EXHIBIT 1
$[ ]
IPC INFORMATION SYSTEMS, INC.
__ % SENIOR DISCOUNT NOTES DUE 2008
UNDERWRITING AGREEMENT
April , 1998
April , 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Xxxxx & Co.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
IPC Information Systems, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") $[__________] principal amount at maturity ($[ ]
initial accreted value) of its __ % Senior Discount Notes due 2008 (the
"Securities") to be issued pursuant to the provisions of an Indenture to be
dated as of April , 1998 (the "Indenture") between the Company and United
States Trust Company of New York (the "Trustee").
The offering of the Securities is conditioned upon (i) the
consummation of a merger of Arizona Acquisition Corp., a Delaware corporation
("AAC") into the Company (the "Merger") pursuant to an Agreement and Plan of
Merger dated December 18, 1997, as amended (the "Merger Agreement"), between AAC
and the Company, (ii) the concurrent closing of an equity investment in AAC by
Cable Systems Holdings, LLC of up to $72 million (the "Equity Investment") and a
$75 million senior secured five-year revolving credit facility provided by a
bank syndicate (the "Syndicate") led by Xxxxxx Xxxxxxx Senior Funding, Inc. (the
"Credit Facility") and (iii) certain other matters set forth in Section 5
hereof. The Merger, the Equity Investment and the Credit Facility will occur
concurrently with the closing of the offering of the Securities.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Securities. The registration statement as amended at the time it becomes
effective, including the exhibits thereto and the documents incorporated by
reference therein, and the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Original Registration Statement"; any registration statement
filed pursuant to Rule 462(b) under the Securities Act is hereinafter referred
to as the "Rule 462(b) Registration Statement"; the Original Registration
Statement and any Rule 462(b) Registration Statement are hereinafter referred to
collectively as the "Registration Statement"; and the prospectus in the form
first used to confirm sales of Securities is hereinafter referred to as the
"Prospectus." As used herein, the term "Prospectus" shall include the documents
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein with respect to a prospectus or registration statement
shall include all documents deemed to be incorporated by reference therein
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that are filed subsequent to the date of such prospectus or registration
statement with the Commission pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
1. Representations and Warranties. The Company represents and
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warrants to and agrees with each of the Underwriters that:
(a) The Original Registration Statement has become effective and, if
the Company has elected to rely upon Rule 462(b) under the Securities Act,
the Rule 462(b) Registration Statement shall have become effective not
later than the earlier of (i) 10:00 p.m. Eastern time on the date hereof
and (ii) the time confirmations are sent or given, as specified by Rule
462(b)(2) under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement is in effect; and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder, (iii) each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply (A) to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein or (B) to that part of the Registration Statement
that constitutes the Statement of Eligibility and Qualification (Form T-1)
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in
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good standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly by the Company, except for the
capital stock of International Exchange Networks, Ltd. which is only 80%
owned by the Company, free and clear of all liens, encumbrances, equities
and claims; the two non-U.S. subsidiaries of the Company generating the
highest percentage of the Company's telecommunications revenue are listed
on Schedule II attached hereto. For purposes of this Agreement, the term
"subsidiary" or "subsidiaries" shall refer to "significant subsidiaries" as
such term is defined in Rule 1-02 of Regulation S-X of the Exchange Act.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
(f) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized and, when executed and delivered by the
Company will be a valid and binding agreement of the Company, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally and general
principles of equity.
(g) The Merger has been duly authorized and the Merger Agreement has
been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company and each other party thereto,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
general principles of equity. All corporate action on the part of the
Company and its stockholders necessary to approve the Merger has been
accomplished or will be accomplished by the Closing Date (as defined
below). The Merger will become effective upon the filing of a merger
certificate with the Secretary of State of the State of Delaware (a form of
which is attached hereto as Exhibit D).
(h) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid
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for by the Underwriters in accordance with the terms of this Agreement,
will be entitled to the benefits of the Indenture, and will be valid and
binding obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture, the
Merger Agreement and the Securities will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture, the Merger Agreement or the Securities, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or, to the
best of the Company's knowledge, threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 or Rule 462 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
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(n) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) To the best of the Company's knowledge, there are no costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) Each of the Company and its subsidiaries has all necessary
licenses, consents, authorizations, approvals and permits of and from, and
has made all declarations and filings with, all federal, state, local,
supranational, foreign and other governmental authorities, to own, lease,
license and use its properties and assets and to conduct its business in
the manner described in the Prospectus; and neither the Company nor any of
its subsidiaries has received any notice of proceedings relating to the
revocation or modification, or non-renewal of any such license, consent,
authorization, approval, order, certificate or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole, except as described in the Prospectus.
(q) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Securities registered pursuant to the
Registration Statement, except for the Registration Rights Agreement dated
as of May 9, 1994, between the Company and Xxxxxxx X. Xxxxxxxxxxx and Xxxxx
X. Xxxxxxxxxxx and the Registration Rights Agreement dated as of April 20,
1995, by and among the Company, Xxxxxx X. Xxxxx and Xxxxxx Xxxxx.
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(r) The Company, after giving effect to the issuance of the Securities
and the consummation of the transactions contemplated by the Prospectus,
will not be (i) insolvent, (ii) left with unreasonably small capital with
which to engage in its anticipated businesses or (iii) incurring debts
beyond its ability to pay such debts as they become due.
2. Agreements to Sell and Purchase. The Company hereby agrees to
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sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth in Schedule I
hereto opposite its name at [__]% of their principal amount at maturity (the
"Purchase Price") plus accreted original issue discount, if any, from
[__________], 1998 to the date of payment and delivery.
3. Terms of Public Offering. The Company is advised by you that the
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Underwriters propose to make a public offering of their respective portions of
the Securities as soon after the Original Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company
is further advised by you that the Securities are to be offered to the public
initially at [__]% of their principal amount at maturity (the "Public Offering
Price") plus accreted original issue discount, if any, and to certain dealers
selected by you at a price that represents a concession not in excess of [__]%
of their principal amount at maturity under the Public Offering Price, and that
any Underwriter may allow, and such dealers may reallow, a concession, not in
excess of [__]% of their principal amount at maturity, to any Underwriter or to
certain other dealers.
4. Payment and Delivery. Payment for the Securities shall be made to
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the Company in Federal or other funds immediately available in New York City
against delivery of the Securities for the respective accounts of the several
Underwriters at a closing to be held at the offices of Xxxxxx, Xxxxx & Xxxxxxx,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., New York City time, on April
, 1998, or at such other time on the same or such other date, not later than May
13, 1998, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date".
Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date for the respective accounts of the
several Underwriters, with any transfer taxes payable in connection with the
transfer of the Securities to the Underwriters duly paid, against payment of the
Purchase Price therefor plus accrued interest, if any to the date of payment and
delivery.
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5. Conditions to the Underwriters' Obligations. The obligations of
-------------------------------------------
the Company to sell the Securities to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Securities on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than 5:30 p.m. (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
(b) The representations and warranties of the Company contained in
this Agreement shall be true and correct as of the Closing Date and the
Company shall have complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date. The Underwriters shall have received on the
Closing Date a certificate, dated the Closing Date and signed by an
executive officer of the Company, to the effect set forth above and in
clause 5(a)(i) above.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxx Xxxxxxxx & Xxxx, outside counsel for the Company, dated
the Closing Date, in the
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form attached hereto as Exhibit A. The opinion of outside counsel for the
Company shall be rendered to you at the request of the Company and shall so
state therein.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP, outside counsel for Citicorp
Venture Capital, Ltd. ("CVC"), dated the Closing Date, in the form attached
hereto as Exhibit B. The opinion of outside counsel for CVC shall be
rendered to you at the request of the Company and shall so state therein.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxx, U.S. regulatory counsel for the Company, dated
the Closing Date, in the form attached hereto as Exhibit C. The opinion of
Xxxxxx & Xxxxxx shall be rendered to you at the request of the Company and
shall so state therein.
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated the
Closing Date, with respect to the Registration Statement and the Prospectus
and such other related matters as you may reasonably request.
(g) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from Coopers & Xxxxxxx L.L.P., independent public accountants for the
Company, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than the date hereof.
(h) As of the Closing Date, the Merger and the Equity Investment
shall have been consummated.
(i) As of the Closing Date, the Credit Facility shall (i) have been
duly authorized, executed and delivered by the Company and each member of
the Syndicate, (ii) constitute a legal, valid and binding obligation of the
Company and each member of the Syndicate, to the satisfaction of the
Underwriters, and (iii) entitle the Company to draw no less than
$_____________ under such Credit Facility.
(j) The Underwriters shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
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6. Covenants of the Company. In further consideration of the
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agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto)
and, to furnish to you in New York City, without charge, prior to 3:00 p.m.
New York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 6(c) below, as many
copies of the Prospectus and any supplements and amendments thereto or to
the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Securities as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Securities may have been sold by you on behalf of
the Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so that
the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) If the Company elects to rely on Rule 462(b) under the Securities
Act, the Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) under the Securities Act no later
than the earlier of (i) 10:00 p.m. Eastern time on the date hereof and (ii)
the time confirmations are sent or given, as
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specified by Rule 462(b)(2) under the Securities Act, and shall pay the
applicable fees in accordance with Rule 111 under the Securities Act.
(f) To make generally available to the Company's security holders and
to you, as soon as practicable, but not later than 60 days after the end of
the twelve-month period beginning at the end of the Company's fiscal
quarter during which the effective date of the Original Registration
Statement occurs, an earnings statement of the Company covering such
twelve-month period that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder.
(g) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Securities under the Securities Act and
all other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) any transfer or other taxes payable in connection with the
transfer and delivery of the Securities to the Underwriters, (iii) the cost
of printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Securities under state securities
laws and all expenses in connection with the qualification of the
Securities for offer and sale under state securities laws as provided in
Section 6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements
of counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Securities by the National Association
of Securities Dealers, Inc., (v) any fees charged by rating agencies for
the rating of the Securities, (vi) the cost of printing certificates
representing the Securities, (vii) the costs and charges of the Trustee,
(viii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Securities, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with
the road show, and (ix) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that
except as provided in this Section, Section 7 entitled "Indemnity
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and Contribution", and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of
any of the Securities by them and any advertising expenses connected with
any offers they may make.
7. Indemnity and Contribution. (a) The Company agrees to indemnify
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and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided, however, that the foregoing indemnity agreement with
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respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Securities, or any person controlling such Underwriter, if
it is established that a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) was
not sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Securities to such person, and if the Prospectus
(as so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "indemnified party")
shall promptly notify the person against whom
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such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of
parties indemnified pursuant to Section 7(a), and by the Company, in the case of
parties indemnified pursuant to Section 7(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause 7(d)(i) above is not permitted by applicable law, in such
proportion
13
as is appropriate to reflect not only the relative benefits referred to in
clause 7(d)(i) above but also the relative fault of the Company on the one hand
and of the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Securities
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Securities. The relative fault of the Company on the one
hand and of the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective principal amounts of Securities they have purchased hereunder,
and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by pro
---
rata allocation (even if the Underwriters were treated as one entity for such
----
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person
14
controlling any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
8. Termination. This Agreement shall be subject to termination by
-----------
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange or the National Association
of Securities Dealers, Inc., (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
8(a)(i) through 8(a)(iv), such event singly or together with any other such
event makes it, in your judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
--------------------------------------
become effective upon the later of (x) execution and delivery hereof by the
parties hereto and (y) release of notification of the effectiveness of the
Original Registration Statement by the Commission.
If, on the Closing Date, one of the Underwriters shall fail or refuse
to purchase Securities that it has agreed to purchase hereunder on such date,
and the aggregate principal amount of Securities which such defaulting
Underwriter agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Securities to be purchased on such
date, the other Underwriter shall be obligated to purchase the Securities which
such defaulting Underwriter agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of Securities that
--------
any Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such principal
amount of Securities without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter shall fail or refuse to purchase Securities and
the aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
15
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriter as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Headings. The headings of the sections of this Agreement have
--------
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
12. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to you shall be directed to Xxxxxx Xxxxxxx & Co. Incorporated, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:Xxxxxx Xxxxxxxx; and notices to
the Company shall be directed to it at IPC Information Systems, Inc., 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Financial Officer.
16
12. Applicable Law. This Agreement shall be governed by the laws of
--------------
the State of New York.
Very truly yours,
IPC INFORMATION SYSTEMS, INC.
By:________________________________
Name:
Title:
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX, XXXXX & CO.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:_________________________
Name:
Title:
SCHEDULE I
Initial Accreted Value
of Securities
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Xxxxx & Co.
_______________
Total .................. ===============
SCHEDULE II
TELECOMMUNICATIONS SUBSIDIARIES
International Exchange Networks, Ltd.
EXHIBIT A
OPINION OF COUNSEL FOR THE COMPANY
Attach opinion of counsel for the Company, to be delivered pursuant to
Section 5(c) of the Underwriting Agreement to the effect that:
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities and claims;
(iii) the Underwriting Agreement has been duly authorized, executed
and delivered by the Company;
(iv) the Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and general principles of
equity;
(v) the Merger has been duly authorized and the Merger Agreement has
been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company and each other party thereto,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
general principles of equity; all corporate action on the part of the
2
Company and its stockholders necessary to approve the Merger has been
accomplished; the Merger will become effective upon the filing of a merger
certificate (a form of which is attached hereto as Exhibit A) with the
Secretary of State of the State of Delaware;
(vi) the Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Securities, the Merger Agreement and the Indenture will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company
of its obligations under the Underwriting Agreement, the Securities, the
Merger Agreement and the Indenture, except (A) such as may be required by
the securities or Blue Sky laws of the various states in connection with
the offer and sale of the Securities and (B) the approval of the Merger by
the Federal Trade Commission and the Department of Justice under the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act, which has been obtained and is in
full force and effect;
(viii) the statements (A) in the Prospectus under the captions
"Certain Relationships and Other Related Transactions," "Description of
Revolving Credit Facility," "Description of the Notes" and "Underwriters",
(B) in the Registration Statement under Item and 15 and (C) in "Item 3--
Legal Proceedings" of the Company's most recent annual report on Form 10-K
and in "Item 3--Other Events" of any current report on Form 8-K included or
incorporated by reference in the Prospectus, in each case insofar as such
statements constitute summaries of the legal matters, documents and
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(ix) the statements in the Prospectus under the caption "Certain
United States Federal Income Tax Considerations," insofar as such
statements constitute a summary of
3
the United States federal tax laws referred to therein, are accurate and
fairly summarize in all material respects the United States federal tax
laws referred to therein;
(x) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required;
(xi) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company," as such
term is defined in the Investment Company Act of 1940, as amended; and
(xii) such counsel (A) is of the opinion that each document
incorporated by reference in the Prospectus (except for financial
statements and schedules and other financial and statistical data included
therein as to which such counsel need not express any opinion), complied as
to form when filed with the Commission in all material respects with the
Exchange Act and the rules and regulations of the Commission thereunder,
(B) is of the opinion that the Registration Statement and Prospectus
(except for financial statements and schedules and other financial and
statistical data included therein as to which such counsel need not express
any opinion) comply as to form in all material respects with the Securities
Act and the applicable rules and regulations of the Commission thereunder,
(C) has no reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which such counsel
need not express any belief and except for that part of the Registration
Statement that constitutes the Form T-1 heretofore referred to) the
Registration Statement and the prospectus included therein at the time the
Registration Statement became effective 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 not misleading and (D)
has no reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which such counsel
need not express any belief) the Prospectus when issued contained and as of
the Closing Date contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
With respect to subparagraph (xii) above, such counsel may state that its
opinion and belief are based upon its participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are
4
without independent check or verification except with respect to subparagraphs
(viii) and (ix) above.
EXHIBIT B
OPINION OF COUNSEL FOR CITIBANK VENTURE CAPITAL, LTD.
Attach opinion of counsel for Citicorp Venture Capital, Ltd., to be
delivered pursuant to Section 5(d) of the Underwriting Agreement to the effect
that:
such counsel (A) is of the opinion that each document incorporated by
reference in the Prospectus (except for financial statements and schedules
and other financial and statistical data included therein as to which such
counsel need not express any opinion), complied as to form when filed with
the Commission in all material respects with the Exchange Act and the rules
and regulations of the Commission thereunder, (B) is of the opinion that
the Registration Statement and Prospectus (except for financial statements
and schedules and other financial and statistical data included therein as
to which such counsel need not express any opinion) comply as to form in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (C) has no reason to believe that
(except for financial statements and schedules and other financial and
statistical date as to which such counsel need not express any belief and
except for that part of the Registration Statement that constitutes the
Form T-1 heretofore referred to) the Registration Statement and the
prospectus included therein at the time the Registration Statement became
effective 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 not misleading and (D) has no reason to believe that
(except for financial statements and schedules and other financial and
statistical data as to which such counsel need not express any belief) the
Prospectus when issued contained and as of the Closing Date contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
With respect to the paragraph above, such counsel may state that its
opinion and belief are based upon its participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification.
EXHIBIT C
OPINION OF U.S. REGULATORY COUNSEL FOR THE COMPANY
EXHIBIT D
MERGER CERTIFICATE
