EXHIBIT 2.1
Execution Copy
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PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT (this "Agreement") is made as of March 23,
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1999, between ZC Acquisition Corp., a Delaware corporation (the "Company"), GTCR
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Fund VI, L.P., a Delaware limited partnership ("GTCR Fund VI"), GTCR VI
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Executive Fund, L.P., a Delaware limited partnership ("Executive Fund"), and
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GTCR Associates VI, a Delaware general partnership ("Associates Fund"). GTCR
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Fund VI, Executive Fund and Associates Fund are collectively referred to herein
as the "Purchasers" and individually as a "Purchaser." Except as otherwise
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indicated herein, capitalized terms used herein are defined in Section 6 hereof.
The parties hereto agree as follows:
Section 1. Authorization and Closing.
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1A. Authorization of the Stock. The Company shall authorize the
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issuance and sale to the Purchasers of up to 96,200 shares of its Class A
Preferred Stock, par value $.01 per share (the "Class A Preferred"), and up to
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7,600,000 shares of its Common Stock, par value $.01 per share (the "Common
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Stock"), each having the rights and preferences set forth in Exhibit A attached
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hereto. The Class A Preferred and the Common Stock are collectively referred to
herein as the "Stock."
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1B. Purchase and Sale of the Stock.
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(a) At the Closing (as defined in ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇), the Company
shall sell to the Purchasers and, subject to the terms and conditions set forth
herein, the Purchasers shall purchase from the Company, 1,000,000 shares of
Common Stock at a price of $.50 per share. Each Purchaser shall purchase the
percentage of such shares set forth next to such Purchaser's name on the
signature pages attached hereto.
(b) The Company has been organized for the purpose of owning and
operating a business in the electronic commerce consulting and implementation
industry by means of first acquiring an existing business or businesses
satisfactory to the Purchasers and thereafter from time to time making
additional acquisitions which are synergistic with or otherwise complementary to
such initial acquisition. The Purchasers intend to provide up to $100 million
(including the Pre-Acquisition Funding, as defined below) in equity financing to
the Company as the equity portion of the debt and equity financing necessary to
fund such acquisitions and for other internal growth initiatives, in each case
as approved by the Board of Directors of the Company (the "Board") and the
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Purchasers (an "Approved Use"). The funds obtained by the Company from the
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Purchasers on the Closing Date, along with additional investments by the
Purchasers up to an aggregate of $3,000,000 (including the investment by the
Purchasers on the Closing Date, the "Pre-Acquisition Funding"),
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shall finance the Company's costs of conducting a search for the initial
acquisition. The Purchasers' obligation to purchase any additional stock of the
Company will be conditioned on the Company's not being in default under any of
its material agreements, adequate debt financing being available to fund any
proposed acquisition or other Approved Use on terms satisfactory to the
Purchasers, and the Company's operations and the acquisition or other Approved
Use being satisfactory to the Purchasers. In order to implement the foregoing,
the Purchasers may purchase from time to time after the Closing, upon the
written request of the Board in connection with an Approved Use, (i) first, up
to an additional 6,600,000 shares of Common Stock at a price of $.50 per share
and (ii) second, after all such shares of Common Stock have been purchased, up
to 96,200 shares of Class A Preferred at a price of $1,000 per share (the
amounts set forth in each of (i) and (ii) immediately above as adjusted from
time to time as a result of stock dividends, stock splits, recapitalization and
similar events). Each Purchaser shall purchase the percentage of such shares set
forth next to such Purchaser's name on the signature pages attached hereto. At
the time of any such purchase, each Purchaser shall be entitled to receive, and
the Company shall be obligated to deliver, satisfactory representations and
warranties and all other information and documentation as such Purchaser may
reasonably request.
1C. The Closing. The closing of the purchase and sale of the Stock
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to be purchased pursuant to Section 1B(a) (the "Closing") shall take place at
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the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ at 10:00 a.m. on March 23, 1999, or at such other place or on such other
date as may be mutually agreeable to the Company and the Purchasers. At the
Closing, the Company shall deliver to each Purchaser stock certificates
evidencing the Stock to be purchased by such Purchaser, registered in such
Purchaser's name, upon payment of the purchase price thereof by a cashier's or
certified check, or by wire transfer of immediately available funds to such
account as designated by the Company.
Section 2. Conditions of Each Purchaser's Obligation at the Closing.
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The obligation of each Purchaser to purchase and pay for the Stock to be
purchased by it at the Closing is subject to the satisfaction as of the Closing
of the following conditions:
2A. Representations and Warranties; Covenants. The representations
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and warranties contained in Section 5 hereof shall be true and correct at and as
of the Closing as though then made, except to the extent of changes caused by
the transactions expressly contemplated herein, and the Company shall have
performed in all material respects all of the covenants required to be performed
by it hereunder prior to the Closing.
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2B. Certificate of Incorporation. The Company's certificate of
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incorporation (the "Certificate of Incorporation") shall include the provisions
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set forth in Exhibit A hereto, shall be in full force and effect under the laws
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of Delaware as of the Closing and shall not have been amended or modified.
2C. Management Agreement. The Company shall have entered into senior
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management agreements, in form and substance substantially similar to Exhibit B
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attached hereto (the "Management Agreements") with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and with other
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executives to be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ after consultation with GTCR (each
an "Executive", and collectively, the "Executives"), the Management Agreements
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shall not have been amended or modified and shall be in full force and effect as
of the Closing, and each Executive shall have purchased the Stock proposed to be
purchased by such Executive thereunder.
2D. Stockholders Agreement. The Company, the Purchasers and the
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Executive shall have entered into a stockholders agreement in form and substance
substantially similar to Exhibit C attached hereto (the "Stockholders
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Agreement"), and the Stockholders Agreement shall be in full force and effect as
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of the Closing.
2E. Professional Services Agreement. The Company and GTCR ▇▇▇▇▇▇
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▇▇▇▇▇▇, L.L.C., a Delaware limited liability company ("GTCR") shall have entered
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into a professional services agreement in form and substance substantially
similar to Exhibit D attached hereto (the "Professional Services Agreement"),
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and the Professional Services Agreement shall be in full force and effect as of
the Closing.
2F. Registration Agreement. The Company, the Purchasers and the
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Executive shall have entered into a registration agreement in form and substance
substantially similar to Exhibit E attached hereto (the "Registration
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Agreement"), and the Registration Agreement shall be in full force and effect as
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of the Closing.
2G. Closing Documents. The Company shall have delivered to the
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Purchasers all of the following documents:
(i) an Officer's Certificate, dated the date of the Closing,
stating that the conditions specified in Section 2A have been fully
satisfied;
(ii) certified copies of the resolutions duly adopted by the
Board authorizing the execution, delivery and performance of this
Agreement, the Management Agreement, the Stockholders Agreement, the
Professional Services Agreement, the Registration Agreement and each of the
other agreements contemplated hereby (the
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"Transaction Documents"), the issuance and sale of the Stock and the
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consummation of all other transactions contemplated by this Agreement; and
(iii) certified copies of the Certificate of Incorporation and
the Company's bylaws, each as in effect at the Closing.
2H. Fees and Expenses. The Company shall have reimbursed each
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Purchaser for its fees and expenses as provided in Section 7A hereof.
2I. Compliance with Applicable Laws. The purchase of Stock by the
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Purchasers hereunder shall not be prohibited by any applicable law or
governmental regulation, shall not subject any Purchaser to any penalty,
liability or, in each Purchaser's reasonable judgment, other onerous conditions
under or pursuant to any applicable law or governmental regulation, and shall be
permitted by laws and regulations of the jurisdictions to which such Purchaser
is subject.
2J. Waiver. Any condition specified in this Section 2 may be waived
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only if such waiver is set forth in a writing executed by each Purchaser.
Section 3. Covenants.
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3A. Financial Statements and Other Information. The Company shall
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deliver to each Purchaser (so long as such Purchaser holds any Stock) and to
each holder of at least 15% of the Investor Preferred and each holder of at
least 15% of the Investor Common:
(i) as soon as available but in any event within 45 days after
the end of each quarterly accounting period in each fiscal year, unaudited
consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such quarterly period and for the period
from the beginning of the fiscal year to the end of such quarter, and
consolidating and consolidated balance sheets of the Company and its
Subsidiaries as of the end of such quarterly period, all prepared in
accordance with generally accepted accounting principles, consistently
applied, subject to the absence of footnote disclosures and to normal year-
end adjustments;
(ii) accompanying the financial statements referred to in (i)
above, an Officer's Certificate stating that neither the Company nor any of
its Subsidiaries is in default under any of its material agreements or, if
any such default exists, specifying the nature and period of existence
thereof and what actions the Company and its Subsidiaries have taken and
propose to take with respect thereto;
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(iii) within 120 days after the end of each fiscal year,
consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such fiscal year, and consolidating and
consolidated balance sheets of the Company and its Subsidiaries as of the
end of such fiscal year, setting forth in each case comparisons to the
annual budget and to the preceding fiscal year, all prepared in accordance
with generally accepted accounting principles, consistently applied, and
accompanied by (a) with respect to the consolidated portions of such
statements (except with respect to budget data), an opinion containing no
exceptions or qualifications (except for qualifications regarding specified
contingent liabilities) of an independent accounting firm of recognized
national standing acceptable to the Majority Holders, and (b) a copy of
such firm's annual management letter to the Board;
(iv) promptly upon receipt thereof, any additional reports,
management letters or other detailed information concerning material
aspects of the Company's operations or financial affairs given to the
Company by its independent accountants (and not otherwise contained in
other materials provided hereunder);
(v) at least 30 days prior to the beginning of each fiscal
year, an annual budget prepared on a monthly basis for the Company and its
Subsidiaries for such fiscal year (displaying anticipated statements of
income and cash flows), and promptly upon preparation thereof any other
significant budgets prepared by the Company and any revisions of such
annual or other budgets, and within 30 days after any monthly period in
which there is a material adverse deviation from the annual budget, an
Officer's Certificate explaining the deviation and what actions the Company
has taken and proposes to take with respect thereto;
(vi) promptly (but in any event within five business days) after
the discovery or receipt of notice of any default under any material
agreement to which it or any of its Subsidiaries is a party or any other
event or circumstance affecting the Company or any Subsidiary which is
reasonably likely to have a material adverse effect on the financial
condition, operating results, assets or operations of the Company and its
Subsidiaries taken as a whole (including the filing of any material
litigation against the Company or any Subsidiary or the existence of any
material dispute with any Person which involves a reasonable likelihood of
such litigation being commenced), an Officer's Certificate specifying the
nature and period of existence thereof and what actions the Company and its
Subsidiaries have taken and propose to take with respect thereto; and
(vii) with reasonable promptness, such other information and
financial data concerning the Company and its Subsidiaries as any Person
entitled to receive information under this Section 3A may reasonably
request.
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Each of the financial statements referred to in subsections (i) and (iii) shall
be true and correct in all material respects as of the dates and for the periods
stated therein, subject in the case of the unaudited financial statements to
changes resulting from normal year-end audit adjustments (none of which would,
alone or in the aggregate, be materially adverse to the financial condition,
operating results, assets, operations or business prospects of the Company and
its Subsidiaries taken as a whole). Notwithstanding anything in this Section 3A
to the contrary, in the event that any Investor or a transferee of any Investor
distributes any of such Person's Stock to its limited partners (or its limited
liability company members or other equity holders, as the case may be), then any
such Person receiving such distribution shall not have the rights set forth in
clauses (iv), (v) and (vii) of this Section 3A unless such Person holds at least
10% of the Investor Common or the Investor Preferred.
3B. Inspection of Property. The Company shall permit any
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representatives designated by any Purchaser (so long as such Purchaser holds any
Stock) or any holder of at least 15% of the outstanding Investor Preferred or at
least 15% of the outstanding Investor Common, upon reasonable notice and during
normal business hours and such other times as any such holder may reasonably
request, to (i) visit and inspect any of the properties of the Company and its
Subsidiaries, (ii) examine the corporate and financial records of the Company
and its Subsidiaries and make copies thereof or extracts therefrom and (iii)
discuss the affairs, finances and accounts of any such corporations with the
directors, officers, key employees and independent accountants of the Company
and its Subsidiaries; provided that the Company shall have the right to have its
chief financial officer present at any meetings with the Company's independent
accountants. Notwithstanding anything in this Section 3B to the contrary, in the
event that any Investor or a transferee of any Investor distributes any of such
Person's Stock to its limited partners (or its limited liability company members
or other equity holders, as the case may be), then any such Person receiving
such distribution shall not have the rights set forth in this Section 3B unless
such Person holds at least 10% of the Investor Common or the Investor Preferred.
3C. Restrictions. The Company shall not, without the prior written
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consent of the Majority Holders:
(i) directly or indirectly declare or pay any dividends or make
any distributions upon any of its equity securities, other than payments of
dividends on, or redemption payments in respect of, the Class A Preferred
pursuant to the Certificate of Incorporation;
(ii) directly or indirectly redeem, purchase or otherwise
acquire, or permit any Subsidiary to redeem, purchase or otherwise acquire,
any of the Company's equity securities (including, without limitation,
warrants, options and other rights to acquire equity
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securities) other than redemptions of Class A Preferred pursuant to the
Company's Certificate of Incorporation, and other than the repurchase of
Common Stock from an employee or former employee pursuant to the Management
Agreements or any stock option or equity incentive plan that has been
approved by the Board;
(iii) except as expressly contemplated by this Agreement or the
Management Agreement, authorize, issue, sell or enter into any agreement
providing for the issuance (contingent or otherwise), or permit any
Subsidiary to authorize, issue, sell or enter into any agreement providing
for the issuance (contingent or otherwise) of, (a) any notes or debt
securities containing equity features (including, without limitation, any
notes or debt securities convertible into or exchangeable for equity
securities, issued in connection with the issuance of equity securities or
containing profit participation features) or (b) any equity securities (or
any securities convertible into or exchangeable for any equity securities)
or rights to acquire any equity securities, other than the issuance of
equity securities by a Subsidiary to the Company or another Subsidiary;
(iv) make, or permit any Subsidiary to make, any loans or
advances to, guarantees for the benefit of, or Investments in, any Person
in excess of $50,000.00, except for (A) loans to the Executives as
contemplated by the Management Agreements, (B) reasonable advances to
employees in the ordinary course of business as well as travel advances,
(C) relocation loans and (D) trade credit extended to customers in the
ordinary course of business and (E) Investments having a stated maturity no
greater than one year from the date the Company makes such Investment in
(1) obligations of the United States government or any agency thereof or
obligations guaranteed by the United States government, (2) certificates of
deposit of commercial banks having combined capital and surplus of at least
$50 million, (3) commercial paper with a rating of at least "Prime-1" by
▇▇▇▇▇'▇ Investors Service, Inc. or (4) money market accounts investing in
any of the foregoing or in substantially similar investments;
(v) merge or consolidate with any Person or permit any
Subsidiary to merge or consolidate with any Person (other than a wholly
owned Subsidiary);
(vi) sell, lease or otherwise dispose of, or permit any
Subsidiary to sell, lease or otherwise dispose of, more than 5% of the
consolidated assets of the Company and its Subsidiaries (computed on the
basis of book value, determined in accordance with generally accepted
accounting principles consistently applied, or fair market value,
determined by the Board in its reasonable good faith judgment) in any
transaction or series of related transactions (other than sales of
inventory in the ordinary course of business);
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(vii) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction (including, without limitation,
any reorganization into a limited liability company, a partnership or any
other non-corporate entity which is treated as a partnership for federal
income tax purposes);
(viii) acquire, or permit any Subsidiary to acquire, any interest
in any business (whether by a purchase of assets, purchase of stock, merger
or otherwise), or enter into any joint venture;
(ix) enter into, or permit any Subsidiary to enter into, the
ownership, active management or operation of any business other than the
provision of business and information technology consulting and services;
(x) enter into, or permit any Subsidiary to enter into, any
transaction with any of its or any Subsidiary's officers, directors,
employees or Affiliates or any individual related by blood, marriage or
adoption to any such Person (a "Relative") or any entity in which any such
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Person or individual owns a beneficial interest (a "Related Entity"),
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except for normal employment arrangements and benefit programs on
reasonable terms and except as otherwise expressly contemplated by this
Agreement, the Management Agreement and the Professional Services
Agreement; provided that in no event shall any Relative or Related Entity
be employed by, render services to or receive compensation from the Company
or any Subsidiary;
(xi) become subject to, or permit any of its Subsidiaries to
become subject to, any agreement or instrument which by its terms would
(under any circumstances) restrict (A) the right of any Subsidiary to make
loans or advances or pay dividends to, transfer property to, or repay any
Indebtedness owned to, the Company or any Subsidiary or (B) the Company's
right to perform the provisions of this Agreement, the Certificate of
Incorporation, the Bylaws or the other Transaction Documents;
(xii) except as expressly contemplated by this Agreement, make
any amendment to the Certificate of Incorporation or the Bylaws, or file
any resolution of the Board with the Secretary of the State of Delaware, in
each case containing any provisions which would increase the number of
authorized shares of Stock or adversely affect or otherwise impair the
rights or the relative preferences and priorities of the holders of the
Stock under this Agreement, the Certificate of Incorporation, the Bylaws or
the other Transaction Documents; or
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(xiii) create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, Indebtedness
exceeding the amounts approved therefor by the Board in the annual budget.
3D. Affirmative Covenants. So long as any Purchaser holds any Stock,
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the Company shall, and shall cause each Subsidiary to:
(i) comply with all applicable laws, rules and regulations of
all governmental authorities, the violation of which would reasonably be
expected to have a material adverse effect upon the financial condition,
operating results, assets or operations of the Company and its Subsidiaries
taken as a whole, and pay and discharge when payable all taxes, assessments
and governmental charges (except to the extent the same are being contested
in good faith and adequate reserves therefor have been established); and
(ii) enter into and maintain appropriate nondisclosure and
noncompete agreements with its key employees.
3E. Current Public Information. At all times after the Company has
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filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Securities Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder and
shall take such further action as any holder or holders of Restricted Securities
may reasonably request, all to the extent required to enable such holders to
sell Restricted Securities pursuant to (i) Rule 144 adopted by the Securities
and Exchange Commission under the Securities Act (as such rule may be amended
from time to time) or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission or (ii) a registration statement on Form S-2
or S-3 or any similar registration form hereafter adopted by the Securities and
Exchange Commission. Upon request, the Company shall deliver to any holder of
Restricted Securities a written statement as to whether it has complied with
such requirements.
3F. Amendment of Other Agreements. The Company shall not amend,
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modify or waive any provision of the Management Agreement or any other agreement
with key executives of the Company without the prior written consent of the
Majority Holders. The Company shall enforce the provisions of the Management
Agreement and any other agreement with key executives of the Company and shall
exercise all of its rights and remedies thereunder (including, without
limitation, any repurchase options and first refusal rights) unless it is
otherwise directed by the Majority Holders.
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3G. Public Disclosures. The Company shall not, nor shall it permit
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any Subsidiary to, disclose a Purchaser's name or identity as an investor in the
Company in any press release or other public announcement or in any document or
material filed with any governmental entity, without the prior written consent
of such Purchaser, unless such disclosure is required by applicable law or
governmental regulations or by order of a court of competent jurisdiction, in
which case prior to making such disclosure the Company shall give written notice
to such Purchaser describing in reasonable detail the proposed content of such
disclosure and shall permit such Purchaser to review and comment upon the form
and substance of such disclosure.
3H. Unrelated Business Taxable Income. The Company shall not engage
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in any transaction which is reasonably likely to cause GTCR Fund VI or any of
its limited partners which are exempt from income taxation under Section 501(a)
of the IRC and, if applicable, any pension plan that any such trust may be a
part of, to recognize unrelated business taxable income as defined in Section
512 and Section 514 of the IRC.
3I. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance. In connection with any transaction
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in which the Company is involved (a "Transaction") which is required to be
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reported under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended from time to time (the "HSR Act"), the Company shall prepare and file
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all documents with the Federal Trade Commission and the United States Department
of Justice which may be required to comply with the HSR Act, and shall promptly
furnish all materials thereafter requested by any of the regulatory agencies
having jurisdiction over such filings, in connection with a Transaction. The
Company shall take all reasonable actions and shall file and use reasonable best
efforts to have declared effective or approved all documents and notifications
with any governmental or regulatory bodies, as may be necessary or may
reasonably be requested under federal antitrust laws for the consummation of the
Transaction. Notwithstanding the foregoing, if GTCR Fund VI, rather than the
Company, is required to make a filing under the HSR Act in connection with a
Transaction, the Company will provide to GTCR Fund VI all necessary information
for such filing, will facilitate such filing and will pay all reasonable fees
associated with such filing.
Section 4. Transfer of Restricted Securities.
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(i) Restricted Securities are transferable only pursuant to
(a) public offerings registered under the Securities Act, (b) Rule 144 or Rule
144A of the Securities and Exchange Commission (or any similar rule or rules
then in force) if such rule or rules are available and (c) subject to the
conditions specified in clause (ii) below, any other legally available means of
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transfer.
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(ii) In connection with the transfer of any Restricted
Securities (other than a transfer described in Sections 4(i)(a) or (b) above),
the holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, together with an opinion of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ or other counsel which (to the Company's reasonable
satisfaction) is knowledgeable in securities law matters to the effect that such
transfer of Restricted Securities may be effected without registration of such
Restricted Securities under the Securities Act. In addition, if the holder of
the Restricted Securities delivers to the Company an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
or such other counsel that no subsequent transfer of such Restricted Securities
shall require registration under the Securities Act, the Company shall promptly
upon such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in Section 7C.
If the Company is not required to deliver new certificates for such Restricted
Securities not bearing such legend, the holder thereof shall not transfer the
same until the prospective transferee has confirmed to the Company in writing
its agreement to be bound by the conditions contained in this Section and
Section 7C.
(iii) Upon the request of any Purchaser, the Company shall
promptly supply to such Purchaser or its prospective transferees all information
regarding the Company required to be delivered in connection with a transfer
pursuant to Rule 144A of the Securities and Exchange Commission.
Section 5. Representations and Warranties of the Company. As a
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material inducement to the Purchasers to enter into this Agreement and purchase
the Stock, the Company hereby represents and warrants to the Purchasers that,
except as specifically set forth on the Disclosure Schedule attached hereto:
5A. Organization and Corporate Power. The Company is a corporation
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duly organized, validly existing and in good standing under the laws of Delaware
and is qualified to do business in every jurisdiction in which the failure to so
qualify might reasonably be expected to have a material adverse effect on the
financial condition, operating results, assets or operations of the Company and
its Subsidiaries taken as a whole. The Company has all requisite corporate
power and authority and all material licenses, permits and authorizations
necessary to own and operate its properties, to carry on its businesses as now
conducted and presently proposed to be conducted and to carry out the
transactions contemplated by this Agreement. The copies of the Company's
Certificate of Incorporation and bylaws which have been furnished to the
Purchaser's counsel reflect all amendments made thereto at any time prior to the
date of this Agreement and are correct and complete.
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5B. Capital Stock and Related Matters.
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(i) As of the Closing and immediately thereafter, the authorized
capital stock of the Company shall consist of 9,720,260 shares of Stock, of
which 96,200 shares shall be designated as Class A Preferred, all of which shall
be reserved for issuance to the Purchasers pursuant to Section 1B(b) hereof, and
of which 9,624,060 shares shall be designated as Common Stock (1,760,000 of
which shall be issued and outstanding, 6,600,000 of which shall be reserved for
issuance to the Purchasers pursuant to Section 1B(b) hereof, 760,000 of which
shall be reserved for issuances to future senior management, 480,000 of which
shall be reserved for issuances to other future management, and 24,060 of which
shall be reserved for future issuances to ▇▇▇▇▇▇▇▇ & Struggles. As of the
Closing, the Company shall not have outstanding any stock or securities
convertible or exchangeable for any shares of its capital stock or containing
any profit participation features, nor shall it have outstanding any rights or
options to subscribe for or to purchase its capital stock or any stock or
securities convertible into or exchangeable for its capital stock or any stock
appreciation rights or phantom stock plans other than pursuant to and as
contemplated by this Agreement and the Management Agreement. As of the Closing,
the Company shall not be subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock or any
warrants, options or other rights to acquire its capital stock, except pursuant
to this Agreement, the Management Agreement and the Company's Certificate of
Incorporation. As of the Closing, all of the outstanding shares of the
Company's capital stock shall be validly issued, fully paid and nonassessable.
(ii) There are no statutory or, to the best of the Company's
knowledge, contractual stockholders preemptive rights or rights of refusal with
respect to the issuance of the Stock hereunder or the issuance of the Stock
pursuant to Section 1B(b), except as expressly contemplated in the Shareholders
Agreement or provided herein . Based in part on the investment representations
of the Purchasers in Section 7C hereof and of the Executive in Section 1(d) of
the Management Agreement, the Company has not violated any applicable federal or
state securities laws in connection with the offer, sale or issuance of any of
its capital stock, and the offer, sale and issuance of the Stock here under and
pursuant to Section 1B(b) hereof do not and will not require registration under
the Securities Act or any applicable state securities laws. To the best of the
Company's knowledge, there are no agreements between the Company's stockholders
with respect to the voting or transfer of the Company's capital stock or with
respect to any other aspect of the Company's affairs, except for the
Stockholders Agreement, the Management Agreement and the Registration Agreement.
5C. Subsidiaries; Investments. The Company does not own or hold any
-------------------------
shares of stock or any other security or interest in any other Person or any
rights to acquire any such security or interest, and the Company has never had
any Subsidiary.
-12-
5D. Authorization; No Breach. The execution, delivery and
------------------------
performance of this Agreement, the Management Agreement, the Stockholders
Agreement, the Professional Services Agreement, the Registration Agreement and
all other agreements contemplated hereby to which the Company is a party have
been duly authorized by the Company. This Agreement, the Management Agreement,
the Stockholders Agreement, the Professional Services Agreement, the
Registration Agreement, the Certificate of Incorporation and all other
agreements contemplated hereby each constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms. The execution and
delivery by the Company of this Agreement, the Management Agreement, the
Stockholders Agreement, the Professional Services Agreement, the Registration
Agreement and all other agreements contemplated hereby to which the Company is a
party, the offering, sale and issuance of the Stock hereunder and pursuant to
Section 1B(b) and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company do not and will 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, security interest,
charge or encumbrance upon the Company's capital stock or assets 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
authorization, consent, approval, exemption or other action by or notice to any
court or administrative or governmental body pursuant to, the Certificate of
Incorporation or bylaws of the Company, or any law, statute, rule or regulation
to which the Company is subject, or any agreement, instrument, order, judgment
or decree to which the Company is a party or by which it is bound.
5E. Conduct of Business; Liabilities. Other than the negotiation,
--------------------------------
execution and delivery of this Agreement, the Management Agreement, the
Stockholders Agreement, the Professional Services Agreement, the Registration
Agreement and the other agreements contemplated hereby and thereby, prior to the
Closing, the Company has not (i) conducted any business, (ii) incurred any
expenses, obligations or liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise, whether or not known to the Company and whether due
or to become due and regardless of when asserted), (iii) owned any assets, (iv)
entered into any contracts or agreements, or (v) violated any laws or
governmental rules or regulations.
5F. Litigation, etc. There are no actions, suits, proceedings,
----------------
orders, investigations or claims pending or, to the best of the Company's
knowledge, threatened against or affecting the Company (or to the best of the
Company's knowledge, pending or threatened against or affecting any of the
officers, directors or employees of the Company with respect to their businesses
or proposed business activities) at law or in equity, or before or by any
governmental department, commission, board, bureau, agency or instrumentality
with respect to the transactions contemplated by this Agreement.
-13-
5G. Brokerage. Except as set forth in the Professional Services
---------
Agreement, there are no claims for brokerage commissions, finders, fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement binding upon the Company. The
Company shall pay, and hold each Purchaser harmless against, any liability, loss
or expense (including, without limitation, attorneys, fees and out-of-pocket
expenses) arising in connection with any such claim.
5H. Governmental Consent, etc. No permit, consent, approval or
--------------------------
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transactions contemplated hereby or
thereby.
5I. Disclosure. Neither this Agreement nor any of the schedules,
----------
attachments, written statements, documents, certificates or other items prepared
or supplied to the Purchasers by or on behalf of the Company with respect to the
transactions contemplated hereby contain any untrue statement of a material fact
or omit a material fact necessary to make each statement contained herein or
therein not misleading. There is no fact which the Company has not disclosed to
the Purchasers in writing and of which any of its officers, directors or
executive employees is aware and which has had or might reasonably be
anticipated to have a material adverse effect upon the existing or expected
financial condition, operating results, assets, customer or supplier relations,
employee relations or business prospects of the Company.
5J. Closing Date. The representations and warranties of the Company
------------
contained in this Section 5 and elsewhere in this Agreement and all information
contained in any exhibit, schedule or attachment hereto or in any writing
delivered by, or on behalf of, the Company to the Purchasers shall be true and
correct in all material respects on the date of the Closing as though then made,
except as affected by the transactions expressly contemplated by this Agreement.
Section 6. Definitions. For the purposes of this Agreement, the
-----------
following terms have the meanings set forth below:
"Affiliate" of any particular person or entity means any other person
---------
or entity controlling, controlled by or under common control with such
particular person or entity. For purposes of this Agreement, all holdings of
Class A Preferred and Common Stock by Persons who are Affiliates of each other
shall be aggregated for purposes of meeting any threshold tests under this
Agreement.
-14-
"Indebtedness" means all indebtedness for borrowed money (including
------------
purchase money obligations) maturing one year or more from the date of creation
or incurrence thereof or renewable or extendible at the option of the debtor to
a date one year or more from the date of creation or incurrence thereof, all
indebtedness under revolving credit arrangements extending over a year or more,
all capitalized lease obligations and all guarantees of any of the foregoing.
"Investor Common" means (i) the Common Stock issued hereunder and (ii)
---------------
any Common Stock issued or issuable with respect to the Common Stock referred to
in clause (i) above by way of stock dividends or stock splits or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares of Investor Common, such shares
shall cease to be Investor Common when they have been (a) effectively registered
under the Securities Act and disposed of in accordance with the Registration
statement covering them or (b) distributed to the public through a broker,
dealer or market maker pursuant to Rule 144 under the Securities Act (or any
similar rule then in force).
"Investor Preferred" means (i) the Class A Preferred issued hereunder
------------------
(including, without limitation, pursuant to Section 1B(b) and (ii) any Class A
Preferred issued or issuable with respect to the Class A Preferred referred to
in clause (i) above by way of stock dividends or stock splits or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares of Investor Preferred, such shares
shall cease to be Investor Preferred when they have been (a) effectively
registered under the Securities Act and disposed of in accordance with the
Registration statement covering them or (b) distributed to the public through a
broker, dealer or market maker pursuant to Rule 144 under the Securities Act (or
any similar rule then in force).
"Investor Stock" means the Investor Preferred and the Investor Common.
--------------
"Investment" as applied to any Person means (i) any direct or indirect
----------
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
"IRC" means the Internal Revenue Code of 1986, as amended, and any
---
reference to any particular IRC Section shall be interpreted to include any
revision of or successor to that Section regardless of how numbered or
classified.
"Majority Holders" means the holders of a majority of the Investor
----------------
Preferred or, if no Investor Preferred is outstanding, the holders of a majority
of the Investor Common.
-15-
"Officer's Certificate" means a certificate signed by the Company's
---------------------
president or its chief financial officer, stating that (i) the officer signing
such certificate has made or has caused to be made such investigations as are
necessary in order to permit him to verify the accuracy of the information set
forth in such certificate and (ii) to the best of such officer's knowledge, such
certificate does not misstate any material fact and does not omit to state any
fact necessary to make the certificate not misleading.
"Person" means an individual, a partnership, a limited liability
------
company, a corporation, 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.
"Restricted Securities" means (i) the Stock issued hereunder and
---------------------
pursuant to Section 1B(b) hereof and (ii) any securities issued with respect to
the securities referred to in clause (i) above by way of a stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. As to any particular Restricted
Securities, such securities shall cease to be Restricted Securities when they
have (a) been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) become eligible
for sale pursuant to Rule 144(k) (or any similar provision then in force) under
the Securities Act or (c) been otherwise transferred and new certificates for
them not bearing the Securities Act legend set forth in Section 7C have been
delivered by the Company in accordance with Section 4(ii). Whenever any
particular securities cease to be Restricted Securities, the holder thereof
shall be entitled to receive from the Company, without expense, new securities
of like tenor not bearing a Securities Act legend of the character set forth in
Section 7C.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
-----------------------
as amended, or any similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
----------------------------------
agency succeeding to the functions thereof.
"Subsidiary" means any corporation of which the securities having a
----------
majority of the ordinary voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by the Company
either directly or through one or more Subsidiaries.
-16-
Section 7. Miscellaneous.
-------------
7A. Expenses. The Company agrees to pay, and hold each Purchaser and
--------
all holders of Investor Stock harmless against liability for the payment of, (i)
the reasonable fees and expenses of one counsel arising in connection with the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated by this Agreement (including, without limitation,
reasonable fees and expenses arising with respect to any subsequent purchase of
Stock pursuant to Section 1B(b) hereof), (ii) the reasonable fees and expenses
incurred with respect to any amendments or waivers (whether or not the same
become effective) under or in respect of this Agreement, the Management
Agreement, the Stockholders Agreement, the Professional Services Agreement, the
Registration Agreement, the other agreements contemplated hereby and the
Certificate of Incorporation, (iii) stamp and other taxes which may be payable
in respect of the execution and delivery of this Agreement or the issuance,
delivery or acquisition of any shares of Stock purchased hereunder or in
accordance with Section 1B(b) hereof, and (iv) the reasonable fees and expenses
incurred with respect to the interpretation or enforcement of the rights granted
under this Agreement, the Management Agreement, the Stockholders Agreement, the
Professional Services Agreement, the Registration Agreement, the other
agreements contemplated hereby and the Certificate of Incorporation and the
Company's bylaws.
7B. Remedies. Each holder of Investor Stock shall have all rights
--------
and remedies set forth in this Agreement and the Certificate of Incorporation
and all rights and remedies which such holders have been granted at any time
under any other agreement or contract and all of the rights which such holders
have under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
7C. Purchasers' Investment Representations. Each Purchaser hereby
--------------------------------------
represents (i) that it is acquiring the Restricted Securities purchased
hereunder or acquired pursuant hereto for its own account with the present
intention of holding such securities for purposes of investment, and that it has
no intention of selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities laws, (ii) that
it is an "accredited investor" and a sophisticated investor for purposes of
applicable U.S. federal and state securities laws and regulations, (iii) that
this Agreement and each of the other agreements contemplated hereby constitutes
(or will constitute) the legal, valid and binding obligation of each Purchaser,
enforceable in accordance with its terms, (iv) that the execution, delivery and
performance of this Agreement and such other agreements by such Purchaser does
not and will not conflict with, violate or cause a breach of any agreement,
contract or instrument to which such purchaser is subject, and (v) that such
Purchaser has had an opportunity to ask questions and receive answers concerning
the terms and
-17-
conditions of the offering of the Class A Preferred and has had full access to
such other information concerning the Company as such Purchaser has requested.
Notwithstanding the foregoing, nothing contained herein shall prevent such
Purchaser and subsequent holders of Restricted Securities from transferring such
securities in compliance with the provisions of Section 4 hereof. Each
certificate for Restricted Securities shall be imprinted with a legend in
substantially the following form:
"The securities represented by this certificate were originally issued
on [DATE OF ISSUANCE] and have not been registered under the
Securities Act of 1933, as amended. The transfer of the securities
represented by this certificate is subject to the conditions specified
in the Purchase Agreement, dated as of March 23, 1999 by and among the
issuer (the "Company") and certain investors, and the Company reserves
-------
the right to refuse the transfer of such securities until such
conditions have been fulfilled with respect to such transfer. A copy
of such conditions shall be furnished by the Company to the holder
hereof upon written request and without charge."
7D. Consent to Amendments. Except as otherwise expressly provided
---------------------
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Majority Holders. No other course of dealing between the Company and the holder
of any Stock or any delay in exercising any rights hereunder or under the
Certificate of Incorporation shall operate as a waiver of any rights of any such
holders. For purposes of this Agreement, shares of Stock held by the Company or
any Subsidiaries shall not be deemed to be outstanding.
7E. Survival of Representations and Warranties. All representations
------------------------------------------
and warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by the Purchasers or on their behalf.
7F. Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for the Purchasers' benefit as a
purchaser or holder of Stock are also for the benefit of, and enforceable by,
any subsequent holder of such Stock. The rights and obligations of each
Purchaser under this Agreement and the agreements contemplated hereby may be
assigned by such Purchaser at any time, in whole or in part, to any investment
fund
-18-
managed by GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C., or any successor thereto, provided that
such fund makes the representations contained in Section 7C.
7G. Generally Accepted Accounting Principles. Where any accounting
----------------------------------------
determination or calculation is required to be made under this Agreement or the
exhibits hereto, such determination or calculation (unless otherwise provided)
shall be made in accordance with generally accepted accounting principles,
consistently applied, except that if because of a change in generally accepted
accounting principles the Company would have to alter a previously utilized
accounting method or policy in order to remain in compliance with generally
accepted accounting principles, such determination or calculation shall continue
to be made in accordance with the Company's previous accounting methods and
policies.
7H. 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 this Agreement.
7I. Counterparts. This Agreement may be executed simultaneously in
------------
two or more 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 Agreement.
7J. Descriptive Headings; Interpretation. The descriptive headings
------------------------------------
of this Agreement are inserted for convenience only and do not constitute a
Section of this Agreement. The use of the word "including" in this Agreement
shall be by way of example rather than by limitation.
7K. Governing Law. The laws of Delaware shall govern all issues
-------------
concerning the relative rights of the Company and its stockholders and all other
questions concerning the construction, validity and interpretation of this
Agreement, without giving effect to any choice of law or other conflict of law
provision or rule (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.
7L. 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, sent to the recipient by reputable express courier service
(charges prepaid) or 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 Purchasers and to the Company at the address
indicated below:
-19-
If to the Company:
-----------------
ZC Acquisition Corp.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
with copies to:
--------------
GTCR Fund VI, L.P.
GTCR VI Executive Fund, L.P.
GTCR Associates VI
c/o GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to the Purchasers:
--------------------
GTCR Fund VI, L.P.
GTCR VI Executive Fund, L.P.
GTCR Associates VI
c/o GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-20-
with a copy to:
--------------
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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.
* * * * *
-21-
IN WITNESS WHEREOF, the parties hereto have executed this Purchase
Agreement on the date first written above.
ZC ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Its: President
Investment Percentage
---------------------
99.0655% GTCR FUND VI, L.P.
By: GTCR Partners VI, L.P.
Its: General Partner
By: GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Its: Principal
0.7102% GTCR VI EXECUTIVE FUND, L.P.
By: GTCR Partners VI, L.P.
Its: General Partner
By: GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Its: Principal
0.2243% GTCR ASSOCIATES VI
By: GTCR Partners VI, L.P.
Its: Managing General Partner
By: GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Its: Principal
SIGNATURE PAGE TO THE PURCHASE AGREEMENT
LIST OF EXHIBITS
----------------
Exhibit A - Certificate of Incorporation
Exhibit B - Form of Management Agreement
Exhibit C - Form of Stockholders Agreement
Exhibit D - Form of Professional Services Agreement
Exhibit E - Form of Registration Agreement