EXECUTION COPY
STOCKHOLDERS AGREEMENT
AGREEMENT, dated as of December 18, 1997 by and between Arizona
Acquisition Corp., a Delaware corporation ("Merger Subsidiary"), and the other
parties signatory hereto (each, a "Stockholder"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Agreement and Plan of
Merger, dated the date hereof (as such agreement may be amended from time to
time, the "Merger Agreement").
WHEREAS, concurrently herewith, Merger Subsidiary and IPC Information
Systems, Inc., a Delaware corporation (the "Company"), are entering into a
Merger Agreement, pursuant to which Merger Subsidiary will be merged with and
into the Company (the "Merger"), whereby each share of common stock, par value
$.01 per share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time will be converted into either (A) the
right to retain at the election of the holder thereof and subject to the terms
of the Merger Agreement, common stock, par value $.01 per share, of the Company
or (B) the right to receive cash, other than (i) shares of Company Common Stock
owned, directly or indirectly, by the Company or any Subsidiary of the Company
or by Merger Subsidiary and (ii) Dissenting Shares.
WHEREAS, as a condition to Merger Subsidiary's entering into the Merger
Agreement, Merger Subsidiary requires that each Stockholder enter into, and each
such Stockholder has agreed to enter into, this Agreement with Merger
Subsidiary.
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual agreements contained herein, the parties hereby
agree as follows:
Section 1. CERTAIN DEFINITIONS. The following terms, when used in this
Agreement, shall have the following meanings (such definitions to be equally
applicable to both singular and plural terms of the terms defined):
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, provided that no securityholder of the Company shall be deemed an
Affiliate of any other securityholder solely by reason of any investment in the
Company. For the purpose of this definition, the term "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of stock,
as a trustee or executor, by contract or credit arrangement or otherwise.
"AMENDED AND RESTATED LABOR POOLING AGREEMENTS" has the meaning
ascribed thereto in Section 5(e) of this Agreement.
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
all other Persons with whom such Person would constitute a "group" as described
in Section 13(d)(3) of the Exchange Act.
"BUSINESS" means (i) the design, manufacture, sale, distribution and/or
maintenance of voice and/or data communications products, including, but not
limited to, turret or dealerboard systems used within the financial services,
energy, transportation or emergency services industries, Private Branch Exchange
(PBX) and/or key telephone systems, voice recording systems and video
teleconferencing products; (ii) the furnishing of communications cabling or
voice or data communications products, including the design and/or installation
of local and wide area networks or the provision of maintenance services for
said communications cabling or products; (iii) the design, furnishing,
installation and/or maintenance of low voltage cabling systems (such as would
not require an electrical license for the installation thereof); and (iv) the
provision of long distance telecommunications network services.
"COMPANY" has the meaning ascribed thereto in the recitals of this
Agreement.
"COMPANY COMMON STOCK" has the meaning ascribed thereto in the recitals
of this Agreement.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") means the possession, directly or indirectly or as a trustee or
executor, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of stock, as a trustee or
executor, by contract or credit arrangement or otherwise.
"EXISTING SHARES" has the meaning ascribed thereto in Section 2(a)(i).
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"KEC-NY" means Xxxxxxxxxxx Electric Company, Inc., a New York
corporation.
"KEC-NJ" means Xxxxxxxxxxx Electric Company, Inc., a New Jersey
corporation.
"KLEINKNECHTS" means Xxxxxxx Xxxxxxxxxxx and Xxxxx Xxxxxxxxxxx.
"MERGER" has the meaning ascribed thereto in the recitals of this
Agreement.
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"MERGER SUBSIDIARY" has the meaning ascribed thereto in the
introductory paragraph of this Agreement.
"PERSON" means an individual, corporation, partnership, limited
liability company, limited partnership, association, trust, unincorporated
organization or other entity or group (as defined in Section 13(d)(3) of the
Exchange Act).
"ROLLOVER STOCKHOLDER" means Xxxxxxx Xxxxxxxxxxx.
"SHARES" means the Existing Shares, together with any shares of Company
Common Stock acquired of record or beneficially by such Stockholder in any
capacity after the date hereof and prior to the termination hereof, whether upon
exercise of options, conversion of convertible securities, purchase, exchange or
otherwise; PROVIDED, HOWEVER, that in the event of a stock dividend or
distribution, or any change in the Company Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.
"STOCKHOLDER" has the meaning ascribed thereto in the introductory
paragraph to this Agreement.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"TERMINATION DATE" has the meaning ascribed thereto in Section 12 of
this Agreement.
"TRUSTEE" has the meaning ascribed thereto in Section 2(a)(i) of this
Agreement.
Section 2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each
Stockholder hereby, severally and not jointly, represents and warrants to Merger
Subsidiary as follows:
(a) (i) Such Stockholder is either (A) the record holder or
beneficial owner of the number of, or (B) trustee of a trust
that is the record holder or beneficial owner of, and whose
beneficiaries are the beneficial owners (such trustee, a
"Trustee"), shares of Company Common Stock as is set forth
opposite such Stockholder's
name on Schedule I hereto (the "Existing Shares").
(ii) On the date hereof, the Existing Shares set
forth opposite such Stockholder's name on Schedule I hereto
constitute all of the outstanding shares of Company Common
Stock owned of record or beneficially by such Stockholder.
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Such Stockholder does not have record or beneficial ownership
of any Shares not set forth on Schedule I hereto.
(iii) Such Stockholder has sole power of disposition
with respect to all of the Existing Shares set forth opposite
such Stockholder's name on Schedule I and sole voting power
with respect to the matters set forth in Section 4 hereof and
sole power to demand dissenter's or appraisal rights, in each
case with respect to all of the Existing Shares set forth
opposite such Stockholder's name on Schedule I, with no
restrictions on such rights, subject to applicable federal
securities laws and the terms of this Agreement.
(iv) Such Stockholder will have sole power of
disposition with respect to Shares other than Existing Shares,
if any, which become beneficially owned by such Stockholder
and will have sole voting power with respect to the matters
set forth in Section 4 hereof and sole power to demand
dissenter's or appraisal rights, in each case with respect to
all Shares other than Existing Shares, if any, which become
beneficially owned by such Stockholder with no restrictions on
such rights, subject to applicable federal securities laws and
the terms of this Agreement.
(b) Such Stockholder has the legal capacity, power and
authority to enter into and perform all of such Stockholder's
obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Stockholder will not violate any
other agreement to which such Stockholder is a party or by which such
Stockholder is bound including, without limitation, any trust
agreement, voting agreement, stockholders agreement, voting trust,
partnership or other agreement. This Agreement has been duly and
validly executed and delivered by such Stockholder and constitutes a
valid and binding agreement of such Stockholder, enforceable against
such Stockholder in accordance with its terms, except as limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditor's rights generally, (b) general principles of
equity, whether such enforceability is considered in a proceeding in
equity or at law, and to the discretion of the court before which any
proceeding therefore may be brought, or (c) public policy
considerations or court decisions which may limit the rights of the
parties thereto for indemnification. All necessary consents of any
beneficiary of or holder of interest in any trust of which a
Stockholder is Trustee to the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been
obtained. If such Stockholder is married and such Stockholder's Shares
constitute community property, this Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such
person in accordance with its terms.
(c) Except for filings under the HSR Act, if applicable, (i)
no filing with, and no permit, authorization, consent or approval of,
any state or federal public body or
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authority is necessary for the execution of this Agreement by such
Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby and (ii) neither the execution and
delivery of this Agreement by such Stockholder nor the consummation by
such Stockholder of the transactions contemplated hereby nor compliance
by such Stockholder with any of the provisions hereof shall (x)
conflict with or result in any breach of any applicable trust,
partnership agreement or other agreements or organizational documents
applicable to such Stockholder, (y) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or
other instrument or obligation of any kind to which such Stockholder is
a party or by which such Stockholder or any of such Stockholder's
properties or assets may be bound or (z) violate any order, writ,
injunction, decree, judgment, statute, rule or regulation applicable to
such Stockholder or any of such Stockholder's properties or assets.
(d) Except for the shares of Company Common Stock owned by the
Kleinknechts identified in Schedule II hereto (the "Pledged Shares"),
such Stockholder's Shares and the certificates representing such Shares
are now and at all times during the term hereof will be held by such
Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or
any other encumbrances whatsoever, except for any such encumbrances or
proxies arising hereunder.
(e) No broker, investment banker, financial adviser or other
person is entitled to any broker's, finder's, financial adviser's or
other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of
such Stockholder in his or her capacity as such.
(f) Such Stockholder understands and acknowledges that Merger
Subsidiary is entering into the Merger Agreement in reliance upon such
Stockholder's execution and delivery of this Agreement with Merger
Subsidiary.
Section 3. REPRESENTATIONS AND WARRANTIES OF MERGER SUBSIDIARY. Merger
Subsidiary hereby represents and warrants to each Stockholder as follows:
(a) Merger Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation.
(b) Merger Subsidiary has all necessary power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Merger
Subsidiary of this Agreement and the
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consummation by Merger Subsidiary of the transactions contemplated
hereby have been duly and validly authorized and approved by all
required corporate action other than shareholder approval which shall
be effected prior to the Effective Time. This Agreement has been duly
executed and delivered by Merger Subsidiary, and (assuming due
authorization, execution and delivery by the Stockholders) constitutes
a valid and binding obligation of Merger Subsidiary, enforceable
against it in accordance with its terms, except as limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditor's rights generally, (b) general principles of
equity, whether such enforceability is considered in a proceeding in
equity or at law, and to the discretion of the court before which any
proceeding therefor may be brought, or (c) public policy considerations
or court decisions which may limit the rights of the parties thereto
for indemnification.
(c) Except for the filing of a pre-merger notification and
report form under the HSR Act, the execution and delivery of this
Agreement do not, and the consummation by Merger Subsidiary of the
transactions contemplated by this Agreement and compliance by Merger
Subsidiary with the provisions of this Agreement will not, conflict
with, or result in any breach or violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of or "put" right
with respect to any obligation or to loss of a material benefit under,
or result in the creation of any lien upon any of the properties or
assets of Merger Subsidiary under, (i) any charter or by-laws of Merger
Subsidiary, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to Merger Subsidiary or its properties
or assets or (iii) any judgment, order, decree, statute, law,
ordinance, rule, regulation or arbitration award applicable to Merger
Subsidiary or its properties or assets. No consent, approval, order or
authorization of, or registration, declaration or filing with, or
notice to, any state or federal public body or authority is required by
or with respect to Merger Subsidiary in connection with the execution
and delivery of this Agreement by Merger Subsidiary or the consummation
by Merger Subsidiary of any of the transactions contemplated by this
Agreement.
Section 4. AGREEMENT TO VOTE; PROXY
(a) Each Stockholder hereby, severally and not jointly, agrees
that, until the Termination Date (as defined in Section 12), at any
meeting of the Company Stockholders, however called, or in connection
with any written consent of the Company Stockholders, such Stockholder
shall vote (or cause to be voted) the Shares held of record or
beneficially by such Stockholder (i) in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the
approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and this Agreement and any actions
required in furtherance hereof and thereof; (ii) against any action or
agreement that would result in a breach of any covenant, representation
or warranty or any other
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obligation or agreement of the Company under the Merger Agreement or
this Agreement; (iii) in favor of the incentive stock option plan
referred to in Section 5(l) of the Merger Agreement; and (iv) against
the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement or any such actions identified in
writing by Merger Subsidiary in advance): (A) any extraordinary
corporate transaction, including, without limitation, a merger,
consolidation or other business combination involving the Company or
its Subsidiaries; (B) a sale, lease or transfer of a material amount of
assets of the Company or its Subsidiaries or a reorganization,
recapitalization, dissolution or liquidation of the Company or its
Subsidiaries; (C) any change in the majority of the board of directors
of the Company; (D) any material change in the present capitalization
of the Company or any amendment of the Company's Certificate of
Incorporation or By-Laws; (E) any other material change in the
Company's corporate structure or business; or (F) any other action
which is intended, or could reasonably be expected, to impede,
interfere with, delay, postpone, discourage or materially adversely
affect the Merger or the transactions contemplated by the Merger
Agreement or this Agreement. Such Stockholder shall not enter into any
agreement or understanding with any person or entity to vote or give
instructions in any manner inconsistent with clauses (i), (ii) or (iii)
of the preceding sentence.
(b) EACH STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS, MERGER
SUBSIDIARY AND ANY DESIGNEE OF MERGER SUBSIDIARY, EACH OF THEM
INDIVIDUALLY, SUCH STOCKHOLDER'S IRREVOCABLE (UNTIL THE TERMINATION
DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO
VOTE THE SHARES AS SET FORTH IN SECTION 4.1 ABOVE. EACH STOCKHOLDER
INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE) AND
COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION AND EXECUTE
SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF
THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH
STOCKHOLDER WITH RESPECT TO SUCH STOCKHOLDER'S SHARES.
Section 5. CERTAIN COVENANTS OF STOCKHOLDERS. Except in accordance with
the terms of this Agreement, each Stockholder hereby severally covenants and
agrees as follows:
(a) Prior to the Termination Date, no Stockholder shall, in
its capacity as such, directly or indirectly (including through
advisors, agents or other intermediaries), solicit (including by way of
furnishing information) or respond to any inquiries or the making of
any proposal by any person or entity (other than Merger Subsidiary or
any Affiliate thereof) with respect to the Company that constitutes or
could reasonably be expected to lead to an Acquisition Proposal (as
defined in Section 5(j) of the Merger Agreement), provided, however,
that the foregoing shall not restrict a Stockholder who is also a
director of the Company from taking any actions in such Stockholder's
capacity as a
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director. If any Stockholder in its capacity as such receives any such
inquiry or proposal, then such Stockholder shall promptly inform Merger
Subsidiary of the material terms and conditions, if any, of such
inquiry or proposal and the identity of the person making it. Each
Stockholder, in its capacity as such, will immediately cease and cause
to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the
foregoing.
(b) Prior to the Termination Date, no Stockholder shall,
directly or indirectly (i) except pursuant to the terms of the Merger
Agreement or this Agreement, offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, enforce or permit the
execution of the provisions of any redemption agreement with the
Company or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, sale,
transfer, tender, pledge, encumbrance, assignment or other disposition
of, or exercise any discretionary powers to distribute, any or all of
such Stockholder's Shares or any interest therein, including any trust
income or principal, except in each case to a Permitted Transferee who
is or agrees to become bound by this Agreement; (ii) except as
contemplated hereby, grant any proxies or powers of attorney with
respect to any Shares, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares; or (iii) take any
action that would make any representation or warranty of such
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling such Stockholder from performing such
Stockholder's obligations under this Agreement.
(c) Each Stockholder hereby waives any rights of appraisal or
rights to dissent from the Merger that such Stockholder may have. Each
Trustee represents that no beneficiary who is a beneficial owner of
Shares under any trust has any right of appraisal or right to dissent
from the Merger which has not been so waived.
(d) Subject to the terms and provisions of the Merger
Agreement, in connection with the Merger, the Rollover Stockholder
hereby agrees to elect to retain an aggregate of 380,952 shares of
Surviving Corporation Common Stock upon conversion of, and with respect
to, 380,952 of such Rollover Stockholder's Shares (the "Rollover
Shares") unless otherwise agreed with Merger Subsidiary.
(e) The Kleinknechts shall cause (i) KEC-NY to enter into the
Amended and Restated Labor Pooling Agreement between KEC-NY and the
Company, substantially in the form of Exhibit A-1 attached to the
Merger Agreement, and (ii) KEC-NJ to enter into the Amended and
Restated Labor Pooling Agreement between KEC-NJ and the Company,
substantially in the form of Exhibit A-2 attached hereto (collectively,
the "Amended and Restated Labor Pooling Agreements").
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(f) Xxxxxxx Xxxxxxxxxxx shall enter into the Investors
Agreement among the Company, Cable Systems Holding LLC, Cable Systems
International Inc. and certain other parties named therein.
(g) Unless, in connection therewith, the Shares held by any
trust which are presently subject to the terms of this Agreement are
transferred to one or more Stockholders and remain subject in all
respects to the terms of this Agreement, or other Permitted Transferees
who upon receipt of such Shares become signatories to this Agreement,
the Stockholders who are Trustees shall not take any action to
terminate, close or liquidate any such trust and shall take all steps
necessary to maintain the existence thereof at least until the first to
occur of (i) the Effective Time and (ii) the Termination Date.
(h) The Rollover Stockholder shall take all actions necessary
to cause any Rollover Shares that constitute Pledged Shares, prior to
the Effective Time, to be free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or
arrangements or any other encumbrances whatsoever, except for any such
encumbrances or proxies arising hereunder.
Section 6. NON-COMPETITION.
(a) For a period of three years after the Effective Time,
except as contemplated or permitted under the Merger Agreement, the
Amended and Restated Labor Pooling Agreements, the Corporate
Opportunity Agreement, the Investors Agreement, dated the date hereof,
among the Company and the other parties named therein, the Amended and
Restated Employment Agreement, dated as of the Effective Date between
Xxxxxxx Xxxxxxxxxxx and the Company (the "Xxxxxxx Xxxxxxxxxxx
Employment Agreement"), or the Amended and Restated Employment
Agreement, dated the Effective Date, between Xxxxx Xxxxxxxxxxx and the
Company (the "Xxxxx Xxxxxxxxxxx Employment Agreement" and, together
with the Xxxxxxx Xxxxxxxxxxx Employment Agreement, the "Amended and
Restated Employment Agreements") each of the Kleinknechts severally
agrees, and shall cause each of their respective Affiliates, including,
without limitation, KEC-NY and KEC-NJ, to agree, that any such Person
shall not, directly or indirectly, through any Person Controlled by
either of the Kleinknechts in any form or manner within any
jurisdiction in which the Company or any of its Affiliates are doing
business: (i) engage in the Business (as defined herein) for his or
their own account or for the account of any other Person, or (ii)
become interested in any Person engaged in the Business as a partner,
shareholder, member, principal, agent, employee, trustee, consultant or
in any other relationship or capacity; PROVIDED, HOWEVER, that either
of the Kleinknechts may own, directly or indirectly, solely as a
passive investment, securities of any Person if either of the
Kleinknechts or any of their respective Affiliates, as the case may be
(1) is not a Person in Control of, or a member of a group that
Controls, such Person and (2) does not, directly or indirectly, own 5%
or more of any voting class of securities of such Person.
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(b) In perpetuity and on a worldwide basis, except as
contemplated or permitted under the Merger Agreement, each of the
Kleinknechts severally agrees, and shall cause each of their respective
Affiliates including, without limitation, KEC-NY or KEC-NJ to agree,
that such Person shall not, directly or indirectly, disclose to any
other party, unless required to do so by law or court order, any
confidential, non-public or proprietary information relating to the
Company or to any Subsidiary or joint venture thereof which information
was acquired during the course of such Person's relationship with the
Company, except information which (i) becomes known to such Person from
a source other than the Company, its directors, officers or employees,
which source is not obligated to the Company to keep such information
confidential or (ii) becomes generally available to the public through
no breach of this Agreement by the Kleinknechts.
(c) For a period ending on the later to occur of (i) three
years after the Effective Time and (ii) the expiration or termination
of the Amended and Restated Labor Pooling Agreements, on a worldwide
basis, except as contemplated or permitted under the Merger Agreement
or the Amended and Restated Labor Pooling Agreements, each of the
Kleinknechts severally agrees that, without the prior written consent
of the Company, the Kleinknechts, any of their Affiliates or any
business or enterprise with which either of the Kleinknechts is
associated as an officer, director or controlling shareholder or other
investor with the power to direct or cause the direction of the
management of such business or enterprise shall not employ or attempt
to employ an employee of the Company or any of its subsidiaries or
joint ventures (other than, with respect to Xxxxxxx Xxxxxxxxxxx, his
executive assistant).
(d) If either of the Kleinknechts breaches, or threatens to
commit a breach of, any of the provisions contained in this Section 6,
the Company shall have the following rights and remedies with respect
to Xxxxxxx or Xxxxx Xxxxxxxxxxx, as the case may be, each of which
rights and remedies shall be independent of the others and severally
enforceable, and each of which is in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or in
equity:
(i) the right and remedy to have the provisions of
this Section 6 specifically enforced by any court of competent
jurisdiction and Merger Subsidiary shall be entitled to apply
for and receive injunctive relief in order to prevent the
continuation of any existing breach or the occurrence of any
threatened breach, it being agreed that any breach or
threatened breach of the provisions of this Section 6 would
cause irreparable injury to the Company and that money damages
would not provide an adequate remedy to the Company.
(e) Each of the Kleinknechts agrees that the provisions of
this Section 6 are reasonable and valid in geographical and temporal
scope and in all other respects. If any court determines that the
provisions of this Section 6, or any part thereof, is unenforceable
because of the duration or geographical scope of such provision, such
court
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shall have the power to reduce the duration or scope of such provision,
as the case may be, and, in its reduced form, such provision shall be
enforceable.
(f) If any court determines that the provisions of this
Section 6, or any part thereof, is invalid or unenforceable, the
remainder of the provisions of this Section 6 shall not thereby be
affected and shall be given full effect without regard to invalid
portions.
Section 7. TERMINATION OF CERTAIN AGREEMENTS. Effective immediately
prior to the Effective Time and without further action by the parties hereto,
each of (a) the Employment Agreement, dated May 9, 1994, between the Company and
Xxxxx Xxxxxxxxxxx, (b) the Employment Agreement, dated May 9, 1994, between the
Company and Xxxxxxx Xxxxxxxxxxx, (c) Registration Rights Agreement, dated as of
May 9, 1994, between the Company, Xxxxxxx Xxxxxxxxxxx and Xxxxx Xxxxxxxxxxx and
(d) all special compensation arrangements for the Kleinknechts (other than those
set forth in the Amended and Restated Employment Agreements), in each case shall
terminate without any obligation or liability to the Company and shall be of no
further force and effect.
Section 8. FURTHER ASSURANCES. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
Section 9. CERTAIN EVENTS. Each Stockholder agrees that this Agreement
and the obligations hereunder shall attach to such Stockholder's Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Shares shall pass, whether by operation of law or otherwise,
including without limitation such Stockholder's heirs, guardians, administrators
or successors or as a result of any divorce.
Section 10. STOP TRANSFER. Each Stockholder agrees with, and covenants
to, Merger Subsidiary that such Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Stockholder's Shares, unless
such transfer is made in compliance with this Agreement.
Section 11. RULE 145 AFFILIATES. Each Stockholder who is an "affiliate"
of the Company for purposes of Rule 145 under the Securities Act of 1933, as
amended, hereby agrees to deliver to Merger Subsidiary, on or prior to the
Closing Date (as defined in the Merger Agreement) a written agreement as
contemplated by Section 5(o) of the Merger Agreement.
Section 12. TERMINATION. The obligations of the Stockholders and the
irrevocable proxy contained in Section 4(b) of this Agreement shall terminate
upon the first to occur of (a) the Effective Time and (b) the date the Merger
Agreement is terminated in accordance with its terms (the "Termination Date");
provided that the provisions of Sections 2, 3 and 13 and any
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claim for breach of any representation, warranty, covenant or other agreement
under this Agreement shall survive the Effective Time and/or the Termination
Date, as applicable.
Section 13. MISCELLANEOUS.
(a) All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly received if so given) by hand
delivery, telegram, telex or telecopy, or by mail (registered or
certified mail, postage prepaid, return receipt requested) or by any
courier service providing proof of delivery. All communications
hereunder shall be delivered to the respective parties at the following
addresses:
If to the Stockholders: Xxxxxxx Xxxxxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telecopier:
copy to: White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Rover, Esq.
Telecopier: (000) 000-0000
If to Merger Subsidiary: Arizona Acquisition Corp.
c/o Cable Systems Holding LLC
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: President
Telecopier: 000-000-0000
copy to: Citicorp Venture Capital, Ltd.
000 Xxxx Xxxxxx
00xx Xxxxx, Xxxx 0
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Xx.
Telecopier: 000-000-0000
and: Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telecopier: 000-000-0000
-12-
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
(b) At any time prior to the Effective Time, any party hereto
may, with respect to any other party hereto, (i) extend the time for
the performance of any of the obligations or other acts, (ii) waive any
inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto or (iii) waive compliance
with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby.
(c) The headings contained in this Agreement are for the
convenience of reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
(d) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated by the
Merger Agreement is not affected in any manner adverse to any party.
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable
manner.
(e) This Agreement, including all exhibits, disclosure
schedules and schedules hereto, constitutes the entire agreement and
supersedes all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject
matter hereof and except as otherwise expressly provided herein.
(f) Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party (whether by
operation of law or otherwise) without the prior written consent of the
other parties hereto. Subject to the preceding sentence, this Agreement
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, and no other
Person shall have any right, benefit or obligation under this Agreement
as a third party beneficiary or otherwise.
(g) The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms. It is
accordingly agreed that the parties hereto shall be entitled to
specific performance of the terms hereof, this being in addition to any
other remedy to which they are entitled at law or in equity.
-13-
(h) No failure or delay on the part of any party hereto in the
exercise of any right hereunder shall impair such right or be construed
to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or
partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
(i) Notwithstanding anything herein to the contrary, no Person
executing this Agreement who is, or becomes during the term hereof, a
director of the Company makes any agreement or understanding herein in
his or her capacity as such director, and the agreements set forth
herein shall in no way restrict any director in the exercise of his or
her fiduciary duties as a director of the Company. Each Stockholder has
executed this Agreement solely in his or her capacity as the record or
beneficial holder of such Stockholder's Shares or as the trustee of a
trust whose beneficiaries are the beneficial owners of such
Stockholder's Shares.
(j) Each party agrees to bear its own expenses in connection
with the transactions contemplated hereby.
(k) This Agreement shall be governed and construed in
accordance with the laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than
the State of New York, except to the extent that the General
Corporation Law of the State of Delaware applies as a result of the
Company being incorporated in the State of Delaware, in which case such
General Corporation Law shall apply.
(l) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND
FOR ANY COUNTERCLAIM THEREIN.
(m) This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement.
(n) Each of the Stockholders hereby acknowledges that, for
purposes of Title IV of the Employee Retirement Income Security Act of
1974, as amended, IPC and IXNET may become members of a controlled
group of corporations that includes Citicorp Venture Capital, Ltd. and
its Affiliates.
-14-
[Signature Page to Follow]
-15-
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ARIZONA ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxx
---------------------------
Name: Xxxxx X. Xxxx
Title: President
STOCKHOLDERS:
/s/ Xxxxxxx Xxxxxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxxxxx
/s/ Xxxxx Xxxxxxxxxxx
---------------------------
Xxxxx Xxxxxxxxxxx
XXXXXXXXXXX 1997 ANNUITY TRUST
By: /s/ Xxxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Agent
XXXX XXXXXXXXXXX
REVOCABLE TRUST
By: /s/ Xxxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Agent
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XXXX XXXXXXXXXXX
REVOCABLE TRUST
By: /s/ Xxxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Agent
XXXX XXXXXXXXXXX
REVOCABLE TRUST
By: /s/ Xxxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Agent
/s/ Xxxx Xxxxxxxxxxx
---------------------------
Xxxx Xxxxxxxxxxx
XXXXX X. XXXXXXXXXXX 1996
GRANTOR RETAINED
ANNUITY TRUST
By: /s/ Xxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxxxxx
Title:
XXXXXXX XXXXXXXXXXX 1996
GRANTOR RETAINED
ANNUITY TRUST
By: /s/ Xxxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title:
-17-
/s/ Xxxxxxx Xxxxxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxxxxx
/s/ Xxxxx Xxxxxxxxxxx
---------------------------
Xxxxx Xxxxxxxxxxx
/s/ Xxxx Xxxxxxxxxxx
---------------------------
Xxxx Xxxxxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxxxxx
-18-
SCHEDULE I
EXISTING SHARES
---------------
SHAREHOLDER NO. OF EXISTING SHARES
----------- ----------------------
Xxxxxxx X. Xxxxxxxxxxx 1,552,273
Xxxxx X. Xxxxxxxxxxx 2,240,999
Xxxxxxxxxxx 1997 Annuity Trust 1,000,000
Xxxx Xxxxxxxxxxx 1997 Revocable Trust 300,575
Xxxx Xxxxxxxxxxx Revocable Trust 300,275
Xxxx Xxxxxxxxxxx Revocable Trust 300,275
Xxxx Xxxxxxxxxxx 298
Xxxxx X. Xxxxxxxxxxx 1996 Grantor Retained Annuity Trust 155,637
Xxxxxxx Xxxxxxxxxxx 1996 Grantor Retained Annuity Trust 155,637
Xxxxxxx Xxxxxxxxxxx 300,075
Xxxxx Xxxxxxxxxxx 300,075
Xxxx Xxxxxxxxxxx 300,075
Xxxxxxx X. Xxxxxxxxxxx 46,574
-19-
SCHEDULE II
PLEDGED SHARES
--------------
Any and all shares of Existing Shares pledged by the Kleinknechts pursuant to
(a) the Pledge Agreement, dated April 28, 1994, by the Kleinknechts and
Citibank, N.A. and National Westminster Bank NJ, (b) the Pledge Agreement, dated
October 6, 1995, between the Kleinknechts and The Chase Manhattan Bank (National
Association) and (c) the Pledge Agreement, dated April 15, 1996, between Xxxxx
X. Xxxxxxxxxxx and Xxxxxxx Xxxxxxxxxxx and Xxxxx Xxxxxx Inc.
-20-
