EXHIBIT 2.1.2
DATED 18 December 1998
INTERNATIONAL EXCHANGE
NETWORKS LTD. (1)
and
lPC INFORMATION SYSTEMS,
INC. (2)
-------------------------
DEED
constituting Unsecured Guaranteed Subordinated
Loan Note 2000/2002
-------------------------
Xxxxxx Xxxx
London
THIS DEED is dated 18 December 1998 and made BETWEEN:
(1) INTERNATIONAL EXCHANGE NETWORKS LTD, a company incorporated in the State of
Delaware, USA, whose principal place of business is at Wall Street Plaza,
00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, XXX ("IXNet"); and
(2) IPC INFORMATION SYSTEMS, INC. a company incorporated in the State of
Delaware, USA, whose principal place of business is at Wall Street Plaza,
00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, XXX ("IPC").
WHEREAS:
(A) IXNet by Resolution of its Board of Directors passed on 14 December 1998 in
exercise of the powers conferred on the Directors by the By-laws has
created a Loan Note 2000/2002 (the "Note") and has determined to constitute
the same in manner hereinafter appearing;
(B) IPC, IXNet's parent company, has agreed to indemnify the Noteholder (as
defined below) in the manner contained in the Conditions to the Note;
(C) IPC has issued 10 7/8% Senior Discount Notes due 2008 pursuant to an
indenture dated as of 30th April, 1998 and supplemented by the First
Supplemental Indenture dated as of 30th September, 1998 made between IPC as
Issuer and United States Trust Company of New York as Trustee;
(D) EPC has a five year secured revolving credit facility of up to $55,000,000
made pursuant to a credit agreement dated as of 30th April, 1998, as
amended, made between IPC (1), IPC Funding Corp. (2), the Initial Lenders
(as defined therein)(3), the Initial Issuing Bank (as defined therein)(4),
Xxxxxx Xxxxxxx Senior Funding, Inc. as Syndication Agent and Arranger (5),
Xxxxxxx Sachs Credit Partners L.P. as Documentation Agent (6) and General
Electric Capital Corporation as Administrative Agent and Collateral Agent
(together with any subsequent Administrative Agent, hereinafter referred to
as the "Agent")(7).
NOW THIS DEED WITNESSES as follows:
1 Definitions
-----------
In this Deed and the Note:
"Credit Agreement" means the credit agreement referred to in Recital (D)
and includes that agreement as amended, restated, supplemented, increased
or otherwise modified or renewed, replaced or refinanced from time to time
provided and to the extent only that entry into and/or performance of such
agreement does not breach Section 4.03 of the indenture referred to in
Recital (C) in its original form (as amended by the First Supplemental
Indenture referred to in such Recital) as at the date hereof, and
1
"Sale and Purchase Agreement" means the sale and purchase agreement dated 7
August, 1998 made between Marshalls 106 Limited, Marshalls Finance Limited,
IXNet and IPC, as amended as of the date hereof.
2 Issue of Note and application of proceeds
-----------------------------------------
2.1 IXNet may issue a Note in an aggregate principal amount of
(Pounds)4,500,000. The Note shall be issued on the terms contained in this
Deed and in the Certificate and Conditions appearing in schedule 1 hereto
and a "Noteholder" is a person entered in the register as the holder of the
Note. The proceeds of issue thereof shall be receivable by IXNet and shall
be applicable as the Directors in their absolute discretion shall
determine.
2.2 The Noteholder shall be entitled to receive free of charge one Certificate
for the Note held by him.
3 Company to maintain Register
----------------------------
IXNet shall at all times keep at its principal place of business in London
or at such other place as may be approved by the Noteholder an accurate
register of the Note showing the number of the issued Note, the name and
address of the Noteholder from time to time, the nominal amount of Note
held by the Noteholder and the date of issue of such Note.
4 Counterparts
------------
This Deed may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument. Any party to this
Deed may enter into this Deed by executing any such counterpart.
5 Notices
-------
Any notice or other document shall be given to IXNet (with a copy to IPC by
registered mail or confirmed facsimile) or the Noteholder either by sending
it by post in a first-class prepaid envelope or by delivering it to its
registered office. Any notice so given shall be deemed to have been served
on the day following that on which it is posted.
6 Proper Law and jury trial
-------------------------
6.1 This Deed and the Note is governed by English law. The parties irrevocably
submit to the jurisdiction of the English courts in relation to any matter
arising in connection with this Deed and the Note. A Party may, however,
bring proceedings in connection with this Deed and the Note in any court of
competent jurisdiction. IXNet and IPC each irrevocably appoint Titmuss
Sainer Dechert at present of Xx. 0 Xxxxxxxxx' Xxx, Xxxxxx XX0X 0XX,
Attention: Head of Business Law Department, to receive on their behalf
process issued out of the English courts in connection with this Deed.
2
6.2 Each party to this Deed and the Noteholder hereby expressly waives any
right to a trial by jury in any action or proceeding to enforce or defend
any rights under this Deed or the Note.
IN WITNESS whereof this Deed has been executed the day and year first above
written.
3
Schedule I
----------
Form of Note Certificate
------------------------
CERTIFICATE NO. AMOUNT
(Pounds)4,500,000
INTERNATIONAL EXCHANGE NETWORKS LIMITED
(Incorporated in the state of Delaware, USA
whose principal place of business is at
Wall Street Plaza, 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000, XXX)
Unsecured Guaranteed Subordinated Loan Note 2000/2002
Issued pursuant to a Resolution of the Board of Directors
passed on 14 December 1998
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THIS IS TO CERTIFY that
(the "Noteholder") of
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is the holder of (Pounds)4,500,000 of the above-mentioned Note which is
constituted by a Deed dated 18th December 1998 made between International
Exchange Networks Ltd. ("IXNet") and IPC Information Systems, Inc. ("IPC"). The
Note is issued subject to and with the benefit of the provisions contained in
the Deed and the Conditions endorsed hereon. Expressions defined in the Deed
shall have the same meaning when used in this Certificate and Conditions.
The Note together with the Deed are hereinafter referred to as the "Note
Documents", IXNet and IPC are hereinafter referred to as the "Obligors",
Marshalls 106 Limited as "106" and Marshalls Finance Limited as "MFL". Words and
expressions defined in the Sale and Purchase Agreement and not otherwise defined
herein shall have the same meaning when used in this Note.
4
EXECUTED and DELIVERED as a DEED )
by INTERNATIONAL EXCHANGE )
NETWORKS, LTD. )
-------------------------------
Authorised Officer
-------------------------------
Authorised Officer
EXECUTED and DELIVERED as a DEED )
by IPC INFORMATION SYSTEMS, INC. )
-------------------------------
Authorised Officer
-------------------------------
Authorised Officer
EXECUTED and DELIVERED as a DEED )
by MARSHALLS 106 LIMITED )
-------------------------------
Director
-------------------------------
Director/Secretary
EXECUTED and DELIVERED as a DEED )
by GENERAL ELECTRIC CAPITAL )
CORPORATION as ADMINISTRATIVE )
AGENT )
-------------------------------
Authorised Signatory
5
The Conditions
--------------
1 Redemption
----------
Subject to Conditions 5.3 and 10, IXNet will repay the principal amount of
(Pounds)4,500,000 under this Note in three instalments (each a "Tranche"),
as follows: (Pounds)1,125,000 on 31st January 2000, (Pounds)1,575,000 on
31st January, 2001 and (Pounds)1,800,000 on 31st January 2002 (each being a
"Payment Date" and the last being the "Final Payment Date").
2 Interest
--------
2.1 Subject to Conditions 5.3 and 10, IXNet shall pay interest on each Tranche
on the relevant Payment Date or, if different, the date on which IXNet pays
the full amount of such Tranche; such interest shall accrue from the date
of this Note until the date of payment thereof and shall be compounded
monthly. The rate of interest shall be at a rate per annum of 3.0 per cent.
per annum over the Sterling base lending rate of Barclays Bank plc in force
from time to time.
3 Indemnity
---------
IPC undertakes to procure that IXNet will perform all of its obligations
under this Note; and, subject to Condition 4, it agrees to indemnify the
Noteholder against all liabilities, losses and expenses of whatever nature
which such Noteholder may incur or sustain as a result of any failure by
IXNet to do so. IPC further agrees that the Noteholder is at liberty to
compound with or grant indulgence or relief to IXNet or to any other
person, or to vary this Note, or to do any other matter or thing which, but
for this provision, might exonerate it, without in any way prejudicing or
affecting its rights against it.
4 Subordination
-------------
4.1 For so long as an Event of Default (as that expression is defined in the
Credit Agreement) has occurred and is continuing, unremedied or unwaived
under the Credit Agreement, neither of the Obligors shall make any payment
under this Note to the Noteholder or deposit into any escrow account under
Condition 10.3 and the Noteholder may not take any action to enforce its
rights under or accelerate this Note, provided that if
(a) there is an acceleration of the entire indebtedness under the Credit
Agreement, the Noteholder may, subject to Condition 4.2, enforce its rights
under this Note except to the extent that such enforcement is inconsistent
with the enforcement of the rights of the agents (in their capacity as
such) on behalf of the Lender Parties (as defined in the Credit Agreement)
and the lenders under the Credit Agreement; and/or
(b) an event of default under Condition 7(b) and/or (c) has occurred, the
Noteholder may only, subject to Condition 4.2, make a claim as an unsecured
creditor in the insolvency, winding-up, bankruptcy or liquidation of
either Obligor and take any and all steps necessary to preserve that claim
or ranking.
6
Notwithstanding any term of this Note postponing, subordinating or
preventing any payment by either Obligor under this Note or the Deed, as
between the Obligors and the Noteholder, the relevant payment obligation
shall be deemed to remain due, owing and payable in accordance with the
terms of this Note and the Deed in order that interest and indemnity
payments will accrue thereon in accordance with the terms of this Note and
the Deed.
4.2 In the event that any payment is made in the circumstances contemplated in
Condition 4. 1, either by the Obligors, the Solicitors (as defined in
Condition 10.3) or otherwise, including by reason of or in connection with
any insolvency, winding-up, bankruptcy or liquidation proceedings relating
to either Obligor (and notwithstanding that such payment results from an
action which is permitted under Condition 4.1 (a) or (b)), the Noteholder
shall receive such payment in trust for and turn over such payment to
General Electric Capital Corporation, or subsequent Administrative Agent,
on behalf of the Lenders under the Credit Agreement.
4.3 The limitation on the exercise of the Noteholder's rights and performance
of the Obligors' obligations under Conditions 4.1 and 4.2 shall cease to
apply in relation to any continuing Event of Default (other than an Event
of Default of the type described in Section 6.01(f) of the Credit Agreement
as in force as at the date hereof) if, on the expiry of 120 days from the
date on which that Event of Default first occurred, the entire indebtedness
under the Credit Agreement has not been accelerated.
4.4 The Lender Parties and Agents (as defined in the Credit Agreement) may
enforce the provisions of this Condition 4 directly in their own name.
5 Payments
--------
5.1 Subject to Conditions 5.3 and 10, all payments to the Noteholder under this
Note shall be made in full (without any withholding or other deduction) in
Sterling in immediately available and freely transferable funds on the due
date to such account as the Noteholder may specify. Subject to Condition
8.1, if an Obligor is compelled by law to make any deduction or withholding
it will pay the Noteholder such additional amounts as are required to
ensure that after the making of such deduction or withholding the
Noteholder receives on the relevant date and retains (free from any
liability) the amount which would have been received had no such
withholding or deduction been required.
5.2 If the date for payment of any amount due in respect of the Note is not a
day (a "Business Day") on which banks are open for business in London and
New York, then such payment shall be made on the next succeeding day which
is a Business Day. No adjustment will be made to the payment in respect of
any such modification of the date on which payments is made.
5.3 In the event of:
7
(a) the direct or indirect sale or transfer of all or substantially all of
the assets of MFL; or
(b) the dissolution or winding up of MFL; or
(c) an Insolvency Event (as defined in the Marshalls Contract known as the
Framework Agreement) occurring with respect to 106 or MFL, or
(d) MFL failing to pay a Shortfall (as defined in the Marshalls Contract
known as the Framework Agreement) in excess of (Pounds)100,000 when due
provided that it shall not be a failure to pay a Shortfall or portion
of such Shortfall to the extent that the same remains subject to a Bona
Fide Dispute (as defined below),
then, subject to Condition 7, the due date for all principal and interest
payments hereunder shall be deferred until the Final Payment Date. For the
purposes of Condition 5.3(a), substantially all of the assets of MFL shall
mean assets constituting 80% or more of the assets of the Marshalls Group
(excluding the Group) on a consolidated basis, either on the basis of book
value or fair market value and for the purposes of Condition 5.3(d):
"Bona Fide Dispute" means a bona fide dispute between MFL and IXNet in
relation to whether a Shortfall is due or in relation to the provision of
Services resulting in MFL being entitled not to pay monies otherwise due
under the Marshalls Contract known as the Operating Contract (as defined in
the Telecommunications Framework Agreement).
6 Warranties
----------
6.1 Each Obligor (in respect of itself only) hereby represents and warrants to
the Noteholder that at the date of this Note:
(a) IPC and IXNet are duly incorporated in the State of Delaware, USA and
each Obligor has full power and authority to execute, deliver and
perform its obligations under the Note Documents;
(b) the execution, delivery and performance of the Note Documents has not
resulted, nor will result, in a breach of any provision of, or
constitute a default (so that the same could have a Material Adverse
Effect as defined in Condition 6.2) under (i) each Obligor's
constitutional documents or (ii) any statute, law, order, rule or
regulation of any Governmental Authority (as defined in Condition 6.2)
applicable to it;
(c) each of the Note Documents has been duly and validly authorised,
executed and delivered by the Obligors and is the legal, valid and
binding obligations of each Obligor enforceable against each Obligor in
accordance with its terms, subject to any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganisation, moratorium or similar laws
affecting creditors' rights generally;
8
(d) no registration with, or consent or approval of, or any other action
by, any person or Governmental Authority is required in connection with
the execution, delivery and performance of each of the Note Documents
by the Obligors;
(e) no proceedings have been commenced or, to the best of each Obligor's
knowledge, are pending or threatened against or affecting such Obligor
before any governmental authority which, in aggregate and if adversely
determined, could materially and adversely affect the rights, title and
interest of each Obligor under the Note Documents.
6.2 In Condition 6.1:
"Governmental Authority" means any federal, state or other governmental
agency or body, authority, administrative or regulatory body, arbitrator,
court or other tribunal, foreign or domestic; and
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition, operations, performance, assets, liabilities or
prospects of the Obligors taken as a whole, (b) the rights and remedies of
the Noteholder under either of the Note Documents or (c) the ability of any
Obligor to perform its obligations under either of the Note Documents.
7 Events of Default
-----------------
Subject to Condition 4 and 10.3, the Noteholder may require immediate
repayment of this Note in any of the following circumstances:
(a) if any Obligor is in breach of any of Conditions 1, 2, 5.1, 5.2 and/or
6 of this Note;
(b) if any Obligor becomes insolvent or generally unable to pay its debts
as they become due;
(c) if any Obligor is dissolved or enters into bankruptcy, reorganisation
liquidation, administration, administrative receivership, receivership,
a voluntary arrangement, or scheme of arrangement with creditors, any
analogous or similar procedure in any jurisdiction other than England
or any form of procedure relating to insolvency, reorganisation or
dissolution in any jurisdiction; or a petition is presented or other
step is taken by any person with a view to any of those things unless
dismissed within 30 days;
(d) if an Event of Default (as defined in the Credit Agreement), or if an
event (having a similar effect in any amended version of the Credit
Agreement), occurs and is continuing.
9
8 Transfer
--------
8.1 Subject to the other provisions of this Condition 8, the Noteholder may
transfer this Note in whole, but not part.
8.2 Such transfer may be made without the consent of any Obligor provided that
the transferee (i) is a member of the Marshalls Group and (ii) will take
the Note subject to any rights of set-off which either Obligor may have
against MFL in relation to that Marshalls Contract known as the Framework
Agreement.
8.3 The Note may be transferred otherwise than in accordance with Condition 8.2
with the prior written consent of the Obligors and provided that the
transferee is a financial institution which, at the time it becomes the
Noteholder has (by reference to its latest audited accounts) or, if it is
part of a group, its ultimate parent company shall have (by reference to
the latest consolidated audited accounts of such group), shareholders funds
of at least US$250,000,000 or its equivalent in other currencies.
8.4 To transfer this Note, the Noteholder shall deliver to IXNet the
Certificate together with a form of transfer, executed by the transferor
(such form to include the name and address of the transferee and the amount
of the Note transferred). Upon receipt by IXNet of the same, it shall amend
the register in accordance with the form of transfer. Title to this Note
shall pass by such registration in the register.
8.5 IXNet shall, within 7 business days after each registration, deliver to the
transferee a new Certificate for the Note transferred.
9 Surrender of Note
-----------------
9.1 Subject to Condition 9.2, upon receipt in full of all amounts due under
this Note, this Note shall be cancelled and the Noteholder shall return it
to IXNet.
9.2 Any release, cancellation or discharge of this Note shall be conditional
upon no disposition or payment to the Noteholder in respect of an Obligor's
obligations hereunder being void, set aside or ordered to be refunded for
any reason.
10 Set-off and Relevant Claims
---------------------------
10.1 Except as set out in Condition 10.2:
(a) the Noteholder hereby waives any right (whether in law, equity or
otherwise) to set-off any moneys owing by it to any Obligor against any
amount payable under this Note; and
(b) each Obligor hereby waives any right (whether in law, equity or
otherwise) to set-off any amount payable under this Note against any
moneys owing to it from the Noteholder.
10
10.2 If on any Payment Date there shall be outstanding any Relevant Claims (as
hereinafter defined), IXNet may deduct from such payment an amount equal to
the amount of the Relevant Claim plus interest accrued or previously paid
on such amount at the rate specified in Condition 2 from the date of this
Note (less any amount previously deducted in connection with any such
Relevant Claim); provided, however, promptly upon the settlement,
resolution or withdrawal of any such Relevant Claim (as described below)
with respect to which a deduction was made, IXNet shall pay to the
Noteholder the then remaining amount of such Relevant Claim, together with
accrued interest at the rate specified in Condition 2. LXNet further agrees
that, to the extent there are any payments to the Group under the Marshalls
Contracts from any member of the Marshalls Group (the "Marshalls Contract
Obligations"), and for so long as (and only for so long as) this Note is
then held by a member of the Marshalls Group, the Noteholder, on behalf of
such member of the Marshalls Group, including the Noteholder as a member of
such Marshalls Group, may offset against any of the Marshalls Contract
Obligations any principal, interest or other amounts payable under this
Note which remain outstanding beyond their respective due dates. Upon
settlement or resolution of a Relevant Claim in favour of IXNet pursuant to
Condition 10.2(c) or (d) of this Note or in the event of any Working
Capital Offset (such amount as described in Condition 10.2(c) or (d) and/or
the amount of the Working Capital Offset being the "Settled Amount"), the
principal amount of this Note shall be reduced by the Settled Amount, and
the amount of any accrued interest on this Note shall be reduced for the
amount of accrued interest with respect to the Settled Amount. Any such
reduction of principal shall first be applied as a reduction of the
principal amount of the Tranche that is next payable under this Note.
For the purpose of this Note:
(a) "Relevant Claims" shall mean claims made by IXNet (taking account of
all applicable vendor protection provisions) pursuant to the provisions
of the Sale and Purchase Agreement, the Taxation Deed or the Marshalls
Contracts in respect of which MFL or 106 shall have received notice in
writing, specifying in reasonable detail with supporting evidence the
events, matter or default which gives rise to the claim and an estimate
of the amount claimed and which have not been settled, resolved or
withdrawn and, in addition shall include the amount of the difference
between the Working Capital Adjustment and the Estimated Working
Capital Adjustment payable by 106 to IXNet as provided for by clause
6.3(e) of the Sale and Purchase Agreement (the "Working Capital
Offset");
(b) any claim notified shall be deemed to have been withdrawn on the
expiration of 365 Relevant Days after the date of the claim being so
notified unless Court proceedings have been commenced against the
appropriate parties. For the purposes of the foregoing, "Relevant Day"
shall mean any day which is (i) a day on which the aggregate amount of
all successful claims and pending claims (excluding the Working Capital
Offset) exceeds the cumulative threshold specified in Schedule 5 to the
Sale and Purchase Agreement, or (ii) any day after the third
anniversary of the Completion Date;
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(c) a claim shall be deemed to be settled upon MFL or 106 and IXNet
agreeing a final settlement thereof and a claim shall be deemed to be
resolved upon an order or decree of a Court of competent jurisdiction
being given in proceedings in respect of the claim and such order or
decree being final and not or no longer appealable;
(d) the amount determined to be payable upon the settlement or resolution
of the claim shall be the amount agreed by MFL or 106 and IXNet under
any such settlement or determined by any such order or decree (as the
case may be) to be payable by MFL or 106 in respect thereof.
10.3 Subject to Condition 4, on the earlier of the Final Payment Date and the
date on which this Note is accelerated pursuant to Condition 7, IXNet shall
deposit into an escrow account to be established in the name of IXNet's and
the Noteholder's solicitors (together, the "Solicitors") an amount equal to
the amount of the Relevant Claims with respect to which IXNet had
previously made deduction from the principal payments due hereunder (and
which has not been previously resolved or settled), together with accrued
interest at the rate specified in Condition 2 hereof ("Existing Interest").
The Solicitors shall hold such monies pending the settlement, resolution or
withdrawal of any Relevant Claim (as determined under Conditions 10.2(b),
(c) and (d) respectively), at which time they shall pay to the Noteholder
the amount so agreed or determined in respect of such Relevant Claim
together with:
(a) the Existing Interest; and
(b) interest accrued from the date of deposit in the escrow account until
the date of payment,
thereon and any remaining amounts, after all Relevant Claims have been
settled, resolved or withdrawn, shall be distributed to IXNet.
11 Counterparts
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This Note may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument. Any party to this
Note may enter into this Note by executing any such counterpart.
12 Notices
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Any notice or other document may be given hereunder either personally or by
sending it by post in a first-class prepaid envelope or by delivering it to
him at the recipient's registered address. Any notice so given shall be
deemed to have been served on any day following that on which it is posted.
12
13 Marshalls
---------
Nothing contained in these Conditions shall prevent MFL, or any other
member of the Marshalls Group which is or becomes a transferee of this Note
in compliance with Condition 8, from having its rights under this Note
charged in favour of its banks if it is required to do so under its working
capital credit agreement and/or existing charges given in respect thereof
provided that, notwithstanding the foregoing, any transfer in connection
with the exercise of such charge shall remain subject to the transfer
restrictions and other provisions of Condition 8.
14 Proper Law and jury trial
-------------------------
14.1 This Note is governed by English law. The parties irrevocably submit to the
jurisdiction of the English courts in relation to any matter arising in
connection with this Note. A party may, however, bring proceedings in
connection with this Note in any court of competent jurisdiction. Each
Obligor irrevocably appoint Titmuss Sainer Dechert at present of Xx. 0
Xxxxxxxxx' Xxx, Xxxxxx XX0X 0XX, Attention: Head of Business Law
Department, to receive on their behalf process issued out of the English
courts in connection with this Agreement.
14.2 Each party to this Note and the Noteholder hereby expressly waives any
right to a trial by jury in any action or proceeding to enforce or defend
any rights under this Deed or the Note.
13
EXECUTED and DELIVERED as a DEED )
by INTERNATIONAL EXCHANGE )
NETWORKS, LTD. )
------------------------------
Authorised Officer
------------------------------
Authorised Officer
EXECUTED and DELIVERED as a DEED )
by IPC INFORMATION SYSTEMS, INC. )
------------------------------
Authorised Officer
------------------------------
Authorised Officer
EXECUTED and DELIVERED as a DEED )
by MARSHALLS 106 LIMITED )
------------------------------
Director
------------------------------
Director/Secretary
EXECUTED and DELIVERED as a DEED )
by GENERAL ELECTRIC CAPITAL )
CORPORATION as ADMINISTRATIVE )
AGENT )
------------------------------
Authorised Signatory
14
