EXHIBIT 6
INVESTORS AGREEMENT
dated as of
December 18, 1997
among
IPC INFORMATION SYSTEMS, INC.
CABLE SYSTEMS HOLDING, LLC
AND
CERTAIN OTHER PERSONS NAMED HEREIN
________________
* Cable Systems International, Inc. to be added as a signatory in the
event CSI owns IPC stock.
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS
Section 1.01. Definitions.....................................................1
ARTICLE 2 CORPORATE GOVERNANCE AND MANAGEMENT
Section 2.01. Composition of the Board........................................6
Section 2.02. Removal.........................................................7
Section 2.03. Vacancies.......................................................7
Section 2.04. Action by the Board.............................................7
Section 2.05. Conflicting Charter or Bylaw Provision..........................8
Section 2.06. IXNET Board.....................................................8
ARTICLE 3 RESTRICTIONS ON TRANSFER
Section 3.01. General.........................................................8
Section 3.02. Legends.........................................................8
Section 3.03. Permitted Transferees...........................................9
Section 3.04. Restrictions on Transfers by ▇▇▇▇▇▇▇▇▇▇▇ Shareholders...........9
Section 3.05. Restrictions on Transfers by ▇▇▇▇▇ Shareholders and ▇▇▇▇▇▇▇▇
Shareholders....................................................9
ARTICLE 4 TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
Section 4.01. Rights to Participate in Transfer..............................10
Section 4.02. Right to Compel Participation in Certain Transfers.............12
ARTICLE 5 REGISTRATION RIGHTS
Section 5.01. Demand Registration............................................13
Section 5.02. Piggyback Registration.........................................16
Section 5.03. Holdback Agreements............................................17
Section 5.04. Registration Procedures........................................17
Section 5.05. Indemnification by the Company.................................20
Section 5.06. Indemnification by Participating Shareholders..................21
Section 5.07. Conduct of Indemnification Proceedings.........................21
Section 5.08. Contribution...................................................22
Section 5.09. Participation in Public Offering...............................23
Section 5.10. Rule 144.......................................................24
Section 5.11. No Transfer of Registration Rights.............................24
ARTICLE 6 CERTAIN COVENANTS AND AGREEMENTS
Section 6.01. Limitations on Subsequent Registration.........................24
Section 6.02. Limitation on Purchase of Common Stock.........................24
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ARTICLE 7 MISCELLANEOUS
Section 7.01. Entire Agreement...............................................25
Section 7.02. Binding Effect; Benefit........................................25
Section 7.03. Assignability..................................................25
Section 7.04. Amendment; Waiver; Termination.................................25
Section 7.05. Notices........................................................26
Section 7.06. Headings.......................................................28
Section 7.07. Counterparts...................................................28
Section 7.08. Governing Law..................................................28
Section 7.09. Specific Enforcement...........................................29
Section 7.10. Certain Actions................................................29
Section 7.11. Consent to Jurisdiction; Expenses..............................29
Section 7.12. Severability...................................................30
Section 7.13. Additional Stockholder.........................................30
Section 7.14. Schedule I.....................................................30
Section 7.15 Effectiveness..................................................30
Schedule I Securities Ownership
Exhibit A Form of Joinder Agreement
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INVESTORS AGREEMENT
INVESTORS AGREEMENT, dated as of December 18, 1997, among (i) IPC
Information Systems, Inc. (the "Company"), (ii) Cable Systems Holding, LLC, a
Delaware limited liability company ("CSH"), and (iii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
(iv) ▇▇▇▇▇ ▇▇▇▇▇ and (v) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Merger Agreement (as defined
below), Arizona Acquisition Corp. will be merged with and into the Company,
with the Company as the surviving corporation (the "Merger");
WHEREAS, at the Effective Time (as defined in the Merger Agreement)
the parties hereto will hold securities of the Company as set forth on
Schedule I to be attached hereto at the Effective Time;
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations after consummation of
the transactions contemplated by the Merger Agreement;
The parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"Adverse Person" means any Person whom the Board of Directors of the
Company may reasonably determine to be a competitor or a potential competitor
of the Company or its Subsidiaries.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person, provided that no securityholder of the Company shall be
deemed an Affiliate of any other securityholder solely by reason of any
investment in the Company. For the purpose of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
"beneficially own" shall have the meaning set forth in Rule 13d-3 of
the Exchange Act.
"Board" means the board of directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in New York City are authorized by law to close.
"Change of Control" means such time as (a) the CSH Shareholders
shall own less than 20% of the outstanding shares of Common Stock, (b) the
transfer of all or substantially all of the assets of the Company to any
Person or group shall have been consummated, or (c) the Company shall have
been liquidated.
"Closing Date" shall have the meaning ascribed thereto in the Merger
Agreement.
"Common Stock" shall mean the common stock, par value $.01 per
share, of the Company and any stock into which such Common Stock may
thereafter be converted or changed; provided, however, that in the event of a
stock dividend, split-up, recapitalization, combination, exchange of stock or
the like in respect of such Common Stock, the term "Common Stock" shall be
deemed to refer to and include the stock as well as all stock dividends and
distributions and any stock into which or for which any or all of such stock
may be changed or exchanged.
"CSH Entities" means (a) CSH and (b) Cable Systems International
Inc., a Delaware Corporation, if it becomes a party hereto pursuant to
Section 7.13.
"CSH Shareholders" means the CSH Entities and their direct and
indirect Permitted Transferees so long as any such Person shall beneficially
own any Common Stock.
"Drag-Along Portion" means, with respect to any ▇▇▇▇▇▇▇▇▇▇▇
Shareholder, any ▇▇▇▇▇ Shareholder or any ▇▇▇▇▇▇▇▇ Shareholder, the number of
Shares beneficially owned by such ▇▇▇▇▇▇▇▇▇▇▇ Shareholder, ▇▇▇▇▇ Shareholder
or ▇▇▇▇▇▇▇▇ Shareholder multiplied by a fraction, the numerator of which is
the number of Shares to be sold by the CSH Shareholders on behalf of the CSH
Shareholders and the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, the ▇▇▇▇▇ Shareholders and the
▇▇▇▇▇▇▇▇ Shareholders and the denominator of which is the total number of
Shares then beneficially owned by all of the Shareholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Fully Diluted" means all outstanding shares of Common Stock and all
shares issuable in respect of securities convertible into or exchangeable or
exercisable for such Common Stock, stock appreciation rights or options,
warrants and other irrevocable rights to purchase or subscribe for such
Common Stock or securities convertible into or exchangeable or exercisable
for such Common Stock; provided that no Person shall be deemed to own such
number of Fully Diluted shares of any Common Stock as such Person has the
right to acquire from any Person other than the Company.
"Initial Ownership" means, with respect to any Shareholder, the
number of shares of Common Stock beneficially owned (and (without
duplication) which such Persons have the right to acquire from any Person) as
of the Effective Time, or in the case of any Person that shall become a party
to this Agreement on a later date, as of such date, taking into account any
stock split, stock dividend, reverse stock split or similar event.
"▇▇▇▇▇▇▇▇▇▇▇ Shareholders" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and his direct
and indirect Permitted Transferees so long as any such Person shall
beneficially own any Common Stock.
"Merger Agreement" means the Agreement and Plan of Merger dated as
of the date hereof, as subsequently amended, between the Company and Arizona
Acquisition Corp.
"Permitted Transferee" means (i) in the case of any Shareholder who
is a natural person, (a) a spouse or lineal descendent (including by adoption
and stepchildren), heir, executor, testamentary trustee or legatee of such
Shareholder or (b) any trust or estate the beneficiaries of which, or any
corporation, limited liability company or partnership, the stockholders,
members or partners of which include only the Persons described in clause (a)
above, and (ii) in the case of any CSH Shareholder, (a) Citicorp Venture
Capital, Ltd., any stockholder, member, partner or Affiliate of any such CSH
Shareholder or of Citicorp Venture Capital, Ltd. and any officer, director,
or employee of any such CSH Shareholder, Citicorp Venture Capital, Ltd. or of
any such stockholder, member, partner or Affiliate, (b) a spouse or lineal
descendant (including by adoption and stepchildren), heir, executor,
testamentary trustee or legatee of the officers, directors and employees
referred to in clause (ii)(a) above, and any trust or estate (where a
majority in interest of the beneficiaries thereof are any of the Persons
described in this clause (b) and in clause (ii)(a) above), corporation,
limited liability company or partnership (where a majority in interest of the
stockholders, members or limited partners, or where the managing general
partner, is one of more of the Persons described in this clause (b) or in
clause (ii)(a) above.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust or other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
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"Pro Rata Portion" means the number of Shares a Shareholder holds
multiplied by a fraction, the numerator of which is the number of Shares to
be sold by the CSH Shareholders, the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, the ▇▇▇▇▇
Shareholders and the ▇▇▇▇▇▇▇▇ Shareholders in a Public Offering and the
denominator of which is the total number of Shares, on a Fully Diluted basis,
held in the aggregate by the CSH Shareholders, the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders,
the ▇▇▇▇▇ Shareholders and the ▇▇▇▇▇▇▇▇ Shareholders immediately prior to
such Public Offering.
"Public Offering" means any primary or secondary public offering of
shares of Common Stock pursuant to an effective registration statement under
the Securities Act other than pursuant to a registration statement filed in
connection with a transaction of the type described in Rule 145 of the
Securities Act or for the purpose of issuing securities pursuant to an
employee benefit plan.
"Registrable Securities" means at any time, with respect to any
Shareholder, any shares of Common Stock then owned by such Shareholder until
(i) a registration statement covering such securities has been declared
effective by the SEC and such securities have been disposed of pursuant to
such effective registration statement, (ii) such securities are sold to the
public pursuant to Rule 144 (or any similar provisions then in force) under
the Securities Act or (iii) such securities are otherwise transferred, the
Company has delivered a new certificate or other evidence of ownership for
such securities not bearing the legend required pursuant to this Agreement
and such securities are freely tradeable without restriction by the holder
thereof under the Securities Act.
"Registration Expenses" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the securities registered), (iii) printing
expenses, (iv) internal expenses of the Company (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), (v) reasonable fees and disbursements
of counsel for the Company and customary fees and expenses for independent
certified public accountants retained by the Company (including expenses
relating to any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort
letters requested pursuant to Section 5.04(g) hereof), (vi) the reasonable
fees and expenses of any special experts retained by the Company in
connection with such registration, (vii) reasonable fees and expenses of up
to one counsel for the Shareholders participating in the offering, (viii)
fees and expenses in connection with any review of underwriting arrangements
by the National Association of Securities Dealers, Inc. (the "NASD"),
including fees and expenses of any "qualified independent underwriter" and
(ix) fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, but shall not include any underwriting fees, discounts
or commissions attributable to the sale of Registrable Securities, or any
out-of-pocket expenses (except as set forth in clause (vii) above) of the
Shareholders.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
"▇▇▇▇▇▇▇▇ Shareholders" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and his direct and
indirect Permitted Transferees so long as any such Person shall beneficially
own any Common Stock.
"Shareholder" means each Person (other than the Company) who shall
be a party to this Agreement, whether in connection with the execution and
delivery hereof as of the date hereof, pursuant to Section 7.03 or otherwise,
so long as such Person shall beneficially own any Common Stock.
"Shares" means shares of Common Stock held by the Shareholders.
"Subject Securities" means the Common Stock beneficially owned by
the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, the ▇▇▇▇▇ Shareholders and the ▇▇▇▇▇▇▇▇
Shareholders to be transferred in a Section 4.02 Sale.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Tag-Along Portion" means the number of Shares held by the Tagging
Person or the Selling Person, as the case may be, multiplied by a fraction,
the numerator of which is the number of Shares proposed to be sold by the
Selling Person pursuant to Section 4.01, and the denominator of which is the
aggregate number of Shares, on a Fully Diluted basis, then owned by the
Selling Person.
"Third Party" means a prospective purchaser of Common Stock from a
Shareholder where such purchaser is not a Permitted Transferee of such
Shareholder or an entity in which such Shareholder or any of its Permitted
Transferees directly or indirectly owns any outstanding securities or other
ownership interests having ordinary voting power.
"Underwritten Public Offering" means a firmly underwritten public
offering of Registrable Securities of the Company pursuant to an effective
registration statement under the Securities Act.
"▇▇▇▇▇ Shareholders" means ▇▇▇▇▇ and his direct and indirect
Permitted Transferees so long as any such Person shall beneficially own any
Common Stock.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
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Term Section
Cause 2.02
Demand Registration 5.01(a)
Drag-Along Rights 4.02(a)
Free Percentage 4.01(a)
Holders 5.01(a)(ii)
Indemnified Party 5.07
Indemnifying Party 5.07
Inspectors 5.04(g)
Joinder Agreement 3.03
Maximum Offering Size 5.01(e)
Nominee 2.03(a)
Piggyback Registration 5.02(a)
Records 5.04(g)
Section 4.01 Response Notice 4.01(a)
Section 4.02 Sale 4.02(a)
Section 4.02 Notice 4.02(a)
Section 4.02 Sale Price 4.02(a)
Section 4.02 Notice Period 4.02(a)
Selling Person 4.01(a)
Selling Shareholder 5.01(a)
Tag-Along Notice 4.01(a)
Tag-Along Notice Period 4.01(a)
Tag-Along Offer 4.01(a)
Tag-Along Right 4.01(a)
Tag-Along Sale 4.01(a)
Tagging Person 4.01(a)
Transfer 3.01(a)
▇▇▇▇▇ Preamble
ARTICLE 2.
CORPORATE GOVERNANCE AND MANAGEMENT
Section 2.01. Composition of the Board. The Board shall consist of
nine members, of whom (i) three shall be nominated by the CSH Shareholders,
(ii) two shall be nominated by the CSH Shareholders and shall be individuals
which are not "Affiliates" or "Associates" (as those terms are used within
the meaning of Rule 12b-2 of the General Rules and Regulations under the
Exchange Act) of any Shareholder or its Affiliates, (iii) two shall be
nominated by the CSH Shareholders and shall be individuals who are executive
officers of the Company or its Subsidiaries and (iv) two shall be nominated
by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders.
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Each Shareholder entitled to vote for the election of directors to the Board
agrees that it will vote its shares of Common Stock or execute consents, as
the case may be, and take all other necessary action (including causing the
Company to call a special meeting of shareholders) in order to ensure that
the composition of the Board is as set forth in this Section 2.01; provided
that, no Shareholder shall be required to vote for the CSH Shareholders' or
the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders' nominee(s) , as applicable, if the number of
Shares held by the group of Shareholders, as applicable, making the
nomination is, at the close of business on the day preceding such vote or
execution of consents, (x) less than 5% of the outstanding number of Shares
of Common Stock, in the case of the CSH Shareholders or (y) less than 50% of
its Initial Ownership of Common Stock, in the case of the ▇▇▇▇▇▇▇▇▇▇▇
Shareholders.
Section 2.02. Removal. Subject to applicable law, each Shareholder
agrees that if, at any time, it is then entitled to vote for the removal of
directors of the Company, it will not vote any of its Shares in favor of the
removal of any director who shall have been designated or nominated pursuant
to Section 2.01 unless such removal shall be for Cause or the Person(s)
entitled to designate or nominate such director shall have consented to such
removal in writing, provided that if the Persons entitled to designate or
nominate any director pursuant to Section 2.01 shall request the removal,
with or without Cause, of such director in writing, each such Shareholder
shall vote its shares of Common Stock in favor of such removal. Removal for
"Cause" shall mean removal of a director because of such director's (a)
willful and continued failure substantially to perform his duties with the
Company in his established position, (b) willful conduct which is injurious
to the Company or any of its Subsidiaries, monetarily or otherwise, (c)
conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, or (d) abuse of illegal drugs or other controlled substances or
habitual intoxication.
Section 2.03. Vacancies. If, as a result of death, disability,
retirement, resignation, removal (with or without Cause) or otherwise, there
shall exist or occur any vacancy on the Board:
(a) The Shareholder(s) entitled under Section 2.01 to nominate such
director whose death, disability, retirement, resignation or removal resulted
in such vacancy, may, subject to the provisions of Section 2.01, nominate
another individual (the "Nominee") to fill such vacancy and serve as a
director of the Company; and
(b) each Shareholder then entitled to vote for the election of the
Nominee as a director of the Company agrees that it will vote its Shares, or
execute a written consent, as the case may be, in order to ensure that the
Nominee be elected to the Board; provided that, no Shareholder shall be
required to vote for another party's Nominee(s) if the aggregate number of
Shares held by the Shareholder or group of Shareholders, as applicable,
making the nomination is, at the close of business of the day preceding such
vote or execution of consents, less than (x) 5% of the outstanding number of
Shares of Common Stock, in the case of the CSH Shareholders or (y) less than
50% of the Initial Ownership of Common Stock, in the case of the ▇▇▇▇▇▇▇▇▇▇▇
Shareholders.
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Section 2.04. Action by the Board. (a) A quorum at any meeting of
the Board shall consist of five directors.
(b) All actions of the Board shall require the affirmative vote of
at least a majority of the directors present at a duly convened meeting of
the Board at which a quorum is present or the unanimous written consent of
the Board; provided that, in the event there is a vacancy on the Board and an
individual has been nominated to fill such vacancy, the first order of
business shall be to fill such vacancy.
Section 2.05. Conflicting Charter or Bylaw Provision. Each
Shareholder shall vote its Shares, and shall take all other actions
reasonably necessary, to ensure that the Company's certificate of
incorporation and bylaws are consistent with, facilitate and do not at any
time conflict with any provision of this Agreement.
Section 2.06. IXNET Board. For so long as (a) International
Exchange Network Ltd, a Delaware corporation ("IXNET") is a wholly-owned
Subsidiary of the Company and (b) ▇▇▇▇▇ ▇▇▇▇▇ is an employee of IXNET, the
Company shall cause ▇▇▇▇▇ ▇▇▇▇▇ to be a member of the board of directors of
IXNET.
ARTICLE 3.
RESTRICTIONS ON TRANSFER
Section 3.01 General. (a) Each Shareholder agrees that it will not,
directly or indirectly, sell, assign, transfer, grant a participation in,
pledge or otherwise dispose of ("transfer") any Common Stock (or solicit any
offers to buy or otherwise acquire, or take a pledge of any Common Stock)
except in compliance with the Securities Act and the terms and conditions of
this Agreement.
(b) Any attempt to transfer any Common Stock not in compliance with
this Agreement shall be null and void and the Company shall not, and shall
cause any transfer agent not to, give any effect in the Company's stock
records to such attempted transfer.
Section 3.02. Legends. (a) In addition to any other legend that may
be required, each certificate for shares of Common Stock that is issued to
any Shareholder shall bear a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN
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ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED. SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN THE INVESTORS
AGREEMENT DATED AS OF DECEMBER 18, 1997, COPIES OF WHICH MAY BE OBTAINED
UPON REQUEST FROM IPC INFORMATION SYSTEMS, INC. OR ANY SUCCESSOR THERETO."
(b) If any Common Stock shall cease to be subject to any and all
restrictions on transfer set forth in this Agreement, the Company shall, upon
the written request of the holder thereof, issue to such holder a new
certificate evidencing such Common Stock without the legend required by
Section 3.02(a) endorsed thereon.
Section 3.03. Permitted Transferees. Any Shareholder may at any
time transfer any or all of its Shares to one or more of its Permitted
Transferees without the consent of the Company or any Shareholder or group of
Shareholders and without compliance with Sections 3.04 and 4.01 so long as
(a) such Permitted Transferee shall have executed a Joinder Agreement
substantially in the form of Exhibit A hereto ("Joinder Agreement") and
thereby agreed to be bound by the terms of this Agreement and (b) the
transfer to such Permitted Transferee is not in violation of applicable
federal or state securities laws.
Section 3.04. Restrictions on Transfers by ▇▇▇▇▇▇▇▇▇▇▇ Shareholders.
(a) Except as provided in Section 3.03, the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders may
transfer their Common Stock only as follows:
(i) in a transfer made in compliance with Section 4.01 or
Section 4.02;
(ii) in a Public Offering in connection with the exercise of
their rights under Article 5 hereof; or
(iii) following the earlier to occur of (i) the date on which
the number of Shares held by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders is less
than 5% of the outstanding number of Shares of Common Stock and (ii)
the fifth anniversary of the Closing Date, to any Person other than
any Adverse Person.
(b) The restrictions set forth in Section 3.04 shall terminate at
such time as the aggregate number of Shares of Common stock held by the CSH
Shareholders is less than 50% of the CSH Shareholders' aggregate Initial
Ownership of Common Stock.
Section 3.05. Restrictions on Transfers by ▇▇▇▇▇ Shareholders and
▇▇▇▇▇▇▇▇ Shareholders. Except as provided in Section 3.03, the ▇▇▇▇▇
Shareholders and the ▇▇▇▇▇▇▇▇ Shareholders may transfer their Common Stock
only as follows:
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(i) in a transfer made in compliance with Section 4.01 of
Section 4.02; or
(ii) in any Public Offering; or
(iii) following the 30th month anniversary of the Closing Date,
to any Person other than any Adverse Person; or
(iv) to any Person, in a transfer through a broker or dealer in
compliance with Rule 144 (or any successor rule).
ARTICLE 4.
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
Section 4.01. Rights to Participate in Transfer. (a) If CSH
Shareholders (the "Selling Person") propose to, directly or indirectly,
transfer (other than transfers of Shares (i) in a Public Offering, (ii) to
any Permitted Transferee of any of the CSH Shareholders or (iii) up to 3% in
the aggregate of the securities of such class outstanding on the date of the
first transfer of any Shares by any of the CSH Shareholders (such percentage,
the "Free Percentage")) shares of Common Stock (a "Tag-Along Sale"), the
▇▇▇▇▇▇▇▇▇▇▇ Shareholders and/or the ▇▇▇▇▇ Shareholders and/or the ▇▇▇▇▇▇▇▇
Shareholders may, at their option, elect to exercise their rights under this
Section 4.01 (each such Shareholder, a "Tagging Person"). In the event of
such a proposed transfer, the Selling Person shall provide each ▇▇▇▇▇▇▇▇▇▇▇
Shareholder, each ▇▇▇▇▇ Shareholder and each ▇▇▇▇▇▇▇▇ Shareholder written
notice of the material terms and conditions of such proposed transfer
("Tag-Along Notice") and offer each Tagging Person the opportunity to
participate in such sale. The Tag-Along Notice shall identify the number of
shares of Common Stock subject to the offer ("Tag-Along Offer"), the
consideration for which the transfer is proposed to be made and all other
material terms and conditions of the Tag-Along Offer. Each Tagging Person
shall have the right (a "Tag-Along Right"), exercisable by irrevocable
written notice (a "Section 4.01 Response Notice") given within 10 Business
Days from receipt of the Tag-Along Notice (the "Tag-Along Notice Period") to
participate in such Tag-Along Sale on the same terms and conditions as set
forth in the Tag-Along Notice and to sell all or any portion of its Tag-Along
Portion. If the Tagging Persons exercise their Tag-Along Rights hereunder,
each Tagging Person shall deliver at least two business days prior to the
date scheduled for the closing of the Tag-Along Sale to the Selling Person
for delivery to the prospective transferee one or more certificates, in a
proper form for transfer, representing the Shares of such Tagging Person to
be included in the Tag-Along Sale. Such certificate or certificates that a
Tagging Person delivers to the Selling Person shall be delivered on the date
scheduled for the closing of the Tag-Along Sale to such transferee in
consummation of the Tag-Along Sale. Notwithstanding anything to the contrary
contained in this Section 4.01, except for the Selling Person's obligation to
return to each Tagging Person any certificates representing the Tagging
Person's Shares there shall be no
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liability on the part of the Selling Person to any Shareholder in the event
that the proposed Tag-Along Sale is not consummated for whatever reason.
Whether a Tag-Along Sale is effected pursuant to this Section 4.01 by the
Selling Person is in the sole and absolute discretion of the Selling Person.
(b) Concurrently with the consummation of the Tag-Along Sale, the
Selling Person shall notify the Tagging Persons thereof, shall remit to the
Tagging Persons the total consideration (by bank or certified check) for the
Shares of the Tagging Persons transferred pursuant thereto, and shall,
promptly after the consummation of such Tag-Along Sale, furnish such other
evidence of the completion and time of completion of such transfer and the
terms thereof as may be reasonably requested by the Tagging Persons.
(c) If at the termination of the Tag-Along Notice Period any
Tagging Person shall not have elected to participate in the Tag-Along Sale,
such Tagging Person will be deemed to have waived its rights under Section
4.01(a) with respect to the transfer of its securities pursuant to such
Tag-Along Sale.
(d) If any Tagging Person declines to exercise its Tag-Along Rights
or elects to exercise its Tag-Along Rights with respect to less than such
Tagging Person's Tag-Along Portion, the CSH Shareholders shall be entitled to
transfer, pursuant to the Tag-Along Offer, a number of Shares held by the CSH
Shareholders equal to the number of Shares constituting the portion of such
Tagging Person's Tag-Along Portion with respect to which Tag-Along Rights
were not exercised.
(e) The CSH Shareholders and any Tagging Person who exercises the
Tag-Along Rights pursuant to this Section 4.01 may consummate the Tag-Along
Sale on substantially the same terms and conditions set forth in the
Tag-Along Notice (provided, however, that the price payable in any such sale
may exceed the price specified in the Tag-Along Notice by up to 5%) within
120 days of the date on which Tag-Along Rights shall have been waived,
exercised or expire.
(f) The exercise or the non-exercise of the rights of the Tagging
Persons to participate in one or more Tag-Along Sales shall not adversely
affect their rights to participate in subsequent Tag-Along Sales subject to
this Section 4.01.
(g) The sale of the Selling Person's Shares in any Tag-Along Sale
shall be effected on the same terms and conditions as the sale of any Tagging
Person's Shares and no Selling Person shall receive any form of special
consideration or control premium in addition to the price payable for the
sold Shares.
(h) The right of the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, the ▇▇▇▇▇
Shareholders and the ▇▇▇▇▇▇▇▇ Shareholders to participate in a Tag-Along Sale
shall terminate at such time as the aggregate number of Shares held by the
▇▇▇▇▇▇▇▇▇▇▇ Shareholders, the ▇▇▇▇▇ Shareholders or the
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▇▇▇▇▇▇▇▇ Shareholders, as the case may be, is less than 50% of their
aggregate Initial Ownership of Common Stock.
Section 4.02. Right to Compel Participation in Certain Transfers.
(a) If (i) the CSH Shareholders propose to transfer Shares representing not
less than 50% of their aggregate Initial Ownership of Common Stock to a Third
Party in a bona fide sale for cash negotiated on an arms-length basis, and
(ii) the CSH Shareholders propose a transfer in which the Shares to be
transferred by the CSH Shareholders, the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, the ▇▇▇▇▇
Shareholders and the ▇▇▇▇▇▇▇▇ Shareholders would constitute more than 50% of
the outstanding shares of Common Stock determined on a fully diluted basis (a
"Section 4.02 Sale"), the CSH Shareholders may at their option require all
▇▇▇▇▇▇▇▇▇▇▇ Shareholders, ▇▇▇▇▇ Shareholders and ▇▇▇▇▇▇▇▇ Shareholders to
sell the Subject Securities ("Drag-Along Rights") then held by every
▇▇▇▇▇▇▇▇▇▇▇ Shareholder, ▇▇▇▇▇ Shareholder, and ▇▇▇▇▇▇▇▇ Shareholders to such
Third Party, for the same consideration per share of Common Stock and
otherwise on the same terms and conditions as the CSH Shareholders. CSH
shall provide written notice of such Section 4.02 Sale to the ▇▇▇▇▇▇▇▇▇▇▇
Shareholders, the ▇▇▇▇▇ Shareholders and the ▇▇▇▇▇▇▇▇ Shareholders (a
"Section 4.02 Notice") not later than the 30th day prior to the proposed
Section 4.02 Sale. The Section 4.02 Notice shall identify the transferee,
the number of Subject Securities, the consideration for which a transfer is
proposed to be made (the "Section 4.02 Sale Price") and all other material
terms and conditions of the Section 4.02 Sale. The number of shares of
Common Stock to be sold by each ▇▇▇▇▇▇▇▇▇▇▇ Shareholder, ▇▇▇▇▇ Shareholder
and ▇▇▇▇▇▇▇▇ Shareholders shall not exceed the Drag-Along Portion of the
shares of Common Stock that such ▇▇▇▇▇▇▇▇▇▇▇ Shareholder, ▇▇▇▇▇ Shareholder
and ▇▇▇▇▇▇▇▇ Shareholders owns. Each ▇▇▇▇▇▇▇▇▇▇▇ Shareholder, ▇▇▇▇▇
Shareholder or ▇▇▇▇▇▇▇▇ Shareholder shall be required to participate in the
Section 4.02 Sale on the terms and conditions set forth in the Section 4.02
Notice and to tender all its Subject Securities as set forth below. The
price payable in such transfer shall be the Section 4.02 Sale Price. Each of
the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, ▇▇▇▇▇ Shareholders or ▇▇▇▇▇▇▇▇ Shareholders
shall deliver not later than 2 Business Days prior to the date scheduled for
the Section 4.02 Sale to a representative of CSH designated in the Section
4.02 Notice certificates representing all Subject Securities held by such
▇▇▇▇▇▇▇▇▇▇▇ Shareholder, ▇▇▇▇▇ Shareholder and ▇▇▇▇▇▇▇▇ Shareholders duly
endorsed, together with all other documents required to be executed in
connection with such Section 4.02 Sale or, if such delivery is not permitted
by applicable law, an unconditional agreement to deliver such Subject
Securities pursuant to this Section 4.02 at the closing for such Section 4.02
Sale against delivery to such ▇▇▇▇▇▇▇▇▇▇▇ Shareholder, ▇▇▇▇▇ Shareholder and
▇▇▇▇▇▇▇▇ Shareholders of the consideration therefor. If a ▇▇▇▇▇▇▇▇▇▇▇
Shareholder, ▇▇▇▇▇ Shareholder or ▇▇▇▇▇▇▇▇ Shareholder should fail to deliver
such certificates to CSH, the Company shall cause the books and records of
the Company to show that such Subject Securities are bound by the provisions
of this Section 4.02 and that such Subject Securities shall be transferred to
the purchaser of the Subject Securities immediately upon surrender for
transfer by the holder thereof.
(b) The CSH Shareholders shall have a period of 120 days from the
date of receipt of the Section 4.02 Notice to consummate the Section 4.02
Sale on the terms and conditions set forth in such Section 4.02 Sale Notice.
If the Section 4.02 Sale shall not have been
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consummated during such period, CSH shall return to each of the ▇▇▇▇▇▇▇▇▇▇▇
Shareholders, each of the ▇▇▇▇▇ Shareholders and each of the ▇▇▇▇▇▇▇▇
Shareholders all certificates representing Shares that such ▇▇▇▇▇▇▇▇▇▇▇
Shareholder, ▇▇▇▇▇ Shareholder or ▇▇▇▇▇▇▇▇ Shareholder, as the case may be,
may have delivered for transfer pursuant hereto, together with any documents
in the possession of CSH executed by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholder, the ▇▇▇▇▇
Shareholder or the ▇▇▇▇▇▇▇▇ Shareholder, as the case may be, in connection
with such proposed transfer, and all the restrictions on transfer contained
in this Agreement or otherwise applicable at such time with respect to Common
Stock owned by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, the ▇▇▇▇▇ Shareholders and the
▇▇▇▇▇▇▇▇ Shareholders shall again be in effect.
(c) Concurrently with the consummation of the transfer of Shares
pursuant to this Section 4.02, CSH or the Company, as applicable, shall remit
to each of the Shareholders who have surrendered their certificates the total
consideration (by bank or certified check) for the Shares transferred
pursuant hereto and shall furnish such other evidence of the completion and
time of completion of such transfer and the terms thereof as may be
reasonably requested by such Shareholders.
(d) In furtherance of, and not in limitation of the foregoing
provisions of this Section 4.02, in connection with a Section 4.02 Sale
(which Section 4.02 Sale may be structured as a merger, recapitalization,
reorganization, sale of assets or otherwise) each ▇▇▇▇▇▇▇▇▇▇▇ Shareholder,
▇▇▇▇▇ Shareholder or ▇▇▇▇▇▇▇▇ Shareholder will (i) consent to and raise no
objection against the Section 4.02 Sale or the process pursuant to which it
was arranged, (ii) waive any appraisal rights and other similar rights and
(iii) execute all documents containing such terms and conditions as those
executed by other Shareholders as directed by the CSH Shareholders.
(e) The sale of the CSH Shareholders' Shares in any Section 4.02
Sale shall be effected on the same terms and conditions as the sale of any
Shares owned by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, the ▇▇▇▇▇ Shareholders and the
▇▇▇▇▇▇▇▇ Shareholders and no CSH Shareholder shall receive any form of
special consideration or control premium in addition to the price payable for
the sold Shares.
ARTICLE 5.
REGISTRATION RIGHTS
Section 5.01. Demand Registration. (a) If the Company shall
receive a written request by the CSH Shareholders (any such requesting
Person, a "Selling Shareholder") that the Company effect the registration
under the Securities Act of all or a portion of such Selling Shareholder's
Registrable Securities, and specifying the intended method of disposition
thereof, then the Company shall promptly give written notice of such
requested registration (a "Demand Registration") to the ▇▇▇▇▇▇▇▇▇▇▇
Shareholders, the ▇▇▇▇▇ Shareholders and the ▇▇▇▇▇▇▇▇
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Shareholders, and thereupon will use its best efforts to effect, as
expeditiously as possible, the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by the Selling Shareholders, then held by the
Selling Shareholders; and
(ii) all other Registrable Securities of the same type as that to
which the request by the Selling Shareholders relates which any
▇▇▇▇▇▇▇▇▇▇▇ Shareholder, any ▇▇▇▇▇ Shareholder or any Servidio
Shareholder (all such Shareholders, together with the Selling
Shareholders, the "Holders") has requested the Company to register by
written request received by the Company within 10 days (one of which
shall be a Business Day) after the receipt by such Holders of such
written notice given by the Company, all to the extent necessary to
permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be
registered; provided that, subject to Section 5.01(d) hereof, the
Company shall not be obligated to effect more than five Demand
Registrations for the CSH Shareholders; and provided further that the
Company shall not be obligated to effect a Demand Registration unless
the aggregate proceeds expected to be received from the sale of the
Common Stock requested to be included in such Demand Registration, in
the reasonable opinion of CSH exercised in good faith, equals or
exceeds $7,500,000. In no event will the Company be required to
effect more than one Demand Registration within any four-month period.
(b) Promptly after the expiration of the 10-day period referred to
in Section 5.01(a)(ii) hereof, the Company will notify all the Holders to be
included in the Demand Registration of the other Holders and the number of
Registrable Securities requested to be included therein. The Selling
Shareholders requesting a registration under Section 5.01(a) may, at any time
prior to the effective date of the registration statement relating to such
registration, revoke such request, without liability to any of the other
Holders, by providing a written notice to the Company revoking such request,
in which case such request, so revoked, shall be considered a Demand
Registration unless such revocation arose out of the fault of the Company or
unless the participating Shareholders reimburse the Company for all costs
incurred by the Company in connection with such registration, in which case
such request shall not be considered a Demand Registration.
(c) The Company will pay all Registration Expenses in connection
with any Demand Registration.
(d) A registration requested pursuant to this Section 5.01 shall
not be deemed to have been effected unless the registration statement
relating thereto (i) has become effective under the Securities Act and (ii)
all of the Registrable Securities registered thereunder have been
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sold; provided that if, within 180 days after it has become effective, the
offering of Registrable Securities pursuant to such registration is
interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court such registration will be
deemed not to have been effected.
(e) If a Demand Registration involves an Underwritten Public
Offering and the managing underwriter shall advise the Company and the
Selling Shareholders that, in its view, (i) the number of shares of
Registrable Securities requested to be included in such registration
(including any securities which the Company proposes to be included which are
not Registrable Securities) or (ii) the inclusion of some or all of the
shares of Registrable Securities owned by the Holders, in any such case,
exceeds the largest number of shares which can be sold without having an
adverse effect on such offering, including the price at which such shares can
be sold (the "Maximum Offering Size"), the Company will include in such
registration, in the priority listed below, up to the Maximum Offering Size:
(A) first, all Registrable Securities requested to be registered
by the parties requesting such Demand Registration and all Registrable
Securities requested to be included in such registration by any other
Holder (allocated, if necessary for the offering not to exceed the
Maximum Offering Size, pro rata among such Holders on the basis of the
relative number of Registrable Securities so requested to be included
in such registration); and
(B) second, any securities proposed to be registered by the
Company.
(f) Upon written notice to each Selling Shareholder, the Company
may postpone effecting a registration pursuant to this Section 5.01 on one
occasion during any period of six consecutive months for a reasonable time
specified in the notice but not exceeding 90 days (which period may not be
extended or renewed), if (1) an investment banking firm of recognized
national standing shall advise the Company and the Selling Shareholders in
writing that effecting the registration would materially and adversely affect
an offering of securities of such Company the preparation of which had then
been commenced or (2) the Company is in possession of material non-public
information the disclosure of which during the period specified in such
notice the Company believes, in its reasonable judgment, would not be in the
best interests of the Company.
(g) After the Company has effected one Demand Registration by the
CSH Shareholders pursuant to this Section 5.01 of Common Stock, the
▇▇▇▇▇▇▇▇▇▇▇ Shareholders, upon request of the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders owning
a majority of the Shares acquired by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders on the
Closing Date may request that the Company register Common Stock which are
Registrable Securities then owned by such ▇▇▇▇▇▇▇▇▇▇▇ Shareholders. In no
event will the Company be required to effect more than two such Demand
Registrations by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders. The other provisions of this
Article 5 applicable to Demand
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Registrations requested by the CSH Shareholders shall apply, mutatis
mutandis, to any such Demand Registration by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders.
(h) If any registration requested pursuant to this Section 5.01
which is proposed by the Company to be effected by the filing of a
registration statement on form S-3 (or any successor or similar short-form
registration statement) shall be in connection with an Underwritten Public
Offering, and if the managing underwriter shall advise the Company in writing
that, in its opinion, the use of another form of registration statement is of
material importance to the success of such proposed offering, then such
registration shall be effected on such other form.
Section 5.02. Piggyback Registration. (a) If the Company proposes
to register any of its Common Stock under the Securities Act (other than
pursuant to a Demand Registration), it will each such time, subject to the
provisions of Section 5.02(b) hereof, give prompt written notice at least 15
days prior to the anticipated filing date of the registration statement
relating to such registration to all Shareholders which notice shall set
forth such Shareholders' rights under this Section 5.02 and shall offer all
Shareholders the opportunity to include in such registration statement such
number of shares of Common Stock as each such Shareholder may request (a
"Piggyback Registration"). Upon the written request of any such Shareholder
made within 10 days after the receipt of notice from the Company (which
request shall specify the number of shares of Common Stock intended to be
disposed of by such Shareholder), the Company will use its reasonable best
efforts to effect the registration under the Securities Act of all shares of
Common Stock which the Company has been so requested to register by such
Shareholders, to the extent requisite to permit the disposition of the shares
of Common Stock so to be registered; provided that (i) if such registration
involves an Underwritten Public Offering, all such Shareholders requesting to
be included in the Company's registration must sell their Registrable
Securities to the underwriters selected as provided in Section 5.04(f) on the
same terms and conditions as apply to the Company or the Selling Shareholder,
as applicable, and (ii) if, at any time after giving written notice of its
intention to register any stock pursuant to this Section 5.02(a) and prior to
the effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to register
such stock, the Company shall give written notice to all such Shareholders
and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration. No registration
effected under this Section 5.02 shall relieve the Company of its obligations
to effect a Demand Registration to the extent required by Section 5.01
hereof. The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this
Section 5.02.
(b) If a registration pursuant to this Section 5.02 involves an
Underwritten Public Offering and the managing underwriter advises the Company
that, in its view, the number of shares of Common Stock which the Company and
the selling Shareholders intend to include in such registration exceeds the
Maximum Offering Size, the Company will include in such registration, in the
following priority, up to the Maximum Offering Size:
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(i) first, so much of the Common Stock proposed to be registered
for the account of the Company as would not cause the offering to
exceed the Maximum Offering Size; and
(ii) second, all Registrable Securities requested to be
included in such registration by any Shareholder pursuant to Section
5.02 (allocated, if necessary for the offering not to exceed the
Maximum Offering Size, pro rata among such Shareholders on the basis
of the relative number of shares of Registrable Securities so
requested to be included in such registration).
Section 5.03. Holdback Agreements. With respect to each and every
firmly underwritten Public Offering, each Shareholder agrees not to offer or
sell any shares of Common Stock (except for shares of Common Stock, if any,
sold in that Public Offering) during the 14 days prior to the effective date
of the applicable registration statement for a public offering of shares of
Common Stock (except as part of such registration) and during the period
after such effective date equal to the lesser of: (i) 180 days or (ii) any
such shorter period as the Company and the lead managing underwriter of an
Underwritten Public Offering agree.
Section 5.04. Registration Procedures. Whenever Shareholders
request that any Registrable Securities be registered pursuant to Section
5.01 or 5.02 hereof, the Company will, subject to the provisions of such
Sections, use its reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection with any
such request:
(a) The Company will as expeditiously as possible prepare and file
with the SEC a registration statement on any form selected by counsel for the
Company and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method
of distribution thereof, and use its reasonable best efforts to cause such
filed registration statement to become and remain effective for a period of
not less than 180 days (or such shorter period in which all of the
Registrable Securities of the Holders included in such registration statement
shall have actually been sold thereunder).
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to
each Shareholder and each underwriter, if any, of the Registrable Securities
covered by such registration statement copies of such registration statement
as proposed to be filed, and thereafter the Company will furnish to such
Shareholder and underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such Shareholder or
underwriter may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such Shareholder. Each Shareholder shall
have the right to request that the Company modify any information contained
in such registration statement, amendment and
-17-
supplement thereto pertaining to such Shareholder and the Company shall use
its reasonable best efforts to comply with such request, provided, however,
that the Company shall not have any obligation to so modify any information
if so doing would cause the prospectus to contain an 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.
(c) After the filing of the registration statement, the Company
will (i) cause the related prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule
424 under the Securities Act, (ii) comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement during the applicable period in
accordance with the intended methods of disposition by the sellers thereof
set forth in such registration statement or supplement to such prospectus and
(iii) promptly notify each Shareholder holding Registrable Securities covered
by such registration statement of any stop order issued or threatened by the
SEC or any state securities commission under state blue sky laws and take all
reasonable actions required to prevent the entry of such stop order or to
remove it if entered.
(d) The Company will use its reasonable best efforts to (i)
register or qualify the Registrable Securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions
in the United States as any Shareholder holding such Registrable Securities
reasonably (in light of such Shareholder's intended plan of distribution)
requests and (ii) cause such Registrable Securities to be registered with or
approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company and do any
and all other acts and things that may be reasonably necessary or advisable
to enable such Shareholder to consummate the disposition of the Registrable
Securities owned by such Shareholder; provided that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (B)
subject itself to taxation in any such jurisdiction or (C) consent to general
service of process in any such jurisdiction.
(e) The Company will immediately notify each Shareholder holding
such Registrable Securities covered by such registration statement, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not
contain an 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 promptly prepare and make available to each such
Shareholder and file with the SEC any such supplement or amendment.
(f) In connection with any Demand Registration requested by the CSH
Shareholders, the Company shall appoint the underwriter or underwriters
chosen by CSH. The Company will enter into customary agreements (including
an underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or
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facilitate the disposition of such Registrable Securities, including the
engagement of a "qualified independent underwriter" in connection with the
qualification of the underwriting arrangements with the NASD.
(g) Upon execution of confidentiality agreements in form and
substance reasonably satisfactory to the Company, the Company will make
available for inspection by any Shareholder and any underwriter participating
in any disposition pursuant to a registration statement being filed by the
Company pursuant to this Section 5.04 and any attorney, accountant or other
professional retained by any such Shareholder or underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records") as
shall be reasonably requested by any such Person, and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any Inspectors in connection with such registration statement.
(h) The Company will furnish to each such Shareholder (if requested
by such Shareholder) and to each such underwriter, if any, a signed
counterpart, addressed to such underwriter and the participating
Shareholders, of (i) an opinion or opinions of counsel to the Company and
(ii) a comfort letter or comfort letters from the Company's independent
public accountants, each in customary form and covering such matters of the
type customarily covered by opinions or comfort letters, as the case may be,
as a majority of such Shareholders or the managing underwriter therefor
reasonably requests.
(i) The Company will otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC and the relevant
state blue sky commissions, and make available to its securityholders, as
soon as reasonably practicable, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act.
(j) The Company may require each such Shareholder to promptly
furnish in writing to the Company information regarding the distribution of
the Registrable Securities as the Company may from time to time reasonably
request and such other information as may be legally required in connection
with such registration.
(k) Each such Shareholder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
Section 5.04(e) hereof, such Shareholder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Shareholder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section
5.04(e) hereof, and, if so directed by the Company, such Shareholder will
deliver to the Company all copies, other than any permanent file copies then
in such Shareholder's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event
that the Company shall give such notice, the Company shall extend the period
during which such
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registration statement shall be maintained effective (including the period
referred to in Section 5.04(a) hereof) by the number of days during the
period from and including the date of the giving of notice pursuant to
Section 5.04(e) hereof to the date when the Company shall make available to
such Shareholder a prospectus supplemented or amended to conform with the
requirements of Section 5.04(e) hereof.
(l) The Company will use its reasonable best efforts to list such
Registrable Securities on any securities exchange on which the Common Stock
is then listed or on NASDAQ if the Common Stock is then quoted on NASDAQ not
later than the effective date of such registration statement.
Section 5.05. Indemnification by the Company. The Company agrees
to indemnify and hold harmless each Shareholder holding Registrable
Securities covered by a registration statement, its officers, directors,
employees, members, partners and agents, any affiliate of such Shareholder
and each Person, if any, who controls such Shareholder within the meaning of
the Securities Act or Section 20 of the Exchange Act (and officers,
directors, employees, members, partners and agents of any such affiliate or
controlling Persons) from and against any and all losses, claims, damages and
liabilities, joint or several, and expenses (including reasonable attorneys
fees and costs and expenses of investigation) caused by any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Securities (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission so made
in strict conformity with information furnished in writing to the Company by
such Shareholder or on such Shareholder's behalf expressly for use therein;
provided that with respect to any untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus, or in any
prospectus, as the case may be, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the
prospectus (or, in the case of a prospectus, the prospectus as amended or
supplemented) was not sent or given to the Person asserting any such loss,
claim, damage, liability or expense at or prior to the written confirmation
of the sale of the Registrable Securities concerned to such Person if it is
determined that the Company has provided such current copy of such prospectus
(or such amended or supplemented prospectus, as the case may be) to such
Shareholder in a timely manner prior to such sale and it was the
responsibility of such Shareholder under the Securities Act to provide such
Person with a current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) and such current copy of the prospectus (or
such amended or supplemented prospectus, as the case may be) would have cured
the defect giving rise to such loss, claim, damage, liability or expense.
The Company also agrees to indemnify any underwriters of the Registrable
Securities, their officers and
-20-
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Shareholders provided in this
Section 5.05.
Section 5.06. Indemnification by Participating Shareholders. Each
Shareholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers, directors and agents and each Person (other than such
Shareholder) if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to such Shareholder, but only
(i) with respect to information furnished in writing by such Shareholder or on
such Shareholder's behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus or (ii) to the extent that any
loss, claim, damage, liability or expense described in Section 5.05 results from
the fact that a current copy of the prospectus (or, in the case of a prospectus,
the prospectus as amended or supplemented) was not sent or given to the Person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Securities concerned to such
Person if it is determined that it was the responsibility of such Shareholder to
provide such Person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. Each such Shareholder shall be prepared, if required by the
underwriting agreement, to indemnify and hold harmless underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Company provided in this Section 5.06. As a condition to
including Registrable Securities in any registration statement filed in
accordance with Article 5 hereof, the Company may require that it shall have
received an undertaking reasonably satisfactory to it from any underwriter to
indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
No Shareholder shall be liable under Section 5.06 for any damage
thereunder in excess of the net proceeds realized by such Shareholder in the
sale of the Registrable Securities of such Shareholder.
Section 5.07. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article 5, such Person (an "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses; provided that the failure of
any Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially and actually prejudiced by such failure to
notify. In any such proceeding, any Indemnified Party shall have the right to
-21-
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of such Indemnified Party representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any and all losses, claims, damages, liabilities and expenses or
liability (to the extent stated above) by reason of such settlement or judgment.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such proceeding.
Section 5.08. Contribution. If the indemnification provided for in
this Article 5 is held by a court of competent jurisdiction to be unavailable to
the Indemnified Parties in respect of any losses, claims, damages, liabilities
or expenses referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) as between the Company and the Shareholders holding Registrable
Securities covered by a registration statement and their related Indemnified
Parties on the one hand and the underwriters and their related Indemnified
Parties on the other, in such proportion as is appropriate to reflect the
relative benefits received by the Company and such Shareholders on the one hand
and the underwriters on the other, from the offering of the Shareholders'
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits but also the relative fault of the Company and such Shareholders on the
one hand and of such underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations and (ii) as between the
Company and their related Indemnified Parties on the one hand and each such
Shareholder and their related Indemnified Parties on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each such Shareholder in connection with such statements or omissions, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and such Shareholders on the one hand and such underwriters on
the other shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and such Shareholders
-22-
bear to the total underwriting discounts and commissions received by such
underwriters, in each case as set forth in the table on the cover page of the
prospectus. The relative fault of the Company and such Shareholders on the one
hand and of such underwriters on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and such Shareholders or by such
underwriters. The relative fault of the Company on the one hand and of each
such Shareholder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 5.08 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages, liabilities or expenses referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5.08 no
underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to securities purchased by such underwriter in
such offering, less the aggregate amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no Shareholder shall be required
to contribute any amount in excess of the amount by which the net proceeds
realized on the sale of the Registrable Securities of such Shareholder exceeds
the amount of any damages which such Shareholder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Each
Shareholder's obligation to contribute pursuant to this Section 5.08 is several
in the proportion that the proceeds of the offering received by such Shareholder
bears to the total proceeds of the offering received by all such Shareholders
and not joint.
Section 5.09. Participation in Public Offering. No Person may
participate in any Underwritten Public Offering hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements to be entered into in connection with such
Underwritten Public Offering and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements and the
provisions of this Agreement in respect of registration rights.
-23-
Section 5.10 Rule 144. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder (or, if the Company
is not required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available such information), and it will
take such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell shares of Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of
any holder of Registrable Securities, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.
Notwithstanding anything contained in this Section 5.10, the Company may
de-register under Section 12 of the Exchange Act if it then is permitted to do
so pursuant to the Exchange Act and the rules and regulations thereunder and, in
such circumstances, shall not be required hereby to file any reports which may
be necessary in order for Rule 144 or any similar rule or regulation to be
available.
Section 5.11. No Transfer of Registration Rights. None of the
rights of Shareholders under this Article 5 shall be assignable by any
Shareholder to any Person acquiring securities of such Shareholder in any Public
Offering or pursuant to a distribution to the public under Rule 144 under the
Securities Act.
ARTICLE 6.
CERTAIN COVENANTS AND AGREEMENTS
Section 6.01. Limitations on Subsequent Registration. Without the
prior written consent of Shareholders holding at least 51% of the Shares held by
all Shareholders, the Company shall not enter into any agreement with any holder
or prospective holder of any securities of the Company (a) that would allow such
holder or prospective holder to include such securities in any registration
filed pursuant to Section 5.01 or 5.02 hereof, unless under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of such securities would
not reduce the amount of the Registrable Securities of the Shareholders included
therein or (b) on terms otherwise more favorable than this Agreement.
Section 6.02. Limitation on Purchase of Common Stock. Until the
earlier to occur of (i) the fifth anniversary of the Closing Date or (ii) the
occurrence of a Change in Control no ▇▇▇▇▇▇▇▇▇▇▇ Shareholder shall acquire any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock except (x) as a Permitted Transferee in a transfer
from any other ▇▇▇▇▇▇▇▇▇▇▇ Shareholder which is otherwise permitted under the
terms of Article 3 hereof or (y) pursuant to stock options granted by the
Company.
-24-
ARTICLE 7
MISCELLANEOUS
Section 7.01. Entire Agreement. This Agreement, including all
exhibits hereto, constitutes the entire agreement and supersedes all prior
agreements and undertakings, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof and except as otherwise
expressly provided herein.
Section 7.02. Binding Effect; Benefit. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and permitted assigns. Except as
expressly provided in Sections 5.05 and 5.06, nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the parties
hereto, and their respective heirs, successors, legal representatives and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
Section 7.03. Assignability. (a) Neither this Agreement nor any
right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by the Company or any Shareholder; provided that (i) any
Permitted Transferee acquiring shares of Common Stock in a transfer permitted
under this Agreement shall execute and deliver to the Company a Joinder
Agreement, and (ii) with the prior written consent of Shareholders holding at
least 50% of the Shares held by all Shareholders, the rights and obligations of
the Shareholders under Article 5 shall be assignable by the Shareholders to any
Third Party acquiring Registrable Securities in a transfer permitted under this
Agreement.
Section 7.04. Amendment; Waiver; Termination. (a) No provision of
this Agreement may be waived except by an instrument in writing executed by the
party against whom the waiver is to be effective. No provision of this
Agreement may be amended or otherwise modified except by an instrument in
writing executed by the Company and holders of at least 50% of the Shares held
by the Shareholders at the time of such proposed amendment or modification.
(b) In addition, any amendment or modification of any provision of
this Agreement that would adversely affect any (i) CSH Shareholder may be
effected only with the consent of CSH Shareholders holding at least 50% of the
Shares held by the CSH Shareholders, (ii) ▇▇▇▇▇▇▇▇▇▇▇ Shareholder may be
effected only with the consent of ▇▇▇▇▇▇▇▇▇▇▇ Shareholders holding at least 50%
of the Shares held by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders, (iii) ▇▇▇▇▇ Shareholder may
be effected only with the consent of ▇▇▇▇▇ Shareholders holding at least 50% of
the Shares held by the ▇▇▇▇▇ Shareholders or (iv) ▇▇▇▇▇▇▇▇ Shareholder may be
effected only with the consent of ▇▇▇▇▇▇▇▇ Shareholders holding at least 50% of
the Shares held by the ▇▇▇▇▇▇▇▇ Shareholders.
-25-
(c) This Agreement shall terminate on the tenth anniversary of the
date hereof unless earlier terminated.
Section 7.05. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if so given) by hand delivery, telegram,
telex or telecopy, or by mail (registered or certified mail, postage prepaid,
return receipt requested) or by any courier service providing proof of delivery.
All communications hereunder shall be delivered to the respective parties at the
following addresses:
(i) if to the Company to:
IPC Information Systems, Inc.
Wall Street Plaza
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Citicorp Venture Capital, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
Thacher, ▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
-26-
(ii) if to any CSH Shareholder, to:
Cable Systems Holding, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Citicorp Venture Capital, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to any ▇▇▇▇▇▇▇▇▇▇▇ Shareholder, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York
Attention: ▇▇▇▇▇▇ ▇. Rover, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
-27-
(iv) If to any ▇▇▇▇▇ Shareholder, to:
IPC Information Systems, Inc.
Wall Street Plaza
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(v) If to any Servidio Shareholder, to:
IPC Information Systems, Inc.
Wall Street Plaza
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 7.06. Headings. The headings contained in this Agreement
are for the convenience of reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
Section 7.07. Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
Section 7.08. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule that would
cause the application of the laws of any jurisdiction other than the State of
New York, except to the extent that the General Corporation
-28-
Law of the State of Delaware applies as a result of the Company being
incorporated in the State of Delaware, in which case such General Corporation
Law shall apply.
Section 7.09. Specific Enforcement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms. It is
accordingly agreed that the parties hereto shall be entitled to specific
performance of the terms hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 7.10. Certain Actions. Unless otherwise expressly provided
herein, whenever any action is required under this Agreement by:
(a) the CSH Stockholders (as a group, as opposed to the exercise by a
CSH Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by the
CSH Shareholders as a group; or
(b) the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders (as a group, as opposed to the
exercise by a ▇▇▇▇▇▇▇▇▇▇▇ Shareholder of its individual rights hereunder), it
shall be by the affirmative vote of the holders of at least 51% of the Shares
then held by the ▇▇▇▇▇▇▇▇▇▇▇ Shareholders as a group.
(c) the ▇▇▇▇▇ Shareholders (as a group, as opposed to the exercise by
a ▇▇▇▇▇ Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by the
▇▇▇▇▇ Shareholders as a group.
(d) the Servidio Shareholders (as a group, as opposed to the exercise
of a ▇▇▇▇▇▇▇▇ Shareholder of its individual rights hereunder), it shall be by
the affirmative vote of the holders of at least 51% of the Shares then held by
the ▇▇▇▇▇▇▇▇ Shareholders as a group.
Section 7.11. Consent to Jurisdiction; Expenses. (a) Any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in any Federal Court sitting in New York,
New York, or any New York State court sitting in New York, New York, and each of
the parties hereby consents to the exclusive jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party by any method provided in Section
7.05 shall be deemed effective service of process on such party and consents to
the personal jurisdiction of any Federal Court sitting in New York, New York, or
any New York State court sitting in New York, New York.
-29-
(b) In any dispute arising under this Agreement among any of the
parties hereto, the costs and expenses (including, without limitation, the
reasonable fees and expenses of counsel) incurred by the prevailing party shall
be paid by the party that does not prevail.
Section 7.12. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by the Merger Agreement is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner.
Section 7.13. Additional Stockholder. In the event that CSI shall
acquire Common Stock, CSH agrees to cover CSI to become a party to this
Agreement by executing the signature page hereof.
Section 7.14. Schedule I. The parties hereto shall cooperate in
causing Schedule I hereto to set forth the securities of the Company held by
them.
Section 7.15. Effectiveness. It is a condition precedent to the
effectiveness of this Agreement that the "Merger" under and as defined in the
Merger Agreement shall have been consummated.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
IPC INFORMATION SYSTEMS, INC.
By: /s/ S.T. ▇▇▇▇▇▇
----------------------------
Name: S.T. ▇▇▇▇▇▇
Title: President and CEO
CABLE SYSTEMS HOLDING, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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-31-
SCHEDULE I
Securities Ownership
EXHIBIT A
Form of Joinder Agreement
IPC Information Systems, Inc.
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Attention: Chief Executive Officer
Gentlemen:
In consideration of the transfer to the undersigned of _____ Shares of
Common Stock, par value $.01 per share, [Describe any other security being
transferred] of IPC Information Systems, Inc., a Delaware corporation (the
"Company"), the undersigned represents that it is a Permitted Transferee of
[Insert name of transferor] and agrees that, as of the date written below, [he]
[she] [it] shall become a party to, and a Permitted Transferee as defined in,
that certain Investors Agreement dated as of December 18, 1998, as such
agreement may have been or may be amended from time to time (the "Agreement"),
among the Company and the persons named therein, and as a Permitted transferee
shall be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement that were applicable to the undersigned's transferor
as though an original party thereto and shall be deemed a [▇▇▇▇▇▇▇▇▇▇▇
Shareholder] [CSH Shareholder] for purposes thereof.
Executed as of the day of ,
TRANSFEREE:
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Address:
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