EXHIBIT 4
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.
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"Merger" has the meaning ascribed thereto in the recitals of this
Agreement.
"Merger Subsidiary" has the meaning ascribed thereto in the introductory
paragraph of this Agreement.
"Permitted Transferee" means in the case of any Stockholder, (a) a spouse
or lineal descendent (including by adoption and stepchildren), heir, executor,
testamentary trustee or legatee of such Stockholder or (b) any trust or estate
the beneficiaries of which, or any corporation, limited liability company or
partnership, the stockholders, members or partners of which include only the
Persons described in clause (a) above.
"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:
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(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. 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
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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 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.
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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 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.
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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 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.
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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 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
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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 hereto, 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").
(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
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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.
(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:
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(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 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-
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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 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
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
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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
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.
-13-
(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.
(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
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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.
[Signature Page to Follow]
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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 X. Xxxxxxxxxxx
______________________________
Xxxxxxx X. Xxxxxxxxxxx
/s/ Xxxxx X. Xxxxxxxxxxx
______________________________
Xxxxx X. Xxxxxxxxxxx
XXXXXXXXXXX 1997 ANNUITY TRUST
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
___________________________
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Agent
XXXX XXXXXXXXXXX
REVOCABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
___________________________
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Agent
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XXXX XXXXXXXXXXX
REVOCABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
___________________________
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Agent
XXXX XXXXXXXXXXX
REVOCABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
___________________________
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Agent
/s/ Xxxx Xxxxxxxxxxx
______________________________
Xxxx Xxxxxxxxxxx
XXXXX X. XXXXXXXXXXX 1996
GRANTOR RETAINED
ANNUITY TRUST
By: /s/ Xxxxx X. Xxxxxxxxxxx
___________________________
Name: Xxxxx X. Xxxxxxxxxxx
Title:
XXXXXXX XXXXXXXXXXX 1996
GRANTOR RETAINED
ANNUITY TRUST
By: /s/ Xxxxxxx Xxxxxxxxxxx
___________________________
Name: Xxxxxxx Xxxxxxxxxxx
Title:
-00-
/x/ Xxxxxxx Xxxxxxxxxxx
______________________________
Xxxxxxx Xxxxxxxxxxx
/s/ Xxxxx Xxxxxxxxxxx
______________________________
Xxxxx Xxxxxxxxxxx
/s/ Xxxx Xxxxxxxxxxx
______________________________
Xxxx Xxxxxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxxxx
______________________________
Xxxxxxx X. Xxxxxxxxxxx
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SCHEDULE I
EXISTING SHARES
Shareholder No. Of Existing Shares
----------- ----------------------
Xxxxxxx X. Xxxxxxxxxxx 1,552,273
Xxxxx Xxxxxxxxxxx 2,240,999
Xxxxxxxxxxx 1997 Annuity Trust 1,000,000
Xxxx Xxxxxxxxxxx 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-
