AGREEMENT AND PLAN OF MERGER
DATED
OCTOBER 12, 1997
AMONG
ICG COMMUNICATIONS, INC.
AND
NETCOM ON-LINE COMMUNICATION SERVICES, INC.
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitions . . . . . . . . . . . . . . . 3
Section 1.3 Use of Terms . . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE MERGER AND RELATED MATTERS
Section 2.1 The Merger . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Effective Time of the Merger . . . . . . . . . . 6
ARTICLE III
CONVERSION OF CAPITAL STOCK
Section 3.1 Conversion of Stock . . . . . . . . . . . . . . 6
Section 3.2 Exchange of Certificates . . . . . . . . . . . . 7
Section 3.3 Dividends and Other Distributions. . . . . . . . 9
Section 3.4 No Fractional Shares. . . . . . . . . . . . . . 9
Section 3.5 No Liability . . . . . . . . . . . . . . . . . 10
Section 3.6 Lost Certificates . . . . . . . . . . . . . . 10
Section 3.7 Treatment of Stock Options, Etc. . . . . . . . 10
Section 3.8 Closing of the Company's Transfer Books . . . 11
Section 3.9 Closing . . . . . . . . . . . . . . . . . . . 11
Section 3.10 No Repurchase Rights . . . . . . . . . . . . . 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ICG
Section 4.1 Organization and Qualification . . . . . . . . 11
Section 4.2 Capitalization . . . . . . . . . . . . . . . . 11
Section 4.3 Subsidiaries . . . . . . . . . . . . . . . . . 12
Section 4.4 Authority Relative to this Agreement . . . . . 12
Section 4.5 No Breach; Required Consents . . . . . . . . . 13
Section 4.6 Consents and Approvals . . . . . . . . . . . . 13
Section 4.7 Reports and Financial Statements . . . . . . . 13
Section 4.8 Compliance with Law; Litigation . . . . . . . 15
Section 4.9 Title to Assets . . . . . . . . . . . . . . . 15
Section 4.10 Employee Matters . . . . . . . . . . . . . . . 15
Section 4.11 ERISA . . . . . . . . . . . . . . . . . . . . 16
Section 4.12 Operations of Acquisition Sub . . . . . . . . 17
Section 4.13 No Broker . . . . . . . . . . . . . . . . . . 17
Section 4.14 Taxes . . . . . . . . . . . . . . . . . . . . 17
Section 4.15 Environmental Laws . . . . . . . . . . . . . . 17
Section 4.16 Transactions with Affiliates . . . . . . . . . 18
Section 4.17 Approval . . . . . . . . . . . . . . . . . . . 18
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 5.1 Organization and Qualification . . . . . . . . 19
Section 5.2 Capitalization . . . . . . . . . . . . . . . . 19
Section 5.3 Subsidiaries . . . . . . . . . . . . . . . . . 19
Section 5.4 Authority Relative to this Agreement . . . . . 20
Section 5.5 No Breach; Required Consents . . . . . . . . . 20
Section 5.6 Consents and Approvals . . . . . . . . . . . . 21
Section 5.7 Reports and Financial Statements . . . . . . . 21
Section 5.8 Compliance with Law; Litigation . . . . . . . 22
Section 5.9 Title to Assets . . . . . . . . . . . . . . . 23
Section 5.10 Employee Matters . . . . . . . . . . . . . . . 23
Section 5.11 ERISA . . . . . . . . . . . . . . . . . . . . 23
Section 5.12 Approval . . . . . . . . . . . . . . . . . . . 24
Section 5.13 Financial Advisor . . . . . . . . . . . . . . 25
Section 5.14 Taxes . . . . . . . . . . . . . . . . . . . . 25
Section 5.15 Environmental Laws . . . . . . . . . . . . . . 25
Section 5.16 Transactions with Affiliates . . . . . . . . . 25
Section 5.17. Contracts . . . . . . . . . . . . . . . . . . 26
Section 5.18. Intellectual Property . . . . . . . . . . . . 26
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business of the Company . . . . . . 26
Section 6.2 Conduct of Business of ICG . . . . . . . . . . 29
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access and Information . . . . . . . . . . . . 30
Section 7.2 SEC Filings . . . . . . . . . . . . . . . . . 31
Section 7.3 Meetings of Stockholders . . . . . . . . . . . 34
Section 7.4 Compliance with the Securities Act . . . . . . 34
Section 7.5 Reasonable Best Efforts . . . . . . . . . . . 34
Section 7.6 Confidentiality and Public Announcements . . . 35
Section 7.7 Notification . . . . . . . . . . . . . . . . . 35
Section 7.8 HSR Act Filings . . . . . . . . . . . . . . . 35
Section 7.9 Indemnification of Executives . . . . . . . . 36
Section 7.10 Employee Benefits . . . . . . . . . . . . . . 37
ARTICLE VIII
CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . . . . . . . 37
Section 8.2 Conditions to Obligation of the Company
to Effect the Merger . . . . . . . . . . . . . 38
Section 8.3 Conditions to Obligations of ICG and
Acquisition Sub to Effect the Merger . . . . . 39
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination . . . . . . . . . . . . . . . . . 39
Section 9.2 Remedies. . . . . . . . . . . . . . . . . . . 40
Section 9.3 Amendment . . . . . . . . . . . . . . . . . . 41
Section 9.4 Waiver . . . . . . . . . . . . . . . . . . . . 41
ARTICLE X
GENERAL PROVISIONS; DEFINITIONS
Section 10.1 Non-Survival of Representations, Warranties
and Agreements . . . . . . . . . . . . . . . . 42
Section 10.2 Notices . . . . . . . . . . . . . . . . . . . 42
Section 10.3 Fees and Expenses . . . . . . . . . . . . . . 43
Section 10.4 Specific Performance . . . . . . . . . . . . . 43
Section 10.5 Third Party Beneficiaries . . . . . . . . . . 43
Section 10.6 Entire Agreement; Miscellaneous . . . . . . . 43
Section 10.7 Governing Law and Venue; Waiver of Jury Trial 43
EXHIBITS
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EXHIBIT DESCRIPTION
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A Form of Affiliate Agreement
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is
dated October 12, 1997 and is entered into by and among ICG
Communications, Inc., a Delaware corporation ("ICG"), and NETCOM
On-Line Communication Services, Inc., a Delaware corporation (the
"Company").
RECITALS
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A. ICG and the Company have agreed to enter into a
transaction in which a Delaware subsidiary of ICG to be formed
("Acquisition Sub") will merge with and into the Company (the
"Merger"). At the effective time of the Merger, the outstanding
shares of the capital stock of the Company shall be converted
into the right to receive shares of common stock of ICG (except
as provided herein). As a result, ICG will become the holder of
all the outstanding shares of capital stock of the Company and
the holders of shares of capital stock of the Company outstanding
immediately prior to the Merger will become holders of shares of
common stock of ICG.
B. The Boards of Directors of ICG and the Company
each have determined that the transactions described herein are
in the best interests of their respective corporations and
stockholders.
C. It is intended that, for federal income tax
purposes, the Merger shall qualify as a reorganization under the
provisions of Section 368(a) of the Code.
D. For financial accounting purposes, it is intended
that the Merger shall be accounted for as a "pooling-of-
interests" under generally accepted accounting principles.
NOW, THEREFORE, in consideration of the foregoing
premises and the representations, warranties and agreements
contained in this Agreement, the parties to this Agreement agree
as follows:
ARTICLE I
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DEFINITIONS
Section 1.1 Definitions. As used in this Agreement,
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the following terms with initial capital letters will have the
meanings set forth below:
"Affiliate" means, as to any Person, any other Person
which, directly or indirectly, controls, is under common control
with, or is controlled by, such Person. As used in this
definition, "control" (including, with correlative meaning,
"controlling," "controlled by" and "under common control with")
means possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person
(whether through the ownership of voting securities, by contract
or otherwise).
"Business Day" means any day on which commercial banks
are open for business in Denver, Colorado and San Jose,
California.
"Company Common Stock" means the shares of common
stock, par value $.01 per share, of the Company.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Environmental Law" means any applicable Legal
Requirement relating to the protection, preservation or
restoration of the environment (including, air, water vapor,
surface water, ground water, drinking water supply, surface land,
subsurface land, plant and animal life or any other natural
resource).
"Equity Affiliate" means, as to any Person, any other
Person in which such Person or any of its Subsidiaries holds a
five percent or greater equity interest.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" means, as to any Person, any trade or
business (whether or not incorporated) that is treated as a
single employer with such Person under Section 414(b), (c), (m)
or (o) or the Code.
"GAAP" means generally accepted accounting principles
as in effect from time to time in the United States of America.
"ICG Closing Stock Price" means the average of the
Volume Weighted Average Price of ICG Common Stock, as quoted by
NASDAQ, for the ten consecutive trading days ending two trading
days prior to the Closing Date.
"ICG Common Stock" means the shares of common stock,
par value $.01 per share, of ICG.
"Intellectual Property" means copyrights, patents,
trademarks, service marks, service names, trade names,
applications therefor, technology rights and licenses, computer
software (including any source or object codes therefor or
documentation relating thereto), trade secrets, franchises, know-
how, inventions, and other intellectual property rights.
"Knowledge" means the actual present knowledge of a
Person that is a human being and, in the case of a Person that is
not a human being, the present actual knowledge of any executive
officer (or any human being having duties comparable to those of
an executive officer) of such Person.
"Legal Requirement" means any statute, ordinance, code,
law, rule, regulation, order or other requirement, standard or
procedure enacted, adopted or applied by any Governmental Entity,
including judicial decisions applying common law or interpreting
any other Legal Requirement or any agreement entered into with a
Governmental Entity in resolution of a dispute or otherwise.
"Lien" means any lien, security interest, pledge,
charge, claim, option, right to acquire, restriction on transfer,
voting restriction or encumbrance of any nature.
"Material Adverse Effect" means a material adverse
effect on the business, properties, assets, prospects, condition
(financial or otherwise), liabilities or operations of a Person
and its Subsidiaries, taken as a whole, or on the ability of such
Person to perform its obligations under this Agreement.
"NASDAQ" means the over-the-counter market of the
National Association of Securities Dealers, Inc.
"Person" means any human being or any partnership,
limited liability company, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture,
Governmental Entity or other entity.
"SEC" means the United States Securities and Exchange
Commission.
"Subsidiary" means, with respect to any Person, any
other Person more than 50% of whose outstanding voting securities
or partnership or other equity interests, as the case may be, are
directly or indirectly owned by such Person.
"Termination Fee" means cash in the amount of
$11,340,000.
Section 1.2 Other Definitions. The following terms
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are defined in the Sections indicated:
Term Section
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Acquisition Proposal 6.1(h)
Acquisition Sub Recital A
Agreement Preamble
Antitrust Division 7.8
BT Alex. Brown 5.4
Certificate of Incorporation 2.1(a)
Certificate of Merger 2.2
Closing 3.9
Closing Date 3.9
Company Preamble
Company Benefit Plans 5.11(a)
Company Options 3.7
Company Permits 5.8(a)
Company SEC Reports 5.7(a)
Company Stock 3.1(b)
Company Stock Certificates 3.2(a)
DGCL 2.1
Effective Time 2.2
Exchange Act 4.6
Exchange Agent 3.2(a)
Exchange Ratio 3.1(a)
Executive 7.9(a)
FTC 7.8
Governmental Entity 4.8(a)
HSR Act 4.6
ICG Preamble
ICG Benefit Plans 4.11(a)
ICG Certificates 3.2(a)
ICG Permits 4.8(a)
ICG SEC Reports 4.7(a)
Indemnified Party 7.2(h)(iii)
Indemnifying Party 7.2(h)(iii)
Joint Proxy Statement/
Prospectus 7.2(a)
Losses 7.2(h)(i)
Meeting 7.3
Merger Recital A
Most Recent Company
Balance Sheet 5.7(c)
Most Recent ICG Balance Sheet 4.7(c)
NASD 7.3
Other Filings 7.2(b)
Preliminary Joint Proxy
Statement/Prospectus 7.2(a)
Secretary 2.2
SEC Filings 7.2(c)
Securities Act 4.6
Surviving Corporation 2.1
Tax 4.14
Section 1.3 Use of Terms. Terms used with initial
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capital letters will have the meanings specified, applicable to
both singular and plural forms, for all purposes of this
Agreement. All pronouns (and any variations) will be deemed to
refer to the masculine, feminine or neuter, as the identity of
the Person may require. The singular or plural includes the
other, as the context requires or permits. The word include (and
any variation) is used in an illustrative sense rather than a
limiting sense. The word day means a calendar day. All
accounting terms not otherwise defined in this Agreement will
have the meanings ascribed to them under GAAP.
ARTICLE II
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THE MERGER AND RELATED MATTERS
Section 2.1 The Merger. Subject to the terms and
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conditions of this Agreement and applicable provisions of the
Delaware General Corporation Law ("DGCL"), at the Effective Time:
(i) Acquisition Sub will be merged with and into the Company;
(ii) the separate existence of Acquisition Sub will cease and the
Company will continue as the surviving corporation in the Merger
(the "Surviving Corporation"); and (iii) the name of the
Surviving Corporation will be NETCOM On-Line Communication
Services, Inc. From and after the Effective Time, and without
any further action on the part of any Person, the Merger will
have all the effects provided by applicable Legal Requirements,
including Sections 251 and 259 of the DGCL, the effects described
in Section 3.1 with respect to the capital stock of
Acquisition Sub and the Company and, subject to applicable Legal
Requirements, the following additional effects as of the
Effective Time:
(a) Certificate of Incorporation. The certificate of
----------------------------
incorporation of Acquisition Sub (the "Certificate of
Incorporation"), will become the certificate of incorporation of
the Surviving Corporation, and such Certificate of Incorporation
may thereafter be amended and/or restated as provided therein and
by the DGCL.
(b) Bylaws. The bylaws of Acquisition Sub, as in
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effect immediately prior to the Effective Time, will become the
bylaws of the Surviving Corporation, and such bylaws may
thereafter be amended or repealed in accordance with their terms
and the Certificate of Incorporation and as provided by the DGCL.
(c) Directors. The directors of Acquisition Sub
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immediately prior to the Effective Time will become the directors
of the Surviving Corporation, each to hold office in accordance
with the Certificate of Incorporation and bylaws of the Surviving
Corporation and the DGCL and until the earlier of such director's
resignation or removal or such director's successor is duly
elected and qualified, as the case may be.
(d) Officers. The officers of Acquisition Sub
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immediately prior to the Effective Time will become the officers
of the Surviving Corporation, each to hold office in accordance
with the Certificate of Incorporation and bylaws of the Surviving
Corporation and the DGCL and until the earlier of such officer's
resignation or removal or such officer's successor is duly
appointed and qualified, as the case may be.
(e) Properties and Liabilities. All the properties,
--------------------------
rights, privileges, powers and franchises of the Company and
Acquisition Sub will vest in the Surviving Corporation, and all
debts, liabilities, agreements and duties of the Company and
Acquisition Sub will become the debts, liabilities, agreements
and duties of the Surviving Corporation.
(f) New ICG Director. David W. Garrison, Chief
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Executive Officer and Chairman of the Board of Directors of the
Company, will become a member of the Board of Directors of ICG to
hold office in accordance with the certificate of incorporation
and bylaws of ICG and the DGCL and until the earlier of Mr.
Garrison's resignation or removal or his successor is duly
elected and qualified.
Section 2.2 Effective Time of the Merger. Subject
----------------------------
to the terms and conditions of this Agreement, on the Closing
Date the parties will prepare, sign and acknowledge, in
accordance with the DGCL, a certificate of merger (the
"Certificate of Merger") and deliver the Certificate of Merger to
the Secretary of State of the State of Delaware (the "Secretary")
for filing pursuant to the DGCL. The Merger will become
effective upon the filing of the Certificate of Merger with the
Secretary. As used in this Agreement, the "Effective Time" means
the time at which the Certificate of Merger is filed with the
Secretary.
ARTICLE III
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CONVERSION OF CAPITAL STOCK
Section 3.1 Conversion of Stock. At the Effective
-------------------
Time, by virtue of the Merger and without any action on the part
of ICG, Acquisition Sub, the Company or the holders of any of the
following securities, the parties agree as follows:
(a) Each share of Company Common Stock outstanding
immediately prior to the Effective Time (except shares subject to
Section 3.1(b)), shall be converted into the right to receive,
and there shall be paid and issued as provided in this Agreement
in exchange for such share, that number of shares of ICG Common
Stock equal to the Exchange Ratio (as defined below), plus cash
in lieu of any fractional share as provided in Section 3.4. The
"Exchange Ratio" shall be determined as follows: (i) if the ICG
Closing Stock Price of a share of ICG Common Stock is greater
than or equal to $22.125, the Exchange Ratio shall equal 0.8628,
(ii) if the ICG Closing Stock Price of a share of ICG Common
Stock is greater than or equal to $19.00 but less than $22.125,
the Exchange Ratio shall equal a fraction (rounded to the nearest
ten-thousandth) determined by dividing $19.0625 by the ICG
Closing Stock Price of a share of ICG Common Stock, and (iii) if
the ICG Closing Stock Price is less than $19.00, the Exchange
Ratio shall equal 1.0078.
(b) Each share of capital stock of the Company (the
"Company Stock") issued and outstanding immediately prior to the
Effective Time and owned directly or indirectly by the Company,
if any, will be canceled and retired, and no ICG Common Stock or
other consideration will be delivered in exchange therefor.
(c) Each share of common stock, par value $.01 per
share, of Acquisition Sub issued and outstanding immediately
prior to the Effective Time (except shares subject to
Section 3.1(d)) will be converted into and will thereafter
evidence and become that number of validly issued, fully paid,
and nonassessable shares of common stock, par value $.01 per
share, of the Surviving Corporation equal to the quotient of (a)
the number of shares of Company Common Stock outstanding
immediately prior to the Effective Time divided by (b) the number
of shares of common stock of Acquisition Sub outstanding
immediately prior to the Effective Time rounded, in the case of
any fractional share, down to the nearest whole number.
(d) Each share of the capital stock of Acquisition Sub
issued and outstanding immediately prior to the Effective Time
and owned directly or indirectly by Acquisition Sub, if any, will
be canceled and retired, and no common stock of the Surviving
Corporation or other consideration will be delivered in exchange
therefor.
(e) In the event ICG changes the number of shares of
ICG Common Stock issued and outstanding after the date of this
Agreement and prior to the Effective Time as a result of a stock
split, stock dividend, or similar recapitalization with respect
to ICG Common Stock and the record date therefor (in the case of
a stock dividend) or the effective date thereof (in the case of a
stock split or similar recapitalization for which a record date
is not established) is after the date of this Agreement and prior
to the Effective Time, the Exchange Ratio will be appropriately
adjusted to reflect such stock split, stock dividend or similar
recapitalization.
Section 3.2 Exchange of Certificates.
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(a) Exchange Agent. As of the Effective Time, ICG
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shall enter into an agreement with a bank or trust company
selected by ICG and reasonably acceptable to the Company which
Person will act as exchange agent (the "Exchange Agent") in
connection with the surrender of certificates that, prior to the
Effective Time, evidenced outstanding shares of Company Common
Stock ("Company Stock Certificates"). Prior to the Closing Date,
ICG will deposit with the Exchange Agent for exchange in
accordance with this Section 3.2 certificates evidencing the
shares of ICG Common Stock to be issued in the Merger ("ICG
Certificates"), which shares of ICG Common Stock will be deemed
to be issued at the Effective Time. At and following the
Effective Time, ICG will deliver to the Exchange Agent such cash
as may be required from time to time to make payments of cash in
lieu of fractional shares of ICG Common Stock in accordance with
Section 3.4.
(b) Exchange. As soon as practicable after the
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Effective Time, ICG will cause the Exchange Agent to mail to each
Person who was a holder of record of Company Common Stock at the
Effective Time: (i) a letter of transmittal (which will specify
that delivery will be effective, and risk of loss and title to
any Company Stock Certificates will pass, only upon delivery of
the Company Stock Certificates to the Exchange Agent and will be
in such form and will have such other provisions that are
specified by ICG and reasonably acceptable to the Company); and
(ii) instructions for use in effecting the surrender of Company
Stock Certificates in exchange for ICG Certificates (together
with any dividend or distribution with respect thereto made after
the Effective Time and any cash to be paid in lieu of fractional
shares of ICG Common Stock pursuant to Section 3.4). Upon
surrender of a Company Stock Certificate for cancellation to the
Exchange Agent or to such other agent or agents as may be
appointed by ICG, together with such letter of transmittal, duly
executed, and such other documents as may be required by the
Exchange Agent or such other agent, the holder of such Company
Stock Certificate will be entitled to receive in exchange
therefor ICG Certificates representing the number of whole shares
of ICG Common Stock that such holder has the right to receive
pursuant to this Agreement (together with any dividend or
distribution with respect thereto made after the Effective Time
and any cash to be paid in lieu of fractional shares of ICG
Common Stock pursuant to Section 3.4) and the Company Stock
Certificate so surrendered will be canceled. In the event of a
transfer of ownership of Company Common Stock that is not
registered in the transfer records of the Company, ICG
Certificates representing the proper number of shares of ICG
Common Stock may be issued to a Person other than the Person in
whose name the surrendered Company Stock Certificate is
registered if the Company Stock Certificate representing such
Company Common Stock is presented to the Exchange Agent
accompanied by all documents required to evidence and effect such
transfer and by evidence reasonably satisfactory to ICG that any
applicable stock transfer tax has been paid. ICG will not
directly or indirectly pay or reimburse any Person for any
transfer taxes of the type referred to in the preceding sentence.
If any ICG Certificates are to be delivered to a Person other
than the Person in whose name the Company Stock Certificates
surrendered in exchange therefor are registered, it will be a
condition to the delivery of such ICG Certificates that the
Company Stock Certificates so surrendered are properly endorsed
or accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise is proper
and that the Person requesting such transfer pay to the Exchange
Agent any transfer or other taxes payable by reason of the
foregoing or establishes to the satisfaction of the Exchange
Agent that such taxes have been paid or are not required to be
paid.
(c) Certificates Not Exchanged. After the Effective
--------------------------
Time, each outstanding Company Stock Certificate will, until
surrendered for exchange in accordance with this Section 3.2, be
deemed for all purposes to evidence ownership of the number of
whole shares of ICG Common Stock into which the shares of Company
Common Stock (which, prior to the Effective Time, were
represented thereby) are converted in accordance with Section
3.1, together with the right to receive any dividend or
distribution with respect thereto made after the Effective Time
and any cash to be paid in lieu of fractional shares of ICG
Common Stock pursuant to Section 3.4.
(d) Expenses. Except as otherwise expressly provided
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in this Agreement, ICG will pay all charges and expenses,
including those of the Exchange Agent, in connection with the
exchange of shares of ICG Common Stock for shares of Company
Common Stock, except any charges or expenses that are otherwise
solely the liability of one or more holders of Company Common
Stock. Any ICG Certificates deposited with the Exchange Agent
that remain unclaimed by the former stockholders of the Company
after six months following the Effective Time will be delivered
to ICG upon its demand, and any former stockholders of the
Company who have not then complied with the instructions for
exchanging their Company Stock Certificates will thereafter look
only to ICG for exchange of Company Stock Certificates and for
any dividend or distribution with respect thereto made after the
Effective Time and any cash to be paid in lieu of fractional
shares of ICG Common Stock pursuant to Section 3.4.
Section 3.3 Dividends and Other Distributions. No
---------------------------------
dividends or other distributions declared or made after the
Effective Time with respect to shares of ICG Common Stock with a
record date after the Effective Time will be paid to the holder
of any unsurrendered Company Stock Certificate with respect to
the shares of ICG Common Stock issuable upon surrender thereof
until the holder of such Company Stock Certificate surrenders
such Company Stock Certificate in accordance with Section 3.2.
Subject to the effect of applicable Legal Requirements, following
surrender of any such Company Stock Certificate, ICG will pay or
cause to be paid, without interest, to the record holder of ICG
Certificates issued in exchange therefor, (a) at the time of such
surrender, the amount of cash in lieu of fractional shares of ICG
Common Stock to which such holder is entitled pursuant to Section
3.4 and the amount, if any, of dividends or other distributions
by ICG with a record date after the Effective Time theretofore
paid with respect to such whole shares of ICG Common Stock and
(b) at the appropriate payment date, the amount of dividends or
other distributions (if any) by ICG with a record date after the
Effective Time but prior to surrender of such Company Stock
Certificate and a payment date subsequent to such surrender
payable with respect to such whole shares of ICG Common Stock.
Section 3.4 No Fractional Shares.
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(a) Cash Payment in Lieu of Fractional Shares. No
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certificates or scrip representing fractional shares of ICG
Common Stock will be issued upon the surrender of Company Stock
Certificates pursuant to Section 3.2. No such fractional
interest will entitle the owner thereof to any rights as a
security holder of ICG. In lieu of any such fractional shares of
ICG Common Stock, each holder of Company Common Stock entitled to
receive shares of ICG Common Stock in the Merger, upon surrender
of such Person's Company Stock Certificates for exchange pursuant
to Section 3.2, will be entitled to receive an amount in cash
(without interest), rounded to the nearest cent, determined by
multiplying the fractional share interest in ICG Common Stock to
which such holder would otherwise be entitled (after taking into
account all shares of Company Common Stock held of record by such
holder immediately prior to the Effective Time) by the market
value of one share of ICG Common Stock at the Effective Time.
The market value of one share of ICG Common Stock at the
Effective Time will be the ICG Closing Stock Price.
(b) Deposit with Exchange Agent. As soon as
---------------------------
practicable after the determination of the amount of cash, if
any, to be paid to holders of shares of Company Common Stock in
lieu of any fractional shares of ICG Common Stock, ICG will
promptly deposit with the Exchange Agent cash in the required
amounts and the Exchange Agent will mail such amounts without
interest to such holders; provided however, that no such amount
will be paid to any holder with respect to any Company Stock
Certificate prior to the surrender by such holder of such Company
Stock Certificate.
Section 3.5 No Liability. None of ICG,
------------
Acquisition Sub, the Company, the Surviving Corporation or the
Exchange Agent will be liable to any holder of shares of Company
Common Stock for any shares of ICG Common Stock, dividends or
distributions with respect thereto or cash payable in lieu of
fractional shares of ICG Common Stock delivered to a state
abandoned property administrator or other public official
pursuant to any applicable abandoned property, escheat or similar
law.
Section 3.6 Lost Certificates. If any Company Stock
-----------------
Certificate is lost, stolen or destroyed, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Company
Stock Certificate the shares of ICG Common Stock (and any
dividend or distribution with respect thereto made after the
Effective Time and any cash payable in lieu of fractional shares
of ICG Common Stock pursuant to Section 3.4) deliverable in
respect thereof as determined in accordance with the terms of
this Agreement, subject to the condition that the Person to whom
the ICG Common Stock (and any dividend or distribution with
respect thereto made after the Effective Time and any cash
payable in lieu of fractional shares pursuant to Section 3.4) is
to be issued shall have (a) delivered to ICG an affidavit
claiming such Company Stock Certificate to be lost, stolen, or
destroyed and (b) if required by ICG, given ICG an indemnity
satisfactory to ICG against any claim that may be made against
ICG with respect to the Company Stock Certificate alleged to have
been lost, stolen or destroyed.
Section 3.7 Treatment of Stock Options, Etc. At
--------------------------------
the Effective Time, each outstanding stock option, warrant or
other right to acquire shares of Company Common Stock ("Company
Options"), whether or not exercisable, as of the Effective Time
will be converted into and become rights with respect to ICG
Common Stock, and ICG shall assume each Company Option, in
accordance with the terms and conditions of the stock option,
warrant or other agreement by which it is evidenced, except that
from and after the Effective Time, (i) each Company Option
assumed by ICG may be exercised solely for shares of ICG Common
Stock, (ii) the number of shares of ICG Common Stock subject to
such Company Option will be equal to the number of shares of
Company Common Stock subject to such Company Option immediately
prior to the Effective Time multiplied by the Exchange Ratio, and
(iii) the per share exercise price under each such Company Option
will be adjusted by dividing the per share exercise price under
each such Company Option by the Exchange Ratio and rounding up to
the nearest cent. Notwithstanding the provisions of clause
(ii) of the preceding sentence, ICG will not be obligated to
issue any fraction of a share of ICG Common Stock upon exercise
of Company Options.
Section 3.8 Closing of the Company's Transfer Books.
---------------------------------------
At the Effective Time, the stock transfer books of the Company
will be closed and no transfer of shares of Company Common Stock
will be made thereafter. In the event that, after the Effective
Time, Company Stock Certificates are presented to the Surviving
Corporation, they will be canceled and exchanged for ICG
Certificates (and, if required, cash) as provided in Section
3.2(b) and Section 3.4.
Section 3.9 Closing. The closing of the
-------
transactions contemplated by this Agreement (the "Closing") will
take place (i) at the offices of Sherman & Howard L.L.C.,
633 Seventeenth Street, Suite 3000, Denver, Colorado, at
9:00 a.m. local time on the date that is the first Business Day
after the day on which the last of the conditions set forth in
Article VIII (excluding delivery of opinions and certificates) is
fulfilled or waived or (ii) at such other place and time as ICG
and the Company agree in writing. The date on which the Closing
occurs is referred to in this Agreement as the "Closing Date."
Section 3.10 No Repurchase Rights. The holders of
--------------------
ICG Common Stock received pursuant to the Merger or issuable
pursuant to the Company Options shall have no right to require
ICG or its Affiliates to repurchase any such shares of ICG Common
Stock.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES OF ICG
ICG represents and warrants to the Company as follows
(it being understood that the representations and warranties
relating to Acquisition Sub will be deemed to be made only as of
the Closing Date):
Section 4.1 Organization and Qualification. Each of
------------------------------
ICG and Acquisition Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to
carry on its business as it is now being conducted. Each of ICG
and Acquisition Sub is duly qualified as a foreign corporation to
do business, and is in good standing, in each jurisdiction where
the character of its properties owned or held under lease or the
nature of its activities make such qualification necessary,
except where the failure to be so qualified will not,
individually or in the aggregate, have a Material Adverse Effect
on it.
Section 4.2 Capitalization.
--------------
(a) As of September 30, 1997, the authorized capital
stock of ICG consisted of: (i) 100,000,000 shares of common
stock, par value $.01 per share, of which 32,381,310 are issued
and outstanding; (ii) 1,000,000 shares of preferred stock, par
value $.01 per share, of which no shares are issued and
outstanding; (iii) 4,786,680 shares of common stock of ICG
issuable upon conversion of outstanding preferred stock of ICG
and its Affiliates; and (iv) 7,439,998 shares of common stock
issuable with respect to all other options, warrants, convertible
debt and similar rights to acquire shares of ICG Common Stock.
(b) All shares of ICG Common Stock to be issued in
connection with the Merger, when issued in accordance with this
Agreement, will be duly authorized, validly issued, fully paid
and nonassessable.
(c) Acquisition Sub is a direct, wholly owned
subsidiary of ICG. ICG will own all of the issued and
outstanding stock of (i) Acquisition Sub immediately prior to the
Effective Time and (ii) Surviving Corporation immediately after
the Effective Time, all of which stock will be owned beneficially
and of record by ICG.
Section 4.3 Subsidiaries. A list of all of the
------------
Equity Affiliates of ICG has been delivered to the Company, which
list reflects the percentage and nature of ICG's ownership of
each Subsidiary and Equity Affiliate of ICG. Each of ICG's
Subsidiaries is a corporation or partnership (including solely
for purposes of this Section 4.3 a limited liability company)
duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or formation and has
the corporate or partnership power to carry on its business as it
is now being conducted or currently proposed to be conducted.
Each of ICG's Subsidiaries is duly qualified as a foreign
corporation or partnership to do business, and is in good
standing, in each jurisdiction where the character of its
properties owned or held under lease or the nature of its
activities makes such qualification necessary except where the
failure to be so qualified will not have a Material Adverse
Effect on ICG. All the outstanding shares of capital stock of
each of ICG's Subsidiaries that is a corporation are validly
issued, fully paid and nonassessable. Except as set forth on the
list of Equity Affiliates, the shares of capital stock or
partnership or other ownership interests in each of ICG's
Subsidiaries or Equity Affiliates that are owned by ICG or by a
Subsidiary of ICG are owned free and clear of any Liens, are not
subject to and have not been issued in violation of any
preemptive rights and have not been issued in violation of any
federal or state securities laws or any other Legal Requirement.
Except as set forth on the list of Equity Affiliates, there are
not, as of the date hereof, and at the Effective Time there will
not be, any outstanding options, warrants, calls or other rights,
agreements or commitments of any character, to which ICG or any
of its Subsidiaries is a party, relating to the issued or
unissued capital stock, other securities or partnership or other
ownership interests in any of the Subsidiaries or Equity
Affiliates of ICG.
Section 4.4 Authority Relative to this Agreement.
------------------------------------
ICG has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated by this Agreement by ICG have been duly authorized
by the Board of Directors of ICG, and no other corporate
proceedings on the part of ICG (other than the approval of ICG
stockholders as contemplated by this Agreement) are necessary to
authorize this Agreement and the transactions contemplated by
this Agreement. The Board of Directors of ICG has received the
opinion of Gleacher NatWest Inc., as financial advisor to ICG,
dated October 12, 1997, satisfactory to ICG and its Board of
Directors to the effect that, as of the date of this Agreement,
the Exchange Ratio is fair from a financial point of view to ICG
and its stockholders. This Agreement constitutes a valid and
binding obligation of ICG enforceable against it in accordance
with its terms, except (i) as enforcement may be limited by
bankruptcy, insolvency or other similar Legal Requirements
affecting the enforcement of creditors' rights generally, (ii) as
the availability of indemnification and other remedies may be
limited by federal and state securities laws and (iii) for
limitations imposed by general principles of equity.
Section 4.5 No Breach; Required Consents. The
----------------------------
execution and delivery of this Agreement by ICG does not, and the
consummation of the transactions contemplated by this Agreement
by ICG and Acquisition Sub will not: (a) subject to approval of
holders of ICG Common Stock, violate or conflict with the
certificate of incorporation or bylaws of ICG or Acquisition Sub;
(b) constitute a breach or default (or an event that with notice
or lapse of time or both would become a breach or default) or
give rise to any Lien, third-party right of termination,
cancellation, modification or acceleration under any agreement or
undertaking to which ICG or Acquisition Sub is a party or by
which any of them is bound, except where such breach, default,
Lien, third-party right of termination, cancellation,
modification or acceleration would not have a Material Adverse
Effect on ICG or Acquisition Sub; or (c) subject to obtaining the
approvals and making the filings described in Section 4.6,
constitute a violation of any applicable Legal Requirement,
except where such violation would not have a Material Adverse
Effect on ICG or Acquisition Sub.
Section 4.6 Consents and Approvals. Neither the
----------------------
execution and delivery of this Agreement by ICG nor the
consummation of the transactions contemplated by this Agreement
by ICG and Acquisition Sub will require ICG or Acquisition Sub to
make any filing or registration with, or obtain any
authorization, consent or approval of, any Governmental Entity,
except those required in connection, or in compliance, with the
provisions of (i) the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), (ii) the Communications
Act of 1934, as amended, (iii) the Securities Act of 1933, as
amended (the "Securities Act"), (iv) the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and (v) the corporation,
securities or blue sky laws or regulations, or similar Legal
Requirements, of various states of the United States, and other
than such filings, registrations, authorizations, consents or
approvals the failure of which to make or obtain would not have a
Material Adverse Effect on ICG or Acquisition Sub or prevent the
consummation of the transactions contemplated by this Agreement.
Section 4.7 Reports and Financial Statements.
--------------------------------
(a) SEC Reports. ICG has filed all required forms,
-----------
reports and documents required to be filed with the SEC since
December 31, 1993 (collectively, the "ICG SEC Reports"). As of
their respective dates or effective dates and except as the same
may have been corrected, updated or superseded by means of a
subsequent filing with the SEC prior to the date of this
Agreement, none of the ICG SEC Reports, including any financial
statements or schedules included or incorporated by reference
therein, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading insofar as such statements relate
to ICG. ICG has delivered or made available to the Company, in
the forms filed with the SEC, all the ICG SEC Reports.
(b) Financial Statements. The audited consolidated
--------------------
financial statements of ICG contained in the ICG SEC Reports
comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the
SEC with respect thereto, were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and present fairly
ICG's consolidated financial condition and the results of its
operations as of the relevant dates thereof and for the periods
covered thereby. The unaudited consolidated interim financial
statements of ICG contained in the ICG SEC Reports comply in all
material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect
thereto, were prepared on a basis consistent with prior interim
periods (except as required by applicable changes in GAAP or in
SEC accounting policies) and include all adjustments (consisting
only of normal recurring accruals) necessary for a fair
presentation of ICG's consolidated financial condition and
results of operations for such periods.
(c) Absence of Certain Changes. Since the date of the
--------------------------
most recent consolidated balance sheet of ICG included in ICG's
Quarterly Report on Form 10-Q filed with the SEC for the quarter
ended June 30, 1997 (the "Most Recent ICG Balance Sheet"), there
has not been any: (i) transaction, commitment, dispute or other
event or condition (financial or otherwise) of any character
(whether or not in the ordinary course of business) that,
individually or in the aggregate, has had, or would have, a
Material Adverse Effect on ICG (other than as a result of changes
in laws or regulations of general applicability or any changes
resulting from general economic, financial, market or industry-
wide conditions); (ii) any declaration, setting aside or payment
of any dividend or other distribution (whether in cash, stock or
property) with respect to the capital stock of ICG; provided that
dividends will be paid on shares of preferred stock issued by ICG
after the date of this Agreement; or (iii) entry into any
commitment or transaction material to ICG and its Subsidiaries
taken as a whole (including any borrowing or sale of assets)
except in the ordinary course of business consistent with past
practice, other than the sale of exchangeable preferred shares of
ICG Funding, LLC and the pending purchase of the stock of
Communications Buying Group, Inc. and the pending issuance of ICG
Common Stock to shareholders of that company.
(d) Absence of Undisclosed Liabilities. ICG does not
----------------------------------
have any indebtedness, liability or obligation required by GAAP
to be reflected on a balance sheet that is not reflected or
reserved against in the Most Recent ICG Balance Sheet except (i)
liabilities, obligations and contingencies that were incurred
after the date of the Most Recent ICG Balance Sheet in the
ordinary course of business and which would not, in the
aggregate, have a Material Adverse Effect and (ii) other
liabilities, obligations and contingencies that would not, in the
aggregate, have a Material Adverse Effect on ICG.
Section 4.8 Compliance with Law; Litigation.
-------------------------------
(a) ICG and its Subsidiaries hold all permits,
licenses, franchises, variances, exemptions, concessions, leases,
instruments, orders and approvals (the "ICG Permits") of all
courts, administrative agencies or commissions or other
governmental authorities or instrumentalities, domestic or
foreign (each, a "Governmental Entity") required to be held under
applicable Legal Requirements, except for such ICG Permits the
failure of which to hold, individually or in the aggregate, does
not have and, in the future is not likely to have, a Material
Adverse Effect on ICG. To ICG's Knowledge, ICG and its
Subsidiaries are in compliance with the terms of the ICG Permits,
except for such failures to comply that, individually or in the
aggregate, would not have a Material Adverse Effect on ICG. To
ICG's Knowledge, the businesses of ICG and its Subsidiaries are
not being conducted in violation of any Legal Requirement, except
for such violations which, individually or in the aggregate,
would not have a Material Adverse Effect on ICG. No
investigation or review by any Governmental Entity with respect
to ICG or any of its Subsidiaries is pending, or, to the
Knowledge of ICG, threatened, nor has any Governmental Entity
indicated to ICG in writing an intention to conduct the same,
other than those the outcome of which would not reasonably be
expected to have a Material Adverse Effect on ICG.
(b) There is no suit, action or proceeding pending or,
to the Knowledge of ICG, threatened, against or affecting ICG or
any of its Subsidiaries that has had or is likely to have a
Material Adverse Effect on ICG, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against ICG or any of its Subsidiaries
that has had or is likely to have a Material Adverse Effect on
ICG.
Section 4.9 Title to Assets. ICG and its
---------------
Subsidiaries have valid title to all material assets reflected on
the Most Recent ICG Balance Sheet, free and clear of any Lien
except: (a) landlord's Liens and Liens for property taxes not
delinquent; (b) Liens that were created in the ordinary course of
business and do not materially detract from the value of such
assets or materially impair the use thereof in the operation of
ICG's business; (c) leased interests in property owned by others
and leased interests in property leased to others; and (d)
zoning, building or similar restrictions, easements, rights-of-
way, reservations of rights, conditions, or other restrictions or
encumbrances relating to or affecting real property that do not,
individually or in the aggregate, materially interfere with the
use of such real property in the operation of ICG's business.
Section 4.10 Employee Matters. ICG and its
----------------
Subsidiaries are in compliance with all applicable Legal
Requirements relating to the employment of its employees,
including any obligations relating to employment standards
legislation, pay equity, occupational health and safety, labor
relations and human rights legislation except for such failures
to comply as do not have, and are not likely to have, a Material
Adverse Effect on ICG.
Section 4.11 ERISA.
-----
(a) Copies of all "employee benefit plans," as defined
in ERISA, and all other material employee benefit arrangements,
programs or payroll practices, including severance pay, sick
leave, vacation pay, salary continuation for disability, deferred
compensation, bonus, stock purchase, hospitalization, medical
insurance, life insurance, tuition reimbursement, employee
assistance and employee discounts, that ICG or any of its ERISA
Affiliates maintains or has an obligation to make contributions
(the "ICG Benefit Plans") have been delivered or made available
to the Company.
(b) Neither ICG nor any of its ERISA Affiliates has
incurred any unsatisfied withdrawal liability, as defined in
Section 4201 of ERISA, with respect to any multiemployer plan,
nor has any of them incurred any liability due to the termination
or reorganization of any multiemployer plan, except any such
liability that would not have a Material Adverse Effect on ICG.
To the Knowledge of ICG, neither ICG nor any of its ERISA
Affiliates reasonably expects to incur any liability due to a
withdrawal from or termination or reorganization of a
multiemployer plan, except any such liability that would not have
a Material Adverse Effect on ICG.
(c) Each ICG Benefit Plan that is intended to qualify
under Section 401 of the Code and the trust maintained pursuant
thereto is the subject of a favorable determination letter or
notification letter issued by the Internal Revenue Service, and
to the Knowledge of ICG, nothing has occurred with respect to any
such plan since such determination letter or notification letter
that is likely to result in the loss of such exemption or the
imposition of any material liability, penalty or tax under ERISA
or the Code. To the Knowledge of ICG and its ERISA Affiliates,
each ICG Benefit Plan has at all times been maintained in all
material respects, by its terms and in operation, in accordance
with all applicable Legal Requirements.
(d) All contributions (including all employer
contributions and employee salary reduction contributions)
required to have been made under the ICG Benefit Plans or
pursuant to applicable Legal Requirements (without regard to any
waivers granted under Section 412 of the Code) to any funds or
trusts established thereunder or in connection therewith have
been made by the due date thereof (including any valid extension
or grace period) and no accumulated funding deficiency exists
with respect to any of the ICG Benefit Plans subject to Section
412 of the Code.
(e) To the Knowledge of ICG, there have been no
violations of ERISA or the Code with respect to the filing of
applicable reports, documents and notices regarding the ICG
Benefit Plans with the Secretary of Labor and the Secretary of
the Treasury or the furnishing of such reports, documents and
notices to the participants or beneficiaries of the ICG Benefit
Plans, except such violations that, individually or in the
aggregate, would not have a Material Adverse Effect on ICG.
(f) There are no pending actions, claims or lawsuits
that have been asserted or instituted against the ICG Benefit
Plans, the assets of any of the trusts under such plans or the
plan sponsor or the plan administrator, or against any fiduciary
of the ICG Benefit Plans, with respect to the operation of such
plans (other than routine benefit claims), nor does ICG have
Knowledge of facts that reasonably could be expected to form the
basis for any such action, claim or lawsuit, except any such
actions, claims or lawsuits that, individually or in the
aggregate, would not have a Material Adverse Effect on ICG.
Section 4.12 Operations of Acquisition Sub. As of
-----------------------------
the Closing, Acquisition Sub will have engaged in no other
business activities other than in contemplation of this Agreement
and the transactions contemplated by this Agreement and will have
no material assets or liabilities other than its rights and
obligations under this Agreement.
Section 4.13 No Broker. Except for the fee payable
---------
by ICG to Gleacher NatWest Inc., no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger or the transactions
contemplated by this Agreement based upon arrangements made by or
on behalf of ICG or Acquisition Sub.
Section 4.14 Taxes. ICG and each of its Subsidiaries
-----
have timely filed all Tax returns required to be filed by any of
them and have timely paid or have established an adequate reserve
for the payment of, all Taxes owed in respect of the periods
covered by such returns, except where the failure to file such
Tax returns or timely pay or establish an adequate reserve for
the payment of such Taxes will not have a Material Adverse Effect
on ICG. The information contained in such Tax returns is
complete and accurate in all material respects. Neither ICG nor
any Subsidiary of ICG is delinquent in the payment of any Tax or
other amount owed to any Governmental Entity, except where the
amount owed, when paid, or the delinquency in paying the amount
owed will not have a Material Adverse Effect on ICG. There are
no claims or investigations pending or, to ICG's Knowledge,
threatened against ICG or any of its Subsidiaries for past Taxes,
except claims and investigations that would not have a Material
Adverse Effect on ICG and adequate provision for which has been
made on the Most Recent Balance Sheet. None of ICG or its
Subsidiaries has waived or extended any applicable statute of
limitations relating to the assessment of any Taxes, other than
state sales and use Taxes, that would be payable by ICG or such
Subsidiary. For the purposes of this Agreement, the term "Tax"
includes all federal, state, local and foreign income, profits,
estimated, franchise, gross receipts, payroll, sales, employment,
use, property, withholding, excise and other taxes, duties and
assessments of any nature whatsoever together with all interest,
penalties and additions imposed with respect to such amounts.
Section 4.15 Environmental Laws.
------------------
(a) Each of ICG and its Subsidiaries is in compliance
in all respects with all Environmental Laws, except where the
failure to so comply would not have a Material Adverse Effect on
ICG; and
(b) No orders, directions or notices have been issued
pursuant to any Environmental Law and no Governmental Entity has
submitted to any of ICG and its Subsidiaries any written request
for information pursuant to any Environmental Law.
Section 4.16 Transactions with Affiliates. Except as
----------------------------
disclosed in the ICG SEC Reports, there is no lease, sublease,
indebtedness, contract, agreement, commitment, understanding or
other arrangement of any kind entered into by ICG with any
officer, director or stockholder of ICG or any "affiliate" or
"associate" of any of them (as those terms are defined in the
Exchange Act) or of ICG, except, in each case, for compensation
paid to directors and officers consistent with previously
established policies (including normal merit increases in such
compensation in the ordinary course of business), reimbursements
of ordinary and necessary expenses incurred in connection with
their employment and amounts paid or benefits granted pursuant to
ICG Benefit Plans and except for transactions that are not
required to be disclosed pursuant to applicable Legal
Requirements.
Section 4.17 Approval.
--------
(a) The Board of Directors of ICG at a meeting duly
called and held: (i) determined that the Merger is advisable and
fair and in the best interests of ICG and its stockholders; (ii)
approved the Merger and this Agreement and the transactions
contemplated by this Agreement; and (iii) recommended the
approval of this Agreement and the Merger by the holders of ICG
Common Stock and directed that the Merger be submitted for
consideration by ICG's stockholders at the Meeting.
(b) The majority vote of the total votes cast at the
Meeting with respect to this Agreement and the Merger is the
minimum vote required for the adoption and approval of this
Agreement, the Merger and the other transactions contemplated by
this Agreement.
Section 4.18 Contracts. Each of ICG and its
---------
Subsidiaries are in material compliance with each material
contract or agreement to which it is a party, and each such
contract is in full force and effect, without material monetary
default by ICG or any such Subsidiary and, to the Knowledge of
ICG, without any breach or default by any other party thereto,
except where such breach or default would not result in a
Material Adverse Effect. No written notice has been received by
ICG or any such Subsidiary or, to ICG's Knowledge, threatened
regarding termination, suspension or material alteration or
amendment thereof. Each such contract or agreement is a valid
and binding obligation of ICG or its Subsidiary, as the case may
be, in accordance with its terms.
Section 4.19 Intellectual Property. ICG and its
---------------------
Subsidiaries own or have the right to use all of its registered
trademarks, service marks and copyrights used by ICG or its
Subsidiaries. To ICG's Knowledge, ICG and its Subsidiaries own
or have the legal right to use, by license or otherwise, all of
its Intellectual Property which is material to the operation of
its business. To ICG's Knowledge, the continued operation of the
business of ICG and such Subsidiaries as currently conducted will
not interfere with, infringe upon, misappropriate or conflict
with any Intellectual Property of another Person.
ARTICLE V
---------
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to ICG as follows:
Section 5.1 Organization and Qualification. The
------------------------------
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to carry on its business
as it is now being conducted. The Company is duly qualified as a
foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
Section 5.2 Capitalization.
--------------
(a) The authorized capital stock of the Company
consists of 40,000,000 shares of Company Common Stock, $.01 par
value per share, of which 11,738,388 shares are issued and
outstanding as of October 10, 1997, and 5,000,000 shares of
preferred stock, $.01 par value per share, none of which are
issued and outstanding and 200,000 of which have been designated
Series C Preferred Stock.
(b) The Company has delivered to ICG a schedule of all
options, warrants, calls, subscriptions or other rights,
agreements or commitments of any kind (including preemptive
rights), to which the Company or any of its Subsidiaries is a
party, relating to the issued or unissued capital stock or other
securities of the Company. Such schedule sets forth for all such
options, warrants, calls, subscriptions or other rights,
agreements or commitments that are outstanding (i) the number of
shares of Company Common Stock issuable pursuant thereto, (ii)
the exercise or conversion price, and (iii) the date of grant.
Any such options, warrants, calls, subscriptions or other rights,
agreements or commitments set forth on such schedule, if not
exercised before the Effective Time, as of the Effective Time
will be converted pursuant to Section 3.7.
(c) All issued and outstanding shares of Company Stock
have been duly authorized and validly issued and are fully paid
and nonassessable, are not subject to, and have not been issued
in violation of, any preemptive rights, and have not been issued
in violation of any federal or state securities laws or any other
Legal Requirement.
Section 5.3 Subsidiaries. A list of all the Equity
------------
Affiliates of the Company has been delivered to ICG, which list
reflects the percentage and nature of the Company's ownership of
each Subsidiary and Equity Affiliate of the Company. Each of the
Company's Subsidiaries is a corporation or partnership duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or formation and has the
corporate or partnership power to carry on its business as it is
now being conducted or currently proposed to be conducted. Each
of the Company's Subsidiaries is duly qualified as a foreign
corporation or partnership to do business, and is in good
standing, in each jurisdiction where the character of its
properties owned or held under lease or the nature of its
activities makes such qualification necessary except where the
failure to be so qualified will not have a Material Adverse
Effect on the Company. All the outstanding shares of capital
stock of each of the Company's Subsidiaries that is a corporation
are validly issued, fully paid and nonassessable. Except as set
forth on the list of Equity Affiliates, the shares of capital
stock or partnership or other ownership interests in each of the
Company's Subsidiaries or Equity Affiliates that are owned by the
Company or by a Subsidiary of the Company are owned free and
clear of any Liens, are not subject to and have not been issued
in violation of any preemptive rights and have not been issued in
violation of any federal or state securities laws or any other
Legal Requirement. Except as set forth on the list of Equity
Affiliates, there are not, as of the date hereof, and at the
Effective Time there will not be, any outstanding options,
warrants, calls or other rights, agreements or commitments of any
character, to which the Company or any of its Subsidiaries is a
party, relating to the issued or unissued capital stock, other
securities or partnership or other ownership interests in any of
the Subsidiaries or Equity Affiliates of the Company.
Section 5.4 Authority Relative to this Agreement.
------------------------------------
The Company has all requisite corporate power and authority to
execute and deliver this Agreement and, subject to approval of
this Agreement by the holders of the Company Stock, to consummate
the transactions contemplated by this Agreement. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly
authorized by the Company's Board of Directors. Except for the
approval of the holders of Company Stock, no other corporate
proceedings on the part of the Company are necessary to authorize
this Agreement and the transactions contemplated by this
Agreement. The Board of Directors of the Company has received
the opinion of BT Alex. Brown Incorporated ("BT Alex. Brown") as
financial advisor to the Company dated October 12, 1997
satisfactory to the Company and its Board of Directors to the
effect that, as of the date of this Agreement, the Exchange Ratio
is fair to the Company's stockholders from a financial point of
view. This Agreement constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms except
(i) as enforcement may be limited by bankruptcy, insolvency or
other similar Legal Requirements affecting the enforcement of
creditors' rights generally, (ii) as the availability of
indemnification and other remedies may be limited by federal and
state securities laws and (iii) for limitations imposed by
general principles of equity.
Section 5.5 No Breach; Required Consents. The
----------------------------
execution and delivery of this Agreement by the Company does not,
and the consummation of the transactions contemplated by this
Agreement by the Company will not: (a) subject to the approval
of holders of Company Stock, violate or conflict with the
certificate of incorporation or bylaws of the Company;
(b) constitute a breach or default (or an event that with notice
or lapse of time or both would become a breach or default) or
give rise to any Lien, third-party right of termination,
cancellation, modification or acceleration under any agreement or
undertaking to which the Company is a party or by which it is
bound, except where such breach, default, Lien, third-party right
of termination, cancellation, modification, or acceleration would
not have a Material Adverse Effect on the Company; or (c) subject
to obtaining the consents, approvals or authorizations and making
the filings or registrations described in Section 5.6, constitute
a violation of any Legal Requirement, except where such violation
would not have a Material Adverse Effect on the Company.
Section 5.6 Consents and Approvals. Neither the
----------------------
execution and delivery of this Agreement by the Company nor the
consummation of the transactions contemplated by this Agreement
by the Company will require the Company to make any filing or
registration with, or obtain any authorization, consent or
approval of, any Governmental Entity or any other Person, except
those required in connection, or in compliance, with the
provisions of (i) the HSR Act, (ii) the Communications Act of
1934, as amended, (iii) the Securities Act, (iv) the Exchange Act
and (v) the corporation, securities or blue sky laws or
regulations, or similar Legal Requirements, of the various states
of the United States, and other than such other filings,
registrations, authorizations, consents or approvals the failure
of which to make or obtain would not have a Material Adverse
Effect on the Company or prevent the consummation of the
transactions contemplated by this Agreement.
Section 5.7 Reports and Financial Statements.
--------------------------------
(a) SEC Reports. The Company has filed all required
-----------
forms, reports and documents required to be filed with the SEC
since December 31, 1993 (collectively, the "Company SEC
Reports"). As of their respective dates or effective dates and
except as the same may have been corrected, updated or superseded
by means of a subsequent filing with the SEC prior to the date of
this Agreement, none of the Company SEC Reports, including any
financial statements or schedules included or incorporated by
reference therein, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The Company has delivered or
made available to ICG, in the forms filed with the SEC, all the
Company SEC Reports.
(b) Financial Statements. The audited consolidated
--------------------
financial statements of the Company contained in the Company SEC
Reports comply in all material respects with applicable
accounting requirements and with the published rules and
regulations of the SEC with respect thereto, were prepared in
accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes
thereto) and present fairly the Company's consolidated financial
condition and the results of its operations as of the relevant
dates thereof and for the periods covered thereby. The unaudited
consolidated interim financial statements of the Company
contained in the Company SEC Reports comply in all material
respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto,
were prepared on a basis consistent with prior interim periods
(except as required by applicable changes in GAAP or in SEC
accounting policies) and include all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation
of the Company's consolidated financial condition and results of
operations for such periods.
(c) Absence of Certain Changes. Since the date of the
--------------------------
most recent consolidated balance sheet of the Company included in
the Company's Quarterly Report on Form 10-Q filed with the SEC
for the quarter ended June 30, 1997 (the "Most Recent Company
Balance Sheet"), there has not been any: (i) transaction,
commitment, dispute or other event or condition (financial or
otherwise) of any character (whether or not in the ordinary
course of business) that, individually or in the aggregate, has
had, or would have, a Material Adverse Effect on the Company
(other than as a result of changes in laws or regulations of
general applicability or any changes resulting from general
economic, financial, market or industry-wide conditions); (ii)
any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with
respect to the capital stock of the Company; or (iii) entry into
any commitment or transaction material to the Company and its
Subsidiaries taken as a whole (including any borrowing or sale of
assets) except in the ordinary course of business consistent with
past practice.
(d) Absence of Undisclosed Liabilities. The Company
----------------------------------
does not have any indebtedness, liability or obligation required
by GAAP to be reflected on a balance sheet that is not reflected
or reserved against in the Most Recent Company Balance Sheet
except (i) liabilities, obligations and contingencies that were
incurred after the date of the Most Recent Company Balance Sheet
in the ordinary course of business and which would not in the
aggregate have a Material Adverse Effect and (ii) other
liabilities, obligations and contingencies that would not, in the
aggregate, have a Material Adverse Effect on the Company.
Section 5.8 Compliance with Law; Litigation.
-------------------------------
(a) To the Company's Knowledge, the Company and its
Subsidiaries hold all permits, licenses, franchises, variances,
exemptions, concessions, leases, instruments, orders and
approvals (the "Company Permits") of all Governmental Entities
required to be held under applicable Legal Requirements, except
such Company Permits the failure of which to hold, individually
or in the aggregate, does not have and, in the future is not
likely to have, a Material Adverse Effect on the Company. To the
Company's Knowledge, the Company and its Subsidiaries are in
compliance with the terms of the Company Permits, except for such
failures to comply that, individually or in the aggregate, would
not have a Material Adverse Effect on the Company. To the
Company's Knowledge, the businesses of the Company and its
Subsidiaries are not being conducted in violation of any Legal
Requirement, except for such violations which, individually or in
the aggregate, would not have a Material Adverse Effect on the
Company. No investigation or review by any Governmental Entity
with respect to the Company or any of its Subsidiaries is
pending, or, to the Knowledge of the Company, threatened, nor has
any Governmental Entity indicated to the Company in writing an
intention to conduct the same, other than those the outcome of
which would not reasonably be expected to have a Material Adverse
Effect on the Company.
(b) There is no suit, action or proceeding pending or,
to the Knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries that has had or is likely
to have a Material Adverse Effect on the Company nor is there any
judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against the Company or any of
its Subsidiaries that has had or is likely to have a Material
Adverse Effect on the Company.
Section 5.9 Title to Assets. The Company and its
---------------
Subsidiaries have valid title to all material assets reflected on
the Most Recent Company Balance Sheet, free and clear of any Lien
except: (a) landlord's Liens and Liens for property taxes not
delinquent; (b) Liens that were created in the ordinary course of
business and do not materially detract from the value of such
assets or materially impair the use thereof in the operation of
the Company's business; (c) leased interests in property owned by
others; and leased interests in property leased to others; and
(d) zoning, building or similar restrictions, easements,
rights-of-way, reservations of rights, conditions, or other
restrictions or encumbrances relating to or affecting real
property that do not, individually or in the aggregate,
materially interfere with the use of such real property in the
operation of the Company's business.
Section 5.10 Employee Matters. The Company and its
----------------
Subsidiaries are in compliance with all applicable Legal
Requirements relating to the employment of employees, including
any obligations relating to employment standards legislation, pay
equity, occupational health and safety, labor relations and human
rights legislation except for such failures to comply as do not
have, and are not likely to have, a Material Adverse Effect on
the Company.
Section 5.11 ERISA.
-----
(a) Copies of all "employee benefit plans," as defined
in ERISA, and all other material employee benefit arrangements,
programs or payroll practices, including severance pay, sick
leave, vacation pay, salary continuation for disability, deferred
compensation, bonus, stock purchase, hospitalization, medical
insurance, life insurance, tuition reimbursement, employee
assistance and employee discounts, that the Company or any of its
ERISA Affiliates maintains or has an obligation to make
contributions (the "Company Benefit Plans") have been delivered
or made available to the Company.
(b) Neither the Company nor any of its ERISA
Affiliates has incurred any unsatisfied withdrawal liability, as
defined in Section 4201 of ERISA, with respect to any
multiemployer plan, nor has any of them incurred any liability
due to the termination or reorganization of any multiemployer
plan, except any such liability that would not have a Material
Adverse Effect on the Company. To the Knowledge of the Company,
neither the Company nor any of its ERISA Affiliates reasonably
expects to incur any liability due to a withdrawal from or
termination or reorganization of a multiemployer plan, except any
such liability that would not have a Material Adverse Effect on
the Company.
(c) Each Company Benefit Plan that is intended to
qualify under Section 401 of the Code, and a form of trust that
is similar in all material respects to the trust maintained
pursuant thereto, have been determined to be exempt from federal
income taxation under Section 501 of the Code by the Internal
Revenue Service, and to the Knowledge of the Company, nothing has
occurred with respect to any such plan since such determination
that is likely to result in the loss of such exemption or the
imposition of any material liability, penalty or tax under ERISA
or the Code. Each Company Benefit Plan has at all times been
maintained in all material respects, by its terms and in
operation, in accordance with all applicable Legal Requirements.
(d) All contributions (including all employer
contributions and employee salary reduction contributions)
required to have been made under the Company Benefit Plans or
pursuant to applicable Legal Requirements (without regard to any
waivers granted under Section 412 of the Code) to any funds or
trusts established thereunder or in connection therewith have
been made by the due date thereof (including any valid extension
or grace period) and no accumulated funding deficiency exists
with respect to any of the Company Benefit Plans subject to
Section 412 of the Code.
(e) To the Knowledge of the Company, there have been
no violations of ERISA or the Code with respect to the filing of
applicable reports, documents and notices regarding the Company
Benefit Plans with the Secretary of Labor and the Secretary of
the Treasury or the furnishing of such reports, documents and
notices to the participants or beneficiaries of the Company
Benefit Plans, except such violations that, individually or in
the aggregate, would not have a Material Adverse Effect on the
Company.
(f) There are no pending actions, claims or lawsuits
that have been asserted or instituted against the Company Benefit
Plans, the assets of any of the trusts under such plans or the
plan sponsor or the plan administrator, or against any fiduciary
of the Company Benefit Plans, with respect to the operation of
such plans (other than routine benefit claims), nor does the
Company have Knowledge of facts that reasonably could be expected
to form the basis for any such action, claim or lawsuit, except
any such actions, claims or lawsuits that, individually or in the
aggregate, would not have a Material Adverse Effect on the
Company.
Section 5.12 Approval.
--------
(a) The Board of Directors of the Company at a meeting
duly called and held: (i) determined that the Merger is advisable
and fair and in the best interests of the Company and its
stockholders; (ii) approved the Merger and this Agreement and the
transactions contemplated by this Agreement in accordance with
the provisions of Section 251 of the DGCL; (iii) recommended the
approval of this Agreement and the Merger by the holders of the
Company Stock and directed that the Merger be submitted for
consideration by the Company's stockholders at the Meeting; and
(iv) adopted a resolution having the effect of causing the Merger
not to be subject to Section 203 of the DGCL to the extent
applicable, if applicable, and to the extent permitted by
applicable Legal Requirements.
(b) The vote of a majority of the outstanding shares
of the Company Stock is the vote required for the adoption and
approval of this Agreement, the Merger and the other transactions
contemplated by this Agreement.
Section 5.13 Financial Advisor/Investment Banker.
-----------------------------------
Except for amounts payable to BT Alex. Brown, pursuant to the
letter agreement dated June 1, 1997, no broker, finder or
investment banker is entitled to any brokerage, finder's or other
fee or commission in connection with the Merger or the
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or its
Subsidiaries. There has been delivered to ICG a true and
complete copy of the agreement pursuant to which BT Alex. Brown
has been retained to act as financial advisor to the Company and
its Subsidiaries in connection with the Merger.
Section 5.14 Taxes. The Company and each of its
-----
Subsidiaries have timely filed all Tax returns required to be
filed by any of them and have timely paid or have established an
adequate reserve for the payment of, all Taxes owed in respect of
the periods covered by such returns, except where the failure to
file such Tax returns or timely pay or establish an adequate
reserve for the payment of such Taxes, will not have a Material
Adverse Effect on the Company. The information contained in such
Tax returns is complete and accurate in all material respects.
Neither the Company nor any Subsidiary of the Company is
delinquent in the payment of any Tax or other amount owed to any
Governmental Entity, except where the amount owed, when paid, or
the delinquency in paying the amount owed will not have a
Material Adverse Effect on the Company. There are no claims or
investigations pending or, to the Company's Knowledge, threatened
against the Company or any of its Subsidiaries for past Taxes,
except claims and investigations that would not have a Material
Adverse Effect on the Company and adequate provision for which
has been made on the Most Recent Balance Sheet. None of the
Company or its Subsidiaries has waived or extended any applicable
statute of limitations relating to the assessment of any material
Taxes that would be payable by the Company or such Subsidiary.
Section 5.15 Environmental Laws.
------------------
(a) Each of the Company and its Subsidiaries is in
compliance in all respects with all Environmental Laws, except
where the failure to so comply would not have a Material Adverse
Effect on the Company; and
(b) No orders, directions or notices have been issued
pursuant to any Environmental Law and no Governmental Entity has
submitted to any of the Company and its Subsidiaries any request
for information pursuant to any Environmental Law.
Section 5.16 Transactions with Affiliates. Except as
----------------------------
disclosed in the Company SEC Reports, there is no lease,
sublease, indebtedness, contract, agreement, commitment,
understanding or other arrangement of any kind entered into by
the Company with any officer, director or stockholder of the
Company or any "affiliate" or "associate" of any of them (as
those terms are defined in the Exchange Act) or of the Company,
except, in each case, for compensation paid to directors and
officers consistent with previously established policies
(including normal merit increases in such compensation in the
ordinary course of business), reimbursements of ordinary and
necessary expenses incurred in connection with their employment
and amounts paid or benefits granted pursuant to Company Benefit
Plans and except for transactions that are not required to be
disclosed pursuant to applicable Legal Requirements.
Section 5.17. Contracts. Each of the Company and its
---------
Subsidiaries are in material compliance with each material
contract or agreement to which it is a party, and each such
contract is in full force and effect, without material monetary
default by the Company or any such Subsidiary and, to the
Knowledge of the Company, without any breach or default by any
other party thereto, except where such breach or default would
not result in a Material Adverse Effect. No written notice has
been received by the Company or any such Subsidiary or, to the
Company's Knowledge, threatened regarding termination, suspension
or material alteration or amendment thereof. Each such contract
or agreement is a valid and binding obligation of the Company or
its Subsidiary, as the case may be, in accordance with its terms.
Section 5.18. Intellectual Property. The Company and
---------------------
its Subsidiaries own or have the right to use all of its
registered trademarks, service marks and copyrights used by the
Company or its Subsidiaries. To the Company's Knowledge, the
Company and its Subsidiaries own or have the legal right to use,
by license or otherwise, all of its Intellectual Property which
is material to the operation of its business. To the Company's
Knowledge, the continued operation of the business of the Company
and such Subsidiaries as currently conducted will not interfere
with, infringe upon, misappropriate or conflict with any
Intellectual Property of another Person.
ARTICLE VI
----------
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business of the Company.
----------------------------------
Prior to the Effective Time, except as contemplated, permitted or
required by this Agreement:
(a) The Company will conduct, and will cause each of
its Subsidiaries to conduct, its business in the ordinary course
in accordance with past practice, and will use, and will cause
each of its Subsidiaries to use, its reasonable best efforts to
preserve intact its present business organization and to preserve
relationships with customers, suppliers and others having
business dealings with them.
(b) The Company will not, and will not permit any of
its Subsidiaries to: (i) amend or propose to amend the
certificate of incorporation or bylaws of the Company or any of
its Subsidiaries; (ii) split, combine or reclassify the
outstanding capital stock of, or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or
in substitution for shares of capital stock of, or other
ownership interests in, the Company or any of its Subsidiaries;
(iii) or declare, set aside or pay any dividend, distribution, or
other payment to any stockholder, director or officer of the
Company or any of its Subsidiaries, other than payments made in
accordance with existing practices; (iv) directly or indirectly
redeem, purchase or otherwise acquire or agree to redeem,
purchase or otherwise acquire any shares of capital stock of, or
other ownership interests in, the Company or any of its
Subsidiaries other than existing contractual rights of repurchase
at cost upon termination of employment; or (v) agree to do any of
the foregoing.
(c) Except with the written consent of ICG, which
consent will not be unreasonably withheld, the Company will not,
and will not permit any of its Subsidiaries to: (i) encumber,
issue, deliver or sell or agree to issue, deliver or sell any
shares of capital stock of, or other equity interests (including
any option, warrant or other similar right to acquire any equity
interest) in the Company or any of its Subsidiaries, except for
shares issued under the Company's Employee Stock Purchase Plan
and except for options to purchase an aggregate of up to 150,000
shares of Company Common Stock, exercisable for fair market value
on the date of grant, issued consistent with past practices to
employees either hired before or after October 12, 1997 and
officers hired after October 12, 1997; (ii) acquire, lease or
dispose of any assets other than in the ordinary course of
business consistent with past practice; (iii) create, assume or
incur any indebtedness except in the ordinary course of business
consistent with past practice; (iv) encumber any of its assets
other than in connection with equipment leases incurred in the
ordinary course of business consistent with past practice;
(v) enter into any other material transaction other than in each
case in the ordinary course of business consistent with past
practice; (vi) make any payment with respect to any indebtedness
of the Company or its Subsidiaries except such payments that are
scheduled to come due prior to the Effective Time; (vii) acquire
by merging or consolidating with, or by acquiring assets of, or
by purchase a substantial ownership interest in, or by any other
method, any business or any other Person; or (viii) agree to do
any of the foregoing.
(d) Except with the written consent of ICG, which
consent will not be unreasonably withheld, and except as required
to comply with applicable Legal Requirements or existing Company
Benefit Plans, the Company will not, and will not permit any of
its Subsidiaries to: (i) adopt, terminate or amend any bonus,
profit sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or
other Company Benefit Plan, agreement, trust, fund or other
arrangement for the benefit or welfare of any director, officer
or current or former employee; (ii) increase in any manner the
compensation or benefits of any director, officer or employee
(except normal increases in the ordinary course of business
consistent with past practice); (iii) except as permitted under
Section 6.1(c)(i), grant any award or option under any bonus,
incentive, performance or other compensation plan or arrangement
or Company Benefit Plan; (iv) take any action to fund or in any
other way secure the payment of compensation or benefits
(including any option, warrant or other similar right to acquire
any equity interest) under any employee plan, agreement, contract
or arrangement or Company Benefit Plan (except in the ordinary
course of business consistent with past practice); or (v) agree
to do any of the foregoing.
(e) The Company will not take or agree to take, and
will cause its Subsidiaries not to take or agree to take, any
action that would: (i) make any representation or warranty of the
Company set forth in this Agreement untrue or incorrect so as to
cause the condition set forth in Section 8.3(a) of this Agreement
not to be fulfilled as of the Effective Time; or (ii) result in
any breach of this Agreement or of the other conditions of this
Agreement set forth in Section 8.1 or Section 8.3 of this
Agreement not to be satisfied as of the Effective Time.
(f) The Company will not, and will not permit any of
its Subsidiaries to enter into any transaction with any officer,
stockholder, director, consultant or employee of the Company of
any Subsidiary thereof or any person or entity that is an
"affiliate" or "associate" of any of the foregoing, as those
terms are defined in Rule 12b-2 under the Exchange Act, whether
or not such transaction would be in the ordinary course of
business.
(g) The Company will take no action that reasonably
could be expected to adversely affect the qualification of the
Merger for pooling-of-interests accounting treatment under GAAP.
(h) The Company and its Subsidiaries will (i) not take
any action to initiate, solicit or encourage, directly or
indirectly, any inquires or the making or implementation of any
proposal or offer (including, without limitation, any proposal or
offer to its stockholders) with respect to a merger, acquisition,
consolidation or similar transaction involving, or any purchase
of all or any significant portion of the assets or any equity
securities of, the Company or any of its Subsidiaries (any such
proposal or offer being hereinafter referred to as an
"Acquisition Proposal"), or engage in any negotiations
concerning, or provide any confidential information or data to,
or have any discussions with, any person or other entity or group
as defined in Section 13(d)(3) of the Exchange Act relating to an
Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; (ii)
immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties
previously conducted with respect to any of the foregoing and
take the necessary steps to inform the individuals or entities
referred to above of the obligations undertaken in this Section
6.1(h); and (iii) notify ICG immediately if any such inquiries or
proposals are received by, any such information is requested from
or any such negotiations or discussions are sought to be
initiated or continued with, the Company or any of its
Subsidiaries. Nothing contained in this Section 6.1(h) will
prohibit the Board of Directors of the Company from (1)
furnishing information to, or entering into discussions or
negotiations with, any person or other entity or group that makes
an Acquisition Proposal or recommending to its stockholders that
they accept such Acquisition Proposal, if (A) the Board of
Directors of the Company reasonably determines in good faith,
after consultation with outside counsel, that such action is
consistent with its fiduciary duties to stockholders imposed by
law, (B) prior to furnishing such information to, or entering
into discussions or negotiations with, such person or entity, the
Company provides written notice to ICG to the effect that it is
furnishing information to, or entering into discussions or
negotiations with, such person or entity, and (C) subject to any
confidentiality agreement with such other party (which the
Company determines in good faith, after consultation with outside
counsel, is required to be executed in order for the Board of
Directors to act consistently with its fiduciary duties to
stockholders imposed by law), the Company keeps ICG informed of
the status (not the terms) of any such discussions or
negotiations; and (2) to the extent applicable, complying with
Rule 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal. Nothing in this Section 6.1(h) shall (x)
permit any party to terminate this Agreement (except as
specifically provided in Section 9.1(d)), (y) permit any party to
enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement (it being agreed that during
the term of this Agreement, no party shall enter into any
agreement with any person that provides for, or in any way
facilitates, an Acquisition Proposal (other than a
confidentiality agreement in customary form)), or (z) breach any
obligation of any party under this Agreement.
(i) The Board of Directors of the Company will
recommend to the stockholders of the Company the approval of the
Merger, unless the Board of Directors reasonably determines in
good faith, after consultation with outside counsel, that such
action would be inconsistent with its fiduciary duties to
stockholders as required by law and, if such determination is
made, will give written notice to ICG of such determination
within two Business Days of the making of such determination.
Upon the issuance of such written notice to ICG, and upon the
written election of ICG, the Company will negotiate in good faith
with ICG for a period of two Business Days regarding such
adjustments in the terms of the Merger as would enable the Board
of Directors of the Company, consistent with its fiduciary duties
to the stockholders, to proceed to recommend the Merger to the
stockholders of the Company as contemplated in this Agreement.
(j) Upon the request of ICG, the Company will
prepare and deliver to ICG, within twenty days after such
request, such financial statements (including audited financial
statements) as may be required by ICG to meet its financial
reporting obligations (including requirements under applicable
securities laws).
(k) The Company shall take no action that reasonably
could be expected to adversely affect the qualification of the
Merger as a reorganization under Section 368(a) of the Code.
(l) The Company will use its reasonable best efforts
to dispose of all of its interest in Internetcom do Brazil, S.A.,
or, alternatively, acquire and hold more than 51 percent of the
equity interests of such company.
Section 6.2 Conduct of Business of ICG. Prior to
--------------------------
the Effective Time, except as contemplated, permitted or required
by this Agreement:
(a) ICG will conduct, and will cause each of its
Subsidiaries to conduct, its business in the ordinary course in
accordance with past practice, and will use, and will cause each
of its Subsidiaries to use, its reasonable best efforts to
preserve intact its present business organization and to preserve
relationships with customers, suppliers and others having
business dealings with them.
(b) ICG will not take or agree to take, and will cause
its Subsidiaries not to take or agree to take, any action that
would (i) make any representation or warranty of ICG set forth in
this Agreement untrue or incorrect so as to cause the condition
set forth in Section 8.2(a) of this Agreement not to be fulfilled
as of the Effective Time or (ii) result in any breach of this
Agreement or of the other conditions set forth in Section 8.1 or
Section 8.2 of this Agreement not to be satisfied as of the
Effective Time.
(c) Without the prior written consent of the Company,
for a period ending upon the earlier of the termination of this
Agreement or twelve months after the date of this Agreement, ICG
will not except as provided in this Agreement (i) acquire or
agree to acquire any voting securities or direct or indirect
rights to acquire any voting securities of the Company or (ii)
(1) make or participate in any "solicitation" of "proxies" to
vote (as such terms are used in the proxy rules of the SEC) with
respect to the voting of any securities of the Company, (2) form,
join or in any way participate in a group within the meaning of
Section 13(d)(3) of the Exchange Act with respect to any voting
securities of the Company or (3) otherwise act, alone or with
others, to seek to control the management, Board of Directors or
policies of the Company. ICG has not taken any of these actions
prior to the date of this Agreement.
(d) The Board of Directors of ICG will recommend to
the stockholders of ICG the approval of the Merger, unless the
Board of Directors reasonably determines in good faith, after
consultation with outside counsel, that such action would be
inconsistent with its fiduciary duties to its stockholders as
required by law and, if such determination is made, will give
written notice to the Company within two Business Days of the
making of such determination. Upon the issuance of such written
notice to the Company, and upon the election of the Company, ICG
will negotiate in good faith with the Company for a period of two
Business Days regarding such adjustments in the terms of the
Merger as would enable the Board of Directors of ICG, consistent
with its fiduciary duties to the stockholders, to proceed to
recommend the Merger to the stockholders of ICG as contemplated
by this Agreement.
(e) ICG shall take no action that reasonably could be
expected to adversely affect the qualification of the Merger for
pooling-of-interests accounting treatment under GAAP.
(f) ICG shall take no action that reasonably could be
expected to adversely affect the qualification of the Merger as a
reorganization under Section 368(a) of the Code.
(g) ICG shall not enter into any agreement with any
Person for the purchase or other acquisition by such Person of
more than 50 percent of the ICG Common Stock, unless such Person
agrees in writing prior to the Effective Time to vote in favor of
the Merger.
ARTICLE VII
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ADDITIONAL AGREEMENTS
Section 7.1 Access and Information. Each of the
----------------------
Company and ICG and their respective Subsidiaries will afford to
the other and to the other's accountants, counsel and other
representatives full access during normal business hours (and at
such other times as the parties may mutually agree) throughout
the period prior to the Effective Time to all of its properties,
books, contracts, commitments, records and personnel.
Section 7.2 SEC Filings.
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(a) The Company and ICG will prepare jointly, and as
soon as reasonably practicable after the date of this Agreement,
file with the SEC a joint proxy statement/registration statement
(the "Preliminary Joint Proxy Statement/Prospectus") comprising
preliminary proxy materials of the Company and ICG under the
Exchange Act with respect to the Merger and a Registration
Statement on Form S-4 and preliminary prospectus of ICG under the
Securities Act with respect to the ICG Common Stock to be issued
in the Merger, and will thereafter use their respective
reasonable best efforts to respond to any comments of the SEC
with respect thereto and to cause a definitive joint proxy
statement/registration statement (including all supplements and
amendments thereto, the "Joint Proxy Statement/Prospectus") and
proxy to be mailed to the Company's and ICG's stockholders as
promptly as practicable.
(b) As soon as reasonably practicable after the date
hereof, the Company and ICG will prepare and file any other
filings relating to the Merger and the other transactions
contemplated hereby that are required to be filed by each under
the Exchange Act and other applicable Legal Requirements
(collectively "Other Filings"), and will use their reasonable
best efforts to respond to any comments of the SEC or any other
appropriate government official with respect thereto.
(c) The Company, on the one hand, and ICG, on the
other, will cooperate with each other and provide all information
necessary to prepare the Preliminary Joint Proxy
Statement/Prospectus, the Joint Proxy Statement/Prospectus and
the Other Filings (collectively "SEC Filings") and will provide
promptly to the other party any information that such party may
obtain that could necessitate amending any such document.
(d) Each of the Company and ICG will notify the other
promptly of the receipt of any comments from the SEC or its staff
or any other government official and of any requests by the SEC
or its staff or any other government official for amendments or
supplements to any of the SEC Filings or for additional
information and will supply the other with copies of all
correspondence between the Company or any of its representatives
or ICG or any of its representatives, as the case may be, on the
one hand, and the SEC or its staff or any other government
official, on the other hand, with respect thereto. If at any
time prior to the Effective Time, any event occurs that should be
set forth in an amendment of, or a supplement to, any of the SEC
Filings, the Company and ICG promptly will prepare and file such
amendment or supplement and will distribute such amendment or
supplement as required by applicable Legal Requirements,
including, in the case of an amendment or supplement to the Joint
Proxy Statement/Prospectus, mailing such supplement or amendment
to the Company's stockholders.
(e) ICG covenants that the SEC Filings (other than any
information provided by the Company for inclusion in the SEC
Filings) (i) will comply in all material respects with the
Securities Act and the Exchange Act and (ii) will not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements contained therein, in light of the circumstances
under which they are made, not misleading.
(f) The Company covenants that the SEC Filings (other
than any information provided by ICG for inclusion in the SEC
Filings) (i) will comply in all material respects with the
Securities Act and the Exchange Act and (ii) will not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(g) ICG will be responsible for all reasonable
expenses incurred in complying with this Section 7.2, including
all registration, qualification and filing fees, printing
expenses, fees and disbursements of counsel (other than counsel
to the Company) and applicable blue-sky fees and expenses.
(h) (i) ICG will indemnify, defend, and hold
harmless the Company, its officers, directors, employees and
agents and each other Person, if any, who controls any of the
foregoing within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities (collectively, "Losses"), joint or
several, to which any of the foregoing may become subject under
the Securities Act or the Exchange Act or otherwise, insofar as
such Losses (or actions in respect thereof) arise out of or are
based upon (A) an untrue statement or alleged untrue statement of
a material fact contained in any SEC Filing, or (B) the omission
or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, provided that such misstatement or omission was based
on or omitted from information provided by ICG in writing for
inclusion in the SEC Filings or was made in reliance upon and in
conformity with such information. ICG promptly will reimburse
the Company and each such officer, director, employee, agent and
controlling Person for any legal or any other expenses reasonably
incurred by any of them in connection with investigating or
defending any such Losses (or action in respect thereof).
(ii) If this Agreement is terminated prior to the
consummation of the Merger, the Company will indemnify, defend
and hold harmless each of ICG and Acquisition Sub and their
officers, employees and agents and directors and each other
Person, if any, who controls any of the foregoing within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any Losses, joint or several, to which any
of the foregoing may become subject under the Securities Act or
the Exchange Act or otherwise, insofar as such Losses (or actions
in respect thereof) arise out of or are based upon (A) an untrue
statement or alleged untrue statement of a material fact
contained in any SEC Filing or (B) the omission or alleged
omission to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
provided that the misstatement or omission was based on or
omitted from information provided by the Company in writing for
use in the SEC Filings or was made in reliance upon and in
conformity with such information. The Company promptly will
reimburse ICG and Acquisition Sub and each such officer,
director, employee, agent and controlling Person for any legal or
any other expenses reasonably incurred by any of them in
connection with investigating or defending any such Losses (or
action in respect thereof).
(iii) For purposes of this Section 7.2, (A)
"Indemnifying Party" means the Person having an obligation
hereunder to indemnify any other Person pursuant to this
Section 7.2, (B) "Indemnified Party" means the Person having the
right to be indemnified pursuant to this Section 7.2 and (C) any
information concerning the Company that is included in any SEC
Filing that is provided to the Company or its counsel for review
within a reasonable period before filing or use thereof and to
which the Company has not provided written notice of objection to
ICG will be deemed to have been provided by the Company for
inclusion in such SEC Filing. Whenever any claim for
indemnification arises under this Section 7.2, the Indemnified
Party will promptly notify the Indemnifying Party in writing of
such claim and, when known, the facts constituting the basis for
such claim (in reasonable detail). Failure by the Indemnified
Party so to notify the Indemnifying Party will not relieve the
Indemnifying Party of any liability hereunder except to the
extent that such failure materially prejudices the Indemnifying
Party.
(iv) After such notice, if the Indemnifying Party
undertakes to defend any such claim, then the Indemnifying Party
will be entitled, if it so elects, to take control of the defense
and investigation with respect to such claim and to employ and
engage attorneys of its own choice to handle and defend such
claim, at the Indemnifying Party's cost, risk and expense, upon
notice to the Indemnified Party of such election, which notice
acknowledges the Indemnifying Party's obligation to provide
indemnification hereunder. The Indemnifying Party will not
settle any third-party claim that is the subject of
indemnification without the written consent of the Indemnified
Party, which consent will not be unreasonably withheld; provided
however, that the Indemnifying Party may settle a claim without
the Indemnified Party's consent if the settlement (A) makes no
admission or acknowledgment of liability or culpability with
respect to the Indemnified Party, (B) includes a complete release
of the Indemnified Party and (C) does not require the Indemnified
Party to make any payment or forego or take any action. The
Indemnified Party will cooperate in all reasonable respects with
the Indemnifying Party and its attorneys in the investigation,
trial and defense of any lawsuit or action with respect to such
claim and any appeal arising therefrom (including the filing in
the Indemnified Party's name of appropriate cross claims and
counterclaims) and the Indemnifying Party will reimburse the
Indemnified Party for all reasonable direct out-of-pocket
expenses incurred by the Indemnified Party in connection with
such cooperation. The Indemnified Party may, at its own expense,
participate in any investigation, trial and defense of such
lawsuit or action controlled by the Indemnifying Party and any
appeal arising therefrom. If, after receipt of a claim notice
pursuant to Section 7.2(h)(iii), the Indemnifying Party does not
undertake to defend any such claim, the Indemnified Party may,
but will have no obligation to, contest any lawsuit or action
with respect to such claim and the Indemnifying Party will be
bound by the result obtained with respect thereto by the
Indemnified Party (including the settlement thereof without the
consent of the Indemnifying Party). If there are one or more
defenses available to the Indemnified Party that conflict with,
or are additional to, those available to the Indemnifying Party,
the Indemnified Party will have the right, at the expense of the
Indemnifying Party, to participate in the defense of the lawsuit
or action; provided however, that the Indemnified Party may not
settle such lawsuit or action without the consent of the
Indemnifying Party, which consent will not be unreasonably
withheld.
(v) If the indemnification provided for in this
Section 7.2(h) is for any reason unavailable to the Indemnified
Party in respect of any Losses (or action in respect thereof)
then the Indemnifying Party will, in lieu of indemnifying the
Indemnified Party, contribute to the amount paid or payable by
the Indemnified Party as a result of such Losses (or action in
respect thereof), in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party on the one hand and
the Indemnified Party on the other with respect to the statement
or omission that resulted in such Losses (or action in respect
thereof) as well as any other relevant equitable considerations.
Relative fault with respect to an untrue or alleged untrue
statement or omission of a material fact will be determined by
reference to whether the untrue or alleged untrue statement or
omission of a material fact related to information supplied by
the Indemnifying Party on the one hand or the Indemnified Party
on the other, the intent of the parties and their relative
Knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable
by the Indemnified Party as a result of the Losses (or action in
respect thereof) referred to above will be deemed to include any
legal or other expenses reasonably incurred by the Indemnified
Party in connection with investigating, trying or defending any
such action or claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
Section 7.3 Meetings of Stockholders. Each of the
------------------------
Company and ICG will take all action necessary, in accordance
with the DGCL, the rules and regulations of the National
Association of Securities Dealers, Inc. ("NASD") and the
certificate of incorporation and bylaws of the Company or ICG, as
applicable, to duly call, give notice of, convene and hold a
meeting of its stockholders as promptly as practicable, to
consider and vote upon the adoption and approval of this
Agreement (as a plan of merger under Section 251 of the DGCL),
the Merger and the other transactions contemplated by this
Agreement (each, individually, the "Meeting"), to the extent such
approval is required by the DGCL, the NASD or the certificate of
incorporation of the Company or ICG, as applicable. Each of the
Company and ICG will use its best efforts to hold such meetings
at the same date and time.
Section 7.4 Compliance with the Securities Act.
----------------------------------
Prior to the Closing Date, the Company will cause to be delivered
to ICG a letter from the Company, identifying all Persons who
are, in its opinion, as of the date of this Agreement,
"affiliates" of the Company as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act. The
Company shall use its reasonable best efforts to cause each such
Person to deliver to ICG not later than October 20, 1997, a
written agreement substantially in the form of Exhibit A. The
Company will, as of the date of the Meeting of its stockholders,
identify other Persons who at that time are affiliates, and use
its reasonable best efforts to cause each such Person to deliver
to ICG on a prompt basis such a written agreement. ICG may cause
the ICG Certificates evidencing shares of ICG Common Stock issued
to such Persons to bear a legend referring to the applicability
of paragraphs (c) and (d) of Rule 145 under the Securities Act.
Section 7.5 Reasonable Best Efforts. Without
-----------------------
limiting the termination and other rights of the parties under
this Agreement (and subject to the parties' rights to take
certain actions pursuant to Section 6.1(h), Section 6.1(i) and
Section 6.2(d) consistent with the fiduciary duties of their
respective Boards of Directors) each of the parties to this
Agreement will use its commercially reasonable best efforts to
take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable under
applicable Legal Requirements to consummate and make effective
the transactions contemplated by this Agreement in the most
expeditious manner practicable, including the satisfaction of all
conditions to the Merger.
Section 7.6 Confidentiality and Public
--------------------------
Announcements. Each party to this Agreement agrees that it will
-------------
treat this Agreement and all negotiations and communications
between them relating to this Agreement, the Merger or otherwise,
and all information disclosed to a party by the other party, as
confidential. No party to this Agreement will make any public
announcements or otherwise communicate with any news media with
respect to this Agreement or any of the transactions contemplated
by this Agreement without prior approval of the other party,
which approval will not unreasonably be withheld, as to the
timing and contents of any such announcement as may be reasonable
under the circumstances; provided however, that nothing contained
herein will prevent any party from promptly making all filings
with Governmental Entities that may, in its reasonable judgment,
be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement so long as such party
gives timely notice to the other parties of the anticipated
disclosure and cooperates with the other party in designing
reasonable procedural and other safeguards to preserve, to the
maximum extent possible, the confidentiality of all information
furnished by the other party pursuant to this Agreement.
Section 7.7 Notification. In the event of, or after
------------
obtaining Knowledge of the occurrence or threatened occurrence
of, any fact or circumstance that would cause or constitute a
breach or violation of any of its representations, warranties,
covenants or other agreements set forth herein, each party to
this Agreement promptly will give notice thereof to the other
party and will use its best efforts to prevent or remedy such
breach.
Section 7.8 HSR Act Filings. ICG and the Company
---------------
each will make or cause to be made an appropriate filing of a
Notification and Report Form pursuant to the HSR Act no later
than 15 Business Days after the date of this Agreement. Each
such filing will request early termination of the waiting period
imposed by the HSR Act. The Company and ICG each will use its
reasonable best efforts to respond or cause a response to be made
as promptly as reasonably practicable to any inquiries received
from the Federal Trade Commission (the "FTC") and the Antitrust
Division of the Department of Justice (the "Antitrust Division")
for additional information or documentation and to respond as
promptly as reasonably practicable to all inquiries and requests
received from any other Governmental Entity in connection with
antitrust matters; provided however, that nothing contained
herein will be deemed to preclude either the Company or ICG from
negotiating reasonably with any Governmental Entity regarding the
scope and content of any such requested information or
documentation. The Company and ICG each will use their
respective reasonable best efforts to overcome any objections
that may be raised by the FTC, the Antitrust Division or any
other Governmental Entity having jurisdiction over antitrust
matters. Notwithstanding the foregoing, neither ICG nor the
Company will be required to make any significant change in the
operations or activities of the business (or any material assets
employed therein) of ICG or any of its Affiliates, or of the
Company or any of its Affiliates, as the case may be, if ICG or
the Company, as the case may be, determines in good faith that
such change would be materially adverse to the operations or
activities of the business (or any material assets employed
therein) of ICG or any of its Affiliates or the Company or any of
its Affiliates, as the case may be.
Section 7.9 Indemnification of Executives.
-----------------------------
(a) Indemnification. ICG will cause the Surviving
---------------
Corporation to, and, should the Surviving Corporation fail or be
unable to do so, ICG shall, indemnify, defend and hold harmless
each person who is now, or has been at any time prior to the date
of this Agreement or who becomes prior to the Effective Time, an
officer or director of the Company (each, an "Executive"),
against all losses, expenses, damages, liabilities, costs,
judgments, and amounts paid in settlement in connection with any
claim, action, suit, proceeding, or investigation based on or
arising out of, in whole or in part, any actions or omissions of
such Executive as an officer or director of the Company on or
prior to the Effective Time, including actions or omissions
relating to any of the transactions contemplated by this
Agreement, to the fullest extent permitted under the DGCL, the
certificate of incorporation and bylaws of the Company and the
Indemnification Agreements, a list of which has been provided to
ICG. ICG will cause the Surviving Corporation to pay expenses in
advance of the final disposition of any such claim, action, suit,
proceeding, or investigation to each Executive to the fullest
extent permitted by applicable Legal Requirements upon receipt of
any undertaking required or contemplated by applicable Legal
Requirements. Without limiting the foregoing, in any case in
which approval of or a determination by the Surviving Corporation
is required to effectuate any indemnification, (i) the Executives
will conclusively be deemed to have met the applicable standards
for indemnification with respect to any actions or omissions of
such Executives as an officer or director of the Company on or
prior to the Effective Time relating to any of the transactions
contemplated by this Agreement and (ii) ICG shall cause the
Surviving Corporation to direct, at the election of any
Executive, that the determination of any such approval shall be
made by independent counsel selected by the Executive and
reasonably acceptable to ICG. If any such claim, action, suit,
proceeding, or investigation is brought against any Executive
(whether arising before or after the Effective Time), (i) the
Executive may retain counsel satisfactory to him or her that is
reasonably acceptable, and (ii) ICG will pay or will cause the
Surviving Corporation to pay all reasonable fees and expenses of
such counsel for the Executive, as such fees and expenses are
incurred, upon receipt of a written undertaking by the Executive
that the Executive will repay the amounts so paid if it
ultimately is determined in a final non-appealable judgment by a
court of competent jurisdiction that he is not entitled to be
indemnified by the Surviving Corporation as authorized by the
DGCL. Neither ICG nor the Surviving Corporation shall have any
obligation hereunder to any Executive when and if a court of
competent jurisdiction shall ultimately determine in a final non-
appealable judgment that such Executive is not entitled to
indemnification hereunder.
(b) The Surviving Corporation shall maintain in effect
for a period of one year after the Effective Time the policy of
officers' and directors' liability insurance maintained by the
Company on the date of this Agreement, with coverage in amount
and scope at least as favorable as the Company's existing
directors' and officers' liability insurance coverage; provided
that such policy shall not be required to be maintained if
equivalent coverage is provided to such Persons under another
policy of officers' and directors' liability insurance maintained
by ICG or any of its Affiliates; and provided further that in
satisfying the obligations under this provision, the Surviving
Corporation shall not be obligated to pay annual premiums in
excess of 200% of the amount per annum paid by the Company in its
last full fiscal year. The amount per annum of premiums paid by
the Company in its last full fiscal year equaled $426,500.
(c) Successors. If ICG or the Surviving Corporation
----------
or any of its successors or assigns (i) consolidates with or
merges into any other Person and will not be the continuing or
surviving Person of such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets
to any Person, then and in each such case, proper provisions will
be made so that the successors and assigns of ICG or the
Surviving Corporation assume the obligations set forth in this
Section 7.9.
Section 7.10 Employee Benefits. For a period of at
-----------------
least one year after the Effective Time, ICG will cause the
Surviving Corporation to make generally available to the
employees of the Company employee benefits, including severance
benefits and accrued vacation time, which are no less favorable
than those currently afforded to the employees of the Company.
On the Effective Date, the Company's employee stock purchase plan
shall be terminated and any cash in participants' accounts will
be refunded to them.
ARTICLE VIII
------------
CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation to
----------------------------------------
Effect the Merger. The respective obligations of each party to
-----------------
effect the Merger will be subject to the fulfillment at or prior
to the Effective Time of the following conditions:
(a) This Agreement, the Merger and the transactions
contemplated by this Agreement shall have been duly approved, to
the extent required by applicable law or rule by (i) the holders
of the outstanding Company Stock entitled to vote, (ii) the
holders of the outstanding ICG Common Stock entitled to vote, and
(iii) ICG as the sole stockholder of Acquisition Sub.
(b) The waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been
earlier terminated.
(c) The Registration Statement on Form S-4 that
includes the Joint Proxy Statement/Prospectus shall have become
effective in accordance with the provisions of the Securities Act
and any necessary state securities law approvals shall have been
obtained and no stop orders with respect thereto shall have been
issued by the SEC and remain in effect.
(d) No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any Legal Requirement that
remains in effect and has the effect of making the transactions
contemplated by this Agreement illegal or otherwise prohibiting
the transactions contemplated by this Agreement, or that
questions the validity or the legality of the transactions
contemplated by this Agreement and that could reasonably be
expected to materially and adversely affect the value of the
business of the Company, it being agreed that each party will use
its reasonable best efforts to have any such injunction lifted.
All material consents of Governmental Entities required to be
obtained with respect to the Merger and the other transactions
contemplated by this Agreement shall have been obtained.
(e) As of the Effective Time, the shares of ICG Common
Stock issued in connection with the Merger will be quoted on
NASDAQ, subject to satisfaction, in each case, of applicable
NASDAQ requirements upon official notice of issuance.
Section 8.2 Conditions to Obligation of the Company
---------------------------------------
to Effect the Merger. The obligation of the Company to effect
--------------------
the Merger will be subject to the fulfillment at or prior to the
Effective Time of the additional following conditions:
(a) The representations and warranties of ICG
contained in this Agreement shall be true and correct in all
material respects as of the Effective Time, with the same force
and effect as if made as of the Effective Time, except (i) for
changes contemplated by this Agreement, (ii) for those
representations and warranties which address matters only as of a
particular date (which shall remain true and correct as of such
date), and (iii) in all such cases, for such breaches or
inaccuracies of such representations and warranties as do not
have a Material Adverse Effect on ICG, and the Company shall have
received a certificate of ICG to such effect signed by the Chief
Executive Officer of ICG. For purposes of determining whether
there has been a failure to satisfy the condition set forth in
this Section 8.2(a), there shall not be considered any change in
the stock price of capital stock of ICG after the date of this
Agreement.
(b) ICG shall have performed or complied in all
material respects with all material agreements and covenants
required by this Agreement to be performed or complied with by it
prior to the Effective Time, and the Company shall have received
a certificate of ICG to such effect signed by the Chief Executive
Officer of ICG.
(c) David W. Garrison shall have been appointed to the
Board of Directors of ICG effective as of the Effective Time.
(d) The opinion of BT Alex. Brown referenced in
Section 5.4 shall not have been withdrawn.
(e) The Company shall have received a written opinion
of Pillsbury Madison & Sutro LLP, or other evidence, in form and
substance reasonably satisfactory to the Company, to the effect
that the Merger will constitute a reorganization within the
meaning of Section 368 of the Code. In rendering such opinion,
counsel may rely upon representations of the parties contained
herein and in certificates of officers of the Company and others.
Section 8.3 Conditions to Obligations of ICG and
------------------------------------
Acquisition Sub to Effect the Merger. The obligations of ICG and
------------------------------------
Acquisition Sub to effect the Merger will be subject to the
fulfillment at or prior to the Effective Time of the additional
following conditions:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all
material respects as of the Effective Time, with the same force
and effect as if made as of the Effective Time, except (i) for
changes contemplated by this Agreement, (ii) for those
representations and warranties which address matters only as of a
particular date (which shall remain true and correct as of such
date), and (iii) in all such cases, for such breaches or
inaccuracies of such representations and warranties as do not
have a Material Adverse Effect on the Company, and ICG shall have
received a certificate of the Company to such effect signed by
the Chief Executive Officer of the Company. For purposes of
determining whether there has been a failure to satisfy the
condition set forth in this Section 8.3(a), there shall not be
considered any change in the stock price or capital stock of the
Company after the date of this Agreement.
(b) The Company shall have performed or complied in
all material respects with all material agreements and covenants
required by this Agreement to be performed or complied with by it
on or prior to the Effective Time, and ICG shall have received a
certificate of the Company to such effect signed by the Chief
Executive Officer of the Company.
(c) The opinion of Gleacher NatWest, Inc. referenced
in Section 4.4 shall not have been withdrawn.
(d) Prior to the Effective Time, the Company shall
have disposed of all of its interest in Internetcom do Brazil,
S.A. or, alternatively, shall have acquired, and holds as of the
Effective Time, more than 51 percent of the equity interests of
such company.
ARTICLE IX
----------
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement may be
-----------
terminated at any time prior to the Effective Time, whether
before or after approval by the stockholders of the Company or
ICG:
(a) by mutual written consent of the Board of
Directors of ICG and the Board of Directors of the Company;
(b) by either ICG or the Company (i) if at the Meeting
of its stockholders (including any postponement or adjournment
thereof), the Merger is not approved and adopted by the
affirmative vote specified herein, (ii) after March 1, 1998 or
(iii) if its independent accountants advise it in writing that
the Merger will not qualify for pooling-of-interests accounting
treatment under GAAP;
(c) by the Company, if it receives notice from
ICG of the determination of the Board of Directors of ICG as
provided in Section 6.2(d);
(d) by ICG, if it receives notice from the Company of
the determination of the Board of Directors of the Company as
provided in Section 6.1(i);
(e) by ICG, if any Person (other than ICG and any of
its Affiliates) shall have acquired before the Effective Time or
the termination of this Agreement 50 percent or more of the
outstanding Company Stock, unless such Person shall have
delivered to ICG within two Business Days of such acquisition
definitive written confirmation to the effect that such Person
will vote in favor of the Merger at the Meeting and take no
action to prevent or delay the Merger.
Section 9.2 Remedies.
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(a) In the event of the termination of this Agreement
or breach of any provision of this Agreement by either ICG or the
Company, ICG and the Company shall be entitled to all remedies
available at law, provided that, subject to the specific
performance remedy in the succeeding sentence, the remedies
specified in Section 9.2(b) and Section 9.2(c) shall be the sole
remedies allowable to ICG or the Company, as the case may be, as
a result of the events specified therein. Notwithstanding
anything to the contrary in this Agreement, in the event of a
breach of any provision of this Agreement prior to the
termination of this Agreement, the non-breaching party shall be
entitled to all available equitable remedies.
(b) Subject to Section 9.2(d), if (i)(w) ICG receives
notice from the Company of the determination of the Board of
Directors of the Company as provided in Section 6.1(i), (x) the
Board of Directors of the Company fails to recommend to the
stockholders of the Company the approval of the Merger prior to
March 2, 1998, or withdraws such recommendation, (y) the Merger
is not consummated as a direct result of the failure of the
Company to obtain stockholder approval as provided in Section
8.1(a)(i) or (z) the condition set forth in Section 8.2(d) fails
to be satisfied, and the giving of such notice or such failure or
withdrawal is not the result of the failure of ICG to satisfy the
conditions set forth in Section 8.2(a) or Section 8.2(b), (ii)
any Person (other than ICG and any of its Affiliates) shall have
acquired before the Effective Time or the termination of this
Agreement 50 percent or more outstanding Company Stock and such
Person fails to timely deliver the written confirmation to ICG as
provided in Section 9.1(e), or (iii) if the Company fails to
satisfy the conditions set forth in either Section 8.3(a) or
Section 8.3(b) and in the case of Section 8.3(b) such failure
prevented the consummation of the Merger prior to March 2, 1998,
the Company will promptly pay to ICG by wire transfer, in
immediately available funds, the Termination Fee.
(c) Subject to Section 9.2(d), if (i)(w) the Company
receives notice from ICG of the determination of the Board of
Directors of ICG as provided in Section 6.2(d), (x) the Board of
Directors of ICG fails to recommend to the stockholders of ICG
the approval of the Merger prior to March 2, 1998, or withdraws
such recommendation, (y) if the Merger is not consummated as a
direct result of the failure of ICG to obtain stockholder
approval as provided in Section 8.1(a)(ii) or (z) the condition
set forth in Section 8.3(c) fails to be satisfied, and the giving
of such notice or such failure or withdrawal is not the result of
the failure of the Company to satisfy the conditions set forth in
Section 8.3(a) or Section 8.3(b), or (ii) if ICG fails to satisfy
the conditions set forth in either Section 8.2(a) or Section
8.2(b) and in the case of Section 8.2(b) such failure prevented
the consummation of the Merger prior to March 2, 1998, ICG shall
promptly pay to the Company by wire transfer, in immediately
available funds, the Termination Fee.
(d) Notwithstanding anything to the contrary herein,
no party shall have any liability under the Agreement, including
Section 9.2(a), Section 9.2(b) or Section 9.2(c), in the event
the Agreement is terminated or terminable as a consequence of the
nonfulfillment of any of the conditions set forth in Section
8.1(b), Section 8.1(c), Section 8.1(d), Section 8.1(e), Section
8.2(c) or Section 8.2(e), unless such nonfulfillment is caused by
that party's material breach of any of its covenants or
obligations under this Agreement.
(e) If the Company or ICG terminates the Agreement as
a consequence of any failure to satisfy the conditions set forth
in Section 8.2(a) or Section 8.3(a), for purposes of determining
whether payment of the Termination Fee under Section 9.2(b) or
Section 9.2(c) is required, the party so terminating the
Agreement on that basis shall bear the burden of proof of
demonstrating by clear and convincing evidence that such failure
occurred and in so doing may not introduce into evidence, nor may
a court consider in its deliberation, any change in the stock
price of the capital stock of either party whether or not such
change is in conjunction with or otherwise relates to the event
giving rise to the breach or otherwise.
Section 9.3 Amendment. This Agreement may be
---------
amended by ICG and the Company by or pursuant to action taken by
their respective Boards of Directors at any time before or after
approval of this Agreement by the stockholders of the Company and
ICG and prior to the Effective Time, but, after either such
approval, no amendment will be made that changes the Exchange
Ratio as provided in Section 3.1 or changes, in any way adverse
to such stockholders, the terms of the ICG Common Stock or that
in any other way materially adversely affects the rights of such
stockholders, without the further approval of such stockholders.
This Agreement may not be amended except by an instrument in
writing signed on behalf of ICG and the Company.
Section 9.4 Waiver. At any time prior to the
------
Effective Time, subject to Section 9.3, ICG and the Company, by
or pursuant to action taken by their respective Boards of
Directors, may (i) extend the time for performance of any of the
obligations or other acts of the other party to this Agreement,
(ii) waive any inaccuracies in the representations and warranties
set forth in this Agreement or in any documents delivered
pursuant to this Agreement and (iii) waive compliance with any of
the agreements or conditions set forth in this Agreement. Any
agreement on the part of a party to this Agreement to any such
extension or waiver will be valid if set forth in an instrument
in writing signed on behalf of such party.
ARTICLE X
---------
GENERAL PROVISIONS; DEFINITIONS
Section 10.1 Non-Survival of Representations,
--------------------------------
Warranties and Agreements. No representations and warranties
-------------------------
contained in this Agreement will survive beyond the Closing Date.
This Section 10.1 will not limit any covenant or agreement of the
parties to this Agreement that by its terms requires performance
after the Closing Date.
Section 10.2 Notices. All notices or other
-------
communications under this Agreement will be in writing and will
be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by cable, telegram, telex or
other standard form of telecommunications, or by registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Company: NETCOM On-Line Communication
Services, Inc.
Two North Second Street, Plaza A
San Jose, California 95113
Attention: David W. Garrison, Chief
Executive Officer and
Chairman of the Board
Telecopy No.: 408-881-3430
With a copy to: Pillsbury, Madison & Sutro LLP
2700 Sand Hill Road
Menlo Park, California 94028
Attention: Jorge A. Del Calvo
Telecopy No.: 415-233-4545
If to ICG: ICG Communications, Inc.
9605 East Maroon Circle
Englewood, Colorado 80112
Attention: J. Shelby Bryan,
President and Chief
Executive Officer and
H. Don Teague, General
Counsel
Telecopy No.: 303-575-6278
With a copy to: Sherman & Howard L.L.C.
633 Seventeenth Street
Suite 3000
Denver, Colorado 80202
Attention: Robert Mintz, Esq.
Telecopy No.: 303-298-0940
or to such other addresses as any party may have furnished to the
other parties in writing in accordance with this Section 10.2.
Section 10.3 Fees and Expenses. Except as provided
-----------------
in Section 9.2, whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and
the transactions contemplated by this Agreement will be paid by
the party incurring such expenses.
Section 10.4 Specific Performance. The parties to
--------------------
this Agreement 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 or were
otherwise breached. It is accordingly agreed that, in accordance
with Section 9.2(a), the parties will be entitled to enforce
specifically the terms and provisions of this Agreement in any
court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled
at law or in equity, and no party will raise any defense to the
institution of such equitable relief.
Section 10.5 Third Party Beneficiaries. The parties
-------------------------
to this Agreement agree that the Company's stockholders,
officers, directors and employees are intended third party
beneficiaries of the terms of this Agreement, to the extent such
terms refer expressly to such Persons, with full rights hereunder
as if each of them were a party to this Agreement.
Section 10.6 Entire Agreement; Miscellaneous. This
-------------------------------
Agreement will be of no force or effect until executed and
delivered by all of the parties to this Agreement. This Agreement
(including the documents and instruments referred to in this
Agreement) when executed and delivered, constitutes the entire
agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter of this Agreement.
This Agreement may be executed in two or more counterparts which
together will constitute a single agreement. This Agreement may
be delivered by facsimile. Any certificate delivered pursuant to
this Agreement will be made without personal liability on the
part of the officer or employee of the Person giving such
certificate.
Section 10.7 Governing Law and Venue; Waiver of Jury
---------------------------------------
Trial.
-----
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE
UNDER, AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND
GOVERNED BY AND IN ACCORDANCE WITH, THE LAW OF THE STATE OF
DELAWARE. The parties hereby irrevocably submit to the
jurisdiction of the courts of the State of Delaware and the
Federal courts of the United States of America located in the
State of Delaware solely in respect of the interpretation and
enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the
transactions contemplated hereby, and hereby waive, and agree not
to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said
courts or that the venue thereof may not be appropriate or that
this Agreement or any such document may not be enforced in or by
such courts, and the parties hereto irrevocably agree that all
claims with respect to such action or proceeding shall be heard
and determined in such a Delaware State or Federal court. The
parties hereby consent to and grant any such court jurisdiction
over the person of such parties and over the subject matter of
such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner
provided in Section 10.2 or in such other manner as may be
permitted by law shall be valid and sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 10.7.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused this
Agreement to be signed by their respective officers thereunder
duly authorized all as of the date first written above.
ICG COMMUNICATIONS, INC.
By: /s/ J. Shelby Bryan
-----------------------------------
Name: J. Shelby Bryan
Title: President and Chief
Executive Officer
NETCOM ON-LINE COMMUNICATION
SERVICES, INC.
By: /s/ David W. Garrison
-------------------------------
Name: David W. Garrison
Title: Chief Executive Officer
and Chairman of the
Board
Exhibit A
to Agreement and
Plan of Merger
FORM OF AFFILIATE AGREEMENT
Gentlemen:
The undersigned is a holder of shares of Common Stock, par
value $0.01 per share ("Common Stock"), of NETCOM On-Line
Communication Services, Inc., a Delaware corporation ("NETCOM"),
and will be entitled to receive in connection with the merger
(the "Merger") of a wholly-owned Delaware subsidiary of ICG
Communications, Inc., a Delaware corporation ("ICG"), with and
into NETCOM, shares of Common Stock, par value $0.01 per share,
of ICG (the "Securities").
The undersigned acknowledges that the undersigned may be
deemed an "affiliate" of NETCOM within the meaning of Rule 145
("Rule 145") promulgated under the Securities Act of 1933, as
amended (the "Act"), and/or as such term is used in and for
purposes of Accounting Series Releases 130 and 135, as amended,
of the Securities and Exchange Commission (the "Commission"),
although nothing contained herein shall be construed as an
admission of such status.
If in fact the undersigned were an affiliate of NETCOM under
the Act, the undersigned's ability to sell, assign or transfer
any Securities received by the undersigned in exchange for any
shares of NETCOM pursuant to the Merger may be restricted unless
such transaction is registered under the Act or an exemption from
such registration is available. The undersigned understands that
such exemptions are limited and the undersigned has obtained
advice of counsel as to the nature and conditions of such
exemptions, including instruction with respect to the
applicability to the sale of such Securities of Rules 144 and
145(d) promulgated under the Act.
The undersigned hereby represents to and covenants to ICG
that the undersigned will not sell, assign or transfer any
Securities received by the undersigned in exchange for shares of
Common Stock pursuant to the Merger except (i) pursuant to an
effective registration statement under the Act, (ii) by a
transaction in conformity with the volume and other limitations
of Rule 145 or Rule 144 under the Act ("Rule 144"), to the extent
applicable, or any other applicable rules promulgated by the
Commission or (iii) in a transaction which, in the opinion of
independent counsel reasonably satisfactory to ICG, or as
described in a "no-action" or interpretative letter from the
Staff of the Commission, is not required to be registered under
the Act.
In the event of a sale of Securities pursuant to Rule 145,
or, if applicable, Rule 144, the undersigned will supply ICG with
evidence of compliance with such Rule, in the form of customary
seller's and broker's Rule 145 or, if applicable, Rule 144,
representation letters or as ICG may otherwise reasonably
request. The undersigned understands that ICG may instruct its
transfer agent to withhold the transfer of any Securities
disposed of by the undersigned in a manner inconsistent with this
letter.
The undersigned acknowledges and agrees that appropriate
legends will be placed on certificates representing Securities
received by the undersigned in the Merger or held by a transferee
thereof, which legends will be removed (i) by delivery of
substitute certificates upon receipt of an opinion in form and
substance reasonably satisfactory to ICG to the effect that such
legends are no longer required for the purposes of the Act and
the rules and regulations of the Commission promulgated
thereunder or (ii) in the event of a sale of the Securities which
has been registered under the Act.
The undersigned further represents to, and covenants with
NETCOM and ICG that the undersigned will not, during the period
beginning on the date that ICG gives written notice that
consummation of the Merger is reasonably expected to occur within
sixty days of the date of such notice, sell, transfer or
otherwise dispose of, or reduce any risk relative to, the
Securities received by the undersigned in the Merger or any other
shares of the capital stock of ICG until after such time as
results covering at least 30 days of operations of ICG (including
the combined operations of NETCOM) have been published by ICG in
the form of a quarterly earnings report, or an annual report on
Form 10-K, if such 30-day period includes the end of ICG's fiscal
year, an effective registration statement filed with the
Commission, a report to the Commission on Form 10-K, 10-Q, or 8-
K, or any other public filing or announcement which includes such
results of operations.
The undersigned acknowledges that it has carefully reviewed
this letter and understands the requirements hereof and the
limitations imposed upon the distribution, sale, transfer or
other disposition of Securities.
Very truly yours,
--------------------------------------
[Name]
[Address]
Dated: October , 1997
--
As an inducement to the above individual to deliver this
letter, ICG agrees that for so long and to the extent necessary
to permit such individual to sell the Securities pursuant to Rule
145 and, to the extent applicable, Rule 144 under the Act, ICG
shall use all reasonable efforts to file, on a timely basis, all
reports and data required to be filed by it with the Commission
pursuant to Section 13 of the Securities and Exchange Act of
1934.
Very truly yours,
ICG COMMUNICATIONS, INC.
By:
-----------------------------------
Name:
-----------------------------
Title:
----------------------------