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EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
Dated as of February 22, 2000
Among
GLOBAL CROSSING LTD.,
GEORGIA MERGER SUB CORPORATION,
IPC COMMUNICATIONS, INC.,
IPC INFORMATION SYSTEMS, INC.,
IDAHO MERGER SUB CORPORATION
and
IXNET, INC.
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TABLE OF CONTENTS
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ARTICLE I
The Mergers....................................................................................2
SECTION 1.01 The Mergers......................................................................2
SECTION 1.02 Closing..........................................................................3
SECTION 1.03 Effective Time of the Mergers....................................................3
SECTION 1.04 Effects of the Mergers...........................................................3
SECTION 1.05 Certificate of Incorporation; By-Laws............................................3
SECTION 1.06 Directors........................................................................4
SECTION 1.07 Officers.........................................................................4
ARTICLE II
Effect of the Merger on the Capital Stock of the Constituent Corporations......................5
SECTION 2.01 Effect of Intercompany Merger on Capital Stock...................................5
SECTION 2.02 Effect of IPC Merger on Capital Stock............................................6
SECTION 2.03 Effect of IXnet Merger on Capital Stock..........................................7
SECTION 2.04 Stock Plans......................................................................8
SECTION 2.05 Exchange of Certificates.........................................................9
SECTION 2.06 Fractional Shares...............................................................10
SECTION 2.07 Lost, Stolen or Destroyed Certificates..........................................11
SECTION 2.08 Appraisal Rights................................................................11
ARTICLE III
Representations and Warranties................................................................12
SECTION 3.01 Representations and Warranties of IPC and IPC Systems...........................12
SECTION 3.02 Representations and Warranties of IXnet.........................................26
SECTION 3.03 Representations and Warranties of Parent and Sub................................39
SECTION 3.04 Representations of Parent and Sub...............................................43
ARTICLE IV
Covenants Relating to Conduct of Business Prior to Mergers....................................44
SECTION 4.01 Conduct of Business of the Companies............................................44
ARTICLE V
Additional Agreements.........................................................................47
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SECTION 5.01 Preparation of Forms S-4 and the Information
Statement/Prospectuses and Schedules 13E-3; Stockholder Meetings......................47
SECTION 5.02 Letter of the Companies' Accountants............................................50
SECTION 5.03 Letter of Parent's Accountants..................................................50
SECTION 5.04 Access to Information; Confidentiality..........................................50
SECTION 5.05 Reasonable Best Efforts.........................................................51
SECTION 5.06 Benefit Plans...................................................................51
SECTION 5.07 Indemnification.................................................................52
SECTION 5.08 Expenses........................................................................54
SECTION 5.09 Public Announcements............................................................54
SECTION 5.10 Affiliates......................................................................54
SECTION 5.11 Listing of Parent Common Stock..................................................54
SECTION 5.12 No Solicitation.................................................................55
SECTION 5.13 Certain Agreements..............................................................56
SECTION 5.14 Stop Transfer...................................................................56
SECTION 5.15 Compliance with Section 228 of the DGCL.........................................56
ARTICLE VI
Conditions Precedent..........................................................................56
SECTION 6.01 Conditions to Each Party's Obligation To Effect the Mergers.....................56
SECTION 6.02 Conditions to Obligations of Parent and GC Merger Sub...........................57
SECTION 6.03 Conditions to Obligation of the Companies and IPC Systems.......................58
ARTICLE VII
Termination, Amendment and Waiver.............................................................60
SECTION 7.01 Termination.....................................................................60
SECTION 7.02 Effect of Termination...........................................................60
SECTION 7.03 Amendment.......................................................................61
SECTION 7.04 Extension; Waiver...............................................................61
ARTICLE VIII
General Provisions............................................................................61
SECTION 8.01 Nonsurvival of Representations and Warranties...................................61
SECTION 8.02 Notices.........................................................................61
SECTION 8.03 Definitions.....................................................................62
SECTION 8.04 Interpretation..................................................................63
SECTION 8.05 Counterparts....................................................................63
SECTION 8.06 Entire Agreement; No Third-Party Beneficiaries..................................63
SECTION 8.07 Governing Law...................................................................63
SECTION 8.08 Assignment......................................................................63
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SECTION 8.09 Enforcement; Jurisdiction.......................................................64
SECTION 8.10 Severability....................................................................64
EXHIBITS
Exhibit A Form of Stockholder Consent
Exhibit B Form of Affiliate Letter
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AGREEMENT AND PLAN OF MERGER dated as of February 22, 2000 among
GLOBAL CROSSING LTD., a company formed under the laws of Bermuda
("Parent"), GEORGIA MERGER SUB CORPORATION, a Delaware
corporation and a wholly owned subsidiary of Parent ("GC Merger
Sub"), IPC COMMUNICATIONS, INC., a Delaware corporation ("IPC"),
IPC INFORMATION SYSTEMS, INC., a Delaware corporation and a
wholly owned subsidiary of IPC ("IPC Systems"), IDAHO MERGER SUB
CORPORATION, a Delaware corporation and a wholly owned
subsidiary of IPC Systems ("IPC Merger Sub" and, together with
GC Merger Sub, "Subs"), IXNET, INC., a Delaware corporation
("IXnet" and, together with IPC, the "Companies")
WHEREAS, the respective Boards of Directors of Parent, GC Merger
Sub, IPC and IPC Systems have determined that the merger of IPC with and into
IPC Systems (the "Intercompany Merger"), and the immediately subsequent merger
of GC Merger Sub with and into IPC Systems (the "IPC Merger"), each upon the
terms and subject to the conditions set forth in this Agreement, would be fair
to and in the best interests of their respective stockholders, and such Boards
of Directors have approved (a) the Intercompany Merger, pursuant to which each
share of Common Stock, par value $0.01 per share, of IPC ("IPC Common Stock")
issued and outstanding immediately prior to the Effective Time of the
Intercompany Merger (as defined in Section 1.03), other than shares of IPC
Common Stock owned, directly or indirectly, by IPC or any wholly owned
subsidiary (as defined in Section 8.03) of IPC or held by IPC as treasury shares
or owned by Parent, GC Merger Sub or any other wholly owned subsidiary of
Parent, will be converted into the right to receive one share of Common Stock,
par value $0.01 per share, of IPC Systems ("IPC Systems Common Stock") and (b)
the IPC Merger, pursuant to which each share of IPC Systems Common Stock issued
and outstanding immediately prior to the Effective Time of the IPC Merger (as
defined in Section 1.03), other than shares of IPC Systems Common Stock owned,
directly or indirectly, by IPC Systems or any wholly owned subsidiary of IPC
Systems or held by IPC Systems as treasury shares or owned by Parent, GC Merger
Sub or any other wholly owned subsidiary of Parent, will be converted into the
right to receive shares of Common Stock, par value $0.01 per share, of Parent
("Parent Common Stock");
WHEREAS, the respective Boards of Directors of Parent, IPC
Merger Sub, IPC, IPC Systems and IXnet have determined that the merger of IPC
Merger Sub with and into IXnet (the "IXnet Merger", together with the IPC Merger
and the Intercompany Merger, the "Mergers"), upon the terms and subject to the
conditions set forth in this Agreement, would be fair to and in the best
interests of their respective stockholders, and such Boards of Directors have
approved the IXnet Merger, pursuant to which each share of Common Stock, par
value $0.01 per share, of IXnet ("IXnet Common Stock") issued and outstanding
immediately prior to the Effective Time of the IXnet Merger (as defined in
Section 1.03), other than shares of IXnet Common Stock owned, directly or
indirectly, by IPC Systems or IXnet or any of their respective wholly owned
subsidiaries or held by IXnet as treasury shares or owned by Parent or any
wholly owned subsidiary of Parent, will be converted into the right to receive
shares of Parent Common Stock;
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WHEREAS, (i) the affirmative vote, by ballot or written consent,
of a majority of the outstanding shares of the IPC Common Stock is required for
the adoption of this Agreement (the "IPC Stockholder Approval") and (ii) the
affirmative vote, by ballot or written consent, of a majority of the outstanding
shares of the IXnet Common Stock is required for the adoption of this Merger
Agreement (the "IXnet Stockholder Approval" and, together with the IPC
Stockholder Approval and the IPC Systems Stockholder Approval (as defined
herein), the "Stockholder Approvals");
WHEREAS, as a condition to its willingness to enter into this Agreement,
Parent has required that Cable Systems Holding, LLC and the other stockholders
of IPC party thereto (the "IPC Stockholders") enter into, and the IPC
Stockholders have agreed to enter into, the Consent and Voting Agreement with
Parent dated of even date herewith (as amended from time to time in accordance
with its terms, the "Voting Agreement") relating to, among other things, the
agreement of the IPC Stockholders to execute and deliver the IPC Stockholder
Consent (as defined herein) immediately following the execution and delivery of
this Agreement; and, in order to induce Parent to enter into this Agreement, the
Board of the Directors of IPC has approved the entering into by Parent and the
IPC Stockholders of the Voting Agreement and the consummation of the
transactions contemplated thereby;
WHEREAS, the parties hereto desire to make certain
representations, warranties, covenants and agreements in connection with the
Mergers and also to prescribe various conditions to the Mergers; and
WHEREAS, for Federal income tax purposes, it is intended that
each of the Mergers qualify as a reorganization under the provisions of Section
368 of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
ARTICLE I
The Mergers
SECTION 1.01 The Mergers. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), (a) IPC shall be merged with and into IPC
Systems at the Effective Time of the Intercompany Merger, (b) following the
Intercompany Merger, GC Merger Sub shall be merged with and into IPC Systems at
the Effective Time of the IPC Merger and (c) following the IPC Merger, IPC
Merger Sub shall be merged with and into IXnet at the Effective Time of the
IXnet Merger. Upon the Effective Time of the Intercompany Merger, the separate
existence of IPC shall cease, and IPC Systems shall continue as the surviving
corporation (the "Intercompany Merger Surviving Corporation") of the
Intercompany Merger. Upon the Effective Time of the IPC Merger, the separate
existence of GC Merger Sub shall cease, and IPC Systems shall continue as the
surviving corporation (the "IPC Merger Surviving
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Corporation") of the IPC Merger. Upon the Effective Time of the IXnet Merger,
the separate existence of IPC Merger Sub shall cease, and IXnet shall continue
as the surviving corporation (the "IXnet Merger Surviving Corporation" and,
together with the Intercompany Merger Surviving Corporation and the IPC Merger
Surviving Corporation, the "Surviving Corporations") of the IXnet Merger.
SECTION 1.02 Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.01 and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the Mergers (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties (the
"Closing Date"), which date shall be no later than the second business day after
satisfaction of the conditions set forth in Article VI, at the offices of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017,
unless another date, time or place is agreed to in writing by the parties
hereto.
SECTION 1.03 Effective Time of the Mergers. Upon the Closing,
the parties shall cause each Surviving Corporation to file a certificate of
merger relating to its Merger (the "Certificates of Merger") with the Secretary
of State of the State of Delaware and shall make all other filings or recordings
required under the DGCL. The Intercompany Merger shall become effective at such
time as the Certificate of Merger for the Intercompany Merger shall have been
duly filed with the Secretary of State of the State of Delaware, or at such
later time as is agreed by Parent and IPC and specified in such Certificate of
Merger (the time the Intercompany Merger becomes effective being the "Effective
Time of the Intercompany Merger"). The IPC Merger shall become effective at such
time as the Certificate of Merger for the IPC Merger shall have been duly filed
with the Secretary of State of the State of Delaware, or at such later time as
is agreed by Parent and IPC and specified in such Certificate of Merger (the
time the IPC Merger becomes effective being the "Effective Time of the IPC
Merger"). The IXnet Merger shall become effective at such time as the
Certificate of Merger for the IXnet Merger shall have been duly filed with the
Secretary of State of the State of Delaware, or at such later time as agreed by
Parent and IXnet and specified in such Certificate of Merger (the time the IXnet
Merger becomes effective being the "Effective Time of the IXnet Merger"; and the
time by which all the Mergers have become effective being the "Effective Time").
The parties shall cause the IPC Merger to become effective immediately following
the Effective Time of the Intercompany Merger and the IXnet Merger to become
effective immediately following the Effective Time of the IPC Merger.
SECTION 1.04 Effects of the Mergers. The Mergers shall have the
effects set forth in Section 259 of the DGCL (or any successor provision).
SECTION 1.05 Certificate of Incorporation; By-Laws. (a) (i) The
certificate of incorporation of IPC Systems, as in effect immediately prior to
the Effective Time of the Intercompany Merger, shall be the certificate of
incorporation of the Intercompany Merger Surviving Corporation, except that at
the Effective Time of the Intercompany Merger such certificate of incorporation
shall be amended as follows: Article Four shall be amended to read in its
entirety as follows: "The total number of shares of stock which the Corporation
shall have the authority to issue is 25,000,000 shares, each having a par value
of one cent ($0.01).".
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(ii) The By-laws of IPC Systems as in effect at the Effective
Time of the Intercompany Merger shall be the By-laws of the Intercompany Merger
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
(b) (i) The certificate of incorporation of IPC Systems, as in
effect immediately prior to the Effective Time of the IPC Merger, shall be the
certificate of incorporation of the IPC Merger Surviving Corporation, except
that at the Effective Time of the IPC Merger such certificate of incorporation
shall be amended as follows: Article Four shall be amended to read in its
entirety as follows: "The total number of shares of stock which the Corporation
shall have the authority to issue is 1,000 shares, each having a par value of
one cent ($0.01)."
(ii) The By-laws of IPC Systems as in effect at the Effective
Time of the IPC Merger shall be the By-laws of the IPC Merger Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(c) (i) The certificate of incorporation of IXnet, as in effect
immediately prior to the Effective Time of the IXnet Merger, shall be the
certificate of incorporation of the IXnet Merger Surviving Corporation, except
that at the Effective Time of the IXnet Merger such certificate of incorporation
shall be amended as follows: Article Four shall be amended to read in its
entirety as follows: "The total number of shares of stock which the Corporation
shall have the authority to issue is 1,000 shares, each having a par value of
one cent ($0.01)."
(ii) The By-laws of IXnet as in effect at the Effective Time of
the IXnet Merger shall be the By-laws of the IXnet Merger Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06 Directors. (a) The directors of IPC at the
Effective Time of the Intercompany Merger shall be the directors of the
Intercompany Merger Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
(b) The directors of GC Merger Sub at the Effective Time of the
IPC Merger shall be the directors of the IPC Merger Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
(c) The directors of IPC Merger Sub at the Effective Time of the
IXnet Merger shall be the directors of the IXnet Merger Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
SECTION 1.07 Officers. (a) The officers of IPC at the Effective
Time of the Intercompany Merger shall be the officers of the Intercompany Merger
Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be.
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(b) The officers of GC Merger Sub at the Effective Time of the
IPC Merger shall be the officers of the IPC Merger Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
(c) The officers of IPC Merger Sub at the Effective Time of the
IXnet Merger shall be the officers of the IXnet Merger Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations
SECTION 2.01 Effect of Intercompany Merger on Capital Stock. As
of the Effective Time of the Intercompany Merger, by virtue of the Intercompany
Merger and without any action on the part of the holder of any shares of IPC
Common Stock or any shares of capital stock of IPC Systems:
(a) Common Stock of IPC Systems. Each share of IPC Systems
Common Stock issued and outstanding immediately prior to the Effective
Time of the Intercompany Merger shall automatically be cancelled and
retired and shall cease to exist, and no consideration shall be
delivered or deliverable in exchange therefor.
(b) Conversion of IPC Common Stock. Except as otherwise provided
herein, each issued and outstanding share of IPC Common Stock shall be
converted into one fully paid and nonassessable share of the common
stock ("Intercompany Merger Surviving Corporation Common Stock") of the
Intercompany Merger Surviving Corporation (the "Intercompany Merger
Exchange Ratio").
(c) Cancellation and Retirement of IPC Common Stock. Except as
otherwise provided herein, from and after the Effective Time of the
Intercompany Merger, all shares of IPC Common Stock issued and
outstanding immediately prior to the Effective Time of the Intercompany
Merger shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each certificate
which immediately prior to the Effective Time of the Intercompany Merger
represented shares of IPC Common Stock (an "IPC Share Certificate")
shall automatically be deemed to represent the number of shares of
Intercompany Merger Surviving Corporation Common Stock to be issued to
the holder of such IPC Share Certificate pursuant to Section 2.01(b)
(the "Intercompany Merger Consideration").
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SECTION 2.02 Effect of IPC Merger on Capital Stock. As of the
Effective Time of the IPC Merger, by virtue of the IPC Merger and without any
action on the part of the holder of any shares of IPC Systems Common Stock or
any shares of capital stock of GC Merger Sub:
(a) Common Stock of GC Merger Sub. Each share of common stock,
par value $0.01 per share, of GC Merger Sub issued and outstanding
immediately prior to the Effective Time of the IPC Merger shall be
converted into one share of the common stock of the IPC Merger Surviving
Corporation and shall constitute the only issued and outstanding capital
stock of the IPC Merger Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Intercompany
Merger Surviving Corporation Common Stock. Each share of Intercompany
Merger Surviving Corporation Common Stock that is owned by the
Intercompany Merger Surviving Corporation or held by the Intercompany
Merger Surviving Corporation as treasury shares or owned by any direct
or indirect wholly owned subsidiary of the Intercompany Merger Surviving
Corporation and each share of Intercompany Merger Surviving Corporation
Common Stock that is owned by Parent, GC Merger Sub or any other direct
or indirect wholly owned subsidiary of Parent shall automatically be
cancelled and retired and shall cease to exist, and no Parent Common
Stock or other consideration shall be delivered or deliverable in
exchange therefor.
(c) Conversion of Intercompany Merger Surviving Corporation
Common Stock. Except as otherwise provided herein, each issued and
outstanding share of Intercompany Merger Surviving Corporation Common
Stock shall be converted into the right to receive from Parent 5.417
fully paid and nonassessable shares of Parent Common Stock (the "IPC
Merger Exchange Ratio"); provided, however, that, in any event, if
between the date of this Agreement and the Effective Time of the IPC
Merger the outstanding shares of Parent Common Stock or IPC Common Stock
shall have been changed into a different number of shares or a different
class (other than pursuant to the Intercompany Merger), by reason of any
stock dividend, subdivision, reclassification, recapitalization,
redenomination, split, combination or exchange of shares, the IPC Merger
Exchange Ratio shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization,
redenomination, split, combination or exchange of shares.
(d) Cancellation and Retirement of Intercompany Merger Surviving
Corporation Common Stock. From and after the Effective Time of the IPC
Merger, all shares of Intercompany Merger Surviving Corporation Common
Stock issued and outstanding immediately prior to the Effective Time of
the IPC Merger shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of an
IPC Share Certificate shall cease to have any rights with respect to the
common stock formerly represented thereby, except the right to receive
the consideration to be issued to holders of Intercompany Merger
Surviving Corporation Common Stock in the IPC Merger pursuant to Section
2.02(c) (the "IPC Merger Consideration"), any cash in lieu of fractional
shares of Parent Common Stock to be paid in consideration therefor
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upon surrender of such certificate in accordance with Section 2.06 and
any dividends payable pursuant to Section 2.05(f).
SECTION 2.03 Effect of IXnet Merger on Capital Stock. As of the
Effective Time of the IXnet Merger, by virtue of the IXnet Merger and without
any action on the part of the holder of any shares of IXnet Common Stock or any
shares of capital stock of IPC Merger Sub:
(a) Common Stock of IPC Merger Sub. Each share of common stock,
par value $0.01 per share, of IPC Merger Sub issued and outstanding
immediately prior to the Effective Time of the IXnet Merger shall be
converted into one share of the common stock of the IXnet Merger
Surviving Corporation and shall constitute the only issued and
outstanding capital stock of the IXnet Merger Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent- and IPC Merger
Surviving Corporation-Owned IXnet Common Stock. Each share of IXnet
Common Stock that is owned by IXnet or held by IXnet as treasury shares
or owned by any direct or indirect wholly owned subsidiary of IXnet, and
each share of IXnet Common Stock that is owned by Parent, the IPC Merger
Surviving Corporation or any of their direct or indirect wholly owned
subsidiaries shall automatically be cancelled and retired and shall
cease to exist, and no Parent Common Stock or other consideration shall
be delivered or deliverable in exchange therefor.
(c) Conversion of IXnet Common Stock. Except as otherwise
provided herein, each issued and outstanding share of IXnet Common Stock
shall be converted into the right to receive from Parent 1.184 fully
paid and nonassessable shares of Parent Common Stock (the "IXnet Merger
Exchange Ratio"); provided, however, that, in any event, if between the
date of this Agreement and the Effective Time of the IXnet Merger the
outstanding shares of Parent Common Stock or IXnet Common Stock shall
have been changed into a different number of shares or a different
class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, redenomination, split, combination or exchange of
shares, the IXnet Merger Exchange Ratio shall be correspondingly
adjusted to reflect such stock dividend, subdivision, reclassification,
recapitalization, redenomination, split, combination or exchange of
shares.
(d) Cancellation and Retirement of IXnet Common Stock. From and
after the Effective Time of the IXnet Merger, all shares of IXnet Common
Stock issued and outstanding immediately prior to the Effective Time of
the IXnet Merger shall no longer be outstanding and shall automatically
be cancelled and retired and shall cease to exist, and each holder of a
certificate which immediately prior to the Effective Time of the IXnet
Merger represented shares of IXnet Common Stock (an "IXnet Share
Certificate" and, together with the IPC Share Certificates, "Share
Certificates") shall cease to have any rights with respect thereto,
except the right to receive the consideration to be issued to holders of
IXnet Common Stock in the IXnet Merger pursuant to Section 2.03(c) (the
"IXnet Merger Consideration" and, together with the IPC Merger
Consideration, the
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"Merger Consideration"), any cash in lieu of fractional shares of Parent
Common Stock to be paid in consideration therefor upon surrender of such
certificate in accordance with Section 2.06 and any dividends payable
pursuant to Section 2.05(f).
SECTION 2.04 Stock Plans. (a) Prior to the Effective Time of the
Mergers, each of IPC and IXnet (x) shall take all action necessary (including
obtaining any necessary consents and/or waivers) to ensure that from and after
the Effective Time of the Mergers, all options granted to Employees to purchase
shares of IPC Common Stock ("IPC Options") or IXnet Common Stock ("IXnet
Options" and, together with IPC Options, "Options"), which are then outstanding
and unexercised (whether or not vested or exercisable), shall, without any
further action on the part of the holders thereof, be converted into and become,
respectively, options to purchase shares of Parent Common Stock on terms
substantially identical to those in effect immediately prior to the Effective
Time of the Mergers under the terms of the stock option plan or other agreement
or award pursuant to which such Options were granted (collectively, such plans,
agreements and awards of IPC or IXnet being hereinafter referred to as the
"Stock Plans") and Parent shall assume the Stock Plans with respect to then
outstanding options (but taking into account any changes thereto, including the
acceleration thereof, provided for in the applicable Stock Plans resulting from
the Mergers) as limited by the Agreement entered into February 22, 2000, among
Parent, IPC, IXnet and certain holders of Options ("Option Limitation
Agreement") and (y) shall amend Section 5(c) of each Stock Plan to provide that
vesting of any Option thereunder held by a party to the Option Limitation
Agreement in connection with or relating to a change of control (as such term is
defined in the Stock Plans) shall be limited in accordance with the Option
Limitation Agreement, and shall amend Section 5(d)of the IXnet Stock Plan to
provide that 25% of IXnet Options held by a person who is not a party to the
Option Limitation Agreement or held by William Adiletta or Richard Farrell shall
become exercisable upon a Change in Control; provided, however, that from and
after the Effective Time of the Mergers (i) each such Option assumed by Parent
may be exercised solely to purchase shares of Parent Common Stock, (ii) the
number of shares of Parent Common Stock purchasable upon exercise of such Option
shall be equal to, in the case of IPC Options, the number of shares of Parent
Common Stock subject to such Option multiplied by the IPC Merger Exchange Ratio,
rounded, if necessary, to the nearest whole share of Parent Common Stock, at a
price per share (rounded to the nearest one-hundredth of a cent) equal to the
per share exercise price specified in such Option divided by the IPC Merger
Exchange Ratio and, in the case of IXnet Options, the number of shares of Parent
Common Stock subject to such Option multiplied by the IXnet Merger Exchange
Ratio, rounded, if necessary, to the nearest whole share of Parent Common Stock,
at a price per share (rounded to the nearest one-hundredth of a cent) equal to
the per share exercise price specified in such Option divided by the IXnet
Merger Exchange Ratio.
(b) Neither the vesting nor the exercisability of any Option
shall accelerate as a result of, or in connection with, the transactions
contemplated hereby, except to the extent required by the existing terms of the
Stock Plan or stock option agreement pursuant to which such Option was granted,
as in effect on the date hereof and as limited or as adjusted pursuant to the
amendments referred to in Section 2.04(a) and the Option Limitation Agreement.
Notwithstanding the foregoing, the number of shares and the per share exercise
price of each Option which is intended to be an "incentive stock option" (as
defined in Section 422 of the Code) shall be adjusted in accordance with the
requirements of Section 424 of the Code.
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(c) Parent shall, as of the Effective Time of the Mergers,
reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of Options assumed by it in accordance with this Section
2.04, such number not to be reduced except to the extent such Options are
exercised, canceled or terminated pursuant to their terms. Upon the Effective
Time of the Mergers or as soon as reasonably practicable thereafter, Parent
shall file, or cause to be filed, a registration statement(s) on Form S-3 or
Form S-8, as the case may be (or any successor or other appropriate forms), with
respect to the shares of Parent Common Stock subject to such Options and shall
cause such registration statement(s) to remain effective (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such Options remain outstanding.
(d) At least ten days prior to the Effective Time of the
Mergers, the Companies shall notify each grantee under every Stock Plan that
such plan is to be assumed by Parent as of the Effective Time of the Mergers,
and that, to the extent not exercised prior to the Effective Time of the
Mergers, each outstanding Option thereunder will be assumed by Parent and
thereafter may be exercised solely to purchase shares of Parent Common Stock in
accordance with Section 2.04(a) hereof.
SECTION 2.05 Exchange of Certificates. (a) Prior to the
Effective Time of the Mergers, Parent shall appoint an agent (the "Exchange
Agent") for the purpose of exchanging Share Certificates for the applicable
Merger Consideration. Immediately following the Effective Time of the Mergers,
Parent shall deposit with the Exchange Agent, for the benefit of the holders of
Share Certificates, certificates representing the Parent Common Stock issuable
pursuant to Section 2.02 or 2.03 in exchange for Share Certificates. Promptly
after the Effective Time of the Mergers, Parent will send, or will cause the
Exchange Agent to send, to each holder of a Share Certificate at the Effective
Time of the Mergers (i) a letter of transmittal for use in such exchange which
shall specify that delivery of the applicable Merger Consideration shall be
effected, and risk of loss and title to the certificates representing Parent
Common Stock and Share Certificates shall pass, only upon proper delivery of the
Share Certificates to the Exchange Agent and (ii) instructions for use in
effecting the surrender of such Share Certificates in exchange for the
certificates representing Parent Common Stock.
(b) Each holder of Share Certificates that formerly represented
shares of IPC Common Stock, IPC Systems Common Stock or IXnet Common Stock which
have been converted into a right to receive Merger Consideration, upon surrender
to the Exchange Agent of such Share Certificates, together with a properly
completed letter of transmittal covering such Share Certificates, will be
entitled to receive the applicable Merger Consideration payable in respect of
such Share Certificates and any dividends payable pursuant to Section 2.05(f).
Until so surrendered, each such Share Certificate shall, after the Effective
Time of the Mergers, represent for all purposes only the right to receive the
applicable Merger Consideration, any cash payable in lieu of fractional shares
pursuant to Section 2.06 and any dividends payable pursuant to Section 2.05(f).
(c) If any portion of the applicable Merger Consideration is to
be paid to a person other than the registered holder of a Share Certificate, it
shall be a condition to such
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payment that such Share Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the person requesting such
payment shall pay to the Exchange Agent any transfer or other taxes required by
reason of the issuance of shares of Parent Common Stock in exchange for the
Share Certificate so surrendered or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable.
(d) After the Effective Time of the Mergers, there shall be no
further registration of transfers of shares of IPC Common Stock, IPC Systems
Common Stock or IXnet Common Stock. If, after the Effective Time of the Mergers,
Share Certificates are presented to a Surviving Corporation, they shall be
cancelled and exchanged for the applicable Merger Consideration provided for,
and in accordance with the procedures set forth, in this Article II.
(e) Any portion of the applicable Merger Consideration made
available to the Exchange Agent pursuant to Section 2.05(a) that remains
unclaimed by the holders of Share Certificates six months after the Effective
Time of the Mergers shall be returned to Parent, upon demand, and any such
holder who has not exchanged his Share Certificates for the applicable Merger
Consideration in accordance with this Section 2.05 prior to that time shall
thereafter look only to Parent for payment of the applicable Merger
Consideration, any cash payable in lieu of fractional shares pursuant to Section
2.06 and any dividends payable pursuant to Section 2.05(f) in respect of his
shares. Notwithstanding the foregoing, Parent shall not be liable to any holder
of Share Certificates for any amount paid to a public official pursuant to
applicable abandoned property laws. Any amounts remaining unclaimed by holders
of Share Certificates seven years after the Effective Time of the Mergers (or
such earlier date immediately prior to such time as such amounts would otherwise
escheat to or become property of any governmental entity) shall, to the extent
permitted by applicable law, become the property of Parent free and clear of any
claims or interest of any person previously entitled thereto.
(f) No dividends or other distributions with respect to Parent
Common Stock issued in the Mergers shall be paid, and no voting rights with
respect to Parent Common Stock issued in the Mergers will be accorded, to the
holder of any unsurrendered Share Certificates until such certificates are
surrendered as provided in this Section 2.05. Subject to the effect of
applicable laws, following the surrender of such certificates, there shall be
paid, without interest, to the record holder of the Parent Common Stock issued
in exchange therefor at the time of such surrender, the amount of dividends or
other distributions with a record date after the Effective Time of the Mergers
payable prior to or on the date of such surrender with respect to such whole
shares of Parent Common Stock and not previously paid, less the amount of any
withholding taxes (if any) which may be required thereon.
SECTION 2.06 Fractional Shares. (a) No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Share Certificates and such fractional share interests
will not entitle the owner thereof to vote or to have any rights of a holder of
Parent Common Stock.
(b) Notwithstanding any other provision of this Agreement, each
holder of shares of IPC Systems Common Stock or IXnet Common Stock exchanged
pursuant to the Mergers
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who would otherwise have been entitled to receive a fraction of a share of
Parent Common Stock (after taking into account all Share Certificates delivered
by such holder) shall be entitled to receive, in lieu thereof, cash (without
interest) in an amount equal to the product of (i) such fractional part of a
share of Parent Common Stock and (ii) the average closing price of the Parent
Common Stock on NASDAQ for the 20 trading days prior to and ending on the
trading day immediately preceding the Closing Date (the "Average Price"). As
promptly as practicable after the determination of the amount of cash, if any,
to be paid to holders of fractional interests, the Exchange Agent shall so
notify Parent, and Parent shall deposit such amount with the Exchange Agent and
shall cause the Exchange Agent to forward payments to such holders of fractional
interests subject to and in accordance with the terms hereof.
SECTION 2.07 Lost, Stolen or Destroyed Certificates. If any
Share Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming such certificate to be lost,
stolen or destroyed and, if requested by Parent, the posting by such person of a
bond in such reasonable amount as Parent may direct as indemnity against any
claim that may be made against it or its subsidiaries with respect to such
certificate, the Exchange Agent will deliver in exchange for such lost, stolen
or destroyed certificate the applicable Merger Consideration with respect to the
shares of capital stock formerly represented thereby, any cash in lieu of
fractional shares of Parent Common Stock, and any unpaid dividends or
distributions in respect of or on Parent Common Stock deliverable in respect
thereof pursuant to this Agreement.
SECTION 2.08 Appraisal Rights. (a) Notwithstanding anything in
this Agreement to the contrary, if provided for by applicable law, shares of IPC
Common Stock that are issued and outstanding immediately prior to the Effective
Time of the Intercompany Merger and that are owned by stockholders who have
properly perfected their rights of appraisal within the meaning of Section 262
of the DGCL (the "IPC Dissenting Shares") shall not be converted into the right
to receive the Intercompany Merger Consideration with respect thereto, unless
and until such stockholders shall have failed to perfect their right of
appraisal under applicable law, but, instead, if provided by applicable law, the
holders thereof shall be entitled to payment of the appraised value of such IPC
Dissenting Shares in accordance with Section 262 of the DGCL. If any such holder
shall have failed to perfect or shall have effectively withdrawn or lost such
right of appraisal, each share of IPC Common Stock held by such stockholder
shall thereupon be deemed to have been converted into the right to receive and
become exchangeable for, at the Effective Time of the Intercompany Merger, the
Intercompany Merger Consideration with respect thereto, in the manner provided
for in Section 2.01.
(b) IPC shall give Parent (i) prompt notice of any demands for
appraisal filed pursuant to Section 262 of the DGCL received by IPC, withdrawals
of such objections and any other instruments served or delivered in connection
with such demands pursuant to the DGCL and received by IPC and (B) the
opportunity to participate in all negotiations and proceedings with respect to
demands under the DGCL consistent with the obligations of IPC thereunder. IPC
shall not, except with the prior written consent of Parent, (x) make any payment
with respect to any such demand, (y) offer to settle or settle any such demand
or (z) waive any failure to timely
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deliver a written demand for appraisal or timely take any other action to
perfect appraisal rights in accordance with the DGCL.
ARTICLE III
Representations and Warranties
SECTION 3.01 Representations and Warranties of IPC and IPC
Systems. Each of IPC and IPC Systems represents and warrants to Parent and GC
Merger Sub as follows:
(a) Organization, Standing and Corporate Power. IPC and each of
its subsidiaries is duly organized, validly existing and in good
standing (with respect to jurisdictions which recognize the concept of
good standing) under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to
carry on its business as now being conducted, except where the failure
to have such power and authority could not reasonably be expected to
have an IPC Material Adverse Effect or an IXnet Material Adverse Effect
(each as defined in Section 8.3). IPC and each of its subsidiaries is
duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate) would not be
reasonably expected to have an IPC Material Adverse Effect. The Recent
SEC Documents (as defined in Section 3.01(e) contain as exhibits
complete and correct copies of the Certificate of Incorporation and
By-laws of each of IPC and IXnet, in each case as amended to the date of
this Agreement.
(b) Subsidiaries. The only direct or indirect subsidiaries of
IPC are those listed in Section 3.01(b) of the disclosure schedule
("Disclosure Schedule") delivered to Parent by IPC at the time of
execution of this Agreement. All the outstanding shares of capital stock
of each such subsidiary have been validly issued and are fully paid and
nonassessable and are owned (of record and beneficially) by IPC, by
another subsidiary (wholly owned) of IPC or by IPC and another such
subsidiary (wholly owned), free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"), except as set forth in Section
3.01(b) of the Disclosure Schedule. Except for the ownership interests
set forth in Section 3.01(b) of the Disclosure Schedule or in the Recent
SEC Documents, IPC does not own, directly or indirectly, any capital
stock or other ownership interest, and does not have any option or
similar right to acquire any assets or equity or other ownership
interest, in any corporation, partnership, business association, joint
venture or other entity. IPC directly owns all the issued and
outstanding capital stock of IPC Systems and IPC Systems directly owns
all the issued and outstanding shares of capital stock of IXnet that are
beneficially owned by IPC.
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(c) Capital Structure. As of February 21, 2000, the authorized
capital stock of IPC consists of (i) 25,000,000 shares of IPC Common
Stock, and (ii) 10,000,000 shares of preferred stock, each having a par
value of one cent ($0.01) ("IPC Preferred Stock"). As of the close of
business on February 21, 2000, there were (i) 8,823,151 shares of IPC
Common Stock and 0 shares of IPC Preferred Stock issued and outstanding;
(ii) 0 shares of IPC Common Stock held in the treasury of IPC; (iii) 40
shares of IPC Common Stock reserved for issuance upon exercise of
authorized but unissued IPC Options pursuant to the Stock Plans; and
(iv) 1,132,793 shares of IPC Common Stock issuable upon exercise of
outstanding IPC Options. Section 3.01(c) of the Disclosure Schedule sets
forth the name of each holder of outstanding options to acquire shares
of IPC Common Stock, the number of options held and the exercise prices
of such options. Except as set forth above, as of the date hereof, no
shares of capital stock or other equity securities of IPC are issued,
reserved for issuance or outstanding. All outstanding shares of capital
stock of IPC are, and all shares which may be issued pursuant to the
Stock Plans will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. Other than
IPC Options, there are no outstanding bonds, debentures, notes or other
indebtedness or other securities of IPC having the right to vote (or
convertible into, or exchangeable or exercisable for, securities having
the right to vote) on any matters on which stockholders of IPC may vote.
Except as set forth above, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which IPC or any of its subsidiaries is a
party or by which any of them is bound obligating IPC or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other equity or voting
securities of IPC or of any of its subsidiaries or obligating IPC or any
of its subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. Except as set forth in the Recent SEC
Documents and except for such indebtedness which is not material to IPC,
IPC and its subsidiaries have no indebtedness. Other than the Options,
(i) there are no outstanding contractual obligations, commitments,
understandings or arrangements of IPC or any of its subsidiaries to
repurchase, redeem or otherwise acquire or make any payment in respect
of any shares of capital stock of IPC or any of its subsidiaries and
(ii) there are no irrevocable proxies with respect to shares of capital
stock of IPC or any subsidiary of IPC. Except as set forth above or in
Section 3.01(c) of the Disclosure Schedule or in the Recent SEC
Documents, there are no agreements or arrangements pursuant to which IPC
is or could be required to register shares of IPC Common Stock or other
securities under the Securities Act of 1933, as amended (the "Securities
Act"), or other agreements or arrangements with or among any
securityholders of IPC with respect to securities of IPC. The authorized
capital stock of IPC Merger Sub consists of 100 shares of common stock,
par value $0.01 per share, all of which have been validly issued, are
fully paid and nonassessable and are owned directly by IPC, free and
clear of any Lien.
(d) Authority; Noncontravention. Each of IPC, IPC Systems and
IPC Merger Sub has the requisite corporate and other power and authority
to enter into this Agreement and, subject to the Stockholder Approvals,
each of which is being obtained by written
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consent immediately following the execution of this Agreement, each of
them has the requisite corporate and other power and authority to
consummate the transactions contemplated hereby and thereby. After the
delivery of the Stockholder Consents, no vote, approval or other action
on the part of any holder of IPC Common Stock, IPC Systems Common Stock
or IXnet Common Stock shall be required to adopt this Agreement and
consummate the transactions contemplated hereby, including the Mergers.
No corporate action is required to be taken by IXnet or its stockholders
in connection with the consummation of the Intercompany Merger or the
IPC Merger. The execution and delivery of this Agreement by IPC, IPC
Systems, IXnet and IPC Merger Sub and the consummation by them of the
transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action on the part of IPC, IPC Systems and
IPC Merger Sub, subject, in the case of the IPC Merger and the
Intercompany Merger to the IPC Systems Stockholder Approval and the IPC
Stockholder Approval, respectively. This Agreement has been duly
executed and delivered by each of IPC, IPC Systems, IXnet and IPC Merger
Sub and constitutes a valid and binding obligation of IPC, IPC Systems,
IXnet and IPC Merger Sub, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or
affecting creditors generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law) or by an implied covenant of good faith and fair
dealing. Except as disclosed in Section 3.01(d) of the Disclosure
Schedule, the execution and delivery of this Agreement and the Voting
Agreement do not, and the consummation of the transactions contemplated
hereby and thereby and compliance with the provisions hereof and thereof
will not (including the delivery of the Stockholder Consents), conflict
with, or result in any breach or violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right
of termination, cancellation or acceleration of or "put" right with
respect to any obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or assets
of IPC or any of its subsidiaries under, (i) the Certificate of
Incorporation or By-laws of IPC or the comparable charter or
organizational documents of any of its subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license
applicable to IPC or any of its subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and
other matters referred to in the following sentence, any judgment,
order, decree, statute, law, ordinance, rule, regulation or arbitration
award applicable to IPC or any of its subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii),
any such conflicts, breaches, violations, defaults, rights, losses or
Liens that individually or in the aggregate could not be reasonably
expected to have an IPC Material Adverse Effect. No consent, approval,
order or authorization of, or registration, declaration or filing with,
or notice to, any Federal, state or local government or any court,
administrative agency or commission or other governmental authority or
agency, domestic or foreign (a "Governmental Entity"), is required by or
with respect to IPC or any of its subsidiaries in connection with the
execution and delivery of this Agreement by IPC, IPC Systems, IXnet or
IPC Merger Sub, as applicable, or the consummation by IPC, IPC Systems,
IXnet or IPC Merger Sub of the
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transactions contemplated hereby or thereby (including the delivery of
the Stockholder Consents), except, with respect to this Agreement, for
(i) the filing of a premerger notification and report form by IPC and
IXnet under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) the filing with the SEC of (y) Information
Statements (as defined herein) relating to each of the Mergers, and (z)
such reports under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with this Agreement,
the Voting Agreement and the transactions contemplated hereby and
thereby, (iii) the filing of the Certificates of Merger with the
Secretary of State of the State of Delaware and the filing of
appropriate documents with the relevant authorities of other states in
which IPC or IXnet is qualified to do business and (iv) such other
consents, approvals, orders, authorizations, registrations,
declarations, filings or notices as are set forth in Section 3.01(d) of
the Disclosure Schedule.
(e) SEC Documents; Undisclosed Liabilities. IPC and, to the
extent applicable, its subsidiaries have filed all required reports,
schedules, forms, statements and other documents with the Securities and
Exchange Commission (the "SEC") since October 1, 1998, and IPC has
delivered or made available to Parent all reports, schedules, forms,
statements and other documents filed by IPC and, to the extent
applicable, its subsidiaries with the SEC since such date (collectively,
and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "SEC Documents"). As of
their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and none of the
SEC Documents (including any and all financial statements included
therein) as of such dates (and, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing)
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The consolidated financial statements
(including the related notes) of IPC and of IXnet included in all SEC
Documents filed since October 1, 1998 (the "SEC Financial Statements")
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited
consolidated quarterly statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may
be indicated in the notes thereto) and fairly present the consolidated
financial position of IPC and its consolidated subsidiaries or IXnet and
its consolidated subsidiaries as the case may be as of the dates thereof
and the consolidated results of their respective operations and cash
flows for the periods then ended (subject, in the case of unaudited
quarterly statements, to normal year-end audit adjustments that have not
been and are not expected to be material in amount). Except as set forth
in Schedule 3.01(e), at the date of the most recent audited financial
statements of IPC included in the SEC Documents filed by IPC or its
subsidiaries since October 1, 1998 and prior to the date of this
Agreement (the "Recent SEC Documents"), neither IPC nor any
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of its subsidiaries had, and since such date neither IPC nor any of such
subsidiaries incurred, any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which, individually
or in the aggregate, would reasonably be expected to have an IPC
Material Adverse Effect. To the best of IPC's knowledge, (i) all
historical financial statements supplied to Parent by IPC for periods
subsequent to December 31, 1999 have been prepared in accordance with
generally accepted accounting principles (except as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of IPC and its consolidated
subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject to
normal year-end adjustments that have not been and are not expected to
be material in amount) and (ii) all financial data so supplied for such
periods is true and accurate in all material respects.
(f) Information Supplied. None of the information supplied or to
be supplied by IPC for inclusion or incorporation by reference in (i)
the Forms S-4 (as defined in Section 5.01) will, at the time each Form
S-4 is filed with the SEC, and at any time it is amended or supplemented
or at the time it becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) each Information Statement/Prospectus
(as defined in Section 5.01(a)) will, at the date it is first mailed to
IPC's stockholders or IXnet's stockholders, as the case may be, or at
the time of the IPC Stockholder Meeting (as defined in Section 5.01(b))
or the IXnet Stockholder Meeting, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Forms S-4 and the Information Statement/Prospectuses
will comply as to form in all material respects with the requirements of
the Exchange Act and the Securities Act and the rules and regulations
promulgated thereunder, except that no representation is made by IPC
with respect to statements made or incorporated by reference therein
based on information supplied by Parent or its subsidiaries for
inclusion or incorporation by reference in the Forms S-4 and the
Information Statement/Prospectuses.
(g) Absence of Certain Changes or Events. Except as disclosed in
Section 3.01(g) of the Disclosure Schedule or except as included in the
Recent SEC Documents, since October 1, 1998, IPC has conducted its
business in all material respects only in the ordinary course consistent
with past practice and there is not and has not been any condition,
event or occurrence which, individually or in the aggregate, would
reasonably be expected to have an IPC Material Adverse Effect or an
IXnet Material Adverse Effect.
(h) Litigation; Labor Matters; Compliance with Laws. (i) Except
as disclosed in the Recent SEC Documents, there are no suits, actions,
complaints, charges, arbitrations, inquiries, counterclaims, proceedings
or governmental or internal investigations pending
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or, to the knowledge of IPC, threatened in writing against or affecting
IPC or any of its subsidiaries which, individually or in the aggregate,
would reasonably be expected to have an IPC Material Adverse Effect; in
addition, there is not any judgment, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding against IPC or any
of its subsidiaries having, or which could reasonably be expected to
have any such effect.
(ii) Except as disclosed in Section 3.01(h)(ii) of the
Disclosure Schedule, (A) neither IPC nor any of its subsidiaries is a
party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor
organization, (B) neither IPC nor any of its subsidiaries is the subject
of any proceeding asserting that it or any subsidiary has committed an
unfair labor practice or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment nor is such unfair
labor practice threatened or otherwise affecting IPC or any of its
subsidiaries, (C) there is not any strike, work stoppage, dispute,
lockout or other labor controversy involving it or any of its
subsidiaries pending or, to its knowledge, threatened, any of which
would reasonably be expected to have an IPC Material Adverse Effect; (D)
no representation question exists or has been raised respecting any of
the Company's employees or any of its subsidiaries' employees within the
past three years, nor to the knowledge of IPC are there any campaigns
being conducted to solicit cards from employees of IPC or any of its
subsidiaries to authorize representation by any labor organization; (E)
neither IPC nor any of its subsidiaries has closed any plant or
facility, effectuated any layoffs of employees or implemented any early
retirement, separation or window program within the past three years,
nor has IPC or any of its subsidiaries planned or announced any such
action or program for the future; (F) neither IPC nor any of its
subsidiaries shall, at any time within the 90-day period prior to the
Closing Date, effectuate a "plant closing" or "mass layoff", as those
terms are defined in the Worker Adjustment and Retraining Notification
Act of 1988, as amended ("WARN"), or any state law, affecting in whole
of in part any site of employment, facility, operating unit or employee;
and (G) the Company and its subsidiaries are in compliance with their
obligations pursuant to WARN, and all other notification and bargaining
obligations arising under any collective bargaining agreement, statute
or otherwise.
(iii) The conduct of the business of each of IPC and each of its
subsidiaries and, to the knowledge of IPC, its contractors complies with
all statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees or arbitration awards applicable thereto, including the Foreign
Corrupt Practices Act, except for violations or failures so to comply,
if any, that, individually or in the aggregate, could not reasonably be
expected to have an IPC Material Adverse Effect.
(i) Absence of Changes with respect to Employees and Employee
Benefit Plans. Except as set forth in Section 3.01(i) of the Disclosure
Schedule or in the Recent SEC Documents, since September 1, 1999, there
has not been any (i) increase in the compensation or fringe benefits of
any present or former director or Employee (as defined in Section
3.01(j) hereof) whose base salary equals or is in excess of $100,000 per
annum
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as of September 1, 1999, of IPC or any subsidiary thereof (except for
increases in salary or wages in the ordinary course of business
consistent with past practice), (ii) grant of any severance or
termination pay to any present or former director or Employee whose base
salary equals or is in excess of $100,000 per annum as of September 1,
1999, of IPC or any subsidiary thereof (except in the ordinary course of
business consistent with past practice or as required by law or
agreements or plans in effect as of September 1, 1999), (iii) loan or
advance of money or other property by IPC or any subsidiary thereof to
any of their present or former directors or Employees which is
outstanding as of the date hereof; or (iv) establishment, adoption,
entrance into, amendment or termination of any IPC Plan (as defined in
Section 3.01(j) hereof).
(j) (i) Except as set forth therein, Section 3.01(j)(i) of the
Disclosure Schedule contains a true and complete list of each "employee
benefit plan" (within the meaning of section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), including,
without limitation, multiemployer plans within the meaning of ERISA
section 3(37)), and all stock purchase, stock option, consulting,
severance, employment, change-in-control, termination, indemnification,
fringe benefit, collective bargaining, bonus, incentive, deferred
compensation and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in
the future as a result of the transactions contemplated by this
Agreement or otherwise), whether formal or informal, oral or written,
legally binding or not, under which any current or former director or
any employee or former employee of IPC or any subsidiary thereof (the
"Employees") has any present or future right to benefits, sponsored or
maintained by IPC or its subsidiaries or under which IPC or any
subsidiary thereof has had or has any present or future liability. All
such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "IPC Plans".
(ii) Except as set forth in Section 3.10(j)(ii) of the
Disclosure Schedule, with respect to each IPC Plan, IPC has made
available to Parent a current, accurate and complete copy (or, to the
extent no such copy exists, an accurate description) thereof and, to the
extent applicable: (A) any related trust agreement or other funding
instrument; (B) the most recent determination letter, if applicable; (C)
any summary plan description and other written communications (or a
description of any oral communications) by IPC or any subsidiary thereof
to their employees concerning the extent of the benefits provided under
an IPC Plan; and (D) with respect to each employee pension plan, for the
three (3) most recent years (I) the Form 5500 and attached schedules,
(II) audited financial statements, (III) actuarial valuation reports and
(IV) attorney's response to an auditor's request for information.
(iii) (A) Each IPC Plan has been established and
administered in accordance with its terms, and in compliance with the
applicable provisions of ERISA, the Code and other applicable laws,
rules and regulations; (B) each IPC Plan which is intended to be
qualified within the meaning of Code section 401(a) is so qualified and
has received a favorable determination letter as to its qualification,
and nothing has occurred,
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whether by action or failure to act, that would reasonably be expected
to cause the loss of such qualification; (C) no event has occurred and
no condition exists that would subject IPC or any subsidiary thereof,
either directly or by reason of their affiliation with any member of
their "Controlled Group" (defined as any organization which is a member
of a controlled group of organizations within the meaning of Code
sections 414(b), (c), (m) or (o)), to any tax, fine, lien, penalty or
other liability imposed by ERISA, the Code or other applicable laws,
rules and regulations; (D) for each IPC Plan with respect to which a
Form 5500 has been filed, no material change has occurred with respect
to the matters covered by the most recent Form since the date thereof;
(E) no "reportable event" (as such term is defined in ERISA section
4043), "prohibited transaction" (as such term is defined in ERISA
section 406 and Code section 4975) or "accumulated funding deficiency"
(as such term is defined in ERISA section 302 and Code section 412
(whether or not waived)) has occurred with respect to any IPC Plan; (F)
no IPC Plan provides retiree welfare benefits and neither IPC nor any
subsidiary thereof has any obligations to provide any retiree welfare
benefits, other than those mandated by the Consolidated Omnibus Budget
Reconciliation Act of 1995; and (G) except as set forth in Section
3.01(j)(iii) of the Disclosure Schedule, all awards, grants or bonuses
made pursuant to any IPC Plan have been, or will be, fully deductible to
IPC or its subsidiaries notwithstanding the provisions of Section 162(m)
of the Internal Revenue Code and the regulations promulgated thereunder;
provided that with respect to each IPC Plan that is a multi-employer
plan, the representations contained in this Section 3.01(j)(iii) are
made to the knowledge of IPC.
(iv) There are no IPC Plans (that are not multiemployer
plans) which are subject to Title IV of ERISA.
(v) With respect to any multiemployer plan (within the
meaning of ERISA section 4001(a)(3)) to which IPC, any subsidiary
thereof, or any member of their Controlled Group has any liability or
contributes (or has at any time contributed or had an obligation to
contribute): (A) none of IPC, any subsidiary thereof, or any member of
their Controlled Group has incurred any withdrawal liability under Title
IV of ERISA, or to the best knowledge of IPC, would be subject to such
liability if, as of the Closing Date, IPC, any of its subsidiaries or
any member of their Controlled Group were to engage in a complete
withdrawal (as defined in ERISA section 4203) or partial withdrawal (as
defined in ERISA section 4205) from any such multiemployer plan; and (B)
to the best knowledge of IPC, no such multiemployer plan is in
reorganization or insolvent (as those terms are defined in ERISA
sections 4241 and 4245, respectively).
(vi) With respect to any IPC Plan other than a
multiemployer plan, and to the best knowledge of IPC with respect to any
multiemployer plan, (A) no actions, suits or claims (other than routine
claims for benefits in the ordinary course) are pending or threatened,
(B) no facts or circumstances exist that could give rise to any such
actions, suits or claims, and (C) no administrative investigation, audit
or other administrative proceeding by the Department of Labor, the
Pension Benefit Guaranty Corporation, the
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Internal Revenue Service or any other governmental agency is pending,
threatened or in progress.
(vii) Except as set forth in Section 3.01(j)(vii) of the
Disclosure Schedule, no IPC Plan exists that, as a result of the
transaction contemplated by this Agreement, could result in the payment
to any current or former Employee or director of IPC or any subsidiary
thereof of any money or other property or could result in the
acceleration or provision of any other rights or benefits to any current
or former Employee or director of IPC or any subsidiary thereof, whether
or not such payment, right or benefit would constitute a parachute
payment within the meaning of Code section 280G.
(k) Tax Returns and Tax Payments. IPC and each of its
subsidiaries, and any consolidated, combined, unitary or aggregate group
for Tax purposes of which IPC or any of its subsidiaries is or has been
a member (a "Consolidated Group") has timely filed all Tax Returns
required to be filed by it and all such Tax Returns are correct and
complete in all material respects. All Taxes shown on such Tax Returns
have been timely paid, and IPC and each of its subsidiaries has timely
paid or accrued all Taxes for which a notice of assessment or collection
has been received (other than amounts being contested in good faith by
appropriate proceedings). IPC and its subsidiaries have made adequate
provision (to the extent required by, and in accordance with generally
accepted accounting principles ("GAAP")) for all Taxes payable for any
periods that end before the Effective Time of the Mergers for which no
Tax Returns have yet been filed and for any periods that begin before
the Effective Time of the Mergers and end after the Effective Time of
the Mergers to the extent such Taxes are attributable to the portion of
any such period ending at the Effective Time of the Mergers, and the
charges, accruals and reserves for Taxes reflected in the financial
statements of IPC and its subsidiaries are adequate under GAAP to cover
the Tax liability accruing or payable by IPC and its subsidiaries in
respect of periods prior to the date hereof. Except as set forth in
Section 3.01(k) of the Disclosure Schedule: (i) no material claim for
unpaid Taxes has become a lien against the property of IPC or any of its
subsidiaries or is being asserted in writing against IPC or any of its
subsidiaries, (ii) neither IPC nor any of its subsidiaries is delinquent
in the payment of any Tax and have not requested or filed any document
having the effect of causing any extension of time within which to file
any Tax Returns in respect of any fiscal year which have not since been
filed, (iii) no material audit or other proceeding with respect to any
Taxes due from IPC or any of its subsidiaries or any Tax Return of IPC
or any of its subsidiaries is pending, threatened, to IPC's knowledge,
or being conducted by a Tax authority, (iv) no extension of the statute
of limitations on the assessment of any Taxes has been granted by IPC
nor any of its subsidiaries and is currently in effect, (v) neither IPC
or any of its subsidiaries (A) has been a member of a Consolidated Group
filing a consolidated federal income Tax Return (other than a group the
common parent of which was IPC) or (B) has any liability for the Taxes
of any person (other than IPC and its subsidiaries), including liability
arising from the application of Treasury Regulation section 1.1502-6 or
any analogous provision of state, local or foreign law, or as a
transferee or successor, by contract, or otherwise, (vi) no consent
under Section 341(f) of the Code has been filed with respect to IPC or
any of its subsidiaries,
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and (vii) all Taxes required to be withheld, collected or deposited by
or with respect to IPC and each of its subsidiaries have been timely
withheld, collected or deposited, as the case may be, and, to the extent
required, have been paid to the relevant taxing authority. As used
herein, "Taxes" shall mean all taxes of any kind, including those on or
measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, value added, property or
windfall profits taxes, customs, duties or similar fees, assessments or
charges of any kind whatsoever, together with any interest and any
penalties, additions to tax or additional amounts imposed by any
governmental authority, domestic or foreign. As used herein, "Tax
Return" shall mean any return, report or statement required to be filed
with any Governmental Entity with respect to Taxes.
(l) Board Approval; Section 203 of the DGCL. The Board of
Directors of IPC has, prior to the execution hereof and prior to the
execution of the Voting Agreement, (i) approved the execution and
delivery by IPC of this Agreement, and the execution and delivery by the
parties thereto of the Voting Agreement and the consummation of the
Mergers and the other transactions contemplated by this Agreement and
the Voting Agreement. Section 203 of the DGCL is inapplicable to this
Agreement, the Mergers, the Voting Agreement and the other transactions
contemplated hereby and thereby with respect to both IPC and IXnet. No
state takeover statute or similar statute or regulation of the State of
Delaware or of any other state or jurisdiction applies or purports to
apply to this Agreement, the Mergers, the Voting Agreement, the
Stockholder Consents or any of the other transactions contemplated
hereby or thereby and (z) no provision of the certificate of
incorporation, by-laws or other governing instruments of IPC or any of
its subsidiaries or the terms of any rights plan or preferred stock of
IPC or any of its subsidiaries would, directly or indirectly, restrict
or impair the ability of Parent to vote, or otherwise to exercise the
rights of a stockholder with respect to, securities of IPC and its
subsidiaries that may be acquired or controlled by Parent or permit any
stockholder to acquire securities of IPC, IPC Systems, IXnet or any
Surviving Corporation on a basis not available to Parent in the event
that Parent were to acquire securities of IPC, IPC Systems or IXnet. The
Board of Directors of IPC Merger Sub has duly approved this Agreement
and the IXnet Merger and declared this Agreement advisable.
(m) Environmental Matters. (i) Except as disclosed in Section
3.01(m) of the Disclosure Schedule:
(A) IPC and its subsidiaries including their
predecessors and their properties (I) are in compliance in all
material respects with all applicable Environmental Laws; (II)
hold all material Environmental Permits (each of which is in
full force and effect) required for any of their current or
intended operations or for any property owned, leased, or
otherwise operated by any of them; (III) are in compliance in
all material respects with all of their Environmental Permits;
and (IV) reasonably believe that: each of their Environmental
Permits will be timely renewed and complied with, without
material expense; any additional Environmental Permits that may
be required of any of them will be timely
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obtained and complied with, without material expense; and
compliance with any Environmental Law that is or is expected to
become applicable to any of them will be timely attained and
maintained, without material expense;
(B) None of IPC and its subsidiaries has received any
Environmental Claim, and none of IPC and its subsidiaries is
aware, after reasonable inquiry, of any threatened Environmental
Claim or of any circumstances, conditions or events that would
reasonably be expected to give rise to an Environmental Claim,
against IPC or any of its subsidiaries, in each case that,
individually or in the aggregate, would reasonably be expected
to have an IPC Material Adverse Effect;
(C) None of IPC and its subsidiaries has entered into or
agreed to any consent decree or order under any Environmental
Law, and none of IPC and its subsidiaries is subject to any
judgment, decree or order of any governmental authority relating
to compliance with any Environmental Law or to investigation,
cleanup, remediation or removal of regulated substances under
any Environmental Law;
(D) There are no (I) underground storage tanks, (II)
polychlorinated biphenyls, (III) asbestos or asbestos-containing
materials or (IV) Hazardous Materials present at any facility
currently or, to the knowledge of IPC, formerly owned, leased or
operated by IPC or any of its subsidiaries that would reasonably
be expected to give rise to material liability of IPC or any of
its subsidiaries under any Environmental Laws;
(E) There are no past (including, to the knowledge of
IPC, with respect to assets or businesses formerly owned, leased
or operated by IPC or any of its subsidiaries) or present
actions, activities, events, conditions or circumstances,
including the release, threatened release, emission, discharge,
generation, treatment, storage or disposal of Hazardous
Materials, that would reasonably be expected to give rise to
material liability of IPC or any of its subsidiaries under any
Environmental Laws or any contract or agreement; and
(F) None of IPC and its subsidiaries has assumed or
retained, by contract or, to the knowledge of IPC, operation of
law, any material liabilities of any kind, fixed or contingent,
under any Environmental Law or with respect to any Hazardous
Material or Environmental Claim.
(ii) The items on Section 3.01(m) of the Disclosure Schedule,
individually and in the aggregate, would not reasonably be expected to
have an IPC Material Adverse Effect.
(iii) IPC has provided or made available to Parent true and
complete copies of all Environmental Reports in its possession or
control.
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(iv) For purposes of this Agreement, the following terms shall
have the following meanings:
"Environmental Claim" means any written notice,
claim, demand, action, suit, complaint, proceeding or
other communication by any person alleging liability or
potential liability (including liability or potential
liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages,
property damage, personal injury, fines or penalties)
arising out of, relating to, based on or resulting from
(i) the presence, discharge, emission, release or
threatened release of any Hazardous Materials at any
location, whether or not owned, leased or operated by
IPC or any of its subsidiaries, or Parent or any of its
subsidiaries, as the case may be, or (ii) any
Environmental Law or Environmental Permit.
"Environmental Laws" means any and all laws,
rules, orders, regulations, statutes, ordinances,
guidelines, codes, decrees, or other legally enforceable
requirement (including common law) of any foreign
government, the United States, or any state, local,
municipal or other governmental authority, regulating,
relating to or imposing liability or standards of
conduct concerning protection of the environment or of
human health, or employee health and safety, as has
been, is now, or may at any time hereafter be, in
effect.
"Environmental Permits" means any and all
permits, licenses, approvals, registrations,
notifications, exemptions and any other authorization
required under any Environmental Law.
"Environmental Report" means any report, study,
assessment, audit, or other similar document that
addresses any issue of actual or potential noncompliance
with, or actual or potential liability under or cost
arising out of, any Environmental Law that may in any
way affect IPC or any of its subsidiaries.
"Hazardous Materials" means any gasoline or
petroleum (including crude oil or any fraction thereof)
or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or
forces of any kind, whether or not any such substance or
force is defined as hazardous or toxic under any
Environmental Law, that is regulated pursuant to or
could give rise to liability under any Environmental
Law.
(n) Material Contract Defaults; Non-Competes. (i) IPC has
provided or made available to Parent copies, and has provided a true and
correct list to Parent, of all material contracts, agreements,
commitments, arrangements, leases, licenses, policies or
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other instruments to which it or any of its subsidiaries is a party or
by which it or any such subsidiary is bound ("IPC Material Contracts").
Neither IPC nor any of its subsidiaries is, or has received any notice
or has any knowledge that any other party is, in default or unable to
perform in any respect under any such IPC Material Contract, including
any license or agreement relating to intellectual property, except for
those defaults which could not reasonably be expected, either
individually or in the aggregate, to have an IPC Material Adverse
Effect; and there has not occurred any event that with the lapse of time
or the giving of notice or both would constitute such a material
default.
(ii) Except as disclosed in Section 3.01(n) of the
Disclosure Schedule or in the Recent SEC Documents, neither IPC
nor any of its subsidiaries is a party to any agreement that
expressly limits the ability of IPC or any of its subsidiaries
to compete in or conduct any line of business or compete with
any person in any geographic area or during any period of time.
(o) Brokers. No broker, investment banker, financial advisor or
other person other than Salomon Smith Barney Inc. and Donaldson, Lufkin
& Jenrette Securities Corporation is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of IPC.
(p) Opinion of Financial Advisor. IPC has received the opinions
of Salomon Smith Barney Inc. and Donaldson, Lufkin & Jenrette Securities
Corporation, each dated the date of this Agreement, to the effect that,
as of the date thereof, the IPC Merger Exchange Ratio is fair, from a
financial point of view, to the holders of IPC Common Stock.
(q) Board Recommendation. The Board of Directors of IPC, at a
meeting duly called and held, has (i) determined that this Agreement and
the transactions contemplated hereby, including the Mergers, and the
Voting Agreement and the transactions contemplated thereby, taken
together, are fair to and in the best interests of the stockholders of
IPC, and (ii) declared this Agreement advisable and resolved to
recommend that the holders of the shares of IPC Common Stock adopt this
Agreement.
(r) Required Votes. The IPC Stockholder Approval, being the
affirmative approval, by vote or written consent, of a majority of the
outstanding shares of IPC Common Stock, is the only vote of the holders
of any class or series of IPC's securities necessary to adopt the Merger
Agreement and approve the Mergers and the other transactions
contemplated hereby. There is no vote of the holders of any class or
series of IPC's securities necessary to approve the Voting Agreement or
the transactions contemplated thereby. The affirmative approval, by vote
or written consent, of a majority of the outstanding shares of IPC
Systems Common Stock to adopt this Agreement (the "IPC Systems
Stockholder Approval") is the only vote of the holders of any class or
series of IPC Systems' securities necessary to adopt the Merger
Agreement and approve the Mergers and the other transactions
contemplated hereby.
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(s) Properties. Except as disclosed in Section 3.01(s) of the
Disclosure Schedule or in the Recent SEC Documents, each of IPC and its
subsidiaries (i) has good and marketable title to all the properties and
assets reflected in the latest audited balance sheet included in the
Recent SEC Documents as being owned by IPC or one of its subsidiaries or
acquired after the date thereof which are, individually or in the
aggregate, material to IPC's business on a consolidated basis (except
properties sold or otherwise disposed of since the date thereof in the
ordinary course of business), free and clear of (A) all Liens except (1)
statutory liens securing payments not yet delinquent and (2) such
imperfections or irregularities of title, or other Liens (other than
real property mortgages or deeds of trust) as do not materially and
adversely affect the current use of the properties or assets subject
thereto or affected thereby or otherwise materially impair business
operations currently conducted at such properties, (B) all real property
mortgages and deeds of trust and (C) the Liens disclosed in Section
3.01(s) of the Disclosure Schedule and (ii) is the lessee of all
leasehold estates reflected in Section 3.01(s) of the Disclosure
Schedule hereto or acquired after the date thereof which are material to
its business on a consolidated basis and is in possession of the
properties purported to be leased thereunder, and each such lease is in
full force and effect and is valid without material default (and the
lessee has not received any written notice of default, whether or not
material) thereunder by the lessee or, to IPC's knowledge, the lessor.
(t) Intellectual Property. (i) Except as disclosed in the Recent
SEC Documents, IPC has heretofore made available to Parent, with respect
to the Intellectual Property owned, held or used by IPC or its
subsidiaries ("IPC IP"), all material patents, registrations and
applications relating thereto, all material unregistered copyrights,
trademarks, service marks, brand names, corporate names, technology and
inventions and each and every material license, sublicense,
consent-to-use agreement and other agreement granting or obtaining any
right to use or practice any rights under any IPC IP to which IPC and/or
any of its subsidiaries is a party ("IPC IP Licenses").
(ii) Except as disclosed on Section 3.01(t)(ii) of the
Disclosure Schedule, (1) IPC and/or any of its subsidiaries own or has
the right to use all the Intellectual Property necessary for IPC and its
subsidiaries to conduct their businesses as is currently conducted and
consistent with past practice; (2) all of the material owned IPC IP is
valid, enforceable and unexpired, is free of Liens, and has not been
abandoned; (3) to IPC's knowledge, the IPC IP does not infringe or
otherwise impair the Intellectual Property of any third party and is not
being infringed or impaired by any third party; (4) no judgment, decree,
injunction, rule or order has been rendered or, to the knowledge of IPC,
is threatened by any Governmental Entity which would limit, cancel or
question the validity of (or IPC or any subsidiary's right to own or
use) any material IPC IP; (5) IPC takes all reasonable steps to protect,
maintain and safeguard the material IPC IP, including executing all
appropriate confidentiality agreements; (6) neither IPC and its
subsidiaries, nor, to IPC's knowledge, any other party to an IP License,
is alleged n writing to be, in breach or default thereunder, and IPC and
its subsidiaries have not received any written notification from any
third party that there is any such breach or default; (7) the
transactions contemplated by this Agreement shall in no material way
impair or limit the
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rights of IPC or any of its subsidiaries under any IP License, or cause
any material payments to be due thereunder.
For the purposes of this Agreement, "Intellectual
Property" shall mean all U.S., state and foreign intellectual property,
including without limitation all (1) (A) inventions, discoveries,
processes, designs, techniques, developments, technology, and related
improvements and know-how, whether or not patented or patentable; (B)
copyrights and works of authorship in any media, including computer
programs, software programs, databases and related items, advertising
and promotional materials (including graphics and text), and Internet
site content; (C) trademarks, service marks, trade names, brand names,
corporate names, domain names, logos, trade dress and all elements
thereof, the goodwill of any business symbolized thereby, and all
common-law rights relating thereto; (D) trade secrets and other
confidential information; (2) all registrations, applications,
recordings, and licenses or other agreements related thereto; (3) all
rights to obtain renewals, extensions, continuations,
continuations-in-part, reissues, divisions or similar legal protections
related thereto; and (4) rights to bring an action at law or in equity
for the infringement or other impairment of the foregoing before the
Closing Date, including the right to receive all proceeds and damages
therefrom.
(u) Transactions with Affiliates. Except as disclosed in the
Recent SEC Documents and as set forth on Section 3.01(u) of the
Disclosure Schedule and in the SEC Documents, from October 1, 1998
through the date of this Agreement, there has been no transaction,
agreement, arrangement or understanding, or any related series thereof,
between IPC or its subsidiaries or contractors, on the one hand, and
IPC's affiliates (other than wholly-owned (excluding directors' and
nominee shares) subsidiaries of IPC), on the other hand, in which the
amount or value involved exceeded $60,000.
SECTION 3.02 Representations and Warranties of IXnet. IXnet
represents and warrants to Parent and GC Merger Sub as follows:
(a) Organization, Standing and Corporate Power. Each of IXnet
and each of its subsidiaries is duly organized, validly existing and in
good standing (with respect to jurisdictions which recognize the concept
of good standing) under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to
carry on its business as now being conducted, except where the failure
to have such power and authority could not reasonably be expected to
have an IXnet Material Adverse Effect. Each of IXnet and each of its
subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure
to be so qualified or licensed (individually or in the aggregate) would
not be reasonably expected to have an IXnet Material Adverse Effect. The
Recent IXnet SEC Documents (as defined in Section 3.02(e)) contain as
exhibits complete and correct copies of the Certificate of Incorporation
and By-laws of IXnet, in each case as amended to the date of this
Agreement.
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(b) Subsidiaries. The only direct or indirect subsidiaries of
IXnet are those listed in Section 3.01(b) of the Disclosure Schedule.
All the outstanding shares of capital stock of each such subsidiary have
been validly issued and are fully paid and nonassessable and are owned
(of record and beneficially) by IXnet, by another subsidiary (wholly
owned) of IXnet or by IXnet and another such subsidiary (wholly owned),
free and clear of all Liens, except as set forth in Section 3.01(b) of
the Disclosure Schedule. Except for the ownership interests set forth in
Section 3.01(b) of the Disclosure Schedule or in the Recent IXnet SEC
Documents, IXnet does not own, directly or indirectly, any capital stock
or other ownership interest, and does not have any option or similar
right to acquire any assets or equity or other ownership interest, in
any corporation, partnership, business association, joint venture or
other entity.
(c) Capital Structure. As of February 21, 2000, the authorized
capital stock of IXnet consists of 100,000,000 shares of IXnet Common
Stock. As of the close of business on February 21, 2000, there were (i)
51,148,867 shares of IXnet Common Stock were issued and outstanding;
(ii) 0 shares of IXnet Common Stock held in the treasury of IXnet; (iii)
907,557 shares of IXnet Common Stock reserved for issuance upon exercise
of authorized but unissued IXnet Options pursuant to the Stock Plans;
and (iv) 9,053,409 shares of IXnet Common Stock issuable upon exercise
of outstanding IXnet Options. Section 3.01(c) of the Disclosure Schedule
sets forth the name of each holder of outstanding options to acquire
shares of IXnet Common Stock, the number of options held and the
exercise prices of such options. Except as set forth above, no shares of
capital stock or other equity securities of IXnet are authorized,
issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of IXnet are, and all shares which may be issued pursuant
to the Stock Plans will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights. Other than the IXnet Options, there are no outstanding bonds,
debentures, notes or other indebtedness or other securities of IXnet
having the right to vote (or convertible into, or exchangeable or
exercisable for, securities having the right to vote) on any matters on
which stockholders of IXnet may vote. Except as set forth above, there
are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to
which IXnet or any of its subsidiaries is a party or by which any of
them is bound obligating IXnet or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other equity or voting securities of IXnet or
of any of its subsidiaries or obligating IXnet or any of its
subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. Except as set forth in the Recent IXnet SEC Documents and
except for such indebtedness which is not material to IXnet, IXnet and
its subsidiaries have no indebtedness. Other than the IXnet Options, (i)
there are no outstanding contractual obligations, commitments,
understandings or arrangements of IXnet or any of its subsidiaries to
repurchase, redeem or otherwise acquire or make any payment in respect
of any shares of capital stock of IXnet or any of its subsidiaries and
(ii) there are no irrevocable proxies with respect to shares of capital
stock of IXnet or any subsidiary of IXnet. Except as set forth above or
in Section 3.01(c) of the Disclosure Schedule or in the Recent IXnet SEC
Documents, there
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are no agreements or arrangements pursuant to which IXnet is or could be
required to register shares of IXnet Common Stock or other securities
under the Securities Act or other agreements or arrangements with or
among any securityholders of IXnet with respect to securities of IXnet.
(d) Authority; Noncontravention. IXnet has the requisite
corporate and other power and authority to enter into this Agreement
and, subject to the IXnet Stockholder Approval with respect to the
consummation of the IXnet Merger, which is being obtained by written
consent immediately following the execution of this Agreement, to
consummate the transactions contemplated hereby. Other than in its
capacity as a stockholder of IXnet, no corporate action is required to
be taken by IPC or its stockholders in connection with the consummation
of the IXnet Merger. The execution and delivery of this Agreement by
IXnet and the consummation by IXnet of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on
the part of IXnet, subject, in the case of the IXnet Merger, to the
IXnet Stockholder Approval. This Agreement has been duly executed and
delivered by IXnet and constitutes a valid and binding obligation of
IXnet, enforceable against IXnet in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law) or by an implied covenant of good faith and fair dealing. Except
as disclosed in Section 3.01(d) of the Disclosure Schedule, the
execution and delivery of this Agreement do not, and the consummation of
the transactions contemplated by this Agreement and compliance with the
provisions hereof will not, conflict with, or result in any breach or
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation or to loss
of a material benefit under, or result in the creation of any Lien upon
any of the properties or assets of IXnet or any of its subsidiaries
under, (i) the Certificate of Incorporation or By-laws of IXnet or the
comparable charter or organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to IXnet or any of its subsidiaries or
their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule,
regulation or arbitration award applicable to IXnet or any of its
subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, breaches,
violations, defaults, rights, losses or Liens that individually or in
the aggregate could not be reasonably expected to have an IXnet Material
Adverse Effect. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any Governmental
Entity, is required by or with respect to IXnet or any of its
subsidiaries in connection with the execution and delivery of this
Agreement by IXnet or the consummation by IXnet of the transactions
contemplated hereby, except, with respect to this Agreement, for (i) the
filing of a premerger notification and report form by IXnet under the
HSR Act, (ii) the filing with the SEC of (y) Information Statements
relating to the Mergers, and (z) such
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reports under the Exchange Act, as may be required in connection with
this Agreement and the transactions contemplated by this Agreement,
(iii) the filing of the Certificates of Merger with the Secretary of
State of the State of Delaware and the filing of appropriate documents
with the relevant authorities of other states in which IXnet is
qualified to do business and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations, filings or notices
as are set forth in Section 3.01(d) of the Disclosure Schedule.
(e) SEC Documents; Undisclosed Liabilities. IXnet and, to the
extent applicable, its subsidiaries have filed all required reports,
schedules, forms, statements and other documents with the SEC since
October 1, 1998, and IXnet has delivered or made available to Parent all
reports, schedules, forms, statements and other documents filed by IXnet
and, to the extent applicable, its subsidiaries with the SEC since such
date (collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference therein, the
"IXnet SEC Documents"). As of their respective dates, the IXnet SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such
IXnet SEC Documents, and none of the IXnet SEC Documents (including any
and all financial statements included therein) as of such dates (and, if
amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
consolidated financial statements (including the related notes) of IXnet
included in all IXnet SEC Documents filed since October 1, 1998 (the
"IXnet SEC Financial Statements") comply as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the
case of unaudited consolidated quarterly statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of IXnet and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited quarterly statements, to normal
year-end audit adjustments that have not been and are not expected to be
material in amount). Except as set forth in Schedule 3.01(e), at the
date of the most recent audited financial statements of IXnet included
in the IXnet SEC Documents filed by IXnet or its subsidiaries since
October 1, 1998 and prior to the date of this Agreement (the "Recent
IXnet SEC Documents"), neither IXnet nor any of its subsidiaries had,
and since such date neither IXnet nor any of such subsidiaries incurred,
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which, individually or in the aggregate, would
reasonably be expected to have an IXnet Material Adverse Effect. To the
best of IXnet's knowledge, (i) all historical financial statements
supplied to Parent by IXnet for periods subsequent to December 31, 1999
have been prepared in accordance with generally accepted accounting
principles (except as permitted by Form 10-Q of the
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SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present the
consolidated financial position of IXnet and its consolidated
subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject to
normal year-end adjustments that have not been and are not expected to
be material in amount) and (ii) all financial data so supplied for such
periods is true and accurate in all material respects.
(f) Information Supplied. None of the information supplied or to
be supplied by IXnet for inclusion or incorporation by reference in (i)
the Forms S-4 will, at the time each Form S-4 is filed with the SEC, and
at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(ii) each Information Statement/Prospectus will, at the date it is first
mailed to IXnet's stockholders or IPC's stockholders, as the case may
be, at the time of the IXnet Stockholder Meeting or the IPC Stockholder
Meeting, as the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Forms S-4
and the Information Statement/Prospectuses will comply as to form in all
material respects with the requirements of the Exchange Act and the
Securities Act and the rules and regulations promulgated thereunder,
except that no representation is made by IXnet with respect to
statements made or incorporated by reference therein based on
information supplied by Parent or GC Merger Sub for inclusion or
incorporation by reference in the Forms S-4 and the Information
Statement/Prospectuses.
(g) Absence of Certain Changes or Events. Except as disclosed in
Section 3.01(g) of the Disclosure Schedule or except as included in the
Recent IXnet SEC Documents, since October 1, 1998, IXnet has conducted
its business in all material respects only in the ordinary course
consistent with past practice and there is not and has not been any
condition, event or occurrence which, individually or in the aggregate,
would reasonably be expected to have an IXnet Material Adverse Effect.
(h) Litigation; Labor Matters; Compliance with Laws. (i) Except
as disclosed in the Recent SEC Documents, there are no suits, actions,
complaints, charges, arbitrations, inquiries, counterclaims, proceedings
or governmental or internal investigations pending or, to the knowledge
of IXnet, threatened in writing against or affecting IPC or any of its
subsidiaries which, individually or in the aggregate, would reasonably
b