Exhibit 10.10
EXECUTIVES SUBSCRIPTION AND STOCK PURCHASE AGREEMENT
This Executive Subscription and Stock Purchase Agreement (the "Agreement")
is entered into as of the 22nd day of November, 2002, by and between National
Waterworks Holdings, a Delaware corporation (the "Company"), and the persons set
forth on the signature page hereto as Executives (the "Executives").
WHEREAS, the Executives wish to purchase from the Company, and the Company
wishes to issue and sell to the Executives shares of the Company's class A
common stock, par value $0.01 per share ("Class A Common Stock") and class B
common stock, par value $0.01 per share ("Class B Common Stock").
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties to
this Agreement, intending to be legally bound, mutually agree as follows:
ARTICLE I
Purchase and Sale of Shares
1.1 Sale and Issuance of Shares. Subject to the terms and conditions of
this Agreement, the Executives do hereby subscribe for and agree to purchase at
the Closing (as defined below), and the Company does hereby agree to sell to the
Executives on the Closing, the number of shares of Class A Common Stock and
Class B Common Stock set forth below the name of each Executive on the signature
pages hereto (collectively, the "Shares") for the total purchase price set forth
below the name of each Executive on the signature pages hereto (the "Purchase
Price").
1.2 Closing. The issuance, sale and purchase of the shares of Class A
Common Stock and Class B Common Stock hereunder shall occur at a closing (the
"Closing") to be held on or immediately after the closing of the transactions
contemplated by that certain Asset Purchase Agreement dated as of September 12,
2002 (the "Purchase Agreement") among U.S. Filter Distribution,
Inc.("Distribution") and National Waterworks, Inc. Payment of the Purchase Price
shall be made at the Closing by delivery of a wire transfer of same day funds
denominated in U.S. dollars, unless otherwise mutually agreed in writing with
the Company.
ARTICLE II
Representations and Warranties of the Company
The Company represents and warrants to the Executives that:
2.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted and as proposed to be conducted.
2.2 Authorization. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance of this
Agreement by the Company, and for the authorization, issuance and delivery of
the Shares being sold under this Agreement, has been taken. This Agreement, when
executed and delivered by all parties hereto, shall constitute the valid and
legally binding obligation of the Company, except to the extent the
enforceability thereof may be limited by bankruptcy laws, insolvency laws,
reorganization laws, moratorium laws or other laws affecting creditors' rights
generally or by general equitable principles.
2.3 Validity of Shares. The Shares, when issued, sold and delivered in
accordance with the terms of this Agreement, shall be duly and validly issued,
and fully paid and nonassessable.
2.4 Securities Act. The sale of Shares in accordance with the terms of
this Agreement (assuming the accuracy of the representations and warranties of
the Executive contained in Article III hereof) is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act").
ARTICLE III
Representations, Warranties and Agreements of
the Executives
3.1 Authorization. Each Executive represents and warrants that this
Agreement, when executed and delivered by him or her, will constitute his or her
valid and legally binding obligation, except to the extent the enforceability
thereof may be limited by bankruptcy laws, insolvency laws, reorganization laws,
moratorium laws or other laws affecting creditors' rights generally or by
general equitable principles.
3.2 Investment Representations.
(a) This Agreement is made with each Executive in reliance upon his
or her representation to the Company, which by his or her acceptance hereof,
each Executive hereby confirms, that (i) the Shares to be received by him or her
will be acquired by him or her for investment for his or her own account, not as
a nominee or agent, and not with a view to the sale or distribution of any part
thereof in violation of applicable federal and state securities laws, (ii) he or
she has no current intention of selling, granting participation in or otherwise
distributing the same in violation of applicable federal and state securities
laws, and (iii) the information contained in the form of Purchaser Questionnaire
attached hereto as Exhibit A and completed by each Executive and delivered to
the Company is true, correct, accurate and complete both as of the date of such
Purchaser Questionnaire and as of the date hereof. By executing this Agreement,
each Executive further represents that he or she does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person, or to any third person, with respect to any of the
Shares in violation of applicable federal and state securities laws.
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(b) Each Executive understands that the Shares have not been
registered under the 1933 Act on the basis that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from registration
under the 1933 Act pursuant to Section 4(2) thereof and regulations issued
thereunder, and that the Company's reliance on such exemption is predicated on
representations of the Executive set forth herein.
(c) Each Executive represents that he or she has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of his investment. Each Executive further represents that he or
she has had access, during the course of the transactions contemplated hereby
and prior to his or her purchase of Shares, to the same kind of information that
is specified in Part I of a registration statement under the 1933 Act and that
he or she has had, during the course of the transactions contemplated hereby and
prior to his or her purchase of the Shares, the opportunity to ask questions of,
and receive answers from, the Company concerning the terms and conditions of the
offering and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information furnished to him or
her or to which he or she had access. Each Executive understands that no federal
or state agency has passed upon this investment or upon the Company, nor has any
such agency made any finding or determination as to the fairness of this
investment.
(d) Each Executive understands that the Shares may not be sold,
transferred or otherwise disposed of without registration under the 1933 Act or
an exemption therefrom, and that in the absence of an effective registration
statement covering the Shares or an available exemption from registration under
the 1933 Act, the Shares must be held indefinitely. Each Executive must be
prepared to bear the economic risk of this investment for an indefinite period
of time. In particular, each Executive acknowledges that he or she is aware that
the Shares may not be sold pursuant to Rule 144 promulgated under the 1933 Act
unless all of the conditions of that Rule are met. Among the current conditions
for use of Rule 144 by certain holders is the availability to the public of
current information about the Company. Such information is not now available,
and the Company has no current plans to make such information available. Each
Executive represents that, in the absence of an effective registration statement
covering the Shares, he or she will sell, transfer or otherwise dispose of the
Shares only in a manner consistent with his representations set forth herein and
then only in accordance with the Stockholders' Agreement referred to in Article
VI.
(e) Independent of the additional restrictions on the transfer of
shares of Class A Common Stock and Class B Common Stock contained in the
Stockholders' Agreement referred to in Article VI, each Executive agrees that he
or she will not make a transfer, disposition or pledge of any of the Shares
other than pursuant to an effective registration statement under the 1933 Act,
unless and until (i) he or she shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the disposition, and (ii) if requested by the Company,
at the expense of such Executive or his transferee, he or she shall have
furnished to the Company an opinion of counsel, reasonably satisfactory to the
Company and its counsel, to the effect that such transfer may be made without
registration of the Shares under the 1933 Act.
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(f) Each Executive acknowledges that this investment is not
recommended for investors who have any need for a current return on this
investment or who cannot bear the risk of losing their entire investment. Each
Executive acknowledges that: (i) he or she has adequate means of providing for
his current needs and possible personal contingencies and has no need for
liquidity in this investment; (ii) his or her commitment to investments which
are not readily marketable is not disproportionate to his or her net worth; and
(iii) his or her investment in the Shares will not cause his or her overall
financial commitments to become excessive.
3.3 Legends; Stop Transfer.
(a) Each Executive acknowledges that all certificates evidencing the
Shares shall bear the following legend:
"TRANSFER RESTRICTED
The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be sold, offered for sale, pledged or hypothecated in the absence of
an effective registration statement as to the securities under said
Act or an opinion of counsel satisfactory to the Company and its
counsel that such registration is not required.
(b) The certificates evidencing the Shares shall also bear any
legend required by any applicable state securities law.
(c) The Company shall make a notation regarding the restrictions on
transfer of the Shares in its stock books, and the Shares shall be transferred
on the books of the Company only if transferred or sold pursuant to an effective
registration statement under the 1933 Act covering such Shares or pursuant to
and in compliance with the provisions of Section 3.2(e) hereof. All shares of
Class A Common Stock and Class B Common Stock of the Company hereafter issued to
each Executive shall bear the same endorsement, shall be subject to all the
terms and conditions of this Agreement. A copy of this Agreement, together with
any amendments thereto, shall remain on file with the Secretary of the Company
and shall be available for inspection to any properly interested person without
charge within five (5) days after the receipt of a written request therefor by
the Company.
ARTICLE IV
Conditions to Obligations of the
Executive at Closing
The obligations of each Executive under Article I of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
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4.1 Representations and Warranties. The representations and warranties of
the Company contained in Article II hereof shall be true on and as of the
Closing with the same force and effect as if they had been made at the Closing.
4.2 Performance. The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it on or before the Closing.
4.3 Qualifications. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall have been duly obtained and shall be
effective on and as of the Closing.
ARTICLE V
Conditions to the Obligations of the Company at Closing
The obligations of the Company under Article I of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
5.1 Representations. The representations, warranties and agreements of
each Executive contained in Article III hereof shall be true on and as of the
Closing Date with the same force and effect as if they had been made at the
Closing.
5.2 Qualifications. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall have been duly obtained and shall be
effective on and as of the Closing.
5.3 Purchaser Questionnaire. The Company shall have received a completed
Purchaser Questionnaire in the form attached hereto as Exhibit A from the
Executives.
5.4 Performance. The Executives shall have performed in all material
respects all of his or her obligations and materially complied with each and all
of his or her covenants required to be performed or complied with on or prior to
the Closing, including without limitation the execution and delivery of the
agreements and undertakings provided for in this Agreement.
ARTICLE VI
Mutual Conditions Precedent
The obligations of the Company and executive under Article I of this
Agreement are subject to the fulfillment on or before the Closing of the
following condition:
Stockholders' Agreement. The Company and each stockholder of the Company
shall have executed and delivered a counterpart signature page to that certain
Stockholders'
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Agreement to be dated the date of the Closing, which agreement shall be subject
to the satisfactory review of Xxxxx X. Xxxxxxx, Xxxxxxxx Xxxxxxxxx and Xxxxx
Xxxxxx.
ARTICLE VII
Miscellaneous
7.1 No Waiver; Modifications in Writing. This Agreement, the Restricted
Stock Agreement of even date herewith by and between the Company and the
Executive, the Employment Agreement by and between National Waterworks, Inc. and
the Executive and the Stockholders' Agreement, sets forth the entire
understanding of the parties, and supersedes all prior agreements, arrangements
and communications, whether oral or written, with respect to the subject matter
hereof. No waiver of or consent to any departure from any provision of this
Agreement shall be effective unless signed in writing by the party entitled to
the benefit thereof, provided that notice of any such waiver shall be given to
each party hereto as set forth below. Except as otherwise provided herein, no
amendment, modification or termination of any provision of this Agreement shall
be effective unless signed in writing by or on behalf of the Company and
Executive. Any amendment, supplement or modification of or to any provision of
this Agreement, any waiver of any provision of this Agreement, and any consent
to any departure by the Company from the terms of any provision of this
Agreement, shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement, no notice to or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances. Notwithstanding the foregoing, nothing herein shall modify any of
the agreements set forth on Schedule I to the Employment Agreement.
7.2 Notices. All notices and other communications necessary or
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given when delivered by hand, one day after sending by
overnight delivery service, or three days after sending by certified mail,
postage prepaid, return receipt requested to the respective addresses of the
parties set forth below:
If to the Executive: To the address set forth below his name on the signature pages hereto.
If to the Company: National Waterworks Holdings, Inc.
American Plaza
000 Xxxx Xxxxxxx 0
Xxxxx 000
Xxxx, Xxxxx 00000
With a copy to each of: X.X. Xxxxxx Partners, LLC
c/o X.X. Xxxxxx Partners, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxxx Xxxxxx
and
Xxxxxx X. Xxx Partners, L.P.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
By notice complying with the foregoing provisions of this Section 7.2, each
party shall have the right to change the mailing address for future notices and
communications to such party.
7.3 Costs, Expenses and Taxes. The Company and the Executive shall pay its
or his own costs and expenses incurred in connection with this Agreement and the
Stockholders' Agreement, any amendment or supplement to or modification of any
of the foregoing, and any and all other documents furnished pursuant hereto or
thereto or in connection herewith or therewith; provided, however, the Company
shall pay the reasonable costs and expenses incurred by the Executive in
connection with the execution and delivery of this Agreement and the
Stockholders' Agreement; provided, further, that (i) the aggregate reasonable
costs and expenses incurred by each of Xxxxx X. Xxxxxxx, Xxxxxxxx Xxxxxxxxx and
Xxxxx Xxxxxx shall not exceed $5,000 in the aggregate, and (ii) the aggregate
reasonable costs and expenses incurred by each of the other regional vice
presidents and senior managers of the Company who are parties hereto shall not
exceed $10,000 in the aggregate. The Company shall pay any and all stamp,
transfer and other similar taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement or the original
issuance of the Shares but excluding all federal, state and local income or
similar taxes and shall save and hold the Executive harmless from and against
any and all liabilities with respect to or resulting from any delay in paying,
or omission to pay, such taxes. The Company shall bear all expenses of shipping
certificates evidencing the Shares (including, without limitation, insurance
expenses) from the location of the Closing to such other places within the
United States of America as the Executive shall specify.
7.4 Execution of Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.
7.5 Binding Effect; Assignment. The rights and obligations of the
Executive under this Agreement may not be assigned to any other person. Except
as expressly provided in this Agreement, this Agreement shall not be construed
so as to confer any right or benefit upon any
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person other than the parties to this Agreement, and their respective successors
and assigns. This Agreement shall be binding upon the Company and the Executive,
and their respective successors and assigns.
7.6 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware as to all matters, including but not limited to matters of
validity, construction, effect, performance and remedies.
7.7 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
7.8 Exhibits and Headings. All Exhibits to this Agreement shall be deemed
to be a part of this Agreement. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
7.9 Injunctive Relief. Each of the parties to this Agreement hereby
acknowledges that in the event of a breach by any of them of any material
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. Each of the parties therefore agrees that, in the event of a
breach of any material provision of this Agreement, the aggrieved party may
elect to institute and prosecute proceedings to enforce specific performance or
to enjoin the continuing breach of such provision, as well as to obtain damages
for breach of this Agreement. By seeking or obtaining any such relief, the
aggrieved party will not be precluded from seeking or obtaining any other relief
to which it may be entitled.
7.10 Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement or the Stockholders' Agreement, or where any
provision hereof or thereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to any
other available remedy.
7.11 83(b) Election. The Executive agrees to make a valid and timely
election under Section 83(b) of the Internal Revenue Code with the Internal
Revenue Service and any applicable state and local taxing authorities with
respect to the Shares of Common Stock being purchased by the Executive or his or
her designee (the "Section 83(b) Election"), and hereby agrees to indemnify and
hold harmless the Company from any and all claims, demands, liabilities, fines
and expenses, including, without limitation, any present or future withholding
tax obligations (collectively, the "Liabilities"), resulting from the failure to
timely make the Section 83(b) Election or on account of or in respect of the
Section 83(b) Election, and the Company shall have the right to offset against
any such Liabilities any other amounts due the Executive then or in the future.
7.12 Withholding Taxes. The Company shall have the right to withhold (or
cause one of the Company's subsidiaries to withhold) from compensation otherwise
payable to the Executive, or to require the Executive to remit to the Company,
an amount sufficient to satisfy all federal, state and local withholding tax
requirements in respect of the Shares being purchased
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by the Executive prior to the issuance of such Shares and the delivery of any
certificate or certificates for such Shares and from time to time thereafter.
7.13 Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties contained herein or made in writing
by or on behalf of the Company or the Executive, as the case may be, in
connection with the transactions contemplated by this Agreement shall survive
the execution and delivery of this Agreement and the sale and purchase of the
Shares and payment therefor.
[Remainder of Page Intentionally Left Blank]
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EXECUTIVE SUBSCRIPTION AND STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal, as of the date first above written.
NATIONAL WATERWORKS HOLDINGS, INC.
By: /s/ Xxxxxxxx Xxxxxxxxx
----------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: C.F.O. and President
Aggregate Number of Shares of Class A Common Stock to
be sold: 511,590.77
Aggregate sale price for Shares of Class A Common
Stock:
$ 9,148
Aggregate Number of Shares of Class B Common Stock to
be sold: 61,098
Aggregate sale price for Shares of Class B Common
Stock:
$ 3,054,900
EXECUTIVE:
/s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 190,359.21
Aggregate purchase price for Shares of Class A Common
Stock :$ 3,404
Number of Shares of Class B Common Stock to be
purchased: 20,400
Aggregate purchase price for Share of Class B Common
Stock:$ 1,020,200
Address for Notices: ________________________________
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/s/ Xxxxxxxx Xxxxxxxxx
----------------------
Xxxxxxxx Xxxxxxxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 95,179,60
Aggregate purchase price for Shares of Class A Common
Stock :$ 1,702
Number of Shares of Class B Common Stock to be
purchased: 10,200
Aggregate purchase price for Share of Class B Common
Stock:$ 510,000
Address for Notices: ________________________________
/s/ Xxxxx Xxxxxx
----------------
Xxxxx Xxxxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 47,589.80
Aggregate purchase price for Shares of Class A Common
Stock :$ 851
Number of Shares of Class B Common Stock to be
purchased: 2,700
Aggregate purchase price for Share of Class B Common
Stock:$ 135,000
Address for Notices: ________________________________
/s/ Xxx Xxxxxxx
---------------
Xxx Xxxxxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 23,794.90
-00-
Xxxxxxxxx purchase price for Shares of Class A Common
Stock :$ 426
Number of Shares of Class B Common Stock to be
purchased: 4,200
Aggregate purchase price for Share of Class B Common
Stock:$ 210,000
Address for Notices: ________________________________
/s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Xxxxxx X. Xxxxxx, Xx., individually
Number of Shares of Class A Common Stock to be
purchased: 426
Aggregate purchase price for Shares of Class A Common
Stock :$ 426
Number of Shares of Class B Common Stock to be
purchased: 4,200
Aggregate purchase price for Share of Class B Common
Stock:$ 210,000
Address for Notices: ________________________________
/s/ Xxx Xxxx
------------
Xxx Xxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 23,794.90
Aggregate purchase price for Shares of Class A Common
Stock :$ 426
Number of Shares of Class B Common Stock to be
purchased: 4,200
Aggregate purchase price for Share of Class B Common
Stock:$ 210,000
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Address for Notices: ________________________________
/s/ Xxxxx X. Xxxx
-----------------
Xxxxx X. Xxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 23,794.90
Aggregate purchase price for Shares of Class A Common
Stock :$ 426
Number of Shares of Class B Common Stock to be
purchased: 4,200
Aggregate purchase price for Share of Class B Common
Stock:$ 210,000
Address for Notices: ________________________________
/s/ Xxxxxx X. Xxxxxxxx III
--------------------------
Xxxxxx X. Xxxxxxxx III, individually
Number of Shares of Class A Common Stock to be
purchased: 23,794.90
Aggregate purchase price for Shares of Class A Common
Stock :$ 426
Number of Shares of Class B Common Stock to be
purchased: 4,200
Aggregate purchase price for Share of Class B Common
Stock:$ 210,000
Address for Notices: ________________________________
/s/ Xxxx Xxxxxxxx
-----------------
Xxxx Xxxxxxxx, individually
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Number of Shares of Class A Common Stock to be
purchased: 23,794.90
Aggregate purchase price for Shares of Class A Common
Stock :$ 426
Number of Shares of Class B Common Stock to be
purchased: 4,200
Aggregate purchase price for Share of Class B Common
Stock:$ 210,000
Address for Notices: ________________________________
s/ Xxxxxx Xxxxxx
----------------
Xxxxxx Xxxxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 11,897.45
Aggregate purchase price for Shares of Class A Common
Stock :$ 213
Number of Shares of Class B Common Stock to be
purchased: 1,266
Aggregate purchase price for Share of Class B Common
Stock:$ 63,300
Address for Notices: ________________________________
s/ Xxxx Xxxxx
-------------
Xxxx Xxxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 11,897.45
Aggregate purchase price for Shares of Class A Common
Stock :$ 213
Number of Shares of Class B Common Stock to be
purchased: 1,266
-00-
Xxxxxxxxx purchase price for Share of Class B Common
Stock:$ 63,300
Address for Notices: ________________________________
s/ Xxxx Xxxxx
-------------
Xxxx Xxxxx, individually
Number of Shares of Class A Common Stock to be
purchased: 11,897.45
Aggregate purchase price for Shares of Class A Common
Stock :$ 213
Number of Shares of Class B Common Stock to be
purchased: 1,266
Aggregate purchase price for Share of Class B Common
Stock:$ 63,300
Address for Notices: ________________________________
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