Exhibit 2.1
================================================================================
AGREEMENT AND PLAN OF MERGER
By and Among
TSI TELECOMMUNICATION NETWORK SERVICES INC.
TSI BRIENCE, LLC,
BRIENCE, INC.,
AND
THE SELLER PARTIES (AS DEFINED HEREIN)
July 15, 2003
================================================================================
Table of Contents
Page
----
ARTICLE I THE MERGER............................................................ 1
1.01 The Merger........................................................ 1
1.02 Conversion of Company Stock....................................... 2
1.03 Other Requirements................................................ 2
1.04 Dissenting Shares................................................. 2
1.05 Exchange of Certificates.......................................... 3
1.06 Fractional Shares................................................. 3
1.07 Managers and Officers............................................. 3
1.08 Options........................................................... 3
ARTICLE II THE CLOSING.......................................................... 4
2.01 The Closing....................................................... 4
ARTICLE III CONDITIONS TO CLOSING............................................... 4
3.01 Conditions to Purchaser's and Merger Sub's Obligations............ 4
3.02 Conditions to the Seller Parties' and Company's Obligations....... 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATED TO THE COMPANY................ 7
4.01 Organization and Corporate Power.................................. 7
4.02 Capital Stock and Related Matters................................. 7
4.03 Subsidiaries...................................................... 8
4.04 Authorization; No Breach.......................................... 8
4.05 Indebtedness...................................................... 8
4.06 Intellectual Property............................................. 8
4.07 Litigation, etc................................................... 8
4.08 Brokerage......................................................... 9
4.09 Insurance......................................................... 9
4.10 ERISA............................................................. 9
4.11 Real Property..................................................... 9
4.12 Legal Compliance.................................................. 9
4.13 No Acceleration of Rights or Benefits............................. 9
4.14 Bank Accounts..................................................... 9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB............ 9
5.01 Organization and Corporate Power.................................. 10
5.02 Authorization; No Breach.......................................... 10
5.03 Capital Stock..................................................... 10
5.04 Capital Stock..................................................... 10
i
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES................. 11
6.01 Organization and Power............................................ 11
6.02 Authorization..................................................... 11
6.03 No Breach......................................................... 11
6.04 Investment Representation......................................... 11
6.05 Brokerage......................................................... 11
6.06 Litigation........................................................ 12
6.07 Capital Stock and Related Matters................................. 12
ARTICLE VII COVENANTS OF PURCHASER AND THE COMPANY.............................. 12
7.01 Affirmative Covenants of Purchaser................................ 12
7.02 Affirmative Covenants of the Company.............................. 12
7.03 Negative Covenants of the Company................................. 13
ARTICLE VIII EMPLOYEES.......................................................... 14
8.01 Employee Matters.................................................. 14
ARTICLE IX TERMINATION.......................................................... 15
9.01 Conditions of Termination......................................... 15
9.02 Effect of Termination............................................. 16
ARTICLE X DEFINITIONS .......................................................... 16
10.01 Definitions....................................................... 16
10.02 Certain Other Definitional Provisions............................. 20
ARTICLE XI MISCELLANEOUS........................................................ 20
11.01 Survival of Representations....................................... 20
11.02 Press Release and Announcements................................... 21
11.03 Tax Treatment..................................................... 21
11.04 Further Assurances................................................ 21
11.05 Exclusivity....................................................... 21
11.06 Remedies.......................................................... 21
11.07 Expenses.......................................................... 21
11.08 Assignment........................................................ 22
11.09 Severability...................................................... 22
11.10 Complete Agreement................................................ 22
11.11 No Third-Party Beneficiaries...................................... 22
11.12 Counterparts...................................................... 22
11.13 Consent to Amendments............................................. 22
11.14 Descriptive Headings; Interpretation.............................. 23
11.15 Governing Law..................................................... 23
11.16 Notices........................................................... 23
11.17 Delivery by Facsimile............................................. 23
11.18 No Strict Construction............................................ 24
11.19 Limitation of Liability of Seller Parties......................... 24
11.20 Termination of Existing Stockholder Agreements.................... 24
11.21 Legend............................................................ 24
ii
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July
15, 2003, is made by and among Brience, Inc., a Delaware corporation (the
"Company"), TSI Telecommunication Network Services Inc., a Delaware corporation
(the "Purchaser"), TSI Brience, LLC, a Delaware limited liability company and a
wholly-owned subsidiary of Purchaser (the "Merger Sub") and, with respect to
Articles VI, X and XI only, the Persons listed on the signature page attached
hereto under the heading "Seller Parties" who execute a counterpart to this
Agreement (individually, a "Seller Party" and collectively, the "Seller
Parties"). The Company, Purchaser, Merger Sub and the Seller Parties are
sometimes collectively referred to herein as the "Parties" and individually as a
"Party". Capitalized terms used and not otherwise defined herein have the
meanings set forth in Article X below.
WHEREAS, for federal and applicable state and local income tax
purposes, it is intended that the Merger (as defined below) shall qualify as a
reorganization within the meaning of Section 368(a) of the Code and the
regulations promulgated thereunder;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
ARTICLE I
THE MERGER
1.01 The Merger.
(a) At the Effective Time and subject to the terms and conditions of
this Agreement, the Company shall merge (the "Merger") with and into Merger Sub
in accordance with the General Corporation Law of the State of Delaware
("Delaware Law"), whereupon the separate existence of the Company shall cease,
and Merger Sub shall be the surviving entity (the "Surviving LLC").
(b) At the Closing, the Company and Merger Sub will file a
Certificate of Merger with the Secretary of State of the State of Delaware and
make all other filings or recordings required by Delaware Law in connection with
the Merger. The Merger shall become effective at such time as such Certificate
of Merger is duly filed with the Secretary of State of the State of Delaware or,
if agreed to by the parties hereto, at such other time as is provided in the
Certificate of Merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving LLC shall
succeed to all the assets, rights, privileges, powers and franchises and be
subject to all of the liabilities, restrictions, disabilities and duties of the
Company and Merger Sub, all as provided under Delaware Law.
1.02 Conversion of Company Stock.
(a) Cancellation of Junior Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the holders thereof, each
share of the Company's Capital Stock, other than the Series C Preferred Stock
(including, without limitation, each share of Common Stock, Series A Preferred
Stock, Series A-1 Preferred Stock, Series B Preferred Stock and Series B-1
Preferred Stock, which are collectively referred to herein as the "Junior
Stock") issued and outstanding immediately prior to the Effective Time (other
than any Dissenting Shares but including any shares of Junior Stock held by
Merger Sub or in the treasury of the Company) shall be canceled and retired and
shall cease to exist with no payment being made with respect thereto.
(b) Conversion of Company Series C Preferred Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of the holders
thereof, each share of the Series C Preferred Stock issued and outstanding as of
immediately prior to the Effective Time shall be converted into the right to
receive a Per Share Portion of the TSI Networks Stock.
For purposes of this Agreement, the term "TSI Networks Stock" means an
aggregate of 1.67 shares of Class B Common Stock, par value $0.01 per share of
Purchaser. Each share of TSI Networks Stock issued pursuant to this Section
1.02(b) shall bear the legend set forth in Section 11.21 below.
For purposes of this Agreement, the term "Per Share Portion" with
respect to holders of Series C Preferred Stock means a fraction, the numerator
of which is one, and the denominator of which is the number of shares of Series
C Preferred Stock issued and outstanding as of immediately prior to the
Effective Time (other than any Series C Preferred Stock held by Merger Sub or in
the treasury of the Company).
(c) Conversion of the Merger Sub Units. At the Effective Time, each
unit of Merger Sub issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become one validly issued, fully paid unit
of the Surviving LLC.
1.03 Other Requirements. Notwithstanding anything in this Agreement
to the contrary, no holder of Series C Preferred Stock shall be entitled to
receive any portion of the TSI Networks Stock (or any securities issued in
exchange therefor) unless, at or prior to the Effective Time, such holder has
complied with the conditions set forth in Section 1.05 below (including
surrendering to the Company a certificate, duly endorsed in blank or accompanied
by duly executed stock powers, representing the number of shares of Series C
Preferred Stock held by such holder, together with a duly executed and completed
Joinder and Transmittal Agreement (as defined below), if applicable).
1.04 Dissenting Shares. Any shares of Company Stock held by a
stockholder of the Company (a "Stockholder") who dissents from the Merger and
becomes entitled to obtain payment for the value of such shares of Company Stock
pursuant to the applicable provisions of the Delaware Law shall be herein called
"Dissenting Shares." Any Dissenting Shares shall not, after the Effective Time,
be entitled to vote for any purpose or receive any dividends or other
2
distributions, shall not be entitled to receive any portion of the TSI Networks
Stock and shall be entitled only to such rights as are set forth in the Delaware
Law; provided, however, that shares of Company Stock held by a dissenting
Stockholder who subsequently withdraws a demand for payment, fails to comply
fully with the requirements of the Delaware Law, or otherwise fails to establish
the right of such Stockholder to be paid the value of such Stockholder's shares
under the Delaware Law shall be deemed to be converted into the right to receive
the appropriate TSI Networks Stock pursuant to the terms and conditions referred
to above.
1.05 Exchange of Certificates. At the Effective Time, each holder of
certificates representing Series C Preferred Stock (each, a "Series C Preferred
Stockholder") (other than holders of Dissenting Shares) shall surrender to the
Company for exchange a certificate, duly endorsed in blank or accompanied by
duly executed stock powers, representing the number of shares of each class of
Series C Preferred held by such holder. Immediately after the Effective Time,
(i) each Seller Party who has surrendered his, her or its certificates shall be
issued the amount of TSI Networks Stock to which he, she or it is entitled under
Section 1.02 above at the Closing and (ii) each other Series C Preferred
Stockholder who has surrendered his, her or its certificates, and has executed
and delivered to the Company a duly executed and completed Joinder and
Transmittal Agreement, substantially in the form attached hereto as Exhibit A
(the "Joinder and Transmittal Agreement"), subject to the further conditions of
this Section 1.05, shall be issued the amount of TSI Networks Stock to which he,
she or it is entitled under Section 1.02 above at the later to occur of (A) the
Closing or (B) the execution and delivery of the Joinder and Transmittal
Agreement. Each share of TSI Networks Stock issued pursuant to this Section 1.05
shall bear the legend set forth in Section 11.21 below. Surrendered certificates
shall forthwith be canceled. Until so surrendered and exchanged, each such
certificate shall represent solely the right to receive the TSI Networks Stock
into which the shares it theretofore represented shall have been converted
pursuant to Section 1.02 above (and except with respect to rights applicable to
Dissenting Shares), and the Surviving LLC shall not be required to issue the
consideration to which the holder of such certificate would otherwise have been
entitled; provided that if any Series C Preferred Stockholder has failed to
surrender and exchange any such certificate or instrument by the first
anniversary of this Agreement, such certificate or instrument shall forever
cease to represent any rights to receive any portion of the TSI Networks Stock.
1.06 Fractional Shares. Notwithstanding anything in this Agreement to
the contrary, fractional shares of TSI Networks Stock shall be permitted to be
issued in the Merger, calculated to the nearest 1/10,000 of a share.
1.07 Managers and Officers. From and after the Effective Time, until
successors are duly elected or appointed in accordance with applicable law, (i)
the managers of the Surviving LLC shall be as set forth on Schedule 1.07(i)
attached hereto, and (ii) the officers of the Surviving LLC shall be as set
forth on Schedule 1.07(ii) attached hereto.
1.08 Options. As of the Effective Time, each option to purchase
shares of the Company Stock which is outstanding and has not been exercised
prior to the Closing Date shall be terminated and shall not be assumed by
Purchaser or the Surviving LLC.
3
ARTICLE II
THE CLOSING
2.01 The Closing.
(a) The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Xxxxxxxx & Xxxxx located at
000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx at 10:00 a.m. (Chicago time) as
promptly as practicable (but in no event later than the third business day)
following full satisfaction or due waiver of all of the closing conditions set
forth in Article III hereof (other than those to be satisfied at the Closing) or
on such other date as is mutually agreeable to Purchaser and the Company. The
date and time of the Closing are herein referred to as the "Closing Date."
(b) Subject to the terms and conditions set forth in this Agreement,
the parties hereto shall consummate the following transactions (the "Closing
Transactions") on the Closing Date:
(i) the Parties shall take such actions as described in
Section 1.05; and
(ii) the Parties shall make such other deliveries as are
required by and in accordance with Article III hereof.
ARTICLE III
CONDITIONS TO CLOSING
3.01 Conditions to Purchaser's and Merger Sub's Obligations. Unless
waived in writing by Purchaser and Merger Sub prior to the Closing, the
obligation of Purchaser and Merger Sub to consummate the transactions to be
performed by them in connection with the Closing is subject to the satisfaction
of the following conditions as of the Closing:
(a) Representations and Warranties. The representations and
warranties set forth in Article IV and Article VI shall be true and correct at
and as of the Closing as though then made (without taking into account any
updates to the Schedules after the date of this Agreement).
(b) Performance of Covenants. Each of the Seller Parties and the
Company shall have performed in all respects all of their covenants and
agreements required to be performed by them hereunder prior to the Closing.
(c) Compliance with Legal Requirements. The consummation of the
transactions contemplated by the Transaction Documents will not be prohibited by
any Legal Requirement or subject any of Purchaser, Merger Sub or the Company to
any onerous penalty, liability or other condition arising under any Legal
Requirement or imposed by any Governmental Entity.
4
(d) Consents. Purchaser shall have received copies of all filings,
notices, licenses, approvals and other Consents of, to or with, any (i)
Governmental Entity or any other Person that are required to be made or obtained
for the consummation of the transactions contemplated by the Transaction
Documents, if any, or (ii) all third party consents set forth on Schedule
3.01(d)(ii) attached hereto.
(e) Exchange Agreement Each of the Series C Preferred Stockholders
(other than GTCR Fund VII, L.P. and GTCR Co-Invest, L.P.) and TSI
Telecommunication Holdings, LLC shall have entered into the Exchange Agreement,
substantially in the form of Exhibit B attached hereto (the "Exchange
Agreement") pursuant to which the Series C Preferred Stockholders will
contribute the TSI Networks Stock to TSI Telecommunication Holdings, LLC, a
Delaware limited liability company ("Holdings LLC") in exchange for an aggregate
of 19,775.01 common units of Holdings LLC.
(f) LLC Agreement, Securityholders and Registration Agreement. Each
of the Series C Preferred Stockholders (other than GTCR Fund VII, L.P. and GTCR
Co-Invest, L.P.) shall have executed joinders to (i) the LLC Agreement, (ii) the
Securityholders Agreement and (iii) the Registration Agreement.
(g) Stockholder Approval. Purchaser shall have received evidence
that this Agreement and the Merger shall have been approved and adopted by
written consent of at least 80% of (i) the holders of the outstanding shares of
Company Stock entitled to vote thereon, voting on an as-converted basis and (ii)
the holders of the outstanding shares of Preferred Stock entitled to vote
thereon, voting on an as-converted basis as a single class.
(h) Dissenters' Rights. The Company shall not have received notices
from Stockholders dissenting from the Merger pursuant to Section 262 of the
Delaware Law with respect to Dissenting Shares representing more than 1% of the
Company Common Stock on a fully diluted, as converted basis.
(i) Modifications of Contracts. The Company shall have entered into
a settlement agreement with Spear Street Saphire, LLC providing for the
cancellation of the Company's promissory note and warrant, each pursuant to a
lease agreement with Spear Street Saphire, LLC, dated as of March 1, 2003.
(j) Litigation, etc. No suit, action or other proceeding shall be
pending or threatened before any court or governmental or regulatory official,
body or authority or any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling or charge would (i) prevent the performance of this
Agreement or the consummation of any of the transactions contemplated thereby or
declare unlawful any of the transactions contemplated hereby, (ii) cause any of
the transactions contemplated by the Agreement to be rescinded following
consummation, or (iii) affect adversely the right of the Surviving LLC to own
the assets and operate the businesses and control the Company following the
Closing, and no such injunction, judgment, order, decree, ruling or charge shall
have been entered or be in effect.
(k) FIRPTA Affadavit. The Company shall deliver to Purchaser an
affidavit, under penalties of perjury, stating that the Company is not and has
not been a United States real
5
property holding corporation, dated as of the Effective Date and in form and
substance satisfactory to Purchaser.
(l) Warrants. The Company shall deliver to Purchaser evidence
satisfactory to Purchaser that each warrant and right to acquire shares of the
Company's Series C Preferred Stock issued and outstanding as of immediately
prior to the Effective Time shall have been irrevocably cancelled, effective at
or prior to the Effective Time.
(m) Joinder and Letter of Transmittal. With respect to each Series C
Preferred Stockholder (other than any of the Seller Parties), the Company shall
have received a duly executed and completed Joinder and Letter of Transmittal
pursuant to Section 1.05.
(n) Other Closing Documents. An officer of the Company shall have
delivered to Purchaser a certificate to the effect that each of the conditions
specified in Sections 3.01(a) to 3.01(m), inclusive have been fully satisfied,
and attaching thereto (i) certified copies of the charter and by-laws of the
Company and (ii) certified copies of the resolutions duly adopted by the
Company's board of directors and Stockholders authorizing the Company's
execution, delivery and performance of this Agreement and the transactions
contemplated by the Transaction Documents.
(o) Due Diligence. Purchaser shall have completed and shall be
satisfied in its sole discretion with the results of its and its attorneys',
accountants' and other representatives' business, legal, accounting and
financial due diligence investigation and evaluation of the Company.
3.02 Conditions to the Seller Parties' and Company's Obligations.
Unless waived in writing by the Company prior to the Closing, the obligations of
the Company and the Seller Parties to consummate the transactions contemplated
by this Agreement are subject to the satisfaction or waiver (if permissible
under applicable law) of the following conditions as of the Closing Date:
(a) Representations and Warranties. The representations and
warranties set forth in Article V hereof shall be true and correct.
(b) Performance of Covenants. Purchaser and Merger Sub shall have
performed in all respects all their covenants and agreements required to be
performed by them under this Agreement at or prior to the Closing.
(c) Consents. The Company shall have received copies of all filings,
notices, licenses and other Consents of, to or with, any Governmental Entity or
any other Person that are required to be made or obtained for the consummation
of the transactions contemplated by the Transaction Documents by the Purchaser
or Merger Sub.
(d) Exchange Agreement. Holdings LLC shall have executed the
Exchange Agreement.
6
(e) Other Closing Documents. Purchaser shall have delivered to the
Company a certificate to the effect that each of the conditions specified in
Sections 3.02(a) through 3.02(c), inclusive, have been satisfied.
(f) Stockholder Approval. This Agreement and the Merger shall have
been approved and adopted by written consent of at least 80% of (i) the holders
of the outstanding shares of Company Stock entitled to vote thereon, voting on
an as-converted basis and (ii) the holders of the outstanding shares of
Preferred Stock entitled to vote thereon, voting on an as-converted basis as a
single class.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
RELATED TO THE COMPANY
As a material inducement to Purchaser and Merger Sub to enter into and
perform their obligations under this Agreement and the other Transaction
Documents, the Company represents and warrants to Purchaser and Merger Sub that
the statements contained in this Article IV are true and correct as of the date
hereof.
4.01 Organization and Corporate Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business in the State of California and
every other jurisdiction in which the nature of its business or its ownership of
property requires it to be qualified. All such jurisdictions in which the
Company is required to be qualified and is qualified are set forth on Schedule
4.01 attached hereto. The Company has full corporate power and authority and all
material licenses, permits, authorizations and other Consents necessary to own
and operate its properties, to carry on its business as now conducted and
presently proposed to be conducted. The copies of the Company's amended and
restated certificate of incorporation and bylaws which have been furnished to
Purchaser reflect all amendments made thereto at any time prior to the date of
this Agreement and are correct and complete.
4.02 Capital Stock and Related Matters. The authorized and issued
capital stock of the Company is accurately described in Schedule 4.02(i)
attached hereto. All of the issued shares described in Schedule 4.02(i) are
issued and outstanding and are owned of record and beneficially by the Seller
Parties and the Other Stockholders as set forth opposite their names on Schedule
4.02(i), free and clear of any Liens. All of the outstanding capital stock of
the Company has been duly authorized by all necessary corporate action on the
part of the Company and is validly issued, fully paid and nonassessable. There
are no rights, outstanding commitments, subscriptions, warrants, options,
conversion rights or agreements of any kind outstanding to purchase or otherwise
acquire any shares of capital stock of the Company or securities or obligations
of any kind convertible into or exchangeable or exercisable for any shares of
capital stock of the Company or any stock appreciation, phantom stock, profit
participation or similar rights with respect to the Company, except as described
on Schedule 4.02(ii). Except as described on Schedule 4.02(iii), there are no
agreements with respect to the voting or transfer of capital stock of the
Company. No equityholder or former equityholder of
7
the Company has any claim or rights against the Company or any equityholder and
the Company does not have any Liability to any equityholder or former
equityholders.
4.03 Subsidiaries. Schedule 4.03 attached hereto correctly sets forth
the name of each Subsidiary of the Company, the jurisdiction of incorporation
and the Persons owning the outstanding capital stock of such Subsidiary.
4.04 Authorization; No Breach. The execution, delivery and
performance of each Transaction Document to which the Company is a party and the
transactions contemplated by the Transaction Documents, have been duly
authorized by the Company. Each Transaction Document to which the Company is a
party constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms. The execution and delivery by the Company of each
Transaction Document to which it is a party, and the fulfillment of and
compliance with the respective terms hereof and thereof, do not and shall not,
except as set forth on Schedule 4.04 (i) conflict with or result in a breach of
the terms, conditions or provisions of, (ii) constitute a default under (whether
with or without the passage of time, the giving of notice or both), (iii) result
in the creation of any Lien upon any capital stock or any asset or property of
the Company pursuant to, (iv) modify, terminate, increase or accelerate (or give
any Person the right to modify, terminate, increase or accelerate) any
obligation, right or adjustment under, (v) result in a violation of or (vi)
require any exemption or other action by or notice or declaration to, or filing
with, or other Consent from, any Governmental Entity pursuant to, the amended
and restated certificate of incorporation or bylaws of the Company, or any Legal
Requirement to which the Company or any Affiliate or any of their assets or
properties is subject, or any Contract, order, judgment or decree to which any
of the foregoing Persons or any of their assets or properties is subject.
4.05 Indebtedness. Except as set forth on Schedule 4.05 attached
hereto, the Company has no outstanding Indebtedness that exceeds $500.00 in the
aggregate.
4.06 Intellectual Property. The attached Schedule 4.06(i) contains a
complete and accurate list of all (a) patented or registered Intellectual
Property owned or used by the Company, (b) pending patent applications and
applications for registrations of other Intellectual Property filed by the
Company, and (c) material unregistered Intellectual Property owned or used by
the Company. Schedule 4.06(ii) contains a complete and accurate list of (x) all
agreements with customers currently using the Company's products or services and
(y) all royalty-bearing licenses granted to the Company by any third party with
respect to any Intellectual Property incorporated in the Company's products or
services, in each case identifying the subject Intellectual Property.
4.07 Litigation, etc. Except as disclosed on the attached Schedule
4.07, there are no actions, suits, proceedings, orders, investigations, claims
or complaints pending, threatened against or affecting the Company or the
operation, conduct, use or value of any of its properties or facilities (or, to
the Company's knowledge, pending or threatened against or affecting any of the
officers, directors or employees of the Company with respect to the Company's
businesses or proposed business activities), or pending or threatened by the
Company against any third party, at law or in equity, or before or by any
Governmental Entity (including
8
any actions, suits, proceedings or investigations with respect to the
transactions contemplated by the Transaction Documents).
4.08 Brokerage. Except as set forth on Schedule 4.08 attached hereto,
there are no claims for brokerage commissions, finders' fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any Contract binding upon the Company.
4.09 Insurance. The attached Schedule 4.09 lists and briefly
describes each insurance policy maintained for or on behalf of the Company with
respect to its properties, assets and business.
4.10 ERISA. Except as disclosed on Schedule 4.10 attached hereto, the
Company does not maintain, sponsor, contribute to or have any Liability with
respect to any Employee Benefit Plan.
4.11 Real Property. The attached Schedule 4.11 lists all real
property leased by the Company and subleased by the Company, as sublandlord, to
any Person.
4.12 Legal Compliance. The items described on Schedule 4.12 attached
hereto constitute all of the permits, filings, notices, licenses, consents,
authorizations, accreditation, waivers, approvals and the like of, to or with
any Governmental Entity or any other Person (collectively, the "Consents") which
are required for the consummation of the transactions contemplated by the
Transaction Documents.
4.13 No Acceleration of Rights or Benefits. Except as set forth in
the Schedule 4.13, (i) the Company has not made, nor is it obligated to make,
any payment to any Person in connection with the transactions contemplated by
this Agreement or the other Transaction Documents or any other change of control
transaction and (ii) no rights or benefits of any Person have been (or will be)
accelerated or increased as a result of the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents and no
Person's rights or obligations are modified upon a change of control of the
Company or provide any Person the right to receive a payment or remedy
(including rescission or liquidated damages) upon a change of control of the
Company.
4.14 Bank Accounts. Schedule 4.14 attached hereto lists all of the
bank accounts (designating each authorized signatory) of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER AND MERGER SUB
As a material inducement to the Company and the Seller Parties to
enter into and perform their respective obligations under this Agreement and the
other Transaction Documents, Purchaser and Merger Sub represent and warrant to
the Company and the Seller Parties that the statements contained in this Article
V as to such Person and not as to any other Person are true
9
and correct as of the date hereof (it being understood that Merger Sub is not
making any representations and warranties with respect to the Company).
5.01 Organization and Corporate Power. Such Person is an entity duly
organized, validly existing and in good standing under the laws of its state of
formation, with full power and authority to enter into this Agreement and
perform its obligations hereunder and under the other Transaction Documents to
which it is a party.
5.02 Authorization; No Breach. The execution, delivery and
performance of this Agreement and the Transaction Documents to which such Person
is a party and the transactions contemplated by the Transaction Documents, have
been duly authorized by such Person. Each Transaction Document to which such
Person is a party constitutes a valid and binding obligation of such entity,
enforceable in accordance with its terms. The execution and delivery by such
Person of this Agreement, and all other Transaction Documents to which such
Person is a party, and the fulfillment of and compliance with the respective
terms hereof and thereof, do not and shall not, except as set forth on Schedule
5.02 and assuming that all of the representations and warranties of the Company
contained in Article IV are and will be true and correct in all respects (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) result in the creation of any Lien upon
any capital securities or any asset or property of such Person pursuant to, (iv)
give any third party the right to modify, terminate or accelerate any obligation
under, (v) result in a violation of or (vi) require any exemption or other
action by or notice or declaration to, or filing with, or other Consent from,
any Governmental Entity pursuant to, the formation documents of such Person, or
any material Legal Requirement to which Person or any of its assets or
properties is subject, or any material Contract, order, judgment or decree to
which such Person or any of its assets or properties is subject.
5.03 Capital Stock. The authorized and issued capital stock of
Purchaser is accurately described in Schedule 5.03(i) attached hereto. There are
no rights, outstanding commitments, subscriptions, warrants, options, conversion
rights or agreements of any kind outstanding to purchase or otherwise acquire
any capital stock of Purchaser or securities or obligations of any kind
convertible into or exchangeable or exercisable for any capital stock of
Purchaser or any stock appreciation, phantom stock, profit participation or
similar rights with respect to Purchaser, except as described on Schedule
5.03(ii).
5.04 Capital Stock. The TSI Networks Stock being issued to the Seller
Parties pursuant to this Agreement, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be validly issued, fully paid and nonassessable, and will be free
of restrictions on transfer other than restrictions on transfer under the
Transaction Documents and under applicable state and federal securities laws.
10
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF THE SELLER PARTIES
As a material inducement to Purchaser and Merger Sub to enter into and
perform their respective obligations under this Agreement and the other
Transaction Documents, each of the Seller Parties represents and warrants
(severally and not jointly) to Purchaser and Merger Sub that the statements
contained in this Article VI as to such Person (and not to any other Person) are
true and correct as of the date hereof.
6.01 Organization and Power. Each such Person that is not an
individual is an entity duly organized, validly existing and in good standing
under the laws of its state of formation, with full power and authority to enter
into this Agreement and other Transaction Documents to which it is a party and
perform its obligations hereunder and under the other Transaction Documents to
which it is a party.
6.02 Authorization. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which such non-individual
Person is a party and the transactions contemplated by the Transaction
Documents, have been duly authorized by such Person. Each Transaction Document
to which such Person is a party constitutes a valid and binding obligation of
such Person, enforceable in accordance with its terms.
6.03 No Breach. The execution and delivery by such Person of this
Agreement, and all other Transaction Documents to which such Person is a party,
and the fulfillment of and compliance with the respective terms hereof and
thereof, do not and shall not (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any Lien upon any capital securities or any asset or
property of such Person pursuant to, (iv) give any third party the right to
modify, terminate or accelerate any obligation under, (v) result in a violation
of or (vi) require any exemption or other action by or notice or declaration to,
or filing with, or other Consent from, any Governmental Entity pursuant to, the
charter or bylaws of such Person, or any material Legal Requirement to which
Persons or any of such Person's assets or properties is subject, or any material
Contract, order, judgment or decree to which such Person or any of such Person's
assets or properties is subject.
6.04 Investment Representation. Such Person is acquiring the TSI
Networks Stock being acquired by it pursuant to the consummation of the
Transaction Documents solely for investment purposes and not with a view to, or
intention of, distribution thereof in violation of the Securities Act, or any
applicable state securities laws. Such Person qualifies as an "accredited
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act.
6.05 Brokerage. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any Contract binding upon such Person.
Each such Person shall pay, and hold each of Purchaser and Merger Sub harmless
against, any Liability (including reasonable attorneys' fees and out-of-pocket
expenses) arising in connection with any such claim based on any Contract
binding upon such Person.
11
6.07 Litigation. There are no actions, suits, proceedings, orders,
investigations, claims or complaints pending, threatened against or affecting
such Person, which could affect such Person's performance hereunder or under the
other Transaction Documents or the consummation of the transactions contemplated
hereunder or thereby.
6.08 Capital Stock and Related Matters. Such Person is the record and
beneficial owner of, and has good and marketable title to, each of the shares of
Series C Preferred Stock named opposite such Person's name on Schedule 6.07(i)
attached hereto, free and clear of all Liens. At the Closing, such Person shall
transfer to the Company good and marketable title to such shares of Series C
Preferred Stock, free and clear of all Liens. After giving effect to the
Closing, such Person will not have any interest in any capital stock of the
Company. Except as disclosed on Schedule 6.07(ii) attached hereto, there are no
agreements with respect to the voting or transfer of capital stock of the
Company and, after giving effect to the Closing, neither Purchaser nor the
Company will have any Liability to such Person or such persons' Affiliate.
ARTICLE VII
COVENANTS OF PURCHASER AND THE COMPANY
7.01 Affirmative Covenants of Purchaser. Purchaser covenants and
agrees to reasonably cooperate with the Company in securing the amendments or
modifications to the Contracts set forth on Schedule 7.01 attached hereto. It is
understood and agreed that such actions by Purchaser shall not include any
requirement of Purchaser to expend money, commence any litigation or offer or
grant any accommodation (financial or otherwise) to any third party. Prior to
the Closing Date, Purchaser covenants and agrees to reasonably cooperate with
the Company to jointly prepare any appraisal rights notices to be distributed to
the Stockholders in connection with the Merger.
7.02 Affirmative Covenants of the Company. Prior to the Closing Date,
unless Purchaser otherwise agrees in writing, the Company will:
(a) maintain its books and records, pay expenses and payables, xxxx
customers, collect receivables, purchase inventory, perform all maintenance and
repairs necessary to maintain its facilities and equipment in good operating
condition (normal wear and tear excepted), replace inoperable, worn out or
obsolete assets with assets of comparable quality, maintain an appropriate level
of insurance, continue to make capital expenditures in accordance with its
budget and in amounts sufficient to support the Company's ongoing business
operations and otherwise conduct its business, in each case in the ordinary
course of business;
(b) use reasonable best efforts to preserve present business
relationships with all customers and suppliers of the Company, to the extent
such relationships are beneficial to the Company and its business (and in any
event to not voluntarily drop, reduce (or agree to reduce) any business from,
any customers), and, except as otherwise directed by Purchaser, to encourage the
employees of the Company to continue their employment with the Company both
before and after the Closing;
12
(c) comply in all material respects with all Legal Requirements and
Contracts applicable to its operations and business, and to pay all applicable
Taxes;
(d) permit, and cause its officers, directors, employees and agents
(including attorneys and accountants) to permit, Purchaser and its Affiliates,
employees, agents, accounting and legal representatives and lenders and its and
their representatives to have reasonable access at reasonable times to the
Company's books, records, invoices, contracts, leases, personnel, facilities,
equipment and other things reasonably related to the business and assets of the
Company, wherever located, and provide to the foregoing Persons such financial
information as they reasonably request from time to time;
(e) upon reasonable request, arrange meetings with such customers
of, and suppliers to, the Company as Purchaser shall designate in order that
Purchaser may confer with such customers and suppliers regarding the business of
the Company;
(f) promptly (after obtaining knowledge thereof) inform Purchaser in
writing of any variances from or breach of any of the representations and
warranties contained in this Agreement or any breach of any covenant hereunder
by any Seller Party or the Company; and
(g) cooperate with Purchaser and use their reasonable best efforts
to make all registrations, filings and applications, to give all notices and to
obtain all Consents necessary for the consummation of the transactions
contemplated by the Transaction Documents and to cause the other conditions to
Purchaser's obligation to close to be satisfied (including (x) the execution and
delivery of all Contracts contemplated hereunder to be so executed and
delivered, (y) calling stockholder meetings and obtaining their Consents,
preparing and delivering appropriate disclosure materials relating to the
Parties and the transactions contemplated by the Transaction Documents as
promptly as practicable following the date of this Agreement and (z) taking any
other additional actions as Purchaser may reasonably request to effect, confirm
or evidence the transactions contemplated by the Transaction Documents);
provided, that, notwithstanding the foregoing, the Company will provide copies
of all documentation necessary to comply with this Section 7.02(g) to Purchaser
for its review and approval prior to submitting such documentation to the
appropriate Persons.
7.03 Negative Covenants of the Company. Prior to the Closing Date,
except as set forth on Schedule 7.03, unless Purchaser otherwise agrees in
writing, the Company will not:
(a) except as expressly contemplated by this Agreement, take or omit
to take any action, which, individually or in the aggregate, could be reasonably
anticipated to have a material adverse effect upon the business; financial
condition; operating results; value; assets; liabilities; operations; applicable
regulations; customer, supplier or employee relations; or business prospects of
the Company;
(b) (i) issue, sell or deliver any shares of its capital stock or
issue or sell any securities convertible into, or options with respect to, or
warrants to purchase or rights to subscribe for, any shares of its capital
stock; (ii) effect any recapitalization, reclassification, stock dividend, stock
split or like change in its capitalization; (iii) amend its articles of
incorporation or bylaws; (iv) make any redemption or purchase of any shares of
its capital stock or any securities
13
convertible into, or options with respect to, or warrants to purchase or rights
to subscribe for, any shares of its capital stock or make any distribution in
respect of any of the foregoing or (v) issue, sell or deliver any shares of its
capital stock or issue or sell any securities convertible into, or options with
respect to, or warrants to purchase or rights to subscribe for, any shares of
its capital stock;
(c) make or change any election, change an annual accounting period,
adopt or change any accounting method, file any amended Tax Return, enter into
any closing agreement, settle any Tax claim or assessment, surrender any right
to claim a refund of Taxes, consent to any extension or waiver of the limitation
period applicable to any Tax claim or assessment, or take any other similar
action, or omit to take any action relating to the filing of any Tax Return or
the payment of any Tax, if such election, adoption, change, amendment,
agreement, settlement, surrender, consent or other action or omission would have
the effect of increasing the present or future Tax liability or decreasing any
present or future Tax asset of the Company, Purchaser, or any of their
respective Affiliates;
(d) take any other action or omit to take any other action that
would require disclosure pursuant to Section 7.02(f) if each representation and
warranty contained herein were remade as of the time of such action or omission;
or
(e) commit to do any of the foregoing.
ARTICLE VIII
EMPLOYEES
8.01 Employee Matters.
(a) Schedule 8.01(a) attached hereto identifies each Active Employee
as of the date of this Agreement, together with such Active Employee's title or
job position, service, compensation and such other information as is required to
be provided by this Article VIII with respect to such Active Employee. Schedule
8.01(a) shall be updated by the Company on or before the Closing Date to
identify individuals who become Active Employees after the date of this
Agreement and to remove those individuals who cease to be Active Employees prior
to the Closing (without regard to the reason or circumstance for such
termination of Active Employee status). In hiring new employees and terminating
employees after the date of this Agreement, the Company shall follow its usual
and ordinary course of business in accordance with past practice, except as
otherwise set forth on Schedule 8.01(b). For purposes of this Section 8.01(a),
the term "Active Employees" shall include all full-time and part-time employees;
casual employees; employees on workers' compensation, military leave, maternity
leave, leave under the Family and Medical Leave Act of 1993, short-term
disability, or layoff with recall rights; and employees on other approved leaves
of absence with a legal or contractual right to reinstatement.
(b) Schedule 8.01(b) attached hereto identifies those Active
Employees as of the date of this Agreement whose employment shall be terminated
by the Company on or prior to the Closing Date. Those Active Employees who are
not listed on Schedule 8.01(b) shall be "Retained Employees" for purposes of
this Agreement and, for avoidance of doubt, those Active
14
Employees who are listed on Schedule 8.01(b) shall not in any event be
considered "Retained Employees" for purposes of this Agreement.
(c) Schedule 8.01(c) attached hereto sets forth the positions and
compensation and, if applicable, severance benefits to be offered by the
Purchaser to the Retained Employees following the Closing Date.
(d) Purchaser shall make available or shall cause the Surviving LLC
to make available to all Retained Employees employee benefit plans and programs
which, in the aggregate, shall be substantially the same as the employee
benefits provided by TSI Telecommunication Services Inc. to its similarly
situated employees; provided, however, that nothing contained in this Agreement
shall confer upon any Retained Employee any right to continue employment with
the Surviving LLC, nor shall anything herein interfere with the right of the
Surviving LLC to terminate the employment of any Retained Employee at any time,
with or without notice or cause, or restrict the Surviving LLC from modifying
the terms and conditions of employment of any Retained Employee after the
Closing Date. Purchaser shall provide or shall cause the Surviving LLC to
provide health continuation coverage to each employee and former employee
(including any spouse or dependents thereof) of the Company who in connection
with the transactions contemplated by this Agreement are or will be "M&A
qualified beneficiaries" (as such term is defined in Section 54.4980B-9 (Q&A 4)
of the federal income tax regulations) to the extent required under COBRA.
(e) Nothing in this Agreement shall cause duplicate benefits to be
paid or provided to or with respect to a Retained Employee under any employee
benefit policies, plans, arrangements, programs, practices, or agreements.
References herein to a benefit with respect to a Retained Employee shall
include, where applicable, benefits with respect to any eligible dependents and
beneficiaries of such Retained Employee under the same employee benefit policy,
plan, arrangement, program, practice or agreement.
(f) On the Closing date, the Company or the Surviving LLC shall pay
transaction bonuses to those individuals and in the amounts set forth on
Schedule 8.01(f) attached hereto in accordance with the terms of the Company's
2002 Management Retention Plan, as amended.
ARTICLE IX
TERMINATION
9.01 Conditions of Termination. This Agreement may be terminated at
any time prior to the Closing:
(a) by the mutual written consent of the Company and Purchaser;
(b) by Purchaser if there has been a misrepresentation or breach of
representation, warranty or covenant by the Company or any Seller Party in the
representations and warranties or covenants set forth in this Agreement or the
Schedules and Exhibits attached hereto;
15
(c) by the Company if there has been a misrepresentation, breach of
any representation, warranty or covenant by Purchaser in the representations and
warranties or covenants set forth in this Agreement or the Schedules and
Exhibits attached hereto; or
(d) by Purchaser or the Company if the transactions contemplated
hereby have not been consummated by August 15, 2003;
provided that the Party electing termination pursuant to clause (d) of this
Section 9.01 is not in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement or the Schedules
and Exhibits attached hereto. In the event of termination by either Purchaser or
the Company pursuant to this Section 9.01, written notice thereof (describing in
reasonable detail the basis therefor) shall forthwith be delivered to the other
Parties.
9.02 Effect of Termination. In the event of termination of this
Agreement by either Purchaser or the Company as provided above, this Agreement
shall forthwith become void and of no further force and effect, except that the
covenants and agreements set forth in Article XI (and X to the extent
definitions are contained therein) shall survive such termination indefinitely,
and except that nothing in Section 9.01 or this Section 9.02 shall be deemed to
release any Party from any Liability for any breach by such Party of the terms
and provisions of this Agreement or to impair the right of any Party to compel
specific performance by another Party of its obligations under this Agreement.
ARTICLE X
DEFINITIONS
10.01 Definitions. For purposes hereof, the following terms, when used
herein with initial capital letters, shall have the respective meanings set
forth herein. Certain defined terms used herein that are defined elsewhere in
this Agreement are referenced in the Index to Defined Terms on page iii hereof.
"Affiliates" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Company Stock" means the Junior Stock and the Series C Preferred.
"Contract" means any agreement, contract, instrument, commitment,
lease, guaranty, indenture, license, or other arrangement or understanding
between parties or by one party in favor of another party, whether written or
oral.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) Employee Pension Benefit
Plan (including any
16
Multiemployer Plan), (c) Employee Welfare Benefit Plan or (d) other plan,
policy, program or arrangement (whether or not terminated) which provides
deferred compensation benefits, stock purchase, stock option, bonus benefits or
compensation, incentive benefits or compensation, severance or salary
continuation benefits or compensation, "change of control" benefits or
compensation or any program, plan, policy or arrangement which provides any
health, life, disability, accident, vacation, tuition reimbursement or other
fringe benefits.
"Employee Pension Benefit Plan" has the meaning set forth in Section
3(2) of ERISA.
"Employee Welfare Benefit Plan" has the meaning set forth in Section
3(1) of ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Governmental Entity" means the United States of America or any other
nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government.
"Indebtedness" means at a particular time, without duplication, (i)
any indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business which
are not more than six months past due), (iv) any commitment by which a Person
assures a creditor against loss (including contingent reimbursement obligations
with respect to letters of credit), (v) any indebtedness guaranteed in any
manner by a Person (including guarantees in the form of an agreement to
repurchase or reimburse), (vi) any obligations under capitalized leases with
respect to which a Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or with respect to which obligations a Person assures a
creditor against loss, (vii) any indebtedness secured by a Lien on a Person's
assets and (viii) accrued interest to and including the Closing Date in respect
of any of the obligations described in the foregoing clauses (i) through (vii)
of this definition and all premiums, penalties, charges, fees, expenses and
other amounts due in connection with the payment and satisfaction in full of
such obligations which will be paid or prepaid at Closing.
"Intellectual Property" means all (i) patents, patent applications,
patent disclosures and inventions, (ii) internet domain names and websites,
trademarks, service marks, trade dress, trade names, logos and corporate names
and registrations and applications for registration thereof together with all of
the goodwill associated therewith, (iii) copyrights (registered or unregistered)
and copyrightable works and registrations and applications for registration
thereof, (iv) mask works and registrations and applications for registration
thereof, (v) computer software (in both source code and object code form), data,
data bases and documentation thereof, (vi) trade secrets and other confidential
information (including ideas, formulas, compositions, inventions (whether
patentable or unpatentable and whether or not
17
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works, financial and
marketing plans and customer and supplier lists and information), (vii) other
intellectual property rights (viii) registrations and applications for any of
the foregoing, and (ix) copies and tangible embodiments thereof (in whatever
form or medium).
"LLC Agreement" means that certain Limited Liability Company Agreement
of TSI Telecommunication Holdings, LLC, dated as of February 14, 2002, by and
among TSI Telecommunication Holdings, LLC and the unitholders party thereto, as
amended from time to time in accordance with its terms.
"Legal Requirement" means any requirement arising under any law, rule,
regulation, directive, decision, by-law, ordinance, circular, code, order,
notice, demand, decree, injunction, resolution, judgment, recommendation or any
determination or direction of any arbitrator or any Governmental Entity.
"Liability" means any liability, debt, obligation, deficiency, Tax,
penalty, fine, claim, cause of action or other loss, cost or expense of any kind
or nature whatsoever, whether asserted or unasserted, absolute or contingent,
known or unknown, accrued or unaccrued, liquidated or unliquidated, and whether
due or to become due and regardless of when asserted.
"Lien" or "Liens" means any mortgage, pledge, security interest,
encumbrance, lien, charge, option, put, restriction, preemptive rights, rights
of first refusal or other similar arrangement or interest or any other type of
preferential arrangement (including any conditional sale or other title
retention agreement or lease in the nature thereof), any sale of receivables
with recourse against the Company, any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code or any similar statute
(other than to reflect ownership by a third party of property leased to the
Company under a lease which is not in the nature of a conditional sale or title
retention agreement), or any subordination arrangement in favor of another
Person.
"Multiemployer Plan" has the meaning set forth in Section 3(37) of
ERISA.
"ordinary course of business" means the ordinary course of business
consistent with past custom and practice, including as to frequency and amount.
"Other Stockholders" means Stockholders of the Company other than the
Seller Parties.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
18
"Preferred Stock" means, collectively, the Series A Preferred Stock,
Series A-1 Preferred Stock, Series B Preferred Stock, Series B-1 Preferred Stock
and Series C Preferred Stock.
"Registration Agreement" means that certain Registration Agreement,
dated as of February 14, 2002, by and among TSI Telecommunication Holdings, LLC,
GTCR Fund VII, L.P., GTCR Fund VII/A, L.P., GTCR Co-Invest, L.P., G. Xxxxxx
Xxxxx, Snowlake Investments Pte Ltd, and each of the other Persons from time to
time party thereo, as amended in accordance with its terms.
"Securityholders Agreement" means that certain Securityholders
Agreement, dated as of February 14, 2002, by and among TSI Telecommunication
Holdings, LLC, GTCR Fund VII, L.P., GTCR Fund VII/A, L.P., GTCR Co-Invest, L.P.,
G. Xxxxxx Xxxxx, Snowlake Investments Pte Ltd, and each of the other Persons
from time to time party thereo, as amended in accordance with its terms.
"Series A Preferred Stock" means the Series A Preferred Stock, par
value $.01 per share of the Company.
"Series A-1 Preferred Stock" means the Series A-1 Preferred Stock, par
value $.01 per share of the Company.
"Series B Preferred Stock" means the Series B Preferred Stock, par
value $.01 per share of the Company.
"Series B-1 Preferred Stock" means the Series B-1 Preferred Stock, par
value $.01 per share of the Company.
"Series C Preferred Stock" means the Series C Preferred Stock, par
value $.01 per share of the Company.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or general partner of such limited
liability company, partnership, association or other business entity.
19
"Tax" or "Taxes" means all taxes, assessments, charges, duties, fees,
levies, imposts or other governmental charges, including, without limitation,
all United States federal, state, provincial, local, foreign and other income,
franchise, profits, capital gains, capital stock, transfer, sales, use, value
added, occupation, property, excise, severance, windfall profits, stamp,
license, payroll, withholding and other taxes, assessments, charges, duties,
fees, levies, imposts or other governmental charges of any kind whatsoever
(whether payable directly or by withholding and whether or not requiring the
filing of a Tax Return), and all estimated taxes, deficiency assessments,
additions to tax, penalties, and interest and shall include any Liability for
such amounts as a result either of being a member of a combined, consolidated,
unitary or affiliated group or of a contractual obligation to indemnify any
person or other entity.
"Tax Returns" means any return, report, information return or other
document (including schedules or any related or supporting information and any
amended returns) filed or required to be filed with any governmental entity or
other authority in connection with the determination, assessment or collection
of any Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax.
"Transaction Documents" means this Agreement, the Exchange Agreement,
the LLC Agreement, the Registration Agreement, the Securityholders Agreement and
agreements providing for the termination of outstanding Warrants and termination
of affiliate contracts (other than existing employment agreements) and any other
Contract contemplated hereby to which the Company and/or any Seller Party is a
party.
"Warrants" means all rights, outstanding commitments, subscriptions,
warrants, options, conversion rights or agreements of any kind outstanding to
purchase or otherwise acquire any shares of capital stock of the Company or
securities or obligations of any kind convertible into or exchangeable or
exercisable for any shares of capital stock of the Company or any stock
appreciation, phantom stock, profit participation or similar rights with respect
to the Company.
10.02 Certain Other Definitional Provisions. Accounting terms which
are not otherwise defined in this Agreement have the meanings given to them
under GAAP. To the extent that the definition of accounting term that is defined
in this Agreement is inconsistent with the meaning of such term under GAAP, the
definition set forth in this Agreement will control.
ARTICLE XI
MISCELLANEOUS
11.01 Survival of Representations. The representations and warranties
in Section 4.01 (Organization and Corporate Power), Section 4.02 (Capital Stock
and Related Matters) and Section 4.04 (Authorization; No Breach), Section 5.01
(Organization and Corporate Power), Section 5.02 (Authorization; No Breach),
Section 5.03 (Capital Securities), Section 6.01 (Organization and Power),
Section 6.02 (Authorization) and Section 6.07 (Capital Stock and Related
Matters) and the covenants and agreements set forth in this Agreement shall
survive the Closing and shall not terminate until the first anniversary of the
Effective Time. All other representations and warranties in this Agreement or in
any certificate delivered by any Party to
20
another Party in connection with this Agreement shall not survive following the
Closing and shall terminate at the Effective Time.
11.02 Press Release and Announcements. Except as may otherwise be
required by Legal Requirements or as expressly set forth herein, the timing and
content of all press releases and other public announcements and all
announcements to the Company's customers, licensors or employees relating to the
transactions contemplated by this Agreement and the other Transaction Documents
shall be determined jointly by Purchaser and the Company prior to the Closing
Date and thereafter by the Surviving LLC.
11.03 Tax Treatment. Each of Purchaser, Merger Sub, the Company and
the Seller Parties agree to report the Merger as a reorganization within the
meaning of Section 368(a) of the Code (and any corresponding provision of state
or local law) in any and all federal, state and local income Tax returns filed
by it except under reasonable reliance on advice from its accounting, financial
or legal advisors. Each of Purchaser, Merger Sub, Company and the Seller Parties
agrees that it shall not take any action, except as expressly provided by this
Agreement and the documents attached as Exhibits hereto, either prior to or
after the Closing Date that may result in the Merger failing to qualify as such
a reorganization.
11.04 Further Assurances. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement or the transactions contemplated by the Transaction Documents, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other Party may reasonably
request, all at the sole cost and expense of the requesting Party.
11.05 Exclusivity. The Company shall, and shall cause the officers,
directors, employees and Affiliates of the Company to, not discuss a possible
sale or other disposition (whether by merger, reorganization, recapitalization
or otherwise) of all or any part of the capital stock or assets of the Company
with any other Person (an "Acquisition Proposal") or provide any information to
any third party other than information which is traditionally provided in the
regular course of such entity's business operations to third parties where such
entity and its officers, directors and Affiliates have no reason to believe that
such information may be utilized to evaluate any such possible sale or other
disposition of the capital stock or assets of the Company. The Company shall,
and shall cause the officers, directors, employees and Affiliates of the Company
to: (i) immediately cease and cause to be terminated any and all contacts,
discussions and negotiations with third parties regarding the foregoing and (ii)
promptly notify Purchaser if any Acquisition Proposal, or any inquiry or contact
with any Person with respect thereto, is subsequently made.
11.06 Remedies. Purchaser, the Company and the Seller Parties each
have and retain all rights and remedies existing in their favor at law or
equity, including, without limitation, any actions for specific performance
and/or injunctive or other equitable relief (including, without limitation, the
remedy of rescission) to enforce or prevent any violations of any provision of
this Agreement.
11.07 Expenses. At the Closing, the Surviving LLC shall pay (or cause
to be paid) all of the costs, fees and expenses incurred by the Company in
connection with this
21
Agreement and the consummation of the transactions contemplated hereby
(including fees and expenses of legal counsel, investment bankers, brokers or
other representatives and consultants and appraisal fees and expenses). If the
Closing does not occur, the Company shall be solely responsible for and shall
pay all of the expenses incurred by the Company in connection with this
Agreement and the preparation for the consummation of the transactions
contemplated hereby. Except as otherwise provided herein or therein, Purchaser
shall pay its own and Merger Sub's and the Seller Parties shall pay their own
fees and expenses incurred in connection with or related to the sales process,
the negotiation of this Agreement and the other Transaction Documents, the
performance of its or their obligations hereunder and thereunder, and the
consummation of the transactions contemplated hereby and thereby.
11.08 Assignment. This Agreement and all covenants and agreements
contained herein and rights, interests or obligations hereunder, by or on behalf
of any of the Parties hereto, shall bind and inure to the benefit of the
respective successors and permitted assigns whether so expressed or not, except
that neither this Agreement nor any of the covenants and agreements herein or
rights, interests or obligations hereunder may be assigned or delegated by any
Seller Party, or assigned or delegated by the Company prior to the Closing,
without the prior written consent of Purchaser. Purchaser may, in its sole
discretion, assign in whole or in part its rights or obligations pursuant to
this Agreement (A) to one or more of its Affiliates, (B) in connection with a
merger or consolidation involving such Purchaser or any of its Affiliates or (C)
in connection with a sale of all of any portion of the securities or assets of
such Purchaser or any of its Affiliates (including, without limitation, in
connection with a disposition of such Person's business in whole or in part).
Each of the assignor's shall be released from any obligations being assigned by
it effective upon the effective date of such assignment. Purchaser and,
following the Closing, the Surviving LLC may assign its rights pursuant to this
Agreement to any of its lenders as collateral security.
11.09 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
11.10 Complete Agreement. This Agreement and the documents referred
to herein contain the complete agreement between the parties hereto and
supersede any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way.
11.11 No Third-Party Beneficiaries. Except as expressly set forth
herein, this Agreement is for the sole benefit of the parties and their
permitted successors and assigns.
11.12 Counterparts. This Agreement may be executed in multiple
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same instrument.
11.13 Consent to Amendments. This Agreement may be amended, or any
provision of this Agreement may be waived; provided that any such amendment or
waiver shall
22
be binding upon the Company (or following the Effective Time, the Surviving LLC)
only if set forth in a writing executed by the Company (or the Surviving LLC, as
the case may be) and referring specifically to the provision alleged to have
been amended or waived, any such amendment or waiver shall be binding upon any
Seller Party only if set forth in a writing executed by such Seller Party and
referring specifically to the provision alleged to have been amended or waived,
and any such amendment or waiver shall be binding upon Purchaser and Merger Sub
only if set forth in a writing executed by Purchaser and referring specifically
to the provision alleged to have been amended or waived. No course of dealing
between or among the parties shall be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of any party
under or by reason of this Agreement.
11.14 Descriptive Headings; Interpretation. The headings and captions
used in this Agreement and the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized terms used in any Schedule or
Exhibit attached hereto and not otherwise defined therein shall have the
meanings set forth in this Agreement. The use of the word "including" herein
shall mean "including without limitation." Any reference to any particular Code
section or any other Legal Requirement will be interpreted to include any
revision of or successor to that section regardless of how it is numbered or
classified.
11.15 Governing Law. The corporate law of the State of Delaware shall
govern all issues and questions concerning the relative rights and obligations
of the Company and the holders of its equity securities. All other issues and
questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the Schedules and Exhibits hereto shall be governed by,
and construed in accordance with, the laws of the State of Delaware without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware.
11.16 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, one day after being sent to the recipient by reputable
overnight courier service (charges prepaid), upon machine-generated
acknowledgment of receipt after transmittal by facsimile or five days after
being mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
shall be sent to the Purchaser, the Seller Parties and the Company at the
addresses indicated on Schedule 11.16 attached hereto or to such other address
or to the attention of such other person as the recipient party has specified by
prior written notice to the sending party.
11.17 Delivery by Facsimile. This Agreement and any signed Contract
entered into in connection herewith or contemplated hereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original Contract and
shall be considered to have the same binding legal effects as if it were the
original signed version thereof delivered in person. At the request of any party
hereto or to any such Contract, each other party hereto or thereto shall
re-execute original forms thereof and deliver them to all other parties. No
party hereto or to any such Contract shall
23
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or Contract was transmitted or communicated through the use of
facsimile machine as a defense to the formation of a Contract and each such
party forever waives any such defense.
11.18 No Strict Construction. The Parties have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties, and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement.
11.19 Limitation of Liability of Seller Parties. Notwithstanding any
other provision of this Agreement, in no event shall any Seller Party have any
liability for any breach of any representation, warrant or covenant set forth in
this Agreement, other than the shares of TSI Networks Stock received by such
Seller Party (or any shares, securities or other consideration received by such
Seller Party in exchange therefor), except in the case of fraud.
11.20 Termination of Existing Stockholder Agreements. At the
Effective Time, the Company and the Seller Parties hereby terminate all
agreements regarding voting, transfer or other arrangements related to the
Company Stock that are in effect immediately prior to the Closing.
11.21 Legend. Each certificate evidencing TSI Networks Stock issued
to a Series C Preferred Stockholder shall be stamped or otherwise imprinted with
a legend in substantially the following form:
`THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO AN AGREEMENT AND PLAN OF MERGER DATED AS OF JULY __,
2003, AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY")
AND CERTAIN OTHER PARTIES. A COPY OF SUCH AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO ANY HOLDER HEREOF
UPON WRITTEN REQUEST."
* * * * *
24
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement and Plan of Merger on the day and year first above written.
Company: BRIENCE, INC.
/s/ Xxxxxxx X. Xxxxx
By: Xxxxxxx X. Xxxxx
Its: CEO
Purchaser: TSI TELECOMMUNICATION NETWORK SERVICES INC.
/s/ G. Xxxxxx Xxxxx
By: G. Xxxxxx Xxxxx
Its: Chief Executive Officer
Merger Sub: TSI BRIENCE, LLC
/s/ G. Xxxxxx Xxxxx
By: G. Xxxxxx Xxxxx
Its: Chief Executive Officer
Seller Parties: GTCR FUND VII, L.P.
GTCR CO-INVEST, L.P.
By: GTCR XXXXXX XXXXXX, L.L.C.
/s/ Xxxxxx X. Xxxxxxxx
By: Xxxxxx X. Xxxxxxxx
Its: Principal
GREYLOCK X LIMITED PARTNERSHIP
GREYLOCK X-A LIMITED PARTNERSHIP
By:
/s/ Xxxxxx X. Xxxxxxxx
By: Greylock X GP Limited Partnership
Its: General Partner
XxXXXXX FAMILY, L.P
By:
/s/ Xxxx X. Xxxxxx
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
XXXXX X. XXXXX REVOCABLE TRUST
/s/ Xxxx X. Xxxxxx
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
MAPACHE INVESTMENTS, L.P.
By:
/s/ Xxxx X. Xxxxxx
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
XXXXXXX XXX AND XXXXX VANDIEEN,
TENANTS IN COMMON
By:
/s/ Xxxx X. Xxxxxx
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
XXXXXXXXX XXXXXXX XXXXXX XXXXXXXXXX XXXXXXXX &
XXXXXXXXX, LLP
/s/ Xxxxxxxx Xxxxxxx
By: Xxxxxxxx Xxxxxxx
Its: Investment Portfolio Administrator
O'MELVENY & XXXXX, LLP
/s/ Xxxxx X. Xxxxx
By: Xxxxx X. Xxxxx
Its: Partner
MG-HIW, LLC
By:
Its:
/s/ Xxx XxXxxxx
XXX XxXXXXX
/s/ Xxxx X. Xxxxxx
XXXXXX X. XXX, XX.
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
/s/ Xxxx X. Xxxxxx
XXXXXXX X. XXXXXX
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
/s/ Xxxx X. Xxxxxx
XXXXXXX XXXXXX
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
/s/ Xxxx X. Xxxxxx
XXXXX XXXXXX
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
/s/ Xxxx X. Xxxxxx
XXXXXXX X. XXXXXX, XX.
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
/s/ Xxxx X. Xxxxxx
XXXXX XXX
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
/s/ Xxxx X. Xxxxxx
XXXXX X. XXXXXX
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
/s/ Xxxx X. Xxxxxx
XXXXX X. XXXXXXX
By: Xxxx X. Xxxxxx
Its: Attorney-In-Fact
