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EXHIBIT 2.1
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AGREEMENT AND PLAN OF REORGANIZATION
TABLE OF CONTENTS
Page
1. THE MERGER 1
1.1 The Merger 1
1.2 Merger Consideration 1
1.3 Effective Time 2
1.4 Effects of the Merger 2
1.5 Name; Articles of Incorporation; Bylaws 2
1.6 Directors and Officers 2
1.7 Supplementary Action 2
1.8 Tax Consequences 3
1.9 Closing 3
1.10 Closing Deliveries 3
1.11 Purchase Price Adjustment 5
1.12 Registration Rights Agreement 7
2. REPRESENTATIONS AND WARRANTIES OF TWC SHAREHOLDERS 8
2.1 Organization and Good Standing 8
2.2 Authority; No Conflict 8
2.3 Capitalization 9
2.4 Financial Statements 10
2.5 Books and Records 10
2.6 Title to Properties; Encumbrances 10
2.7 Condition and Sufficiency of Assets 11
2.8 Accounts Receivable 11
2.9 Inventory 11
2.10 No Undisclosed Liabilities 12
2.11 Taxes 12
2.12 No Material Adverse Change 13
2.13 Employee Benefits 13
2.14 Compliance with Legal Requirements; Governmental
Authorizations 15
2.15 Legal Proceedings; Orders 16
2.16 Absence of Certain Changes and Events. 17
2.17 Contracts; No Defaults 18
2.18 Insurance. 18
2.19 Environmental Matters 19
2.20 Employees 19
2.21 Labor Disputes; Compliance 19
2.22 Intellectual Property 20
2.26 Relationships with Related Persons 21
2.27 Bank Accounts. 21
2.28 Additional Tax Matters 21
2.29 Brokers or Finders 22
2.31 Disclosure 24
3. REPRESENTATIONS AND WARRANTIES OF ANICOM AND MERGER SUB 24
3.1 Organization and Good Standing. 24
3.2 Authority; No Conflict 24
3.3 Capitalization 25
3.4 SEC Filings 25
3.5 Financial Statements 25
3.6 No Undisclosed Liabilities 26
3.8 Certain Proceedings 26
3.9 No Material Adverse Change 26
3.10 Brokers or Finders 27
3.11 Contracts; No Defaults 27
3.12 Environmental Matters 27
3.13 Customers 27
3.14 Suppliers 27
3.15 Merger 27
3.16 Disclosure 28
3.17 Additional Tax Matters 28
4. TWC SHAREHOLDERS' COVENANTS 29
4.1 Access and Investigation 29
4.2 Operation of the Businesses of TWC 29
4.3 Negative Covenant 30
4.4 Required Approvals 30
4.5 Notification 30
4.6 Best Efforts. 30
4.7 TWC Guaranties 30
4.8 Officer's Certificate 31
4.9 ERISA Matters 31
5. COVENANTS OF ANICOM AND MERGER SUB 31
5.1 Access and Investigation 31
5.2 Operation of the Businesses of Anicom 31
5.3 Notification 31
5.4 Approvals of Governmental Bodies 32
5.5 Best Efforts 32
5.6 Xxxxxxxxx Guaranties 32
5.7 Listing of Purchase Shares 32
5.8 TWC Employees 32
6. CONDITIONS PRECEDENT TO ANICOM'S AND MERGER SUB'S OBLIGATION TO CLOSE 32
6.1 Accuracy of Representations 32
6.2 TWC Shareholders' Performance 33
6.3 Consents 33
6.4 No Proceedings 33
6.5 No Claim Regarding Stock Ownership or Sale Proceeds 33
6.6 No Prohibition 33
6.7 Tax Opinion 33
6.8 No Material Adverse Change 34
6.9 XXX Xxx 00
0. CONDITIONS PRECEDENT TO TWC SHAREHOLDERS' OBLIGATION TO CLOSE 34
7.1 Accuracy of Representations. 34
7.2 Merger Sub's Performance 34
7.3 No Proceedings 34
7.4 Tax Opinion 34
7.5 No Material Adverse Change 34
7.6 HSR Act 35
7.7 Registration Statement 35
7.8 Release Under The Xxxxxxxxx Guaranties 35
7.9 Purchase of Vertex Technologies, Inc. Inventory 35
8. TERMINATION 35
8.1 Termination Events 35
8.2 Effect of Termination 36
9. POST-CLOSING COVENANTS 36
9.1 Tax Compliance 36
9.2 Waiver of Pre-Existing Condition Limitations 36
9.3 VTX/Vertex Inventory 36
9.4 Transfer of Insurance Coverage 36
10. INDEMNIFICATION; REMEDIES 37
10.1 Survival 37
10.2 Indemnification and Reimbursement by TWC Shareholders 37
10.3 Indemnification and Reimbursement by Anicom and Merger Sub 37
10.4 Procedure for Indemnification -- Third Party Claims 37
10.5 Procedure for Indemnification -- Other Claims. 39
10.6 Escrow. 39
10.7 Minimum Threshold. 39
10.8 Cap on Indemnity. 39
10.9 Other Limitations. 39
10.10 Applicability to Xxxxxxxxx 39
11. DEFINITIONS 40
"Best Efforts" 40
"Breach" 40
"Code" 40
"Consent" 40
"Contemplated Transactions" 40
"Contract" 40
"Debt" 40
"Encumbrance" 41
"ERISA" 41
"Escrow Agent" 41
"Facilities" 41
"Fair Market Value" 41
"Governmental Authorization" 41
"Governmental Body" 41
"Hazardous Substance" 41
"IRS" 42
"Legal Requirement" 42
"Material Adverse Effect" 42
"Order" 42
"Ordinary Course of Business" 42
"Organizational Documents" 42
"Person" 43
"Proceeding" 43
"Proprietary Rights" 43
"Related Person" 43
"Representative" 44
"Securities Act" 44
"Tax" 44
"Tax Return" 44
"Threatened" 44
"VTX/Vertex Bankruptcy Proceedings" 44
"VTX/Vertex Transactions" 44
12. GENERAL PROVISIONS 44
12.1 Expenses 44
12.2 Notices 45
12.3 Further Assurances 45
12.4 Waiver 46
12.5 Entire Agreement and Modification 46
12.6 Assignments, Successors, and No Third-Party Rights 46
12.7 Severability 46
12.9 Section Headings, Construction 46
12.10 Confidentiality of Agreements 46
12.11 Governing Law 46
12.12 Counterparts 47
12.13 No Strict Construction 47
Page
1996 Financial Statements 10
Accounts Receivable 11
Act 23
Agreement 1
Anicom 1
Anicom SEC Reports 25
Approved Transactions 6
Arbitration Notice 7
Average Trading Price 1
Basket 39
Best Efforts 40
Breach 40
C&L Letter 5
Cap 39
Cash Payment 1
CERCLA 19
Claim 37
Closing 3
Closing Balance Sheet 6
Closing Date 3
Closing Deliveries 3
Code 40
Competing Business 21
Consent 40
Contemplated Transactions 40
Contract 40
Damages 37
Debt 40
Delaware Law 1
Effective Time 2
Employment Agreements 4
Encumbrance 41
Environmental Laws 19
ERISA 41
Escrow Agent 41
Escrow Agreement 3
Facilities 41
Fair Market Value 41
Financial Statements 10
First Person 15
Four Goodys 4
GAAP 10
Xxxxxxxxx 1
Xxxxxxxxx Guaranties 32
Xxxxxxxxx'x Closing Documents 3
Governmental Authorization 41
Governmental Body 41
Hazardous Substance 41
HSR Act 9
Indemnified Persons 37
Independent Accounting Firm 7
Information 22
Insurance Policies 18
Interim Financial Statements 10
IRS 42
Knowledge 42
Leases 4
Legal Requirement 42
Material Adverse Effect 42
Material Contracts 18
Merger 1
Merger Consideration 1
Merger Documents 2
Merger Sub 1
Merger Sub's Closing Documents 4
New York Law 1
Order 42
Ordinary Course of Business 42
Organizational Documents 42
Outstanding Shares 25
Xxxxxxxxx 1
Permitted Termination 35
Person 43
Proceeding 43
Proprietary Rights 43
Purchase Shares 1
RCRA 19
Registration Rights Agreement 7
Related Person 43
Representative 44
Scheduled Plans 13
Securities Act 44
September Balance Sheet 10
Submitting Party 7
Surviving Corporation 1
Tax 44
Tax Return 44
Termination Fees 6
Threatened 44
TW Cable 30
TWC 1
TWC Guaranties 30
TWC Shareholders 1
TWC Shareholders' Closing Documents 3
TWC Shares 1
Vertex Asset Purchase Agreement 35
VTX Inventory 36
VTX/Vertex 5
VTX/Vertex Bankruptcy Proceedings 44
VTX/Vertex Transactions 44
Index of Exhibits
Exhibit A: Escrow Agreement
Exhibit B: Opinion of Counsel to TWC and TWC Shareholders
Exhibit C-1: Xxxxxxxxx Employment Agreement
Exhibit C-2: Xxxxxxxxx Employment Agreement
Exhibit C-3: Xxxxx Xxxxxxxxx Employment Agreement
Exhibit D: Form of Lease Term Sheet
Exhibit E: Opinion of Counsel to Anicom and Merger Sub
Exhibit F: Registration Rights Agreement
Exhibit G: Xxx Xxxxxx Employment Agreement
Index of Schedules
Schedule 2.1(a) TWC Organization and Good Standing
Schedule 2.1(c) TWC Directors and Officers
Schedule 2.2 Required Consents
Schedule 2.3 Capitalization
Schedule 2.6 Title to Properties; Encumbrances
Schedule 2.8 Accounts Receivable
Schedule 2.10 Undisclosed Liabilities
Schedule 2.11 Taxes
Schedule 2.13 Employee Benefits
Schedule 2.14(a) Compliance with Legal Requirements
Schedule 2.14(b) Governmental Authorizations
Schedule 2.15 Legal Proceedings
Schedule 2.16 Absence of Certain Changes and Events
Schedule 2.17 Material Contents
Schedule 2.18 Insurance
Schedule 2.19 Environmental Matters
Schedule 2.20 Employees
Schedule 2.21 Labor Disputes
Schedule 2.22 Intellectual Property
Schedule 2.23 Customers
Schedule 2.26 Related Party Transactions
Schedule 2.27 Bank Accounts
Schedule 2.30 Investor Representation Information
Schedule 3.3 Anicom Capitalization
Schedule 3.12 Environmental Matters
Schedule 4.7 TWC Guaranties
Schedule 5.6 Xxxxxxxxx Guaranties
Schedule 6.3 Non-Required Consents
Anicom, Inc. agrees to furnish supplementally to the Securities Exchange
Commission, upon request, a copy of any omitted exhibit or schedule to this
Agreement.
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this " Agreement") is made and
entered into as of November 24, 1997 by and among ANICOM, INC., a Delaware
corporation (" Anicom"), TWC ACQUISITION CORP., a Delaware corporation and a
wholly owned subsidiary of Anicom (" Merger Sub"), TW COMMUNICATION CORPORATION,
a New York corporation (" TWC"), Xxxxxx Xxxxxxxxx, a shareholder holding 23
shares of common stock of TWC (" Xxxxxxxxx"), and Xxxx X. Xxxxxxxxx, the Chief
Financial Officer of TWC to whom it is anticipated that .4395 shares of common
stock of TWC will be issued by TWC immediately prior to the Closing ("
Xxxxxxxxx" and, together with Xxxxxxxxx, " TWC Shareholders"). Capitalized terms
that are not otherwise defined in this Agreement are defined in Section 11 of
this Agreement.
The Boards of Directors of each of Anicom, Merger Sub and TWC, and TWC
Shareholders, as the sole shareholders of TWC, believe that it is in the best
interests of each corporation and their respective stockholders that TWC and
Merger Sub combine into a single company through the merger of Merger Sub with
and into TWC (the " Merger") and, in furtherance thereof, have approved the
Merger.
For Federal income tax purposes, it is intended that the Merger shall qualify as
a reorganization under the provisions of Section 368(a)(2)(E) of the Code.
The parties, intending to be legally bound, agree as follows:
1. THE MERGER
1.1 The Merger . At the Effective Time (as defined in Section 1.3) and subject
to the terms and conditions of this Agreement and the applicable provisions of
the Delaware General Corporate Law (" Delaware Law") and the Business
Corporation Law of the State of New York (" New York Law"), Merger Sub shall be
merged with and into TWC, the separate corporate existence of Merger Sub shall
cease and TWC shall continue as the surviving corporation. TWC, as the surviving
corporation after the merger, is hereinafter sometimes referred to as the "
Surviving Corporation".
1.2 Merger Consideration . At the Effective Time, by virtue of the Merger and
without any action on the part of Anicom, Merger Sub, TWC or TWC Shareholders,
each share of the common stock, no par value, of TWC (" TWC Shares") will be
cancelled and extinguished and will be converted automatically into the right to
receive a pro rata portion of the aggregate merger consideration (the " Merger
Consideration") of $16,000,000, payable as follows: (a) $3,000,000 in cash (the
" Cash Payment") at the Closing; and (b) $13,000,000 in the form of shares of
Anicom's common stock (the " Purchase Shares") to be determined based upon the
average closing price of Anicom's common stock on the Nasdaq National Market for
the ten trading days ending on the second trading day prior to the date of this
Agreement (" Average Trading Price").
1.3 Effective Time . Subject to the provisions of this Agreement, the parties
hereto shall cause the Merger to be consummated by filing on the Closing Date
the certificates of merger and any other documents required to be filed with the
Secretary of State of either Delaware or New York (the " Merger Documents") in
order to cause the Merger to become effective under Delaware and New York Law as
of 5:00 p.m., Delaware time, on December 4, 1997 or as soon thereafter as is
practicable (the " Effective Time").
1.4 Effects of the Merger . At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law and New York Law. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the property, rights, privileges,
powers and franchises of TWC and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of TWC and Merger Sub shall
become the debts, liabilities and duties of the Surviving Corporation. Each
share of common stock, par value $.01 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
exchanged for one validly issued, fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.
1.5 Name; Articles of Incorporation; Bylaws .
(a) The name of the Surviving Corporation will be TW Communication Corporation.
(b) The Certificate of Incorporation of TWC, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation as of and following the Effective Time, until thereafter amended.
(c) The Bylaws of TWC, as in effect immediately prior to the Effective Time,
shall be the Bylaws of the Surviving Corporation as of and following the
Effective Time, until thereafter amended.
1.6 Directors and Officers . The directors of Merger Sub shall remain the
directors of the Surviving Corporation, until their respective successors are
duly elected or appointed and qualified. The officers of Merger Sub shall remain
the officers of the Surviving Corporation, until their respective successors are
duly elected or appointed and qualified.
1.7 Supplementary Action . If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further assignments
or assurances are necessary or desirable to vest or to perfect or confirm of
record in the Surviving Corporation the title to any property or rights of TWC,
or otherwise to carry out the provisions of this Agreement, the officers and
directors of the Surviving Corporation are hereby authorized and empowered on
behalf of TWC, in the name of and on behalf of TWC, to execute and deliver any
and all things reasonably necessary or proper to vest or to perfect or confirm
title to such property or rights in the Surviving Corporation, and otherwise to
carry out the purposes and provisions of this Agreement.
1.8 Tax Consequences . It is intended by the parties hereto that the Merger
shall constitute a reorganization under Section 368(a)(2)(E) of the Code.
1.9 Closing . The closing of the Merger (" Closing") provided for in this
Agreement will take place at the offices of Xxxxx Xxxx LLP, counsel to TWC and
TWC Shareholders, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m.
(local time) on December 4, 1997 or as soon thereafter as is practicable (the "
Closing Date"). Subject to the provisions of Section 8, failure to consummate
the transactions provided for in this Agreement on the Closing Date will not
result in the termination of this Agreement and will not relieve any party of
any obligation under this Agreement.
1.10 Closing Deliveries . At the Closing, each of the parties shall deliver the
items described below (the " Closing Deliveries").
(a) TWC Shareholders shall deliver, or cause to be delivered, the following
items (" TWC Shareholders ' Closing Documents");
(i) certificates representing the TWC Shares, duly endorsed (or accompanied by
duly executed stock powers) for transfer to Anicom;
(ii) an escrow agreement, substantially in the form of Exhibit A, executed by
TWC Shareholders (the " Escrow Agreement");
(iii) a certificate executed by TWC Shareholders to the effect that (A) their
representations and warranties in this Agreement were accurate in all material
respects as of the date of this Agreement and are accurate in all material
respects as of the Closing Date as if made on the Closing Date (giving full
effect to any supplements to the Schedules hereto that were delivered by TWC
Shareholders to Anicom prior to the Closing Date in accordance with Section 4.5)
and (B) TWC Shareholders have performed and complied in all material respects
with all covenants and conditions required to be performed or complied with by
them prior to or at the Closing;
(iv) a certified copy of resolutions adopted by TWC Shareholders, as the sole
shareholders of TWC, and TWC's Board of Directors authorizing execution of this
Agreement and consummation of the Contemplated Transactions;
(v) a Good Standing Certificate for TWC from each state in which TWC is
authorized to do business (except Puerto Rico, which will be delivered as soon
after the Closing as is reasonably practicable;
(vi) a copy of TWC's Articles of Incorporation and all amendments thereto,
certified by the Secretary of State of New York, and a copy of TWC's Bylaws, and
all amendments thereto, certified by the Secretary of TWC;
(vii) an opinion of Xxxxx Xxxx, legal counsel to TWC and TWC Shareholders,
substantially in the form of Exhibit B;
(viii) executed copies of the Merger Documents;
(ix) an employment agreement, substantially in the form of Exhibit C-1, between
Anicom and Xxxxxxxxx, executed by Xxxxxxxxx; an employment agreement,
substantially in the form of Exhibit C-2, between Anicom and Xxxxxxxxx, executed
by Xxxxxxxxx; and an employment agreement, substantially in the form of Exhibit
C-3, between Anicom and Xxxxx Xxxxxxxxx, executed by Xxxxx Xxxxxxxxx
(collectively, the " Employment Agreements"); and
(x) a lease agreement between Four Goodys Associates, L.P. (" Four Goodys") and
Anicom with respect to the Facility located at 00 Xxxxxxxxx Xxxxxxxxx,
Xxxxxxxxxxx, Xxx Xxxx, executed by Four Goodys, and a lease agreement between a
Missouri limited liability company controlled by Xxxxxxx Xxxxxxxxx and Anicom
with respect to the Facility located in O'Fallon, Missouri, executed by such
Missouri limited liability company, in each case in such form as may be mutually
agreeable to the parties thereto and on substantially the same terms and
conditions set forth on Exhibit D (together, the " Leases").
(b) Merger Sub shall deliver the following items (" Merger Sub's Closing
Documents"):
(i) the Cash Payment by wire transfer of funds to accounts designated by TWC
Shareholders;
(ii) stock certificates representing the Purchase Shares;
(iii) a certificate executed by Anicom to the effect that (A) except as
otherwise stated in such certificate, each of Anicom's and Merger Sub's
representations and warranties in this Agreement was accurate in all material
respects as of the date of this Agreement and is accurate in all material
respects as of the Closing Date as if made on the Closing Date and (B) each of
Anicom and Merger Sub has performed and complied in all material respects with
all covenants and conditions required to be performed or complied with by it
prior to or at the Closing;
(iv) the Escrow Agreement executed by Anicom and the Escrow Agent;
(v) a certified copy of resolutions adopted by each of Anicom's and Merger Sub's
Board of Directors authorizing execution of this Agreement and consummation of
the Contemplated Transactions;
(vi) an opinion of Xxxxxx Xxxxxx & Xxxxx, legal counsel to Anicom, substantially
in the form of Exhibit E;
(vii) executed copies of the Merger Documents;
(viii) the Employment Agreements, executed by Anicom;
(ix) the Leases, executed by Anicom; and
(x) a comfort letter from Coopers & Xxxxxxx L.L.P., dated the effective date of
the Registration Statement under the Securities Act and exclusive of any agreed
upon procedures regarding any specific financial or statistical information,
with respect to Anicom's unaudited consolidated financial statements for the
nine (9) month period ended September 30, 1997 incorporated by reference in the
Registration Statement and in form and substance otherwise customary for
registration statements of a similar nature .
(c) Anicom, Merger Sub, TWC Shareholders and TWC shall also deliver to the other
parties such other documents, instruments, certificates, and opinions as may be
required by this Agreement or as otherwise necessary to consummate the
Contemplated Transactions.
1.11 Purchase Price Adjustment .
(a) Balance Sheet Assumptions. The calculation of the Merger Consideration was
based upon the assumption that, as calculated in good faith and on a basis
consistent with the 1996 Financial Statements:
(1) TWC will have a ratio of total Debt to stockholders' equity as of
December 1, 1997 (calculated without giving effect to any of the following
transactions which may occur during the period between the date hereof and the
Effective Time: (a) the payment of related party accounts receivable by
Xxxxxxxxx and his Affiliates relating to VTX Electronics Corp., a Delaware
corporation, or Vertex Technologies, Inc., a New York corporation (collectively,
" VTX/Vertex"), (b) any distribution of retained "S corporation" earnings by TWC
to Xxxxxxxxx to offset the payments described in clause (a) above, (c) accruing
for, and paying a reasonable estimate toward, any required tax distributions by
TWC to Xxxxxxxxx for the tax periods ended February 28, 1997 and immediately
prior to the Effective Time, (d) any borrowings by TWC to fund the payments
referenced in clause (c) above, and (e) any payments by TWC of transactional
costs pursuant to this Agreement (subject to Section 12.1 of this Agreement) and
any amounts that may become due and payable after December 1, 1997 to Fleet
Bank, National Association ("Fleet Bank"), as a prepayment or termination fee
(the " Termination Fees") pursuant to that certain Loan and Security Agreement,
dated as of November 15, 1995 (the "Fleet Credit Agreement"), with TWC, as
amended (collectively, the " Approved Transactions")) of no greater than 3.6-1;
and
(2) TWC's total stockholders' equity as of December 1, 1997 will not be less
than $2,000,000 (calculated (A) after giving effect to any of the transactions
described in clauses 1.11(a)(1)(a), (b), (c) or (d) above, regardless of when
such transactions occur), but (B) without giving effect to (i) any payments by
TWC of transactional costs pursuant to this Agreement (subject to Section 12.1
of this Agreement) and (ii) any Termination Fees that may become due and payable
after December 1, 1997 to Fleet Bank pursuant to the Fleet Credit Agreement.
If, and to the extent that as of December 1, 1997, the requirement set forth in
clause (2) of the preceding sentence is not satisfied, then Merger Sub shall be
entitled to a corresponding dollar for dollar reduction in the Merger
Consideration and to the extent that, as of December 1, 1997, the foregoing
requirement set forth in clause (1) above is not satisfied, then Merger Sub
shall be entitled to a reduction in the Merger Consideration in an amount equal
to that amount by which TWC's total Debt as of December 1, 1997 exceeded the
amount of Debt at which it would have been in compliance with such requirement.
(b) Closing Balance Sheet. Within ninety (90) days after the Closing Date, TWC
Shareholders shall prepare or cause to be prepared and delivered, at TWC's sole
cost and expense, to Anicom an audited balance sheet of TWC as of December 1,
1997 prepared on a basis consistent with the 1996 Financial Statements (the "
Closing Balance Sheet") and shall include a calculation of the amount of the
post-closing adjustment, if any, required pursuant to the provisions of Section
1.11(a) above. During the preparation of the Closing Balance Sheet, and the
period of any dispute within the contemplation of this Section 1.11(b), Anicom
shall: (i) provide TWC Shareholders and their authorized representatives with
full access during normal business hours to the books, records (including work
papers, schedules, memoranda and other documents), facilities and employees of
TWC, (ii) provide TWC Shareholders as promptly as practicable after the Closing
Date (but in no event later than twenty (20) business days after the Closing
Date, provided that each of the TWC Shareholders uses his commercially
reasonable efforts to assist with the preparation of such information) with
normal month-end closing financial information for TWC for the period ending on
the day prior to December 1, 1997 and (iii) cooperate with TWC Shareholders and
their authorized representatives, including the provision on a timely basis of
all information necessary or useful in preparing the Closing Balance Sheet and
cause TWC to submit any required audit schedules reasonably requested by TWC
Shareholders within forty-five (45) days after the Closing Date. The Closing
Balance Sheet and calculation of the amount of the post-closing adjustment, if
any, shall be deemed to be acceptable to and shall become final and binding on
the parties, except to the extent that Anicom shall have made a specific written
objection thereto as provided below. If Anicom disagrees with the Closing
Balance Sheet, Anicom shall notify TWC Shareholders in writing of such
disagreement within thirty (30) days after the date on which Anicom received the
Closing Balance Sheet, which written notice shall specify the nature of the
dispute and shall provide in reasonable detail the facts or accounting
principles upon which such dispute is based. Thereafter, TWC Shareholders and
Anicom shall use their Best Efforts to resolve such disagreement with respect to
the Closing Balance Sheet.
(c) Dispute Resolution. If TWC Shareholders and Anicom are unable to resolve any
disagreement within twenty (20) days after TWC Shareholders' receipt of such
notice of disagreement, then either TWC Shareholders or Anicom (the " Submitting
Party") may submit such disagreement to a certified independent public
accounting firm that is nationally recognized (the " Independent Accounting
Firm") and mutually agreeable to TWC Shareholders and Anicom upon notice thereof
(an " Arbitration Notice") to the other party. If TWC Shareholders and Anicom
cannot agree upon such election within ten (10) business days after the
Submitting Party's Arbitration Notice is received by the other party, the
Independent Accounting Firm shall be selected by lot from among the other
national public accounting firms in the United States, excluding Coopers &
Xxxxxxx L.L.P., Xxxxx Xxxxxxxx, L.L.P. and their respective Affiliates. The
Independent Accounting Firm will be instructed to use its best efforts to render
its decision as to all items in dispute within thirty (30) days of submission.
At the time of the submission of such dispute to the Independent Accounting Firm
for resolution, Anicom shall file with the Independent Accounting Firm a written
statement of its position with regard to any matters in dispute, at which time
TWC Shareholders shall have ten (10) days to respond in writing to Anicom's
position. The decision of the Independent Accounting Firm shall be final and
binding upon all parties hereto. Each party shall bear its or their own
expenses, including expenses of its or their accountants and attorneys in
connection with the resolution of any such dispute, and the fees and expenses of
the Independent Accounting Firm shall be paid by the party(s) as determined by
the Independent Accounting Firm.
(d) Reduction of Merger Consideration. In order to ensure that no payment made
under this Section 1.11(d) will cause the Merger to be disqualified as a
reorganization under Section 368 of the Code, if and to the extent that any
adjustment is made under this Section 1.11, such sums shall be payable by TWC
Shareholders within ten (10) business days of the final determination of such
adjustment, in a combination of Purchase Shares and cash pursuant to the
following formula: (i) a number of Purchase Shares equal to 80% of the amount
owed divided by the Fair Market Value of any Purchase Share (subject to
equitable adjustment for any intervening stock splits, stock dividends or
recapitalization) as of either the date of this Agreement or the date of
transfer, whichever is higher, and (ii) cash equal to the amount owed minus the
Fair Market Value of the Purchase Shares to be tendered pursuant to the
foregoing clause (i) as of either the date of this Agreement or the date of
transfer, whichever is higher.
1.12 Registration Rights Agreement . On the date hereof, concurrent with the
execution of this Agreement, Anicom and TWC Shareholders shall execute and
deliver a registration rights agreement, substantially in the form of Exhibit F
(the " Registration Rights Agreement").
2. REPRESENTATIONS AND WARRANTIES OF TWC SHAREHOLDERS
TWC Shareholders jointly and severally represent and warrant to Anicom and
Merger Sub as follows:
2.1 Organization and Good Standing .
(a) TWC is a corporation duly organized, validly existing, and in good standing
under the laws of the State of New York, with full corporate power and authority
to conduct its business as it is now being conducted, to own, hold under lease,
or otherwise possess or use the properties and assets that it purports to own,
hold under lease, or otherwise possess or use, and to perform all its
obligations under the contracts to which it is a party or by which it is bound.
Schedule 2.1(a) sets forth all other jurisdictions in which TWC is authorized to
do business. TWC is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each state or other jurisdiction in which
such qualification is required by virtue of the nature of the activities
conducted by it except to the extent such failure to qualify would not have a
TWC Material Adverse Effect.
(b) TWC Shareholders have delivered to Merger Sub correct and complete copies of
the Organizational Documents of TWC, as currently in effect.
(c) Schedule 2.1(c) contains a complete and accurate list of the current
directors and officers of TWC.
(d) TWC does not have any subsidiaries.
2.2 Authority; No Conflict .
(a) This Agreement and TWC Shareholders' Closing Documents constitute or will
constitute when, as and if executed at Closing the legal, valid, and binding
obligation of TWC Shareholders and TWC to the extent each of them is a party
thereto, enforceable against each such party in accordance with their respective
terms. Subject to standard exceptions, TWC Shareholders and TWC, as the case may
be, have the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and TWC Shareholders' Closing Documents and
to perform their obligations under this Agreement and TWC Shareholders' Closing
Documents to the extent each of them is a party thereto.
(b) Except as set forth in Schedule 2.2, neither the execution and delivery of
this Agreement or TWC Shareholders' Closing Documents nor the consummation or
performance of any of the Contemplated Transactions will, directly or
indirectly, except as would not individually or in the aggregate have a TWC
Material Adverse Effect:
(i) contravene, conflict with, or result in (with or without notice or lapse of
time) a violation or breach of (A) any provision of the Organizational Documents
of TWC; (B) any resolution adopted by TWC's Board of Directors or TWC
Shareholders, as the sole shareholders of TWC; (C) any Legal Requirement or any
Order to which TWC or TWC Shareholders, or any of the assets owned or used by
TWC, may be subject, or give any Governmental Body or other Person the right
(with or without notice or lapse of time) to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any relief under any such Legal
Requirement or Order; (D) any of the terms or requirements of, or give any
Governmental Body the right (with or without notice or lapse of time) to revoke,
withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization
that is held by TWC or that otherwise relates to the business of, or any of the
assets owned or used by, TWC; or (E) any provision of, or give any Person the
right (with or without notice or lapse of time) to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Contract;
(ii) cause Anicom or Merger Sub to become subject to, or to become liable for
the payment of, any Tax or cause any of the assets owned by TWC to be reassessed
or revalued by any taxing authority or other Governmental Body; or
(iii) result in (with or without notice or lapse of time) the imposition or
creation of any Encumbrance upon or with respect to any of the assets owned or
used by TWC.
Except as set forth in Schedule 2.2 and except for filings and other applicable
requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the " HSR Act"), TWC is not and will not be required to give any notice
to or obtain any Consent from, and TWC Shareholders are not and will not be
required to give any notice to or obtain any Consent from, any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
2.3 Capitalization . The authorized equity securities of TWC consist of 200
shares of common stock, no par value, of which 23 shares are issued and
outstanding on the date hereof, and 23.4395 shares will be issued and
outstanding on the Closing Date, and constitute the TWC Shares as of each such
date. Xxxxxxxxx is on the date hereof, and TWC Shareholders will on the Closing
Date be, the sole record and beneficial owner(s) and holder(s) of all of the
outstanding TWC Shares as of each such date, with good and valid title to such
TWC Shares, free and clear of all Encumbrances. All of the outstanding equity
securities of TWC have been duly authorized and validly issued and are fully
paid and nonassessable. There are no Contracts relating to the issuance, sale,
or transfer of any equity securities or other securities (whether or not
convertible) of TWC, including options, rights, warrants, puts, or calls. None
of the outstanding equity securities or other securities of TWC was issued, or
has been redeemed or repurchased, in violation of the Securities Act or any
securities or "blue sky" Legal Requirements. TWC has not owned, does not own,
and has no Contract to acquire, any equity securities or other securities of any
Person or any direct or indirect equity or ownership interest in any other
business. TWC Shareholders have provided Merger Sub with complete copies of any
shareholder agreements, voting agreements, and other agreements relating to the
TWC Shares, all of which are listed on Schedule 2.3.
2.4 Financial Statements . TWC Shareholders have caused TWC to deliver to
Anicom: (a) TWC's audited balance sheet, statement of income and statement of
stockholders' equity as of and for the fiscal year ended February 28, 1997 (the
" 1996 Financial Statements"), and (b) TWC's unaudited balance sheet and
statement of income as of and for the seven months ended September 30, 1997 (the
" Interim Financial Statements" and, together with the 1996 Financial
Statements, the " Financial Statements") including in each case the notes
thereto. The Financial Statements and notes thereto are consistent with TWC's
books and records and fairly present the financial condition and results of
operations of TWC as at the respective dates thereof and for the periods therein
referred to, all in accordance with generally accepted accounting principles,
consistently applied (" GAAP") (subject to normal, recurring year-end
adjustments with respect to the Interim Financial Statements) and except as
follows: (i) transactions reflected in the Financial Statements between TWC, on
the one hand, and Xxxxxxxxx or any of his Affiliates, on the other hand have not
necessarily been negotiated on an arm's-length basis and accordingly charges
relating to such transactions may vary from fair market terms; (ii) the Interim
Financial Statements do not contain the footnotes that may be required by GAAP;
and (iii) the Interim Financial Statements include only balance sheets and
statements of income for TWC and do not include any other financial statements
that may be required by GAAP. No financial statements of any Person are required
by GAAP to be consolidated with the financial statements of TWC.
2.5 Books and Records . The books of account, minute books, stock record books,
and other records of TWC, all of which have been made available to Merger Sub,
are complete and correct in all material respects. Without limiting the
generality of the foregoing, the minute books of TWC contain complete and
accurate records of all material meetings held of, and material corporate action
taken by, the shareholders, the boards of directors, and committees of the
boards of directors of TWC, and no meeting of any such shareholders, board of
directors, or committee has been held for which minutes have not been prepared
and are not contained in such minute books. At the Closing, all of those books
and records will be in the possession of the Surviving Corporation.
2.6 Title to Properties; Encumbrances . Schedule 2.6 contains a complete and
accurate list of all leaseholds (including, with respect thereto, the
"commencement date" of each related lease agreement) or other interests in real
property currently owned by TWC. TWC has good and valid title to all the
properties and assets (whether real, personal, or mixed and whether tangible or
intangible) reflected as owned in TWC's balance sheet as of September 30, 1997
(the " September Balance Sheet"), and upon consummation of the Contemplated
Transactions, the Surviving Corporation will be vested with good and valid title
to all such properties and assets (except for personal property sold since the
date of the September Balance Sheet in the Ordinary Course of Business and
except that the contracts governing certain leasehold interests held by TWC
require the consent of the applicable landlords for the consummation of the
Contemplated Transactions which consents Anicom has specifically requested that
TWC neither seek nor obtain) and all of the material properties and assets
purchased or otherwise acquired by TWC since the date of the September Balance
Sheet (except for supplies, inventory, and personal property acquired and/or
sold since the date of the September Balance Sheet in the Ordinary Course of
Business) are listed in Schedule 2.6. Except as set forth on Schedule 2.6
attached hereto, TWC does not use any furniture, fixtures or equipment which it
does not own. Except as set forth on Schedule 2.6, all properties and assets
reflected in the September Balance Sheet are free and clear of all Encumbrances,
except (i) Encumbrances disclosed in the Financial Statements, (ii) Encumbrances
for Taxes, assessments and other governmental charges not yet due and payable or
due but not delinquent or being contested in good faith by appropriate
proceedings, (iii) mechanics', workmen's, repairmen's, warehousemen's, carriers'
or other like Encumbrances arising or incurred in the Ordinary Course of
Business, (iv) equipment leases listed on Schedule 2.6 with third parties
entered into in the Ordinary Course of Business, (v) with respect to real
property, easements, quasi-easements, licenses, covenants, rights of way, and
other similar restrictions and zoning, building and other similar restrictions
of record and (vi) Encumbrances which, individually or in the aggregate, will
not have a TWC Material Adverse Effect. To TWC Shareholders' Knowledge, TWC has
no material liabilities or obligations of any nature with respect to real
property previously owned or operated by TWC which would, individually or in the
aggregate, have a TWC Material Adverse Effect.
2.7 Condition and Sufficiency of Assets . To TWC Shareholders' Knowledge, the
equipment and other tangible personal property used by TWC in the conduct of its
business, and the heating, ventilation, and air-conditioning systems at the
Facilities, are in good operating condition and repair, are adequate for the
uses to which they are being put, are not in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are not material in
nature or cost, and are sufficient for the continued conduct of TWC's business
after the Closing in substantially the same manner as conducted prior to the
Closing, except to the extent that any of the foregoing would not have a TWC
Material Adverse Effect.
2.8 Accounts Receivable . All accounts receivable of TWC that are reflected on
the September Balance Sheet or on the accounting records of TWC as of the
Closing Date, (collectively, the " Accounts Receivable"), represent or will
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. The reserves shown on the
September Balance Sheet or on the accounting records of TWC as of the Closing
Date with respect to the Accounts Receivable are adequate consistent with past
practice. Except as set forth on Schedule 2.8, there is no contest, claim, or
right of set-off, other than returns in the Ordinary Course of Business, in any
agreement with any maker of an Accounts Receivable relating to the amount or
validity of such Accounts Receivable. Prior to the date of this Agreement, TWC
Shareholders have delivered to Anicom a complete and accurate list of all
Accounts Receivable as of November 19, 1997, which list sets forth the aging of
such Accounts Receivable.
2.9 Inventory . Except as set forth in Schedule 2.10, all inventory of TWC,
whether or not reflected in the September Balance Sheet, consists of a quality
and quantity usable and salable in the Ordinary Course of Business, except for
obsolete items and items of below-standard quality (including scraps and lengths
that are not saleable in the Ordinary Course of Business), all of which have
been either reserved for or written off or written down to net realizable value
in the September Balance Sheet or on the accounting records of TWC as of the
Closing Date, as the case may be. All inventories not written off or reserved
for have been priced on a lower of cost or weighted average, moving average cost
basis. The quantities of each item of inventory are reasonable in the present
circumstances of TWC.
2.10 No Undisclosed Liabilities . Except as set forth in Schedule 2.10, TWC has
no liabilities or obligations of any nature (whether known or unknown and
whether absolute, accrued, contingent, or otherwise) other than liabilities or
obligations reflected or reserved against in the September Balance Sheet,
current liabilities incurred in the Ordinary Course of Business since the date
of the September Balance Sheet and Taxes incurred since the date of the
September Balance Sheet and which do not or would not individually or in the
aggregate have a TWC Material Adverse Effect.
2.11 Taxes .
(a) Since 1986, TWC has been eligible to file, and has properly filed, all
elections and other instruments and documents necessary to qualify as, and shall
at the Closing (immediately prior to the Closing) be, an "S corporation" within
the meaning of Section 1361 of the Code.
(b) TWC has never been and is not a member of an "affiliated group" as defined
in Section 1504 of the Code and TWC has never been a party to a tax sharing, tax
indemnity or tax allocation agreement. TWC has timely filed or caused to be
timely filed (on a timely basis since its incorporation) all Tax Returns that
are or were required to be filed by or with respect to it pursuant to the Legal
Requirements of each Governmental Body with taxing power over it or its assets.
TWC has disclosed on its Federal Tax Returns all positions taken therein that
could give rise to a substantial understatement of Federal income tax within the
meaning of Section 6662 of the Code. No claim has ever been made by an authority
in a jurisdiction where TWC does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. TWC Shareholders have caused TWC to
deliver or make available to Merger Sub copies of all such Tax Returns filed by
TWC, examinations, reports and statements of deficiencies assessed against or
agreed to by TWC since January 1, 1995. TWC has paid, or made provision for the
payment of, all Taxes that have or may have become due pursuant to those Tax
Returns or otherwise, or pursuant to any assessment received by TWC Shareholders
or TWC. The United States federal and state income Tax Returns of TWC subject to
such Taxes have not been audited by the IRS or relevant state tax authorities
and, except as set forth on Schedule 2.11, TWC is not a party to any action or
proceeding by any Governmental Body for the collection or assessment of Taxes.
Except as set forth on Schedule 2.11, neither TWC nor TWC Shareholders has given
or been requested to give waivers or extensions (or is or would be subject to a
waiver or extension given by any other Person) of any statute of limitations
relating to the payment of Taxes of TWC or for which TWC may be liable. There
exists no proposed tax assessment against TWC except as disclosed in the
September Balance Sheet or in Schedule 2.11. Except as set forth in Schedule
2.11, neither TWC nor TWC Shareholders expect any authority to assess any
additional Taxes for any period for which Tax Returns have been filed. No
consent to the application of Section 341(f) of the Code has been filed with
respect to any property or assets held, acquired, or to be acquired by TWC. All
Taxes that TWC is or was required by Legal Requirements to withhold or collect
have been duly withheld or collected and, to the extent required, have been paid
to the proper Governmental Body or other Person. All Tax Returns filed by TWC
are true, correct, and complete in all material respects. TWC is not a party to
any Contract that has resulted or would result, separately or in the aggregate,
in the payment of any "excess parachute payments" within the meaning of Section
280G of the Code. TWC has never had a permanent establishment in any foreign
country, as defined in any applicable tax treaty or convention between the
United States and such foreign country, other than a sales office in Puerto
Rico.
2.12 No Material Adverse Change . Except as set forth on Schedule 2.12, since
the date of the September Balance Sheet, there has not been any material adverse
change in the business, operations, properties, assets, or condition of TWC.
2.13 Employee Benefits .
(a) Except as is described in Schedule 2.13, none of TWC or any current or
former Plan Affiliate of TWC has at any time maintained, adopted, made
contributions to or had any other liability with respect to: any "employee
pension benefit plan" (as such term is defined in Section 3(2) of ERISA); any
"employee welfare benefit plan" (as such term is defined in Section 3(1) of
ERISA); any collective bargaining agreement, personnel policy (including
vacation time, holiday pay, bonus programs and sick leave) or material fringe
benefit; any severance agreement or plan or any other medical, life or
disability benefit; any excess benefit plan, bonus or incentive plan, top hat
plan or deferred compensation plan, change-of-control agreement, employment
agreement; or any other benefit plan, policy, program, arrangement, agreement or
contract, whether or not written or terminated (all such plans, policies,
programs, arrangements, agreements and contracts, including those that are set
forth in Schedule 2.13, are referred to in this Agreement as " Scheduled
Plans").
(b) Except as described in Schedule 2.13, TWC Shareholders have delivered to
Merger Sub a complete and accurate copy, as of the Closing, of each written
Scheduled Plan, together with, if applicable, a copy of Form 5500 Annual Reports
(including required schedules and attachments), if any, for the three (3) most
recent plan years; the most recent IRS determination letter and each other
material letter, ruling or notice issued by a Governmental Body with respect to
each such plan and any materials submitted to a Governmental Body in connection
therewith; a copy of each funding vehicle, if any, with respect to each such
plan; the current summary plan description and summary of material modifications
with respect to each such plan; and a copy or description of each other general
explanation or communication which describes a material term of a Scheduled Plan
that has not previously been disclosed to Merger Sub pursuant to this Section.
To the extent any Scheduled Plan has not been delivered as of the date hereof,
TWC Shareholders shall deliver such Scheduled Plan as soon as practicable prior
to Closing, and TWC Shareholders represent that any such Scheduled Plans are
consistent with the description thereof set forth in the corresponding summary
plan description thereof.
(c) Each Scheduled Plan (i) has been and currently complies in form and in
operation in all material respects with all applicable requirements of ERISA and
the Code, and any other Legal Requirements, and so as not to give rise to a
nonexempt prohibited transaction (as such term is defined under ERISA and the
Code) or liability for any other excise taxes, penalties or fines; (ii) has been
and is operated and administered in compliance with its terms (except as
otherwise required by law) and with applicable Legal Requirements in such a
manner as to qualify, where appropriate, for both Federal and state purposes,
for income tax exclusions to its participants, tax-exempt income for its funding
vehicle, and the allowance of deductions and credits with respect to
contributions thereto; and (iii) where appropriate, has received a favorable
determination letter or recognition of exemption from the Internal Revenue
Service upon which the sponsor of such Scheduled Plan is entitled to rely. The
Contemplated Transactions will not cause any additional benefits or liabilities
to accrue or become payable under any Scheduled Plan.
(d) Except as set forth on Schedule 2.13, none of TWC or any current or former
Company Plan Affiliate has at any time participated in, made contributions to or
had any other liability with respect to any Scheduled Plan (i) which is a
"multi-employer plan" as defined in Section 4001 of ERISA, a "multi-employer
plan" within the meaning of Section 3(37) of ERISA, a "multiple employer plan"
within the meaning of Section 413(c) of the Code or a "multiple employer welfare
arrangement" within the meaning of Section 3(40) of ERISA, (ii) which provides
post-retirement or post-employment medical, health, life insurance or other
welfare-type benefits, their spouses or dependents (except for limited continued
medical benefit coverage, if any, required to be provided under state
continuation coverage laws), or (iii) which is subject to Title IV of ERISA or
the minimum funding standards of the Code. With respect to each "multiemployer
plan" (within the meaning of Section 4001(a)(3) of ERISA), TWC would have
incurred no "withdrawal liability" (within the meaning of Section 4201 of ERISA)
in the event of "complete withdrawal" (within the meaning of Section 4203 of
ERISA) from such plan on May 31, 1997, and, to TWC Shareholders' Knowledge, TWC
will not incur $50,000 or more of "withdrawal liability" (within the meaning of
Section 4001(a)(3) of ERISA) in the event of "complete withdrawal" (within the
meaning of Section 4203 of ERISA) from such plan at the Effective Time.
(e) All contributions, payments, premiums, expenses, reimbursements or accruals
for each Scheduled Plan as of the Closing (including periods from the first day
of the then current plan year to the Closing) shall have been made or accrued on
TWC Financial Statements and each such plan otherwise does not have any unfunded
liability as of the end of the last fiscal year of such Scheduled Plan which is
not reflected on TWC Financial Statements or set forth on Schedule 2.13.
(f) As used in this Agreement, with respect to any person (" First Person") the
term "Plan Affiliate" shall mean each other person or entity with whom the First
Person constitutes or has constituted all or part of a controlled group, or
which would be treated or has been treated with the First Person as under common
control or whose employees would be treated or have been treated as employed by
the First Person, under Section 414 of the Code or Section 4001(b) of ERISA and
any regulations, administrative rulings and case law interpreting the foregoing.
2.14 Compliance with Legal Requirements; Governmental Authorizations .
(a) Except as set forth in Schedule 2.14(a):
(i) TWC is, and at all times has been, in full compliance with each Legal
Requirement that is or was applicable to it or to the conduct or operation of
its business or the ownership or use of any of its assets, except for
noncompliance that has not and will not have a TWC Material Adverse Effect;
(ii) no event has occurred or circumstance exists that may constitute or result
in (with or without notice or lapse of time) a violation by TWC of, or a failure
on the part of TWC to comply with, any Legal Requirement, except for violations
that have not and will not have a TWC Material Adverse Effect; and
(iii) TWC has not received any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding, and to TWC
Shareholders' Knowledge, there is no actual, alleged, possible, or potential
violation of, or failure to comply with, any Legal Requirement, or any
obligation on the part of TWC to undertake (except for violations that would
not, individually or in the aggregate, have a TWC Material Adverse Effect), or
to bear all or any portion of the cost of, any remedial action of any material
nature.
(b) Schedule 2.14(b) contains a complete and accurate list of each Governmental
Authorization that is held by TWC or that otherwise relates to the business of,
or to any of the assets owned or used by, TWC and that is material to the
conduct of its business as presently conducted. Each Governmental Authorization
listed or required to be listed in Schedule 2.14(b) is valid and in full force
and effect. Except as set forth in Schedule 2.14(b):
(i) TWC is, and at all times has been, in full compliance with all of the terms
and requirements of each Governmental Authorization identified or required to be
identified in Schedule 2.14(b), except for noncompliance that has not and will
not have a TWC Material Adverse Effect;
(ii) no event has occurred or circumstance exists that may (with or without
notice or lapse of time) (A) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of any
Governmental Authorization listed or required to be listed in Schedule 2.14(b),
except for violations that have not and will not have a TWC Material Adverse
Effect or (B) result directly or indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or any modification to, any
Governmental Authorization listed or required to be listed in Schedule 2.14(b).
(iii) TWC has not received any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of or failure to comply with
any term or requirement of any Governmental Authorization, except for violations
that have not and will not have a TWC Material Adverse Effect or (B) any actual,
proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Governmental Authorization
listed or required to be listed on Schedule 2.14(b); and
(iv) all applications required to have been filed for the renewal of the
Governmental Authorizations listed or required to be listed in Schedule 2.14(b)
have been duly filed on a timely basis with the appropriate Governmental Bodies,
and all other filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely basis with the
appropriate Governmental Bodies.
The Governmental Authorizations listed in Schedule 2.14(b) collectively
constitute, in all material respects, all of the Governmental Authorizations
necessary to permit TWC to lawfully conduct and operate its business in the
manner it currently conducts and operates such businesses and to permit TWC to
own and use its assets in the manner in which it currently owns and uses such
assets.
2.15 Legal Proceedings; Orders .
(a) Except as set forth in Schedule 2.15, there is no pending Proceeding:
(i) that has been commenced by or against TWC or any Scheduled Plan that may be
reasonably likely to have a TWC Material Adverse Effect; or
(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the Contemplated
Transactions.
To TWC Shareholders' Knowledge, no such Proceeding has been Threatened. TWC
Shareholders have delivered to Merger Sub copies of all pleadings,
correspondence, and other documents relating to each Proceeding listed in
Schedule 2.15. Also listed in Schedule 2.15 are all Proceedings commenced or, to
TWC Shareholders' Knowledge, Threatened by or against TWC within the last three
years, and a description of the outcome thereof (other than collection actions
commenced by TWC in the Ordinary Course of Business).
(b) There is no Order to which TWC, or any of the assets owned or used by TWC,
is subject. TWC Shareholders are not subject to any Order that relates to the
business of, or any of the assets owned or used by, TWC. To TWC Shareholders'
Knowledge, no officer, director, agent, or employee of TWC is subject to any
Order that prohibits such officer, director, agent, or employee from engaging in
or continuing any conduct, activity, or practice relating to the business of
TWC.
2.16 Absence of Certain Changes and Events. Except as set forth in Schedule 2.16
and Schedule 2.26 and for the Approved Transactions, since the date of the
September Balance Sheet, TWC has conducted its business only in the Ordinary
Course of Business and there has not been any:
(i) change in TWC's authorized or issued capital stock; grant of any stock
option or right to purchase shares of capital stock of TWC; issuance of any
security convertible into such capital stock; grant of any registration rights;
purchase, redemption, retirement, or other acquisition by TWC of any shares of
any such capital stock; or declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock;
(ii) amendment to the Organizational Documents of TWC;
(iii) payment by TWC of any bonuses or compensation other than regular salary
payments, or increase in the salaries, or payment on any debt of TWC, to any
stockholder, director, officer, or employee, or entry into any employment,
severance, or similar Contract with any director, officer, or employee;
(iv) adoption of, or increase in the payments to or benefits under, any profit
sharing, bonus, deferred compensation, savings, insurance, pension, retirement,
or other Scheduled Plan for or with any employees of TWC;
(v) damage to or destruction or loss of any asset or property of TWC, whether or
not covered by insurance, materially and adversely affecting the properties,
assets, business, financial condition, or prospects of TWC;
(vi) entry into, termination of, or receipt of notice of termination of (A) any
license, maintenance, distributorship, supply, dealer, sales representative,
joint venture, credit, or similar agreement, or (B) any Contract or transaction
involving a total remaining commitment by TWC of at least $50,000 (other than
purchase orders in the Ordinary Course of Business);
(vii) loan or advance by TWC to any Person other than sales to customers on
credit in the Ordinary Course of Business, or discharge or satisfaction of any
material liability except in the Ordinary Course of Business;
(viii) sale (other than sales of inventory in the Ordinary Course of Business),
lease, or other disposition of any asset or property of TWC or mortgage, pledge,
or imposition of any lien or other encumbrance on any material asset or property
of TWC;
(ix) cancellation or waiver of any claims or rights with a value to TWC in
excess of $50,000;
(x) material change in the accounting methods used by TWC; or
(xi) agreement, whether oral or written, by TWC to do any of the foregoing.
2.17 Contracts; No Defaults .
(a) Schedule 2.17 contains a complete and accurate list, and TWC Shareholders
have delivered to Merger Sub true and complete copies (or forms thereof, where
form agreements are used; provided that any and all material deviations or
changes to the forms in any individual case are described in Schedule 2.17), of
every material Contract to which TWC is a party or by which it is bound (the "
Material Contracts").
(b) Except as set forth in Schedule 2.17, all of the Contracts listed or
required to be listed in Schedule 2.17 are in full force and effect and are
valid and enforceable against TWC in accordance with their terms, and, to TWC
Shareholders' Knowledge, no event has occurred or circumstance exists that would
give any Person (including TWC) the right (with or without notice or lapse of
time) to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any such
Material Contract except that the contracts governing certain leasehold
interests held by TWC require the consent of the applicable landlords for the
consummation of the Contemplated Transactions which consents Anicom has
specifically requested that TWC neither seek nor obtain.
(c) Except as set forth on Schedule 2.8, there are no renegotiations of,
attempts to renegotiate, or outstanding rights to renegotiate any material
amounts paid or payable to TWC under current or completed Material Contracts
with any Person having the contractual or statutory right to demand or require
such renegotiation and no such Person has made written demand for such
renegotiation.
2.18 Insurance. Schedule 2.18 contains a complete and accurate list of all
insurance policies (including "self-insurance" programs) now maintained by TWC
(the " Insurance Policies") and maintained by TWC at any time during the past
three years. Except as set forth on Schedule 2.18, no claims have been made
under any such Insurance Policies. The Insurance Policies are in full force and
effect, TWC is not in default under any Insurance Policy, and no claim for
coverage under any Insurance Policy has been denied. TWC covenants and agrees
that all of the Insurance Policies will remain in full force and effect as of
the Closing Date.
2.19 Environmental Matters .
(a) Except as disclosed on Schedule 2.19, TWC has never generated, transported,
treated, stored, or disposed, or, in any manner, arranged for disposal or
treatment (within the meaning of the Resource Conservation and Recovery Act, 42
U.S.C. $ 6901 et seq. (" RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. $ 9601 et seq. (" CERCLA"), or any
applicable federal, state, or local law, regulation, ordinance or requirement,
as amended or hereafter amended relating to the environment (the " Environmental
Laws"), of any Hazardous Substances, the liability for which could be reasonably
expected to have a TWC Material Adverse Effect, except for (i) certain
inventories purchased by TWC for resale and stored by TWC in substantial
compliance with the Environmental Laws and (ii) that TWC sells scrap cable in
the Ordinary Course of Business to industrial scrap dealers in substantial
compliance with the Environmental Laws. To TWC Shareholders' Knowledge, there
are no Hazardous Substances on, in, or under the Facilities (including those
that may be contained in underground storage tanks) except for certain
inventories purchased by TWC for resale and stored by TWC in substantial
compliance with Environmental Laws.
(b) Neither TWC Shareholders nor TWC has received, or has Knowledge of, any
notice of any Proceeding relating to the presence or alleged presence of
Hazardous Substances in, under, or upon the Facilities or upon the properties of
any sites to which any of TWC's waste has been transported, whether for disposal
or for any other purpose, and whether against TWC or any other Person; and there
are no pending, or, to TWC Shareholders' Knowledge, Threatened Proceedings (or
notice of potential Proceedings) from any Governmental Body or any other entity
regarding any matter relating to health, safety, or protection of the
environment relating to the Facilities, except as described in reasonable detail
in Schedule 2.19.
2.20 Employees . TWC has previously delivered to Anicom a complete and accurate
list of the following information for each employee of TWC, including each
employee on leave of absence or layoff status: name; job title; current
compensation paid or payable and any change in compensation since TWC's date of
incorporation; vacation accrued; and service credited for purposes of vesting
and eligibility to participate under each of TWC's Scheduled Plans. To TWC
Shareholders' Knowledge, no former or current employee or current or former
officer or director of TWC is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality, non-competition, or
proprietary rights agreement, between such employee or officer or director and
any other Person that in any way materially adversely affected, affects, or will
affect (i) the performance of his duties as an employee or officer or director
of TWC, or (ii) the ability of TWC to conduct its business. To TWC Shareholders'
Knowledge, no director, officer or other key employee of TWC intends to
terminate his employment with TWC.
2.21 Labor Disputes; Compliance . Except as set forth on Schedule 2.21, TWC has
never been a party to any collective bargaining or other labor Contract. During
the past three (3) years, there has not been, there is not presently pending or
existing, and to TWC Shareholders' Knowledge there is not Threatened, any
strike, slowdown, picketing, work stoppage, labor arbitration, or proceeding in
respect of the grievance of any employee, application or complaint filed by an
employee or union with the National Labor Relations Board or any comparable
Governmental Body, organizational activity, or other labor dispute against or
affecting TWC or any Facility, and no application for certification of a
collective bargaining agent is pending or, to TWC Shareholders' Knowledge, is
Threatened. There is no lockout of any employees by TWC, and no such action is
contemplated by TWC. Except as set forth on Schedule 2.14(a), TWC has complied
in all material respects with all Legal Requirements, and there is no
allegation, charge or complaint or Proceeding pending or, to TWC Shareholders'
Knowledge, Threatened against TWC or any of its officers, directors or
employees, relating to employment, equal employment opportunity, discrimination,
harassment, immigration, wages, hours, benefits, collective bargaining, the
payment of social security and similar taxes, occupational safety and health,
and plant closing.
2.22 Intellectual Property . Schedule 2.22 contains a complete and correct list
of all patented and registered Proprietary Rights owned by TWC and all pending
patent applications and applications for the registration of other Proprietary
Rights owned or filed by TWC. Schedule 2.22 also contains a complete and correct
list of all trade or corporate names used by TWC and a complete and correct list
of all licenses and other rights granted by TWC to any third party with respect
to Proprietary Rights and licenses and other rights granted by any third party
to TWC. Except as set forth in Schedule 2.22, (a) TWC owns and possesses all
right, title and interest in and to, or has a valid license to use, all of the
Proprietary Rights necessary for the operation of TWC's business as presently
conducted and none of such Proprietary Rights have been abandoned; (b) no claim
by any third party contesting the validity, enforceability, use or ownership of
any such Proprietary Rights has been made, is currently outstanding or, to TWC
Shareholders' Knowledge, is Threatened; (c) neither TWC nor, to TWC
Shareholders' Knowledge, any registered agent of TWC has received any notices
of, an allegation of, any infringement or misappropriation by, or conflict with,
any third party with respect to such Proprietary Rights, nor has TWC or, to TWC
Shareholders' Knowledge, any registered agent of TWC received any claims of
infringement or misappropriation of or other conflict with any Proprietary
Rights of any third party; and (d) to TWC Shareholder's Knowledge, TWC has not
infringed, misappropriated or otherwise violated any Proprietary Rights of any
third parties, and TWC Shareholders are not aware of any infringement,
misappropriation or conflict which will occur as a result of the continued
operation of TWC's business.
2.23 Customers. An accurate and complete list of TWC's customers and the amount
of gross revenue of TWC attributable to each such customer during 1996 has been
provided to Anicom. Except as set forth on Schedule 2.23 and Schedule 2.8, TWC
has not received any written or, to TWC Shareholders' Knowledge, oral notice,
and TWC Shareholders have no Knowledge, that any material customer of TWC
intends to discontinue or substantially diminish or change its relationship with
TWC on account of the transaction contemplated hereby or otherwise.
2.24 Suppliers. An accurate and complete list of TWC's suppliers (by dollar
volume of sales during 1996) has been provided to Anicom. No material supplier
has cancelled or otherwise terminated, modified or, to TWC Shareholders'
Knowledge, threatened to cancel or otherwise terminate, or to modify, its
relationship with TWC on account of the transaction contemplated hereby or
otherwise.
2.25 Sales Representatives. An accurate and complete list of TWC's sales
representatives (by dollar volume of sales during 1996) has been provided to
Anicom. During the last twelve months, none of such material sales
representatives has canceled or otherwise terminated, modified or, to TWC
Shareholders' Knowledge, threatened to cancel or otherwise terminate, or to
modify, its relationship with TWC.
2.26 Relationships with Related Persons . Except as set forth in Schedule 2.26,
neither TWC Shareholders nor any Related Person of TWC Shareholders or of TWC
has any interest in any property (whether real, personal, or mixed and whether
tangible or intangible) used in or pertaining to TWC's business. Except as set
forth in Schedule 2.26, neither TWC Shareholders nor any Related Person of TWC
Shareholders or of TWC owns, of record or as a beneficial owner, an equity
interest or any other financial or profit interest in any Person that has (i)
had business dealings or a material financial interest in any transaction with
TWC, or (ii) engaged in competition with TWC with respect to any line of
products or services of TWC (a " Competing Business") in any market presently
served by such TWC except for less than one percent of the outstanding capital
stock of any Competing Business that is publicly traded on any recognized
exchange or in the over-the-counter market. Except as set forth in Schedule
2.26, neither TWC Shareholders nor any Related Person of TWC Shareholders or of
TWC is a party to any Contract with, or has any claim or right against, TWC. All
money owed by TWC to Related Persons (other than for salary) are for bona fide
debts.
2.27 Bank Accounts. Schedule 2.27 contains a complete and accurate list of each
bank at which TWC has an account or safe deposit box, the number of each such
account or box, and the names of all persons authorized to draw on such accounts
or to have access to such boxes.
2.28 Additional Tax Matters .
(a)ab The Merger Consideration received by TWC Shareholders will be
approximately equal to the fair market value of the TWC Shares surrendered in
the exchange.
(b)ab Subject to Section 12.1, TWC and TWC Shareholders will pay their
respective expenses, if any, incurred in connection with the transaction.
(c)ab Except for the Approved Transactions, there has been no significant sale,
distribution, dividend or other disposition of TWC's assets other than in the
ordinary course of business within the twelve (12) months preceding the Closing
Date.
(d)ab TWC is not an investment company as defined in Section 368(a)(2)(F)(iii)
and (iv) of the Code.
(e)ab TWC is not under the jurisdiction of a court in a Title 11 or similar
case.
(f)ab The fair market value of the assets of TWC transferred to Merger Sub will
equal or exceed the sum of the liabilities assumed by Merger Sub, plus the
amount of liabilities, if any, to which TWC's assets are subject.
2.29 Brokers or Finders . TWC Shareholders, TWC and their agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement.
2.30 Investor Representations.
(a) Each of Xxxxxxxxx and Xxxxxxxxx has received a copy of all of the documents
set forth on Schedule 2.30 (the " Information").
(b) The Purchase Shares were not offered to either Xxxxxxxxx or Xxxxxxxxx by any
means of general solicitation or general advertising.
(c) Neither Xxxxxxxxx nor Xxxxxxxxx has received any representations, warranties
or written communications with respect to the offering of the Purchase Shares
other than those contained in this Agreement and Merger Sub's Closing Documents,
and, in entering into the Contemplated Transactions, neither Xxxxxxxxx nor
Xxxxxxxxx is relying upon any information other than that (i) contained in the
Information, this Agreement or Merger Sub's Closing Documents, or (ii) resulting
from Xxxxxxxxx'x or Xxxxxxxxx'x, as the case may be, own investigation of the
Purchase Shares and Anicom.
(d) Other than that the Information is true, correct and complete, with respect
to tax, legal and other economic considerations involved in the Contemplated
Transactions and an investment in the Purchase Shares, neither Xxxxxxxxx nor
Xxxxxxxxx is relying on Anicom. In making his investment in the Purchase Shares,
each of Xxxxxxxxx and Xxxxxxxxx has relied upon the Information and the
representations and warranties of Anicom and Merger Sub contained in this
Agreement and Merger Sub's Closing Documents. Each of Xxxxxxxxx and Xxxxxxxxx
has carefully considered and has, to the extent each individually believes is
necessary, reviewed with his respective professional legal, tax, accounting and
financial advisers the suitability of an investment in the Purchase Shares for
each of Xxxxxxxxx'x and Xxxxxxxxx'x, as the case may be, particular tax and
financial situation and has determined that the Purchase Shares are a suitable
investment for him.
(e) Each of Xxxxxxxxx and Xxxxxxxxx has had an opportunity to ask questions of
and receive answers from Anicom or its representatives concerning the terms of
its investment in the Purchase Shares, all such questions have been answered to
the full satisfaction of each of Xxxxxxxxx and Xxxxxxxxx, and each of Xxxxxxxxx
and Xxxxxxxxx has had the opportunity to request and obtain any additional
information either Xxxxxxxxx or Xxxxxxxxx, as the case may be, deemed necessary
to verify the information contained in the Information, this Agreement and
Merger Sub's Closing Documents. Anicom acknowledges that the TWC Shareholders do
not, and will not, hereby waive any rights they may have under this Agreement as
a result of their due diligence investigation of Anicom.
(f) Each of Xxxxxxxxx and Xxxxxxxxx has knowledge and experience in financial
and business matters generally, and specifically as to the wire and cable
distribution business, and is fully capable of evaluating the merits and risks
of an investment in the Purchase Shares. Each of Xxxxxxxxx and Xxxxxxxxx
recognizes that an investment in the Purchase Shares involves substantial risks,
and is fully aware of and understands all of the risks related to the purchase
of Purchase Shares, to the extent that such risks are identified in the
Information, this Agreement and Merger Sub's Closing Documents. Each of
Xxxxxxxxx and Xxxxxxxxx has determined that the purchase of the Purchase Shares
is consistent with his individual investment objectives. Each of Xxxxxxxxx and
Xxxxxxxxx is able to bear the economic risks of an investment in the Purchase
Shares, and at the present time could afford a complete loss of his investment.
(g) Each of Xxxxxxxxx and Xxxxxxxxx is acquiring the Purchase Shares for his own
account, for investment purposes only, and not with a view towards the sale or
other distribution thereof, in whole or in part. No person other than Xxxxxxxxx
or Xxxxxxxxx, as the case may be, or his permitted assigns has or will have a
direct or indirect beneficial interest in the Purchase Shares.
(h) Each of Xxxxxxxxx and Xxxxxxxxx understands that the Purchase Shares have
not been registered for sale to him under the Securities Act of 1933, as amended
(the " Act"), nor under the securities laws of any state or other jurisdiction.
The offering and sale of the Purchase Shares is intended to be exempt from
registration under the Act by virtue of Section 4(2) of the Act and applicable
state securities laws. The Purchase Shares have not been approved or disapproved
by the Securities and Exchange Commission or by any other federal or state
agency, and no such agency has passed on the accuracy or adequacy of the
Information, nor made any finding or determination as to the fairness or
suitability of an investment in the Purchase Shares.
(i) Each of Xxxxxxxxx and Xxxxxxxxx understands that there are restrictions on
the transferability of the Purchase Shares and the ability to liquidate his
investment in any of the Purchase Shares.
(j) Each of Xxxxxxxxx and Xxxxxxxxx understands and acknowledges that Anicom is
relying upon the representations and warranties contained in this Section 2.30
in determining whether the offering and sale of the Purchase Shares is eligible
for exemption from the registration requirements contained in the Act and in any
applicable state securities law.
(k) Xxxxxxxxx has no present intention to sell, transfer or otherwise dispose of
such number of Purchase Shares as may reduce his interest in Anicom to a number
of Purchase Shares having a value, as of the Effective Time, of less than 50% of
the Merger Consideration received thereby.
2.31 Disclosure .
(a) No representation or warranty of TWC Shareholders in this Agreement omits to
state a material fact necessary to make the statements herein, in light of the
circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 4.5 will contain any untrue statement or
omit to state a material fact necessary to make the statements therein or in
this Agreement, in light of the circumstances in which they were made, not
misleading.
3. REPRESENTATIONS AND WARRANTIES OF ANICOM AND MERGER SUB
Anicom and Merger Sub jointly and severally represent and warrant to TWC
Shareholders and TWC as follows:
3.1 Organization and Good Standing. Each of Anicom and Merger Sub is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the State of Delaware, its state of incorporation.
3.2 Authority; No Conflict .
(a) This Agreement and Merger Sub's Closing Documents constitute the legal,
valid, and binding obligation of Anicom or Merger Sub, as the case may be,
enforceable against Anicom or Merger Sub, as the case may be, in accordance with
its terms. Anicom and Merger Sub, as the case may be, have the absolute and
unrestricted right, power, and authority to execute and deliver this Agreement
and Merger Sub's Closing Documents and to perform its obligations under this
Agreement and Merger Sub's Closing Documents.
(b) Neither the execution and delivery of this Agreement and Merger Sub's
Closing Documents by Anicom or Merger Sub, as the case may be, nor the
consummation or performance of any of the Contemplated Transactions by Anicom or
Merger Sub, as the case may be, will give any Person the right to prevent,
delay, or otherwise interfere with any of the Contemplated Transactions pursuant
to: (i) any provision of Anicom's or Merger Sub's, as the case may be,
Organizational Documents; (ii) any resolution adopted by the board of directors
or the stockholders of Merger Sub; (iii) any Legal Requirement or Order to which
Anicom or Merger Sub, as the case may be, may be subject; or (iv) any Contract
to which Anicom or Merger Sub, as the case may be, is a party or may be bound.
Anicom or Merger Sub, as the case may be, is not required to give any notice to
or obtain any Consent from any Person in connection with the execution and
delivery of this Agreement by Anicom or Merger Sub, as the case may be, or the
consummation or performance of any of the Contemplated Transactions by Anicom or
Merger Sub, as the case may be.
3.3 Capitalization .
(a) The authorized capital stock of Anicom consists of 60,000,000 shares of
common stock, par value $.001 per share, and 1,000,000 shares of preferred
stock, par value $.01 per share. As of the date hereof (but before giving effect
to the Contemplated Transactions), there are issued and outstanding 19,483,485
shares of such common stock, all of which are of one class (the " Outstanding
Shares"). Additionally, there are outstanding warrants to purchase 81,364 shares
of Anicom's common stock. As of the date hereof, 2,264,291 shares of Anicom's
common stock are issuable upon exercise of options to purchase such stock, which
options were issued pursuant to Anicom's stock option plan. Except as described
above and as otherwise provided on Schedule 3.3, other than obligations arising
under any Employee Benefit Plan for which Anicom has or will have liability
(whether actual, contingent, direct or indirect) as of the Closing Date, there
are no outstanding securities of Anicom convertible into or evidencing the right
to purchase or subscribe for any shares of capital stock of Anicom, there are no
outstanding or authorized options, warrants, calls, subscriptions, rights,
commitments or any other agreements of any character obligating Anicom to issue
any shares of its capital stock or any securities convertible into or evidencing
the right to purchase or subscribe for any shares of such stock. No outstanding
options, warrants or other securities exercisable for or convertible into shares
of capital stock of Anicom require anti-dilution adjustments by reason of the
consummation of the Contemplated Transactions.
(b) The Outstanding Shares are duly authorized, validly issued, fully paid and
nonassessable, and are listed for trading on the Nasdaq Stock Market. The
Purchase Shares to be issued pursuant to this Agreement, in accordance with the
terms of this Agreement, will be validly issued, fully paid and nonassessable.
3.4 SEC Filings . Since February 22, 1995, Anicom has filed all forms, reports
and documents required to be filed with the SEC pursuant to the federal
securities laws and the SEC rules and regulations thereunder (the " Anicom SEC
Reports"). As of their respective dates, the Anicom SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Anicom SEC Reports and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3.5 Financial Statements . Each of the audited consolidated financial statements
of Anicom (including any related notes and schedules thereto) included (or
incorporated by reference) in its Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996, is accurate and complete and fairly presents, in
conformity with GAAP applied on a consistent basis through the periods involved
(except as may be noted therein), and in conformity with the SEC's Regulation
S-B, the consolidated financial position of the Anicom and its consolidated
subsidiaries as of its date and the consolidated results of operations and
changes in financial position for the period then ended.
3.6 No Undisclosed Liabilities . Except as and to the extent set forth (or
incorporated by reference) in the Anicom's Annual Report on Form 10-KSB for the
calendar year ended December 31, 1996, Anicom has not incurred any liability or
obligation of any nature whatsoever (whether due or to become due, accrued,
fixed, contingent, liquidated, unliquidated or otherwise) that would be required
by GAAP to be accrued on, reflected on, or reserved against it, in a
consolidated balance sheet (or in the applicable notes thereto) of Anicom
prepared in accordance with GAAP consistently applied, other than liabilities or
obligations which arose in the ordinary course of business and consistent with
past practices since such date and which do not or would not individually or in
the aggregate have an Anicom Material Adverse Effect.
3.7 Taxes. Anicom has filed or caused to be filed all Tax Returns that are or
were required to be filed by or with respect to it pursuant to the Legal
Requirements of each Governmental Body with taxing power over it or its assets.
Anicom has paid, or made provision for the payment of all Taxes that have or may
have come due pursuant to those initial Tax Returns or otherwise, or pursuant to
any assessment received by Anicom. The United States Federal and State income
Tax Returns of Anicom subject to such Taxes have not been audited by the IRS or
relevant state tax authorities and Anicom is not a party to any action or
proceeding by Governmental Body for the collection or assessment of Taxes.
Except for routine filing extensions granted as a matter of right under any
applicable law, Anicom has not been given or been requested to give waivers or
extensions (or is or would be subject to a waiver or extension given by any
other Person) of any statute of limitations relating to the payment of Taxes of
Anicom or for which Anicom may be liable. All Taxes that Anicom is or was
required by Legal Requirements to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper Governmental
Body or other Person. All Tax Returns filed by Anicom are true, correct and
complete in all material respects.
3.8 Certain Proceedings . There is no pending Proceeding:
(i) that has been commenced by or against Anicom or Merger Sub or that otherwise
relates to or may be reasonably likely to have an Anicom Material Adverse Effect
or a Merger Sub Material Adverse Effect, as the case may be; or
(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the Contemplated
Transactions.
To Anicom's Knowledge, no such Proceeding has been Threatened.
3.9 No Material Adverse Change . Since December 31, 1996, there has not been any
Anicom Material Adverse Effect.
3.10 Brokers or Finders . Anicom or Merger Sub, as the case may be, and its
agents have incurred no obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar payment in
connection with this Agreement.
3.11 Contracts; No Defaults . All of the material Contracts to which Anicom is a
party or by which it is bound are in full force and effect and are valid and
enforceable against Anicom in accordance with their terms, and no event has
occurred or circumstance exists that would give any Person (including Anicom)
the right (with or without notice or lapse of time) to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any such material Contract.
3.12 Environmental Matters .
(a) Anicom has never generated, transported, treated, stored, or disposed, or,
in any manner, arranged for disposal or treatment (within the meaning of the
Environmental Laws of any Hazardous Substances, the liability for which could be
reasonably expected to have an Anicom Material Adverse Effect.
(b) Anicom has not received, or have Knowledge of, any notice of any Proceeding
relating to the presence or alleged presence of Hazardous Substances in, under,
or upon any of Anicom's plants or facilities or upon the properties of any sites
to which any of Anicom's waste has been transported, whether for disposal or for
any other purpose, and whether against Anicom or any other Person; and there are
no pending, or, to Anicom's Knowledge, Threatened Proceedings (or notice of
potential Proceedings) from any Governmental Body or any other entity regarding
any matter relating to health, safety, or protection of the environment relating
to any of Anicom's plants or facilities.
3.13 Customers . Since September 30, 1997, Anicom has not received any written
or, to Anicom's Knowledge, oral notice, and Anicom has no Knowledge, that any of
Anicom's ten largest customers during the nine months ended September 30, 1997
intend to discontinue or substantially diminish or change their relationship
with Anicom on account of the transaction contemplated hereby or otherwise.
3.14 Suppliers . Since September 30, 1997, none of Anicom's ten largest
suppliers during the nine months ended September 30, 1997 have cancelled or
otherwise terminated, modified or, to Anicom's Knowledge, Threatened to cancel
or otherwise terminate, or to modify, its relationship with Anicom on account of
the transaction contemplated hereby or otherwise.
3.15 Merger . Each of Anicom and Merger Sub acknowledges and agrees that it has
not relied on, or been induced to enter into this Agreement on account of, any
representation or warranty of any kind, whether oral or written, express or
implied, except for such representations and warranties of TWC Shareholders and
TWC as are set forth in this Agreement. Without limiting the generality of the
foregoing, and notwithstanding any otherwise express representations and
warranties made by TWC Shareholders or TWC, neither TWC Shareholders nor TWC
makes any representation or warranty to the other parties hereto with respect
to:
(a) any projections, estimates or budgets heretofore delivered to or made
available to Anicom or Merger Sub of future revenues, expenses or expenditures
or future results of operations of TWC; or
(b) except as expressly covered by a representation and warranty contained in
this Agreement, any other information or documents (financial or otherwise) made
available to the Anicom or Merger Sub, or their counsel, accountants or advisers
with respect to TWC.
Each of Anicom and Merger Sub agrees and consents that its sole and exclusive
remedy for any and all claims that may arise on account of the Contemplated
Transactions is an action for breach of representation, warranty or covenant of
TWC Shareholders or TWC contained in this Agreement, and hereby unconditionally
and irrevocably waives, and covenants not to xxx on the basis of or otherwise
assert, any other claims or rights which may accrue to its benefit arising from
or in connection with the Contemplated Transactions; provided, however, that
notwithstanding the foregoing, the parties hereto expressly acknowledge and
agree that nothing contained herein shall limit, or be deemed to limit, in any
way or otherwise affect Anicom's or Merger Sub's rights with respect to claims
relating to fraud or intentional misrepresentation by TWC Shareholders or TWC.
3.16 Disclosure .
(a) No representation or warranty of Anicom or Merger Sub, as the case may be,
in this Agreement omits to state a material fact necessary to make the
statements herein, in light of the circumstances in which they were made, not
misleading.
(b) There is no fact known to Anicom or Merger Sub, as the case may be, that has
specific application to Anicom or Merger Sub, as the case may be (other than
general economic or industry conditions), and that would have an Anicom Material
Adverse Effect or Merger Sub Material Adverse Effect, as the case may be, that
has not been set forth in this Agreement.
3.17 Additional Tax Matters .
(a) Merger Sub was formed solely to facilitate the Merger and has no assets or
liabilities.
(b) Anicom owns 100% of all the outstanding stock or Merger Sub.
(c) Anicom has no plan to reacquire any of the Purchase Shares, provided that
the foregoing representation shall not preclude Anicom from exercising any of
its rights or remedies under the Escrow Agreement.
4. TWC SHAREHOLDERS' COVENANTS
4.1 Access and Investigation . During the period from the date of this Agreement
through the Effective Time, TWC Shareholders will, and will cause TWC and its
Representatives to, (i) afford Anicom, Merger Sub and their Representatives full
and free access, during normal business hours and at such other reasonable times
as otherwise may be required under the circumstances, upon reasonable notice,
and under reasonable circumstances so as to minimize the adverse effect on TWC's
business, to TWC's personnel, properties, contracts, books, and records, and
other documents and data, subject to legal privilege, (ii) furnish Anicom,
Merger Sub and their Representatives with copies of all such contracts, books
and records, and other existing documents and data as Anicom or Merger Sub may
reasonably request, and (iii) furnish Anicom, Merger Sub and their
Representatives with such additional financial, operating, and other data and
information as Anicom or Merger Sub may reasonably request.
4.2 Operation of the Businesses of TWC . During the period from the date of this
Agreement through the Effective Time, except as set forth in Schedule 2.16, TWC
Shareholders will, and will cause TWC to:
(a) conduct the business of TWC only in the Ordinary Course of Business,
including: (i) maintaining TWC's assets in good repair, order, and condition,
(ii) maintaining in full force existing insurance, (iii) maintaining the books
and records in the usual, regular and ordinary manner on a basis consistent with
past practices, (iv) performing and complying with all of their material
obligations under all Material Contracts and (v) not sell or otherwise dispose
of TWC's assets outside of the Ordinary Course of Business;
(b) without the prior written approval of Anicom, refrain from declaring, making
or paying any dividend or distribution (including, but not limited to,
distributions of retained earnings or amounts with respect to the payment of
taxes) to TWC's shareholders, provided, however, that notwithstanding the
foregoing, TWC may, without Anicom's prior written approval, distribute to its
shareholders (i) "S corporation" retained earnings of up to $1,750,000 in the
aggregate and (ii) required tax distributions for the tax periods ended on
February 28, 1997 and immediately prior to the Closing of up to $650,000 in the
aggregate;
(c) without the prior written approval of Anicom, refrain from incurring, or
otherwise causing, TWC's outstanding bank indebtedness at the Effective Time to
exceed $14,500,000 in the aggregate;
(d) use their Best Efforts to preserve intact the current business organization
of TWC, keep available the services of the current officers, employees, and
agents of TWC, and maintain the relations and goodwill with suppliers,
customers, landlords, creditors, employees, agents, and others having business
relationships with TWC;
(e) confer with Anicom and Merger Sub concerning operational matters of a
material nature; and
(f) otherwise report periodically to Anicom and Merger Sub concerning the status
of the business, operations, finances and prospects of TWC.
4.3 Negative Covenant . During the period from the date of this Agreement
through the Effective Time, except as set forth in Schedule 2.16, TWC
Shareholders will not, and will cause TWC not to, take any affirmative action,
or fail to take any reasonable action within their or its control, as a result
of which any of the changes or events listed in Section 2.16 is likely to occur.
4.4 Required Approvals . As promptly as practicable after the date of this
Agreement, TWC Shareholders will, and will cause TWC to, make all filings
required by Legal Requirements to be made by them in order to consummate the
Contemplated Transactions. Between the date of this Agreement and the Effective
Time, TWC Shareholders will, and will cause TWC to, cooperate with Anicom or
Merger Sub, as the case may be, in connection with any filings required by Legal
Requirements to be made by Anicom or Merger Sub, as the case may be, to
consummate the Contemplated Transactions.
4.5 Notification . Between the date of this Agreement and the Closing Date, TWC
Shareholders will, and will cause TWC to, promptly notify Anicom and Merger Sub
in writing if TWC Shareholders or TWC becomes aware of any fact or condition
that causes or constitutes a Breach of any of TWC Shareholders' representations
and warranties as of the date of this Agreement, or if TWC Shareholders or TWC
becomes aware of the occurrence after the date of this Agreement of any fact or
condition that would cause or constitute a Breach of any such representation or
warranty had such representation or warranty been made as of the time of
occurrence or discovery of such fact or condition. During the same period, TWC
Shareholders will, and will cause TWC to, promptly notify Anicom and Merger Sub
of the occurrence of any Breach of any covenant of TWC Shareholders or TWC in
this Section 4 or of the occurrence of any event that may make the satisfaction
of the conditions in Section 6 impossible or unlikely.
4.6 Best Efforts. Between the date of this Agreement and the Effective Time, TWC
Shareholders will, and will cause TWC to, use their or its Best Efforts to cause
the conditions in Section 6 to be satisfied.
4.7 TWC Guaranties . Xxxxxxxxx shall use his Best Efforts to release TWC from
all guaranties and other support obligations of TWC in respect of obligations of
Xxxxxxxxx, XX Cable, L.L.C., a New York limited liability company (" TW Cable")
and Four Goodys, immediately prior to the Closing Date, including, without
limitation, the guaranties and other credit support and other obligations set
forth in Schedule 4.7 (collectively, the " TWC Guaranties") (including, without
limitation, to the extent necessary, the assumption by Xxxxxxxxx and Four Goodys
of the obligation of TWC under the TWC Guaranties).
4.8 Officer's Certificate . Between the date of this Agreement and the Effective
Time, TWC Shareholder's will cause TWC to deliver to Anicom and Merger Sub on a
daily basis a certificate, executed by the President or Chief Financial Officer
of TWC, with respect to TWC's total Debt, outstanding accounts payable and
outstanding checks as of each such date.
4.9 ERISA Matters . Between the date of this Agreement and the Effective Time,
TWC shall file, and promptly deliver evidence to Anicom with respect to the
filing, of all required documents, certificates and other materials required in
connection with the filing of Form 5500 Annual Reports with respect to TWC's
Scheduled Plans for the plan year ended February 28, 1997.
5. COVENANTS OF ANICOM AND MERGER SUB
5.1 Access and Investigation . During the period from the date of this Agreement
through the Effective Time, Anicom will, and will cause its Representatives to,
(i) afford TWC, TWC Shareholders and their Representatives full and free access,
during normal business hours and at such other reasonable times as otherwise may
be required under the circumstances, upon reasonable notice, and under
reasonable circumstances so as to minimize the adverse effect on Anicom's
business, to Anicom's personnel, properties, contracts, books, and records, and
other documents and data, subject to legal privilege, (ii) furnish TWC, TWC
Shareholders and their Representatives with copies of all such contracts, books
and records, and other existing documents and data as TWC or TWC Shareholders
may reasonably request, and (iii) furnish TWC, TWC Shareholders and their
Representatives with such additional financial, operating, and other data and
information as Anicom or Merger Sub may reasonably request.
5.2 Operation of the Businesses of Anicom . During the period from the date of
this Agreement through the Effective Time, Anicom will:
(a) use its Best Efforts to preserve intact the current business organization of
Anicom, keep available the services of the current officers, employees, and
agents of Anicom, and maintain the relations and good will with suppliers,
customers, landlords, creditors, employees, agents, and others having business
relationships with Anicom; and
(b) otherwise report to TWC and TWC Shareholders any material adverse change in
the status of the business, operations, finances and prospects of Anicom.
5.3 Notification . Between the date of this Agreement and the Closing Date,
Anicom will promptly notify TWC and TWC Shareholders in writing if Anicom
becomes aware of any fact or condition that causes or constitutes a Breach of
any representations and warranties as of the date of this Agreement, or if
Anicom becomes aware of the occurrence after the date of this Agreement of any
fact or condition that would cause or constitute a Breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. During the same
period, Anicom will promptly notify TWC and TWC Shareholders of the occurrence
of any Breach of any covenant of Anicom in this Section 5 or of the occurrence
of any event that may make the satisfaction of the conditions in Section 7
impossible or unlikely.
5.4 Approvals of Governmental Bodies . As promptly as practicable after the date
of this Agreement, Anicom or Merger Sub, as the case may be, will make any
filings required by Legal Requirements to be made by it in order to consummate
the Contemplated Transactions. Between the date of this Agreement and the
Effective Time, Anicom or Merger Sub, as the case may be, will cooperate with
TWC Shareholders and TWC in connection with any filings required by Legal
Requirements to be made by TWC Shareholders or TWC to consummate the
Contemplated Transactions.
5.5 Best Efforts . Between the date of this Agreement and the Effective Time,
Anicom and Merger Sub, as the case may be, will use their Best Efforts to cause
the conditions in Section 7 to be satisfied.
5.6 Xxxxxxxxx Guaranties . Anicom shall use its Best Efforts to release
Xxxxxxxxx, Four Goodys, TW Cable and their Affiliates from all guaranties and
other support obligations of Xxxxxxxxx, Four Goodys and TW Cable, in respect of
obligations of TWC immediately prior to the Closing Date, including, without
limitation, the guaranties and other credit support obligations set forth in
Schedule 5.6 (collectively, the " Xxxxxxxxx Guaranties") (including, without
limitation, to the extent necessary, the assumption by Anicom of the obligation
of Xxxxxxxxx, Four Goodys and TW Cable under the Xxxxxxxxx Guaranties).
5.7 Listing of Purchase Shares . On or before the Effective Time, Anicom shall
list the Purchase Shares on the Nasdaq National Market.
5.8 TWC Employees . As soon after the Closing as reasonably practicable, each
employee of TWC (other than the TWC Shareholders) who remains an employee of TWC
after the Closing shall receive ten (10) shares of Anicom's common stock, and
Anicom shall make appropriate provision for any federal or state income tax
obligations of such employees resulting therefrom.
5.9 Employment Agreement . Between the date of this Agreement and the Effective
Time, Anicom shall offer employment to Xxx Xxxxxx on substantially the terms set
forth in Exhibit G.
6. CONDITIONS PRECEDENT TO ANICOM'S AND MERGER SUB'S OBLIGATION TO CLOSE
Anicom's and Merger Sub's obligations to consummate the Merger and to take the
other actions required to be taken by Anicom or Merger Sub, as the case may be,
at the Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived by Anicom or Merger
Sub, as the case may be, in whole or in part):
6.1 Accuracy of Representations . Each of TWC Shareholders' representations and
warranties in this Agreement must have been accurate in all material respects as
of the date of this Agreement, and must be accurate in all material respects as
of the Closing Date as if made on the Closing Date without giving effect to any
Supplement to any of the Schedules hereto, or any certificate or document
delivered by TWC Shareholders or TWC pursuant to this Agreement.
6.2 TWC Shareholders' Performance .
(a) Each of the covenants and obligations that TWC Shareholders or TWC are
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been duly performed and complied with in all material
respects.
(b) TWC Shareholders and TWC must have delivered each of TWC Shareholders'
Closing Documents required to be delivered by TWC Shareholders pursuant to
Section 1.10(a).
6.3 Consents . Each of the Consents identified in Schedule 2.2 must have been
obtained and must be in full force and effect (and, with respect to item 3 on
Schedule 2.2, must be in form and substance reasonably acceptable to Anicom),
except that Anicom expressly waives satisfaction of this condition with respect
to the consents listed as items 1 and 2 on Schedule 2.2.
6.4 No Proceedings . There shall not be pending or threatened any material
Proceeding (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions, or (b) that may be likely
have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
6.5 No Claim Regarding Stock Ownership or Sale Proceeds . There must not have
been made or Threatened by any Person any claim asserting that such Person
(a) is the holder or the beneficial owner of, or has the right to acquire or to
obtain beneficial ownership of, any stock of, or any other voting, equity, or
ownership interest in, TWC, or (b) is entitled to all or any portion of the
Merger Consideration payable to TWC Shareholders.
6.6 No Prohibition . Neither the consummation nor the performance of any of the
Contemplated Transactions by TWC Shareholders will, directly or indirectly (with
or without notice or lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Merger Sub or Anicom or any Person
affiliated with Merger Sub or Anicom to suffer any material adverse consequence
under, (i) any applicable Legal Requirement or Order, or (ii) any Legal
Requirement or Order that has been published, introduced, or otherwise formally
proposed by or before any Governmental Body.
6.7 Tax Opinion . Anicom shall have received an opinion from Xxxxxx Xxxxxx &
Xxxxx, dated the Closing Date, based upon certain factual representations of TWC
Shareholders, TWC and Anicom, to the effect that the Merger will constitute a
reorganization for federal income tax purposes within the meaning of Section
368(a) of the Code and no gain or loss will be recognized by TWC, Anicom or
Merger Sub as a result of the Merger.
6.8 No Material Adverse Change . From the date of this Agreement to the
Effective Time, there shall not have been any event or development which results
in a TWC Material Adverse Effect, nor shall there have occurred any event or
development which could reasonably be likely to result in a TWC Material Adverse
Effect in the future.
6.9 HSR Act . The waiting period specified in the HSR Act, including any
accelerations or extensions thereof, shall have expired or been terminated.
7. CONDITIONS PRECEDENT TO TWC SHAREHOLDERS' OBLIGATION TO CLOSE
TWC Shareholders' obligation to consummate the Merger and to take the other
actions required to be taken by TWC Shareholders at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by TWC Shareholders, in whole or in
part):
7.1 Accuracy of Representations. Each of Anicom and Merger Sub's representations
and warranties in this Agreement must have been accurate in all material
respects as of the date of this Agreement and must be accurate in all material
respects as of the Closing Date as if made on the Closing Date.
7.2 Merger Sub's Performance .
(a) Each of the covenants and obligations that Anicom or Merger Sub, as the case
may be, is required to perform or to comply with pursuant to this Agreement at
or prior to the Closing must have been performed and complied with in all
material respects.
(b) Merger Sub must have delivered each of the documents required to be
delivered by Merger Sub pursuant to Section 1.10(b).
7.3 No Proceedings . There shall not be pending or threatened any material
Proceeding (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions, or (b) that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with
any of the Contemplated Transactions.
7.4 Tax Opinion . TWC shall have received a written opinion from Xxxxx Xxxx LLP
the Company, dated the Closing Date, based upon certain factual representations
of TWC Shareholders, TWC and Anicom, to the effect that the Merger will
constitute a reorganization for federal income tax purposes within the meaning
of Section 368(a)(2)(E) of the Code and that no gain or loss will be recognized
by TWC Shareholders as a result of the Merger.
7.5 No Material Adverse Change . From the date of this Agreement to the
Effective Time, there shall not have been any event or development which results
in an Anicom Material Adverse Effect, nor shall there have occurred any event or
development which could reasonably be likely to result in an Anicom Material
Adverse Effect in the future.
7.6 HSR Act . The waiting period specified in the HSR Act, including any
accelerations or extensions thereof, shall have expired or been terminated.
7.7 Registration Statement . The registration statement pursuant to Section 2.1
of the Registration Rights Agreement shall have been declared effective by the
SEC and the Purchase Shares shall have been listed on the NASDAQ National
Market.
7.8 Release Under The Xxxxxxxxx Guaranties . Xxxxxxxxx and his Affiliates shall
have been released from (or Anicom shall have otherwise indemnified them from
and against any and all liability with respect to) any and all of their
obligations under the Xxxxxxxxx Guaranties and Xxxxxxxxx shall have received
written instruments reasonably satisfactory to Xxxxxxxxx executed by the
creditor under or with respect to each Guarantee effectuating the foregoing.
7.9 Purchase of Vertex Technologies, Inc. Inventory . At the Closing, Anicom
shall have purchased the Distribution Inventory (as defined in that certain
Asset Purchase Agreement, dated as of May, 1997, by and between TW Cable, L.L.C.
and Vertex Technologies, Inc., as assigned to TWC (the " Vertex Asset Purchase
Agreement") for the Purchase Price (as defined therein).
8. TERMINATION
8.1 Termination Events . This Agreement may, by notice given prior to or at the
Closing, be terminated only under the following circumstances (each, a "
Permitted Termination"):
(a) by either Anicom or TWC Shareholders if a material Breach of any provision
of this Agreement has been committed by the other party and such Breach has not
been waived;
(b)(i) by Anicom if any of the conditions in Section 6 have not been satisfied
as of the Closing Date or if satisfaction of any such condition is or becomes
impossible (other than through the failure of Anicom or Merger Sub to comply
with its obligations under this Agreement) and Anicom has not waived such
condition on or before the Closing Date;
(ii) by TWC Shareholders, if any of the conditions in Section 7 have not been
satisfied as of the Closing Date or if satisfaction of any such condition is or
becomes impossible (other than through the failure of TWC Shareholders to comply
with his obligations under this Agreement) and TWC Shareholders have not waived
such condition on or before the Closing Date;
(c) by mutual consent of Anicom and TWC Shareholders;
(d) by TWC Shareholders if the Closing has not occurred on or before December 5,
1997; or
(e) by Anicom if the Closing has not occurred on or before December 31, 1997.
8.2 Effect of Termination . Each party's right of termination under Section 8.1
is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section 8.1, all further
obligations of the parties under this Agreement will terminate, except that the
obligations in Section 12.1 will survive; provided, however, that if this
Agreement is terminated by a party because of the Breach of the Agreement by the
other party or because one or more of the conditions to the terminating party's
obligations under this Agreement is not satisfied as a result of the other
party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
9. POST-CLOSING COVENANTS
9.1 Tax Compliance . After Closing, the Parties agree to take or refrain from
taking such further action as may be reasonably necessary to qualify the Merger
as a reorganization under the provisions of Section 368(a) of the Code
including, but not limited to, reporting the Merger as a reorganization on their
respective Tax Returns.
9.2 Waiver of Pre-Existing Condition Limitations . After Closing, in the event
Anicom transfers insurance coverage of TWC's post-closing employees into
Anicom's insurance programs, Anicom shall use its Best Efforts to have any
applicable pre-existing condition limitations waived with respect to such
employees and will not effect any such transfer if any such condition is unable
to be waived.
9.3 VTX/Vertex Inventory . The parties acknowledge that, in addition to the
inventory described in Section 7.9 of this Agreement, VTX/Vertex currently owns
certain inventory of wire and cable and related products (the " VTX Inventory").
Following the Effective Time, Xxxxxxxxx, as the controlling shareholder of
VTX/Vertex shall cause VTX/Vertex to offer to Anicom a right of first refusal to
purchase the VTX Inventory in the Ordinary Course of Business during the twelve
months following the Effective Time at a 17 1/2% discount to the book value
thereof, and Anicom will use its commercially reasonable efforts to assist
VTX/Vertex in selling the VTX Inventory.
9.4 Transfer of Insurance Coverage . As soon as reasonably practicable after the
Closing, Xxxxxxxxx shall use his Best Efforts to cause the transfer of insurance
coverage of Xxxxxx Xxxxxxxx from TWC's insurance policies to those of VTX/Vertex
and the waiver of any applicable pre-existing condition limitations with respect
thereto.
10. INDEMNIFICATION; REMEDIES
10.1 Survival . All representations and warranties in this Agreement, any
supplements to the Schedules hereto, and any certificate or document delivered
pursuant to this Agreement will survive the Merger until the first anniversary
of the Effective Time, except that (a) the representations and warranties in
Sections 2.3 and 2.11 will survive until all applicable statutes of limitation
with respect to the Tax Returns or other matters set forth in such
representation and warranty have elapsed, and (b) all representations and
warranties in Sections 2.13, 2.21 and 2.22 shall survive until the second
anniversary of the Effective Time.
The right to indemnification, reimbursement, or other remedy based on such
representations and warranties will not be affected or limited by any
investigation conducted by Anicom or Merger Sub, as the case may be.
10.2 Indemnification and Reimbursement by TWC Shareholders . TWC Shareholders
shall jointly and severally indemnify and hold harmless Merger Sub and Anicom
and their employees, officers, directors, controlling persons, and Affiliates
(collectively, the " Indemnified Persons"), and shall reimburse the Indemnified
Persons, for any loss, liability, claim, damage, expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively, " Damages"),
arising from or in connection with (a) any Breach of any representation or
warranty made by TWC Shareholders or TWC in this Agreement without giving effect
to any Supplement to any of the Schedules hereto, or any TWC Shareholders'
Closing Document, (b) any Breach by TWC Shareholders or TWC of any covenant or
obligation of TWC Shareholders or TWC in this Agreement or (c) the TWC
Guaranties and any other liabilities or obligations arising from, in connection
with or relating to VTX/Vertex, the VTX/Vertex Transactions or the VTX/Vertex
Bankruptcy Proceedings.
10.3 Indemnification and Reimbursement by Anicom and Merger Sub . Anicom or
Merger Sub, as the case may be, shall indemnify and hold harmless TWC
Shareholders, and shall reimburse TWC Shareholders, for any Damages arising from
or in connection with (a) any Breach of any representation or warranty made by
Anicom or Merger Sub in this Agreement or in any certificate delivered by Merger
Sub pursuant to this Agreement, (b) any Breach by Anicom or Merger Sub of any of
their respective covenants or obligations in this Agreement, (c) Section 630 of
the New York Business Corporation Law or (d) the Xxxxxxxxx Guaranties.
10.4 Procedure for Indemnification -- Third Party Claims .
(a) Promptly after receipt by an indemnified party under Section 10.2 or 10.3 of
notice of a claim against it (" Claim"), such indemnified party shall, if a
claim is to be made against an indemnifying party under such Section, give
notice to the indemnifying party of such Claim, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any liability that
it may have to any indemnified party, except to the extent that the indemnifying
party demonstrates that the defense of such action is prejudiced by the
indemnified party's failure to give such notice.
(b) If any Claim referred to in Section 10.4(a) is made against an indemnified
party and it gives notice to the indemnifying party of such Claim, the
indemnifying party will, unless the Claim involves Taxes, be entitled to
participate in the defense of such Claim and, to the extent that it wishes
(unless (i) the indemnifying party is also a party to such Claim and the
indemnified party determines in good faith that joint representation would be
inappropriate, or (ii) the indemnifying party fails to provide reasonable
assurance to the indemnified party of its financial capacity to defend such
Claim and provide indemnification with respect to such Claim), to assume the
defense of such Claim with counsel satisfactory to the indemnified party and,
after notice from the indemnifying party to the indemnified party of its
election to assume the defense of such Claim, the indemnifying party will not,
as long as it diligently conducts such defense, be liable to the indemnified
party under such Section for any fees of other counsel or any other expenses
with respect to the defense of such Claim in each case subsequently incurred by
the indemnified party in connection with the defense of such Claim, other than
reasonable costs of investigation. If the indemnifying party assumes the defense
of a Claim, (a) it will be conclusively established for purposes of this
Agreement that the claims made in that Claim are within the scope of and subject
to indemnification; (b) no compromise or settlement of such claims may be
effected by the indemnifying party without the indemnified party's consent
unless (i) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect on any
other Claims that may be made against the indemnified party, and (ii) the sole
relief provided is monetary damages that are paid in full by the indemnifying
party; and (c) the indemnifying party will have no liability with respect to any
compromise or settlement of such claims effected without its consent. If notice
is given to an indemnifying party of a Claim and the indemnifying party does
not, within ten days after the indemnified party's notice is given, give notice
to the indemnified party of its election to assume the defense of such Claim,
the indemnifying party will be bound by any determination with respect to said
Claim or any compromise or settlement effected by the indemnified party unless
it objects in good faith as to whether such claim is properly within the scope
of such indemnification.
(c) Notwithstanding the foregoing, if an indemnified party determines in good
faith that there is a reasonable probability that a Claim may adversely affect
it or its Related Persons other than as a result of monetary damages for which
it would be entitled to indemnification under this Agreement, the indemnified
party may, by notice to the indemnifying party, assume the exclusive right to
defend, compromise, or settle such Claim, but the indemnifying party will not be
bound by any determination of a Claim so defended or any compromise or
settlement effected without its consent (which may not be unreasonably
withheld). In the event that TWC Shareholders assume the defense of a Claim
under this Section 10.4, Anicom hereby agrees and endeavors to cooperate, and to
cause TWC to cooperate, in all reasonable respects with TWC Shareholders as they
may reasonably request, which cooperation shall include, without limitation,
making available business records, tax filings, documents or other information
of TWC pertaining to, and employees (including employee time) of TWC having
personal knowledge of, the circumstances relating to such Claim.
10.5 Procedure for Indemnification -- Other Claims. A claim for indemnification
for any matter not involving a third-party claim may be asserted by notice to
the party from whom indemnification is sought.
10.6 Escrow. Any amounts owed by TWC Shareholders to Anicom or Merger Sub shall
be, on a non-exclusive basis, first paid from escrow pursuant to the terms of
the Escrow Agreement.
10.7 Minimum Threshold. Neither party shall be required to indemnify and hold
harmless the other party pursuant to this Agreement for any Claim(s) until such
Claim(s) have a value, in the aggregate, of $400,000 (the " Basket"), at which
time $200,000 of the first $400,000 of any such Claim(s) and one hundred percent
(100%) of amounts in excess of $400,000 with respect to such Claim(s) shall then
be owed.
10.8 Cap on Indemnity. Neither party's obligation(s) to indemnify and hold
harmless the other party pursuant to this Agreement shall exceed $4,000,000 in
the aggregate (the " Cap"); provided, however, that the obligations of Anicom or
Merger Sub, as the case may be, under and with respect to Sections 10.3(c) and
(d) and Section 10.3(b) relating to any breach by Anicom of the covenants
contained in the first sentence of Section 12.1, and the obligations of TWC
Shareholders with respect to Section 10.2(a) relating to the representations and
warranties in Section 2.3 and with respect to Section 10.2(c), shall not be
subject to the Basket or the Cap. Each TWC Shareholder's respective liability to
provide indemnification under this Agreement shall not exceed his pro rata
portion of the Cap which shall be determined based upon the percentage interest
such TWC Shareholder has in the Merger Consideration, and each TWC Shareholder's
respective liability to provide indemnification with respect to any particular
Claim shall not exceed his pro rata portion of such Claim determined based upon
the percentage interest such TWC Shareholder has in the Merger Consideration.
10.9 Other Limitations. The amount of any Damages suffered by an Indemnified
Person under this Agreement (and the amount for which such party may seek
indemnification pursuant to this Article 10 on account of such Damages) shall be
reduced by the amount, if any, of any insurance recovery received by such party
from any insurance policy maintained by such party or its Affiliates, net of (i)
reasonable expenses incurred by such party in obtaining such recovery and (ii)
the present value of any insurance premium increase attributable to the claim
underlying such recover, including retrospective premium adjustments.
10.10 Applicability to Xxxxxxxxx . For purposes of this Section 10 only, the
term "TWC Shareholders" as used herein shall be deemed to include Xxxxxxxxx if
and only if the Closing actually occurs.
11. DEFINITIONS
For purposes of this Agreement, the following terms have the meaning set forth
below:
"Best Efforts"-- the good faith efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible.
"Breach"-- a "Breach" of a representation, warranty, covenant, obligation, or
other provision of this Agreement will be deemed to have occurred if there is or
has been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
"Code" -- the Internal Revenue Code of 1986, as amended, or any successor law,
and rules and regulations issued by the IRS pursuant to, or promulgated under,
the Internal Revenue Code or any successor law.
"Consent" -- any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).
"Contemplated Transactions" -- all of the transactions contemplated by this
Agreement, including:
(i) the merger of Merger Sub with and into TWC;
(ii) the execution, delivery, and performance of TWC Shareholders' Closing
Documents and Merger Sub's Closing Documents; and
(iii) the performance by Merger Sub and TWC Shareholders of their respective
covenants and obligations under this Agreement.
"Contract" -- any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"Debt" -- means without duplication, the sum of (a) all indebtedness of TWC for
borrowed money, (b) the principal portion of all obligations of TWC under
capital leases, and (c) all commercial letters of credit and the maximum or face
amount of all performance and standby letters of credit issued or bankers'
acceptance facilities created for the account of TWC including, without
duplication, all unreimbursed draws thereunder.
"Encumbrance" -- any claim, lien, pledge, charge, security interest, equitable
interest, option, right of first refusal or preemptive right, condition, or
other restriction of any kind, including any restriction on use, voting (in the
case of any security), transfer, receipt of income, or exercise of any other
attribute of ownership.
"ERISA" -- the Employee Retirement Income Security Act of 1974, as amended, or
any successor law.
"Escrow Agent" -- Xxxxxx Trust and Savings Bank, or such other financial
institution as the parties shall mutually agree.
"Facilities" -- any real property, leaseholds, or other interests currently
owned or operated by TWC (or any predecessor Person) and any buildings, plants,
or structures currently or formerly owned, leased, or operated by TWC (or any
predecessor Person).
"Fair Market Value" -- with respect to each Purchase Share, the average closing
(last sale) price per share of Anicom's common stock for the ten trading days
ending on the second trading day prior to the date upon which any such
determination is being made (as quoted on the Nasdaq National Market or such
other national exchange or quotation system upon which Anicom's common stock is
then listed or quoted).
"Governmental Authorization" -- any approval, consent, license, permit, waiver,
or other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body" -- any:
(i) nation, state, county, city, town, village, district, or other jurisdiction
of any nature;
(ii) federal, state, local, municipal, foreign, or other government;
(iii) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official, or other entity and any court
or other tribunal);
(iv) multi-national organization or body; or
(v) body exercising, or entitled or purporting to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
"Hazardous Substance" -- any substance that is now or will foreseeably be
listed, defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any Legal Requirement, including any admixture or solution thereof,
and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials.
"IRS" -- the United States Internal Revenue Service.
" Knowledge" -- an individual will be deemed to have "Knowledge" of a particular
fact or other matter if such individual is actually aware of such fact or other
matter after due inquiry with the person or persons having supervisory
responsibility over the matter in question. A Person (other than an individual)
will be deemed to have "Knowledge" of a particular fact or other matter if any
individual who is serving, or who has at any time served, as a director,
officer, partner, executor, or trustee of such Person (or in any similar
capacity) has, or at any time had, Knowledge of such fact or other matter;
provided, however, that, with respect to TWC, the term "officer" as used in the
foregoing clause shall only include the TWC Shareholders.
"Legal Requirirement" -- any federal, state, local, municipal, foreign, or other
constitution, ordinance, regulation, statute, treaty, or other law adopted,
enacted, implemented, or promulgated by or under the authority of any
Governmental Body or by the eligible voters of any jurisdiction, and any
agreement, approval, consent, injunction, judgment, license, order, or permit by
or with any Governmental Body or to which Xxxxxxxxx, Xxxxxxxxx or TWC is a party
or by which Xxxxxxxxx, Xxxxxxxxx or TWC is bound.
"Material Adverse Effect" -- with respect to a Person means any event, change or
effect that is materially adverse to the condition (financial or otherwise),
properties, assets, liabilities, businesses, operations, results of operations
of such Person.
"Order" -- any award, injunction, judgment, order, ruling, subpoena, or verdict
or other decision entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:
(i) such action is consistent with the past practices of such Person and is
taken in the ordinary course of the normal day-to-day operations of such Person;
and
(ii) such action is not required to be authorized by the board of directors of
such Person (or by any Person or group of Persons exercising similar authority)
and does not require any other separate or special authorization of any nature.
"Organizational Documents"-- (i) the articles or certificate of incorporation
and the bylaws of a corporation; (ii) any charter or similar document adopted or
filed in connection with the creation, formation, or organization of a Person;
and (iii) any amendment to any of the foregoing.
"Person" -- any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, or other entity or Governmental Body.
"Proceeding" -- any suit, litigation, arbitration, hearing, audit,
investigation, or other action (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"Proprietary Rights" -- all proprietary information of TWC, including all
patents, patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); all trademarks, service
marks, trade dress, trade names and corporate names; all registered and
unregistered statutory and common law copyrights; all registrations,
applications and renewals for any of the foregoing; all trade secrets,
confidential information, ideas, formulae, compositions, know-how, manufacturing
and production processes and techniques, research and development information,
drawings, specifications, designs, plans, improvements, proposals, technical and
computer data, documentation and software, financial, business and marketing
plans, and customer and supplier lists/accounts and related information and all
other proprietary rights relating to the production, sale or service of products
and the conduct of TWC's business.
"Related Person" -- with respect to a particular individual:
(i) each other member of such individual's Family; and
(ii) any Person that is directly or indirectly controlled by any one or more
members of such individual's Family.
With respect to a specified Person other than an individual:
(i) any Person that, directly or indirectly, controls, is controlled by, or is
under common control with such specified Person; and
(ii) each Person that serves as a director, executive officer, general partner,
executor, or trustee of such specified Person (or in a similar capacity).
For purposes of this definition, the "Family" of an individual includes (i) such
individual, (ii) the individual's spouse and former spouses, (iii) any lineal
ancestor or lineal descendant of the individual, or (iv) a trust for the benefit
of the foregoing. A Person will be deemed to control another Person, for
purposes of this definition, if the first Person possesses, directly or
indirectly, the power to direct, or cause the direction of, the management
policies of the second Person, (x) through the ownership of voting securities,
(y) through common directors, trustees or officers, or (z) by contract or
otherwise.
"Representative" -- with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.
"Securities Act" -- the Securities Act of 1933, as amended, or any successor law
including the rules and regulations promulgated thereunder.
"Tax" -- any tax (including any income tax, capital gains tax, value-added tax,
sales tax, property tax, gift tax, or estate tax), levy, assessment, tariff,
duty (including any customs duty), deficiency, or other fee, and any related
charge or amount (including any fine, penalty, or interest), imposed, assessed,
or collected by or under the authority of any Governmental Body.
"Tax Return" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter will be
deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing).
"VTX/Vertex Bankruptcy Proceedings" -- those proceedings involving VTX/Vertex in
the U.S. Bankruptcy Court, Eastern District of New York at Westbury for relief
under Chapter 11 of the U.S. Bankruptcy Code referred to as In Re: Vertex
Technology, Inc. and VTX Electronics Corp., Case No. 000-00000-000 and
000-00000-000.
"VTX/Vertex Transactions" -- the transactions contemplated by the Vertex Asset
Purchase Agreement and that certain Securities Purchase Agreement, dated January
10, 1997, by and among TW Cable and the persons identified therein.
12. GENERAL PROVISIONS
12.1 Expenses . Anicom agrees that it will reimburse TWC, or otherwise assume as
a result of the Merger, up to $200,000 in reasonably documented fees and
expenses of their legal counsel, accountants and investment advisors in
connection with the Merger, regardless of whether a Merger is consummated, so
long as TWC and TWC Shareholders have complied with the terms and conditions set
forth in Sections 10 and 12 of that certain Letter of Intent dated November 4,
1997 between Anicom and TWC. Except as set forth in the preceding sentence,
Anicom, on the one hand, and TWC Shareholders (to the extent the costs and
expenses incurred by TWC exceed $200,000), on the other hand, will each be
solely responsible for and bear all of its or their respective expenses,
including, without limitation, expenses of legal counsel, accountants, and other
advisors, incurred at any time in connection with pursuing or consummating the
Merger and the Contemplated Transactions.
12.2 Notices . All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given (a)
when delivered by hand; (b) when sent by telecopier, provided that a copy is
mailed by U.S. certified mail, return receipt requested; (c) three days after
sent by Certified U.S. Mail, return receipt requested; or (d) one day after
deposit with a nationally recognized overnight delivery service, in each case to
the appropriate addresses and telecopier numbers set forth below (or to such
other addresses and telecopier numbers as a party may designate by notice to the
other parties):
Xxxxxxxxx: with a copy to:
Xxxxxx Xxxxxxxxx Xxxxx Xxxx L.L.P.
000 Xxxxxxxx Xxxxx 000 Xxxx Xxxxxx
Xxxxx Xxxxxxxx, Xxx Xxxx 00000-0000 Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Xxxxxxxxx: with a copy to:
Xxxx X. Xxxxxxxxx Xxxxx Xxxx L.L.P.
00 Xxxxxxxxx Xxxxxx 000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Anicom and Merger Sub: with a copy to:
Anicom, Inc. Xxxxxx Xxxxxx & Zavis
0000 Xxxxx Xxxxx Xxxx 000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx Attention: Xxxxxxx X. Xxxx, Esq.
Telecopy No.: (000)000-0000 Telecopy No.: (000) 000-0000
12.3 Further Assurances . The parties agree (a) to furnish upon request to each
other such further information, (b) to execute and deliver to each other such
other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of the
Contemplated Transactions.
12.4 Waiver . The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege.
12.5 Entire Agreement and Modification . This Agreement supersedes all prior
oral or written agreements between the parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement executed
by all parties hereto.
12.6 Assignments, Successors, and No Third-Party Rights . Neither party may
assign any of its rights under this Agreement without the prior consent of the
other parties except that Anicom may assign any of its rights under this
Agreement to any Subsidiary of Anicom. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement.
12.7 Severability . If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.9 Section Headings, Construction . The headings of Sections in this Agreement
are provided for convenience only and will not affect its construction or
interpretation. All references to "Sections" refer to the corresponding Sections
of this Agreement. All words used in this Agreement will be construed to be of
such gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
12.10 Confidentiality of Agreements . The parties hereto will keep the terms of
this Agreement and the other agreements contemplated by this Agreement
confidential and will not, without the prior written consent of the other
parties hereto, disclose such terms to any person or entity other than their
accountants and attorneys who agree to be bound by this confidentiality
provision, provided that this confidentiality obligation will terminate with
respect to any information that becomes generally available to the public
through no fault of the parties hereto or their accountants or attorneys.
12.11 Governing Law . This Agreement will be governed by and construed under the
laws of the State of Illinois without regard to conflicts of laws principles.
The parties hereto irrevocably consent to the personal jurisdiction of any state
or Federal court of competent subject matter jurisdiction located (i) in Xxxx
County, Illinois if Anicom or Merger Sub is the initial plaintiff in any action
between the parties hereto or (ii) in Suffolk or New York County, New York, if
TWC or TWC Shareholders are the initial plaintiffs in any action between the
parties hereto.
12.12 Counterparts . This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
12.13 No Strict Construction . The language used in this Agreement will be the
language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any party hereto.
IN WITNESS WHEREOF, the parties have executed this Merger Agreement as of the
date first written above.
ANICOM, INC. TWC ACQUISITION CORP.
By:/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Chief Executive Officer Chairman
TW COMMUNICATION CORPORATION,
a New York corporation
By: /s/ Xxxxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx, President Xxxxxx Xxxxxxxxx, Individually
By: /s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Individually
