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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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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
Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
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 Xxxxxxx Xxxxxxxx or Xxxxxxx Xxxxxxx 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.
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(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
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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
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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
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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.
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(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
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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
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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 Xxxx-Xxxxx-Xxxxxx 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
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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
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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
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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,
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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
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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,
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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
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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.
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(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
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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 Xxxxxxx Xxxxx Xxxxxx Inc. and Xxxxxxxxx, Lufkin
& Xxxxxxxx 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 Xxxxxxx Xxxxx Barney Inc. and Xxxxxxxxx, Xxxxxx & Xxxxxxxx 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.
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(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
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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.
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(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
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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
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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
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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.
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(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
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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
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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
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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.
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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,
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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 Xxxxxxx Xxxxx Xxxxxx Inc. and Xxxxxxxxx, Lufkin
& Xxxxxxxx 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 Xxxxxxx Xxxxx Barney Inc. and Xxxxxxxxx, Xxxxxx & Xxxxxxxx
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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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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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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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
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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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(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 Xxxxxx Xxxxxxxxxx, Chief
Executive Officer of Parent, Xxx X. Xxxxx, Chief Financial Officer of Parent,
and Xxxxx X. Xxxxxx, 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
Xxxxxx Xxxxxxxx & 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 Xxxxxx Xxxxxxxx & Co., each
Company shall provide a representation letter to Xxxxxx Xxxxxxxx & 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 Xxxxxx Xxxxx 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 XXXXXX
00
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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
Xxxxxxx Xxxxxxx & Xxxxxxxx, 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
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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
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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, Xxxxxxx & Xxxx 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.
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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
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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.
000 X. Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxx
66
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: D. Xxxxx Xxxxxxx
(b) if to either Company, to
IPC Communications, Inc. or IXnet, Inc., as applicable
Wall Street Plaza
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxxxx Xxxxx
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Four Times Square
New York, New York
Facsimile: 000-000-0000
Attention: Xxxxxx X. Coco; and
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
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
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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
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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.
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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/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice Chairman of the Board
GEORGIA MERGER SUB CORPORATION
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
IPC COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: Director
IPC INFORMATION SYSTEMS, INC.
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: Director
IXNET, INC.
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
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IDAHO MERGER SUB CORPORATION
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: President
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:
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.
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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.
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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:
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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]
