value of the IXnet shares owned by IPC -- at a total of
approximately $150 million.
Bob Annunziata, CEO of Global Crossing, said, "IXnet is a great
strategic fit for us. We will now move to the next level beyond providing
building-to-building connectivity in major cities -- providing
desktop-to-desktop connectivity for multinational corporations worldwide. IXnet
will leverage our seamless global network through the provision of sophisticated
IP and data services to financial institutions, one of the largest and fastest
growing customer segments. We can also eliminate substantial network costs by
moving IXnet from leased lines onto the Global Crossing Network, which is
nearing completion. IXnet will give us new capabilities and increased presence
in Asia where we are currently partnering with Microsoft, Softbank and Hutchison
Whampoa, as well as in the financial markets of Europe and the Americas where it
is already the market leader. We welcome David Walsh and his superb management
team to Global Crossing."
IXnet's blue-chip clients include Morgan Stanley, Goldman Sachs,
Merrill Lynch, Citigroup, Chase, Bear Stearns, Donaldson Lufkin & Jenrette,
Deutsche Bank, ABN AMRO, NatWest, HSBC, Nomura, Sumitomo, Barclays, Spear Leeds
& Kellogg, Fidelity Investments, Janus, many of the leading ECNs, and leading
market data providers such as First Call and News Edge. Many of IXnet's customer
relationships grew out of existing relationships with IPC, which was founded in
the 1970s.
Leo Hindery, CEO of GlobalCenter, Global Crossing's complex web hosting
business, said, "Web hosting for financial services firms is a rapidly growing
global market, and financial institutions have become the second largest users
of web hosting services. We are excited by the prospect of being IXnet's partner
for complex web hosting. We will also leverage IPC's dominant position in
trading rooms worldwide to increase usage of our complex web hosting and other
Global Crossing services."
"This is a superb transaction for the customers, employees and
shareholders of both IXnet and IPC," said David Walsh, CEO of IXnet, who will
continue to lead the management teams currently running IXnet and IPC. "As part
of Global Crossing, we will be able to do even more for our customers, taking
advantage of the Global Crossing Network, its GlobalCenter complex web hosting
capability and its global resources. We look forward to becoming part of this
entrepreneurial standard-setter in the global telecommunications business."
The acquisition is expected to be completed in the second quarter of
2000, and is subject to regulatory approval and customary closing conditions.
The acquisition is not subject to shareholder approval; Citicorp Venture
Capital, which owns approximately 60% of IPC, has approved the transaction and
IPC, which owns approximately 73% of IXnet, has also approved the transaction.
The acquisition will be accounted for as a purchase and is expected to be
tax-free to shareholders of IXnet and IPC.
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Chase Securities served as financial advisor to Global Crossing,
Salomon Smith Barney served as financial advisor to IPC and IXnet, and Donaldson
Lufkin and Jenrette provided a fairness opinion to the Board of IPC.
About Global Crossing
Global Crossing Ltd. (Nasdaq:GBLX) is building and offering services
over the world's first global fiber optic network with 97,200 announced route
miles, serving five continents, 24 countries and more than 200 major cities. The
Global Crossing Network and its telecommunications and Internet product
offerings will be available to over 80% of the world's international
communications traffic. Global Crossing's subsidiary, GlobalCenter Inc., is a
leading Internet Commerce Services Provider and provides customers with the
Internet infrastructure necessary to manage complex online enterprises on a
global basis. Among its customers are some of the largest and most densely
trafficked sites on the Web, including Yahoo!, The Motley Fool, Ziff Davis,
MP3.com and eToys. Global Crossing's operations are headquartered in Hamilton,
Bermuda, with principal offices in Los Angeles, California; London, England;
Morristown, New Jersey; Rochester, N.Y.; and Miami, Florida. Visit Global
Crossing at www.globalcrossing.com.
About IXnet
IXnet, Inc. provides a high performance intelligent global extranet
designed exclusively for the financial community. Through a single connection,
IXnet delivers end-to-end managed data and voice communications solutions to the
worldwide financial services community. IXnet uniquely offers superior
performance, reliability and security along with rapid provisioning and
dedicated customer support -- keeping market participants in constant contact 24
hours a day. Customers receive voice and data connectivity, plus financial
content and transactional capabilities on IXnet's global extranet without having
to access multiple public networks or rely on multiple customer service
organizations. With Network Operating Centers in New York, New Jersey and
London, points of presence in 37 countries and 1,450 customer access nodes,
IXnet serves more than 600 of the world's top financial firms. For more
information, please visit www.ixnet.com.
About IPC Communications
IXnet is part of IPC Communications, Inc., the world's leading supplier
of voice trading systems to the financial services community with a
sophisticated suite of globally integrated voice and data telecommunications
products. IPC's patented digital TRADENET MX(R) is the most widely installed
voice trading system in the world. IPC focuses on serving the financial trading
environment by designing, manufacturing, installing, and servicing products that
allow traders around the world to communicate with each other instantly and
reliably. With a global customer base comprising thousands of the world's
largest financial services firms, IPC's reputation for quality and service is
unmatched. For more information, please visit www.ipc.com.
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Statements made in this press release that state the Company's or
management's intentions, beliefs, expectations, or predictions for the future
are forward-looking statements. Such forward-looking statements are subject to a
number of risks, assumptions and uncertainties that could cause the Company's
actual results to differ materially from those projected in such forward-looking
statements. These risks, assumptions and uncertainties include: the ability to
complete systems within currently estimated time frames and budgets; the ability
to compete effectively in a rapidly evolving and price competitive marketplace;
changes in the nature of telecommunications regulation in the United States and
other countries; changes in business strategy; the successful integration of
newly-acquired businesses; the impact of technological change; and other risks
referenced from time to time in the Company's filings with the Securities and
Exchange Commission.
CONTACT: Global Crossing Ltd.
Investor contacts:
Jerry Leshne, 310/385-3838
[email protected]
Jensen Chow, 310/385-5283
[email protected]
or
Press contacts:
George Sard/Kim Polan, 212/687-8080
[email protected] or [email protected]
Tom Goff, 310/385-5231
[email protected]
or
IXnet/IPC Communications
Press Contact:
Spring O'Brien
Procter Lippincott, 212/620-7100 ext. 228
[email protected]
Investor Contact:
Cynthia Artin, 212/412-6405
[email protected]
