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EXHIBIT 9.1
STOCKHOLDERS' AND MEMBERS' AGREEMENT
AGREEMENT (this "AGREEMENT"), dated as of July 31, 1997, by and among
Aqua-Chem, Inc. ("AQUA-CHEM or the "COMPANY"), a Delaware corporation (formerly
known as A-C Acquisition Corp.), Rush Creek LLC (the "HOLDING COMPANY"), Whitney
Equity Partners, L.P. ("WEP"), a Delaware limited partnership, Whitney
Subordinated Debt Fund, L.P. ("WSDF" and together with WEP, the "WHITNEY
FUNDS"),a Delaware limited partnership, the Xxxxxx Family LLC ("XXXXXX LLC"),
a Michigan limited liability company, Xxxxxxx X. Xxxxxx, Trustee of the Xxxxxxx
X. Xxxxxx Trust u/a/d May 10, 1997 (the "XXXXXX TRUST") J. Xxxxx Xxxxxx
("XXXXXX"), Xxxx X. XxXxxxx ("XXXXXXX"), Xxxxx Xxxxxxx ("XXXXXXX") and Xxxxxxx
Xxxxxx ("XXXXXX" and together with the Xxxxxx LLC, the Xxxxxx Trust, Xxxxxx,
XxXxxxx and Xxxxxxx,the "MANAGEMENT STOCKHOLDERS"). WEP, WSDF and the
Management Stockholders are sometimes hereinafter collectively referred to as
the "Stockholders" and each individually as a "STOCKHOLDER."
WHEREAS, pursuant to the terms of the Operating Agreement (the
"OPERATING AGREEMENT"), dated as of the date hereof, by and among the
Institutional Investors and the Management Stockholders, the equity securities
of Aqua-Chem, including, without limitation, the shares of common stock,
par-value $.0l per share, of Aqua-Chem (the "COMMON STOCK"), and the Series C
Redeemable Preferred Stock, par-value $.0l per share, of Aqua-Chem (the "SERIES
C PREFERRED STOCK") set forth opposite each of the names of the Stockholders
have been allocated to their respective Capital Accounts.
WHEREAS, the Stockholders believe that it is in the best interest of
the Company and the Stockholders that provision be made for the continuity and
stability of the business and policies of the Company, and, accordingly, desire
to make certain arrangements among themselves with respect to the election of
directors of the Company and with respect to certain other matters.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenant and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
SECTION 1. DEFINITIONS. As used herein, the following terms shall have
the following respective meanings, and all capitalized terms used herein which
are not otherwise defined shall have the meaning assigned thereto in the
Securities Purchase Agreement, dated as of the date hereof, by and among the
Holding Company, the Company, XX-Xxxxxx Sales and Service, Inc, a Delaware
corporation, and the Institutional Investors.
(a) "AFFILIATE" shall mean (i) in the case of an entity, any Person
who or which, directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, any specified
Person or (ii) in the case of an individual, such individual's spouse, children,
grandchildren or parents or a trust primarily for the benefit of any of the
foregoing.
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EXHIBIT 9.1
(b) "BONA FIDE PURCHASER" shall mean any Person (other than a
selling Stockholder's Affiliates) who or which has delivered a good faith
written offer to purchase all or any portion of such Stockholder's Shares.
(c) "CAPITAL ACCOUNT" shall have the meaning specified in the
Operating Agreement.
(d) "CERTIFICATE OF INCORPORATION" shall mean the Certificate of
Incorporation of the Company, as amended, as in effect as of the date hereof.
(e) "COMMON STOCK" shall have the meaning assigned to that term in
the first Whereas clause of this Agreement.
(f) "DISPOSE" or "DISPOSITION" (and any derivatives thereof) shall
mean (i) a voluntary or involuntary sale, assignment, mortgage, grant, pledge,
hypothecation, exchange, transfer, conveyance or other disposition of a
Stockholder's Shares, and (ii) any agreement, contract or commitment to do any
of the foregoing.
(g) "ELIGIBLE STOCKHOLDER" shall mean each of WEP, WSDF, and their
respective successors and assigns.
(h) "ENCUMBRANCE" or "ENCUMBER" shall mean or refer to any lien,
claim, charge, pledge, mortgage, encumbrance, security interest, preferential
arrangement, restriction on voting or alienation of any kind, adverse interest,
or the interest of a third party under any conditional sale agreement, capital
lease or other title retention agreement.
(i) "INITIAL PUBLIC OFFERING" shall mean the sale by either the
Company or any of its Subsidiaries of its capital stock pursuant to a
registration statement on Form S-1 or otherwise under the Securities Act.
(j) "INSTITUTIONAL INVESTORS" shall mean (i) WSDF and (ii) WEP and
their respective successors and assigns.
(k) "MANAGERS" shall mean Xxxxxxx X. Xxxxxx ("Xxxxxx"), Barton,
McNally, Xxxxxxx, Xxxxxx and the other members of the management of the Company
who hold Shares and become a party to this Agreement.
(1) "MEMBERSHIP UNITS" shall have the meaning specified in the
Operating Agreement.
(m) "OTHER MANAGERS" shall mean Barton, McNally, Xxxxxxx, Xxxxxx and
other members of the management of the Company.
(n) "PERMITTED TRANSFEREES" shall mean in the case of (i) WEP, its
successors and assigns, including, without limitation, the Affiliates, partners
and retired partners of WEP or
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EXHIBIT 9.1
Whitney, the estates and family members of any such partners and retired
partners and of their spouses, and any trusts for the benefit of any of the
foregoing persons, (ii) WSDF, its successors and assigns, including without
limitation, the Affiliates, partners and retired partners of WSDF or Whitney,
the estates and family members of any such partners and retired partners and of
their spouses, and any trusts for the benefit of any of the foregoing persons,
(iii) in the case of Xxxxxx, (A) the estate and family members of Xxxxxx, any
trusts for the benefit of the foregoing persons, any trust which is revocable by
Xxxxxx and of which Xxxxxx is the primary beneficiary during Xxxxxx'x lifetime,
any limited partnership, all of the partners of which are family members of
Xxxxxx, and any limited liability company, all of the members of which are
family members of Xxxxxx, and (B) the Other Managers, (iv) in the case of any
Stockholder that is not a not trust, the estates and family members of such
Stockholder, any trusts for the benefit of the foregoing persons, any trust
which is revocable by such Stockholder and of which the Stockholder is the
primary beneficiary during the Stockholder's lifetime, any limited partnership,
all of the partners of which are family members of such Stockholder, and any
limited liability company, all of the members of which are family members of
such Stockholder, (v) in the case of any Other Manager, (A) the estate and
family members of such Other Manager, any trusts for the benefit of the
foregoing persons, any trust which is revocable by such Other Manager and of
which such Other Manager is the primary beneficiary during such Other Manager's
lifetime, any limited partnership, all of the partners of which are family
members of such Other Manager, and any limited liability company, all of the
members of which are family members of such Other Manager, and (B) Xxxxxx
(provided the Disposition to Xxxxxx is effected pursuant to the original terms
(without amendment or modification) of the Rush Creek Management Group Stock
Restriction and Membership Unit and original Purchase Agreement, dated as of the
date hereof, by and among the Holding Company and the Management Stockholders)
and (vi) in the case of the other Stockholders who are trusts, the estates and
family members of such trusts beneficiaries, and any other trusts for the
benefit of such beneficiaries; provided, however, that in each case such person
shall agree in writing with the parties hereto to be bound by and to comply with
all applicable provisions of this Agreement.
(o) "PERSON" shall mean any individual, partnership, corporation,
limited liability company, joint venture, trust, firm, association,
unincorporated organization or other entity.
(p) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar Federal statute, and the rules and regulations
thereunder, all as the same shall be in effect at the time.
(q) "SHARES" shall mean, with respect to any Stockholder, (i) the
Membership Units held at any time by any such Stockholder, (ii) the shares of
Series C Preferred Stock held at any time by any Stockholder (iii) the shares of
Common Stock held at any time by such Stockholder and, if applicable, (ii) the
shares of Common Stock issuable upon the exercise of any option or warrant
(including the WSDF Warrant) or upon conversion of any convertible securities
held at any time by such Stockholder.
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EXHIBIT 9.1
(r) "STOCKHOLDER" shall mean each person so identified in the
preamble hereto and shall include any other Person who agrees in writing with
the parties hereto to be bound by and to comply with all applicable provisions
of this Agreement and all Permitted Transferees thereof.
(s) "SUBSIDIARIES" shall mean, with respect to any Person, a
corporation or other entity of which 50% or more of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by
such Person. Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company or to Subsidiaries thereof.
(t) "THRESHOLD AMOUNT" shall mean two (2) of the two (2)
Institutional Investors.
(u) "WHITNEY" shall mean X.X. Xxxxxxx & Co.
The parties hereto acknowledge that pursuant to the terms of the
Operating Agreement, the Holding Company is required to exercise the rights
(provided that such Stockholder performs the corresponding obligations) accorded
to the holders of Common Stock and/or Series C Preferred Stock under this
Agreement at the direction of and for the benefit of the Members. In furtherance
of the purposes of the Operating Agreement, the parties hereto acknowledge and
agree that this Agreement shall be performed as if each Member directly owned
the Common Stock and/or Series C Preferred Stock allocated to its Capital
Account (provided that until such time as the Common Stock and/or Series C
Preferred Stock allocated to the Capital Account of a Member is distributed to
such Member, the certificates representing such Common Stock or Series C
Preferred Stock, as the case may be, shall be registered in the name of the
Holding Company). For purposes of this Agreement, each Stockholder shall be
deemed to be the holder of the Common Stock and/or Series C Preferred Stock
allocated to such Stockholder's Capital Account, as well as any such Common
Stock and/or Series C Preferred Stock distributed to such Stockholder pursuant
to the terms of the Operating Agreement. No certificate or other instrument
registered in the name of the Holding Company representing Common Stock or
Series C Preferred Stock allocated to a Member's Capital Account shall represent
any Common Stock or Series C Preferred Stock, as the case may be, allocated to
any other Member's Capital Account.
SECTION 2. PREEMPTIVE RIGHTS. (a) If at any time the Company wishes to
issue any shares of Common Stock or any rights to acquire Common Stock,
including, without limitation, any rights to acquire securities exercisable for,
convertible into or exchangeable for Common Stock (collectively the "EQUITY
EQUIVALENTS") to any Person or Persons, the Company shall promptly deliver a
notice of its intention to sell (the "COMPANY'S NOTICE OF INTENTION TO SELL") to
each Eligible Stockholder and Manager setting forth a description of the Equity
Equivalents to be sold, the proposed purchase price thereof and terms of sale.
Upon receipt of the Company's Notice of Intention to Sell, each Eligible
Stockholder and Manager shall have the right to elect to purchase (or cause the
Holding Company to purchase and to allocate to such Eligible Stockholder's or
Manager's, as the case may be, Capital Account), at the price and on the terms
stated in the Company's Notice
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EXHIBIT 9.1
of Intention to Sell, a number of the Equity Equivalents equal to such Eligible
Stockholder's or Manager's, as the case may be, aggregate proportionate
ownership of Equity Equivalents (calculated on a fully-diluted basis) held by
all Eligible Stockholders and Managers, multiplied by the number of Equity
Equivalents to be issued. For the purpose of determining the number of Equity
Equivalents that may be purchased by any Eligible Stockholder (or by the Holding
Company for the account of such Eligible Stockholder or Manager, as the case may
be), each Eligible Stockholder and Manager shall be deemed to be the owner of
any Equity Equivalents transferred, prior to the date of such election to
purchase, to any Permitted Transferee. Such election is to be made by the
Eligible Stockholders and Managers by written notice to the Company within 30
days after receipt by the Eligible Stockholders and Managers of the Company's
Notice of Intention to Sell (the "ACCEPTANCE PERIOD FOR EQUITY EQUIVALENTS").
Each Eligible Stockholder and Manager shall also have the option, exercisable by
so specifying in such written notice, to purchase (or cause the Holding Company
to purchase and to allocate to such Eligible Stockholder's or Manager's, as the
case may be, Capital Account) on a pro rata basis similar to that described
above, any remaining Equity Equivalents not purchased by other Eligible
Stockholders or Managers (or by the Holding Company for the account of such
other Eligible Stockholders or Managers, as the case may be,), in which case the
Eligible Stockholders or Managers exercising such further option shall be deemed
to have elected to purchase (or have the Holding Company purchase) such
remaining Equity Equivalents on such pro rata basis, up to the aggregate number
of Equity Equivalents which such Eligible Stockholder shall have specified. The
Company shall promptly notify each electing Eligible Stockholder and Manager in
writing of each notice of election received from other Eligible Stockholders and
Managers pursuant to this paragraph 2 (a).
(b) If effective acceptances shall not be received pursuant to
paragraph 2 (a) above in respect of all the Equity Equivalents, then the Company
may, at its election, during a period of 120 days following the expiration of
the Acceptance Period for Equity Equivalents, sell and issue the remaining
Equity Equivalents to another Person at a price and upon terms not more
favorable to such Person than those stated in the Company's Notice of Intention
to Sell; provided, however, that failure by an Eligible Stockholder or Manager
to exercise his, her or its option to purchase (or cause to be purchased) with
respect to one offering, sale and issuance of Equity Equivalents shall not
affect his, her or its option to purchase (or cause to be purchased) Equity
Equivalents in any subsequent offering, sale and purchase. In the event the
Company has not sold the Equity Equivalents, or entered into an agreement to
sell the Equity Equivalents, within such 120-day period, the Company shall not
thereafter issue or sell any Equity Equivalents without first offering such
securities to each Eligible Stockholder and Manager in the manner provided in
Section 2(a) hereof.
(c) If an Eligible Stockholder or Manager gives the Company notice,
pursuant to the provisions of this Section 2, that such Eligible Stockholder or
Manager desires to purchase (or cause the Holding Company to purchase) any of
the Equity Equivalents, payment therefor shall be made by the Eligible
Stockholder or Manager, as the case may be, by check or wire transfer, against
delivery of the securities at the executive offices of the Company within 15
business days after giving the Company such notice, or, if later, the closing
date for the sale of such Equity Equivalents. In the event that any such
proposed issuance is for a consideration other than cash, such Eligible
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EXHIBIT 9.1
Stockholder or Manager will be entitled to pay cash for each share or other
unit, in lieu of such other consideration, in the amount determined in good
faith by the Board of Directors of the Company to constitute the fair value of
such consideration other than cash to be paid per share or other unit.
(d) The preemptive rights contained in this Section 2 shall not
apply to (i) Common Stock issued (A) as a stock dividend to holders of Common
Stock, Series A Preferred Stock, Series B Preferred Stock or Series C Preferred
Stock of the Company, or upon any subdivision or combination of shares of Common
Stock, (B) pursuant to an Initial Public Offering, (C) upon the conversion of
any equity security or debt security of the Company issued on or prior to the
date hereof, or (D) the exercise of any option, warrant or other right to
subscribe for, purchase or otherwise acquire either Common Stock or any equity
security or debt security convertible into Common Stock, issued prior to the
date hereof, and (ii) the issuance by the Company of up to 61,919 shares of
Common Stock reserved or to be reserved for issuance upon the exercise of stock
options, granted or to be granted exclusively to employees, officers, directors
or consultants of the Company or its Subsidiaries and/or Affiliates pursuant to
the Company's employee stock option plan(s) now in existence.
SECTION 3. TRANSFER OF SHARES. No Stockholder shall effect a
Disposition of any of such Stockholder's Shares (or cause the Company to effect
a Disposition of any of the Shares allocated to such Stockholder's Capital
Account), except to a Permitted Transferee or as provided in this Agreement. Any
purported Disposition in violation of this Agreement shall be null and void ab
inito, and neither the Company nor the Holding Company shall recognize any such
Disposition or accord to any such purported transferee any rights as a
Stockholder or a Member (as such term is defined in the Operating Agreement).
SECTION 4. RIGHT OF FIRST REFUSAL; RIGHT OF CO-SALE.
(a) If any Stockholder shall desire at any time to effect the
Disposition of any of such Stockholder's Shares (or cause the Holding Company to
effect the Disposition of any Shares allocated to such Stockholder's Capital
Account) (the "OFFERED SHARES") and shall receive a purchase offer therefor or
the terms of a potential purchase offer therefor from a Bona Fide Purchaser
(such offer being hereinafter referred to as a "PURCHASE OFFER") then such
selling Stockholder ("SELLING STOCKHOLDER") shall promptly notify the Company,
the Holding Company and each Eligible Stockholder of the terms and conditions of
such Purchase Offer; provided, however, that this Section 4 shall not apply to
any transfers by (i) a Stockholder (or by the Holding Company) to such
Stockholder's Permitted Transferees, or (ii) any Eligible Stockholder to any
Person.
(b) Upon receipt of such notice of the Purchase Offer, each Eligible
Stockholder shall have the right to elect to purchase (or cause the Holding
Company to purchase and allocate to such Eligible Stockholder's Capital
Account), at the price and on the terms stated in such notice, a number of the
Offered Shares subject to the Purchase Offer equal to the product obtained by
multiplying (i) the aggregate number of Offered Shares covered by the Purchase
Offer by (ii) a fraction the numerator of which is the number of Equity
Equivalents (calculated on a fully-diluted basis) at the
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EXHIBIT 9.1
time owned by such Eligible Stockholder and the denominator of which is the
aggregate number of the Equity Equivalents (calculated on a fully-diluted basis)
owned by all Eligible Stockholders. Such election is to be made by written
notice ("NOTICE OF ELECTION") to the Selling Stockholder, to each other Eligible
Stockholder and to the Company within 60 days after receipt by such Eligible
Stockholder of the notice of a Purchase Offer (the "ACCEPTANCE PERIOD"). Each
Eligible Stockholder who elects to exercise his, her or its rights under this
Section 4 ("ELECTING STOCKHOLDER") shall also have the option, exercisable by so
specifying in the Notice of Election, to purchase (or to cause to be purchased)
on a pro rata basis similar to that described above any remaining Offered Shares
covered by the Purchase Offer not purchased by the other Eligible Stockholders
(or the Holding Company for the account of such other Eligible Stockholders), in
which case the Eligible Stockholders exercising such further option shall be
deemed to have elected to purchase (or cause the Holding Company to purchase)
such remaining Offered Shares on such pro rata basis, up to the aggregate number
of shares which such Electing Stockholder shall have specified.
(c) If effective acceptances shall not have been received pursuant
to paragraph 4(b) above in respect of all of the Offered Shares subject to the
Purchase Offer, then the Selling Stockholder may, at such Selling Stockholder's
election, either (i) sell (or cause the Holding Company to sell) to the Electing
Stockholders (or the Holding Company for the account of the Electing
Stockholder) pursuant to their elections and sell (or cause the Holding Company
to sell) any remaining Offered Shares subject to the Purchase Offer to the Bona
Fide Purchaser, or (ii) rescind the notice of the Purchase Offer, which
rescission shall be effected by notice in writing delivered to the Holding
Company and each Eligible Stockholder that shall have elected to purchase (or
have the Holding Company purchase) and to the Company within 10 days after
expiration of the Acceptance Period, and keep (or cause the Holding Company to
keep for its account) all, but not less than all, of the Offered Shares subject
to the Purchase Offer. In the event that the Selling Stockholder elects to sell
(or cause the Holding Company to sell) any Offered Shares pursuant to the
Purchase Offer, pursuant to clause (i) of this Section 4(c), the Bona Fide
Purchaser and the Electing Stockholders must purchase such Offered Shares (or in
the case of the Electing Stockholders cause the Company to purchase such Offered
Shares for their respective accounts) no more than 60 days after the end of the
Acceptance Period strictly in accordance with the terms and conditions of the
Purchase Offer; provided, however, that, in the event that the Selling
Stockholder shall so elect to sell (or cause the Holding Company to sell)
Offered Shares to the Bona Fide Purchaser, the prospective Bona Fide Purchaser,
as a condition precedent to the purchase of the Offered Shares, or any part
thereof, shall subscribe to this Agreement and agree to be bound by all of the
terms and conditions hereof. In the event that the Selling Stockholder shall so
elect to sell (or cause the Holding Company to sell) Offered Shares subject to
the Purchase Offer to the Bona Fide Purchaser and Electing Stockholders pursuant
to clause (i) of this Section 4(c), the Selling Stockholder shall so notify in
writing each Eligible Stockholder who is not an Electing Stockholder (the
"OUTSIDE SALE NOTICE") and no such sale shall be made unless and until each such
Eligible Stockholder (collectively, the "ELIGIBLE CO-SALE STOCKHOLDERS") shall
have been afforded the right (the "CO-SALE RIGHT"), exercisable upon written
notice to the Holding Company and the Company within 30 days after receipt of
the Outside Sale Notice, to participate (or cause the Holding Company to
participate) in the sale of Shares at the same time and on the same terms and
conditions under which the Selling Stockholder will sell (or
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EXHIBIT 9.1
cause the Holding Company to sell) the Selling Stockholder's Offered Shares.
Each such Eligible Co-Sale Stockholder may sell (or cause the Holding Company to
sell) all or any part of that number of Shares held by such Eligible Co-Sale
Stockholder equal to the product obtained by multiplying (i) the aggregate
number of Offered Shares covered by the Purchase Offer by (ii) a fraction the
numerator of which is the number of Equity Equivalents (calculated on a
fully-diluted basis) at the time owned by such Eligible Co-Sale Stockholder and
the denominator of which is the aggregate number of Equity Equivalents
(calculated on a fully-diluted basis) owned by all Eligible Co-Sale Stockholders
exercising their Co-Sale Right plus the number of Equity Equivalents (calculated
on a fully-diluted basis) then owned by the Selling Stockholder.
(d) If the Company so requests, each Eligible Co-Sale Stockholder
receiving an Outside Sale Notice in accordance with Section 4(c) and exercising
his, her or its Co-Sale Right shall deliver to (or cause the Holding Company to
deliver) the Company, as agent for such Eligible Co-Sale Stockholder, for
transfer to the Bona Fide Purchaser (i) a stock certificate or certificates
evidencing such Shares of which such Eligible Co-Sale Stockholder elects to
Dispose pursuant to this Section 4 (other than the Membership Units unless the
Operating Agreement provides that Membership Units shall be represented by
certificates) and (ii) an appropriate assignment separate from any certificate
duly executed in a proper form to effect the Disposition of such Shares to the
Bona Fide Purchaser on the books and records of the Company and/or the Holding
Company, as the case may be. No Disposition of such Shares shall be made on
terms and conditions, including the form of consideration, different from those
contained in the Purchase Offer unless the Selling Stockholder re-offers the
Offered Shares subject to the Purchase Offer to the Stockholders in accordance
with this Section 4.
(e) The Shares delivered by the Eligible Co-Sale Stockholders (or
the Holding Company) to the Company pursuant to Section 4(d) shall be
transferred by the Company to the Bona Fide Purchaser in consummation of the
Disposition of the Shares pursuant to the terms and conditions specified
in Section 4(a), and the Company shall promptly thereafter remit to each
Eligible Co-Sale Stockholder (or the Holding Company) that portion of the
Disposition proceeds to which such Eligible Co-Sale Stockholder is entitled by
reason of such Selling Stockholder's participation in such Disposition.
(f) In the event that a Selling Stockholder shall not have Disposed
of (or caused the Holding Company to have Disposed of) all such Stockholder's
Offered Shares subject to a Purchase Offer within 120 days after the date of
the notice given pursuant to Section 4(a), such Selling Stockholder shall
not thereafter Dispose of any Shares (or cause the Holding Company to dispose
of any Shares allocated to such Selling Stockholder's Capital Account) pursuant
to the Purchase Offer or otherwise without first reoffering such Shares to each
Eligible Stockholder in the manner set forth in Section 4 hereof.
(g) Notwithstanding anything contained in this Section 4 or any
notice given hereunder, the provisions of this Section 4 shall be suspended
immediately upon the occurrence of any event within the scope of Section 5.
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EXHIBIT 9.1
SECTION 4A. ADDITIONAL RIGHT OF CO-SALE.
(a) In the event that an Eligible Stockholder (the "SELLING ELIGIBLE
STOCKHOLDER") shall elect to sell (or cause the Holding Company to sell) any of
its Shares (the "SELLING ELIGIBLE STOCKHOLDER'S OFFERED SHARES") to any Person
other than such Eligible Stockholder's Permitted Transferees, the Selling
Eligible Stockholder shall so notify in writing (the "SALE NOTICE") each of the
Managers and the other Eligible Stockholder (collectively, the "CO-SALE
STOCKHOLDERS") and no such sale shall be made unless and until each of the
Co-Sale Stockholders shall have been afforded the right (the "STOCKHOLDER
CO-SALE RIGHT"), exercisable upon written notice to the Holding Company and the
Company within 30 days after receipt of the Sale Notice, to participate (or
cause the Holding Company to participate) in the sale of Shares at the same time
and on the same terms and conditions under which the Selling Eligible
Stockholder will sell (or cause the Holding Company to sell) the Selling
Eligible Stockholder's Offered Shares. Each such Co-Sale Stockholder may sell
(or cause the Holding Company to sell) all or any part of that number of Shares
held by such Co-Sale Stockholder equal to the product obtained by multiplying
(i) the aggregate number of Selling Eligible Stockholder's Offered Shares by
(ii) a fraction the numerator of which is the number of Equity Equivalents
(calculated on a fully-diluted basis) at the time owned by such Co-Sale
Stockholder and the denominator of which is the aggregate number of Equity
Equivalents (calculated on a fully-diluted basis) owned by all Co-Sale
Stockholders exercising their Stockholder Co-Sale Right plus the number of
Equity Equivalents (calculated on a fully-diluted basis) then owned by the
Selling Eligible Stockholder.
(b) If the Company so requests, each Co-Sale Stockholder receiving a
Sale Notice in accordance with Section 4A(a) and exercising his, her or its
Stockholder Co-Sale Right shall deliver to (or cause the Holding Company to
deliver) the Company, as agent for such Co-Sale Stockholder, for transfer to the
purchaser (i) a stock certificate or certificates evidencing such Shares of
which such Co-Sale Stockholder elects to Dispose pursuant to this Section 4A
(other than the Membership Units unless the Operating Agreement provides that
Membership Units shall be represented by certificates) and (ii) an appropriate
assignment separate from any certificate duly executed in a proper form to
effect the Disposition of such Shares to the purchaser on the books and records
of the Company and/or the Holding Company, as the case may be.
(c) The Shares delivered by the Eligible Co-Sale Stockholders
(or the Holding Company) to the Company pursuant to Section 4A(b) shall be
transferred by the Company to the purchaser in consummation of the Disposition
of the Shares pursuant to the terms and conditions specified in Section 4A(a),
and the Company shall promptly thereafter remit to each Co-Sale Stockholder (or
the Holding Company) that portion of the Disposition proceeds to which such
Co-Sale Stockholder is entitled by reason of such Selling Stockholder's
participation in such Disposition.
(d) Notwithstanding anything contained in this Section 4A or any
notice given hereunder, the provisions of this Section 4A shall terminate
immediately upon the occurrence of any event within the scope of Section 5.
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EXHIBIT 9.1
SECTION 5. RIGHT OF BRING-ALONG.
(a) If the Threshold Amount of the Institutional Investors (the
"Selling Institutional Investors") propose to Dispose of all (but not less than
all) of the Shares allocated to their respective Capital Accounts and/or all
(but not less than all) of the Membership Units owned by them (the
"INSTITUTIONAL INVESTOR SHARES") to a Bona Fide Purchaser, other than any
transfers by such Institutional Investors (or by the Holding Company) to such
Institutional Investors' respective Permitted Transferees, then, notwithstanding
anything in this Agreement to the contrary, the Selling Institutional Investors
may require the other Stockholders (the "NON-SELLING HOLDERS") to Dispose of all
their Shares allocated to their respective Capital Accounts and/or Membership
Units, as the case may be, (the "MANAGEMENT SHARES") to such Bona Fide Purchaser
on the same terms and conditions (other than with respect to representations and
warranties) upon which the Selling Institutional Investors effect the
Disposition of the Institutional Investor Shares; provided, however, that the
Non-Selling Stockholders must receive in consideration for the Management Shares
an amount determined by an independent, nationally recognized investment bank or
appraisal firm to be fair market value therefor.
(b) In the event that the Selling Institutional Investors desire to
exercise their rights pursuant to Section 5(a)), the Selling Institutional
Investors shall deliver to the Company and the Non-Selling Holders written
notice ("SALE NOTICE") setting forth the consideration per share or per unit to
be paid by such Bona Fide Purchaser and the other terms and conditions of such
Disposition (the Sale Notice shall have attached to it the fairness opinion,
valuation report or similar document from the investment bank or appraisal firm
opining on the fair market value of the Management Shares, as required by
Section 5(a). Within ten (10) days following the date of such notice, each of
the other Stockholders shall deliver (or cause the Holding Company to deliver)
to the Selling Institutional Investors (i) a stock certificate or certificates
evidencing such Management Shares (other than the Membership Units unless the
Operating Agreement provides that Membership Units shall be represented by
certificates), (ii) an appropriate assignment separate from any certificate duly
executed in a proper form to effect the Disposition of the Management Shares
from the Non-Selling Holders to the Bona Fide Purchaser on the books and records
of the Company and/or the Holding Company, as the case may be, and (iii) a
limited power-of-attorney authorizing one of the Selling Institutional Investors
to effect the Disposition of the Management Shares pursuant to the terms of such
Bona Fide Purchaser's offer as such terms may be modified by the Selling
Institutional Investors, provided, that all of the Management Shares are
disposed of for the same consideration per share and otherwise on the same terms
and conditions upon which the Selling Institutional Investors effect the
Disposition of the Institutional Investor Shares. In the event that any
Non-Selling Holder shall fail to deliver such stock certificate(s), assignment
separate from certificate and limited power-of-attorney to the Selling
Institutional Investors, the Company and/or the Holding Company, as the case may
be, shall cause a notation to be made on its books and records to reflect that
the Management Shares of such Non-Selling Holder are bound by the provisions of
this Section 4 and that the Disposition of such Management Shares may be
effected without such Non-Selling Holder's consent or surrender of its
Management Shares.
10
11
EXHIBIT 9.1
In addition, in the event the Selling Institutional Investors exercise
their rights under Section 5(a), the Non-Selling Holders shall be required to
make to a Bona Fide Purchaser such unqualified representations and warranties
with respect to the Management Shares as are set forth in Section 5(e) hereof
and representations and warranties with respect to all other matters as are
reasonably requested by the Bona Fide Purchaser, provided that the Non-Selling
Holders will only be required to provide representations and warranties on the
same basis and subject to the same qualifications as the Selling Institutional
Investors and will only be required to indemnify the Bona fide Purchaser against
breaches of such representations and warranties up to an aggregate dollar amount
not to exceed their respective consideration received other than with respect to
representations and warranties regarding ownership of stock and authority to
consummate the transaction in question.
(c) Promptly (but in no event later than the day of receipt) after
the consummation of the Disposition of Institutional Investor Shares and the
Management Shares pursuant to this Section 5, the Selling Institutional
Investors shall (i) deliver notice thereof to the Non-Selling Holders, (ii)
remit to the Non-Selling Holders the total sales price of their respective
Management Shares Disposed of pursuant hereto, and (iii) furnish such other
evidence of the completion and time of completion of such Disposition and the
terms thereof as may be reasonably requested in writing by the Non-Selling
Holders.
(d) If, within ninety (90) days after the Selling Institutional
Investors' delivery of the notice required pursuant to Section 5(b), the
Selling Institutional Investors have not completed the Disposition of the
Institutional Investor Shares and the Management Shares in accordance herewith,
the Selling Institutional Investors shall return to the Non-Selling Holders (i)
any stock certificates and assignments with respect to the Non-Selling
Holders' Management Shares which the Non-Selling Holder delivered pursuant to
this Section 5 and (ii) the related limited power-of-attorney. Upon the
Non-Selling Holder's receipt of such materials, all the restrictions on
Disposition contained in this Agreement with respect to the Institutional
Investor Shares and the Management Shares shall again be in effect.
(e) All sales of Institutional Investor Shares and Management
Shares to be made pursuant to this Section 5 shall be subject to the
following terms:
(i) the Disposing Stockholder shall deliver to the Bona
Fide Purchaser the Shares being sold, free and clear of Encumbrances
(ii) the Disposing Stockholders shall deliver certificates
representing the Shares being sold (other than certificates with respect to the
Membership Units unless the Operating Agreement provides that Membership Units
shall be represented by certificates), together with duly executed stock
transfer powers (or, in the case of Membership Units, assignments) in favor of
the Bona Fide Purchaser or its nominees and such other documents, including
evidence of ownership and authority, as the Bona Fide Purchaser may reasonably
request;
11
12
EXHIBIT 9.1
(ii) except as otherwise specifically set forth herein,
the Disposing Stockholder shall not be required to make any representations or
warranties to any Person in connection with such sale, except as to (A) good
title to the Shares being sold, (B) the absence of Encumbrances with respect to
the Shares being sold, (C) its valid existence and good standing (if
applicable), (D) the authority for, and validity and binding effect of (as
against such Disposing Stockholder), any agreement entered into by such
Disposing Stockholder in connection with such sale, (E) all required material
consents to Disposing Stockholder's sale and material governmental approvals
having been obtained (excluding any securities laws) and (vi) the fact that no
broker's commission is payable by the Disposing Stockholder as a result of
Disposing Stockholder's conduct in connection with the sale; and
(iii) the Disposing Stockholder shall not be required to
provide any indemnities in connection with such sale except for breach of the
representations and warranties specifically required by the terms of this
Agreement.
SECTION 6. ELECTION OF DIRECTORS.
(a) From and after the date hereof, at any annual or special
stockholders' meeting called for such purpose, or by written consent in lieu of
a meeting, the Stockholders agree to vote the Shares owned of record or
beneficially by them to maintain a six-member Board of Directors and to elect
(i) two nominees designated by Whitney (or the Whitney Funds) to the Company's
Board of Directors, (ii) two nominees designated by Management (as defined in
the Purchase Agreement) to the Company's Board of Directors, (iii) two
"independent" nominees who are agreeable to each of Whitney (or the Whitney
Funds) and Management (as defined in the Purchase Agreement) to the Company's
Board of Directors, and (v) two nominees of Whitney (or the Whitney Funds) to
each of the Company's audit committee and compensation committee, in each case,
one of which shall be elected as Chairman of such committee provided, however,
that if there is a material breach of any provision of any Transaction Document,
the Stockholders, at the election of Whitney (or the Whitney Funds) agree to
vote the Shares owned of record or beneficially by them to increase the size of
the Board of Directors of the Company to nine and to elect three additional
nominees designated by Whitney (or the Whitney Funds) to the Board of Directors
of the Company. All such directors shall hold office until their respective
successors shall have been elected and shall have qualified. The Company shall
provide to such directors the same information concerning the Company and its
Subsidiaries, and access thereto, provided to other members of the Company's
Board of Directors. The reasonable travel expenses incurred by any such director
or manager in attending any such meetings shall be reimbursed by the Company to
the extent consistent with the Company's then existing policy of reimbursing
directors generally for such expenses. Within two months following the date
hereof, the Company shall purchase directors' and officers' insurance upon terms
and pricing customary for a company of its size and operating in its industry;
provided, however, the Company shall not be obligated to purchase such insurance
in the event that such terms and pricing are not commercially available.
12
13
EXHIBIT 9.1
(b) In the event that Whitney (or the Whitney Funds) shall not
have a designee serving on the Board of Directors of the Company for any
reason, the Company shall give Whitney and the Whitney Funds notice of (in the
same manner as notice is given to directors), and permit one Person designated
by Whitney(or the Whitney Funds) to attend as observer, all meetings of the
Company's Board of Directors and all executive and other committee
meetings of the Board of Directors and shall provide to Whitney and the Whitney
Funds the same information concerning the Company, and access thereto, provided
to members of the Company's Board of Directors. The reasonable travel expenses
incurred by any such designee of Whitney (or the Whitney Funds) in attending
any board or committee meetings shall be reimbursed by the Company to the
extent consistent with the Company's then existing policy of reimbursing
directors generally for such expenses.
(c) The parties hereto will cause the Company's Board of Directors
to meet at least once every quarter on as regular a basis as possible, or more
frequently to the extent that the directors designated by Whitney (or the
Whitney Funds), or in the event no such directors are then serving on the Board
of Directors, an observer designated thereby, reasonably wishes the Board of
Directors to meet.
SECTION 7. LEGEND ON STOCK CERTIFICATES. Each certificate of the
signatories hereto representing Shares shall bear the following legend until
such time as the Shares represented thereby are no longer subject to the
provisions hereof:
"THE SALE, TRANSFER OR ENCUMBRANCE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A STOCKHOLDERS
AGREEMENT, DATED AS OF JULY 31,1997 AMONG AQUA-CHEM, INC. AND CERTAIN HOLDERS OF
ITS OUTSTANDING CAPITAL STOCK. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF AQUA-CHEM, INC."
SECTION 8. DURATION OF AGREEMENT. The rights and obligations of each
Stockholder under this Agreement shall terminate as to such Stockholder upon the
earliest to occur of (i) the transfer of all Shares owned by such Stockholder in
accordance with this Agreement, and (ii) the tenth anniversary of the date
hereof. Upon consummation of an Initial Public Offering, the rights and
obligations of each Stockholder under Sections 2, 3, 4 and 5 of this Agreement
shall terminate.
SECTION 9. REPRESENTATIONS AND WARRANTIES. Each Stockholder
represents and warrants to the other Stockholders as follows:
(a) The execution, delivery and performance of this Agreement by
such Stockholder will not violate any provision of law, any order of any court
or other agency of government, or any provision of any indenture, agreement or
other instrument to which such Stockholder or any of his, her or its properties
or assets is bound, or conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any such indenture,
agreement or other instrument,
13
14
EXHIBIT 9.1
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets of such Stockholder.
(b) This Agreement has been duly executed and delivered by such
Stockholder and constitutes the legal, valid and binding obligation of such
Stockholder, enforceable in accordance with its terms.
(c) The Shares set forth on Exhibit A to the Operating Agreement
listed under the caption "Capital Contribution" opposite each Stockholder's
name constitute all of the securities of the Company owned by such Stockholder
(or allocated to such Stockholder's Capital Account), and, except as set forth
in the Transaction Documents, such Stockholder does not have any right or
obligation to acquire (or cause the Holding Company to acquire) any additional
securities of the Company. The Membership Units set forth on Exhibit A to the
Operating Agreement listed under the caption "Membership Units" opposite each
Stockholder's name constitute all of the equity interest owned by such
Stockholder, and such Stockholder does not have any right or obligation to
acquire any additional equity interest in the Holding Company.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF DELAWARE WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF
SUCH STATE.
SECTION 11. JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY AGREES THAT THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE NOTES, THE SHARES, THE WARRANTS OR ANY
AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL
JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY
WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT THE SUCH COURTS ARE AN
INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 13, SUCH SERVICE TO BECOME
EFFECTIVE 10 DAYS AFTER SUCH MAILING.
SECTION 12. BENEFITS OF AGREEMENT. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns, legal representatives and heirs. Any purported issuance of Equity
Equivalents by the Company, or Disposition of the Shares, in violation of the
provisions of this Agreement shall be null and void ab initio.
14
15
EXHIBIT 9.1
SECTION 13. NOTICES. All notices, requests and other communications to
be given or otherwise made to any Stockholder or other party hereto shall be
deemed to be sufficient if contained in a written instrument duly transmitted by
telecopy or telex or duly sent by overnight courier service or first class
registered or certified mail, postage prepaid, addressed to such party at the
address set forth below or at such other address as may hereafter be designated
in writing by the addressee to the addressor listing all parties:
if to the Company: Aqua-Chem, Inc.
0000 Xxxxx 000xx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
with a copy to: Xxxxx Xxxxxxxxxxx Xxxxx S.C.
Suite 2100
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: 000-000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
if to the Holding
Company: Rush Creek LLC
c/o Aqua-Chem, Inc.
0000 Xxxxx 000xx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
with a copy to: Xxxxx Xxxxxxxxxxx Xxxxx S.C.
Suite 2100
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: 000-000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
if to WSDF: Whitney Subordinated Debt Fund, L.P.,
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Xx. Xxxxxx X. X'Xxxxx
15
16
EXHIBIT 9.1
with a copy to: Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
if to WEP: Whitney Equity Partners, L.P.,
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Xx. Xxxxxx X. X'Xxxxx
with a copy to: Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
if to any Manage-
ment Stockholder: c/o Aqua-Chem, Inc.
0000 Xxxxx 000xx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
with a copy to: Xxxxx Xxxxxxxxxxx Xxxxx S.C.
Suite 2100
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: 000-000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
or to such other address or addresses as shall have been furnished in writing to
the other parties hereto. Each Stockholder agrees, at all times, to provide the
Company with an address for notices hereunder.
All notices hereunder shall be effective on the date of transmission if
transmitted by telex or telecopy, on the first day after delivery to an
overnight national courier service if sent by such service and on the date of
receipt if sent by mail.
16
17
EXHIBIT 9.1
SECTION 14. MODIFICATION. Except as otherwise provided herein, neither
this Agreement nor any provision hereof shall be modified, changed, discharged
or terminated except by an instrument in writing signed by the party against
whom the enforcement of any modification, change, discharge or termination is
sought or by the agreement of all of the Stockholders, subject to this
Agreement; provided, however, that no modification or amendment shall be
effective to reduce the percentage of the Shares the consent of the holders of
which is required under this Section 14.
SECTION 15. ENTIRE AGREEMENT. This Agreement and the Operating
Agreement constitutes the entire agreement among the undersigned with respect to
matters or understandings involving the ownership, control or disposition of
their Shares and supersedes any and all prior agreements or understandings, oral
or written, among any or all of the undersigned relating to such ownership,
control or disposition.
SECTION 16. SIGNATURES; COUNTERPARTS. Telefacsimile transmissions of
any executed original document and/or retransmission of any executed
telefacsimile transmission shall be deemed to be the same as the delivery of an
executed original. At the request of any party hereto, the other parties hereto
shall confirm telefacsimile transmissions by executing duplicate original
documents and delivering the same to the requesting party or parties. This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.
[Balance of page intentionally left blank]
17
18
EXHIBIT 9.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
AQUA-CHEM, INC.
By: /s/ XX Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
RUSH CREEK LLC
By: /s/ XX Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx, Manager
WHITNEY EQUITY PARTNERS, L.P.
By: X.X. XXXXXXX EQUITY PARTNERS, LLC,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Attorney-in-Fact
WHITNEY SUBORDINATED DEBT FUND, L.P.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
A General Partner
/s/ XX Xxxxxx
-----------------------------------------
XXXXXXX X. XXXXXX, TRUSTEE OF THE
XXXXXXX X. XXXXXX TRUST U/A/D
MAY 10, 1997
FIRST SIGNATURE PAGE TO THE STOCKHOLDERS' AND MEMBERS' AGREEMENT]
18
19
EXHIBIT 9.1
/s/ J-Xxxxx Xxxxxx
------------------------------------------
J. XXXXX XXXXXX
/s/ Xxxx X. XxXxxxx
------------------------------------------
XXXX X. XXXXXXX
/s/ Xxxxx Xxxxxxx
------------------------------------------
XXXXX XXXXXXX
/s/ Xxxxxxx Xxxxxx
------------------------------------------
XXXXXXX XXXXXX
XXXXXX FAMILY LLC
By: /s/ XX Xxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxx, Manager
19
