EXHIBIT 10.9
EXECUTION COPY
SUBSCRIPTION AND STOCK PURCHASE AGREEMENT
This Subscription and Stock Purchase Agreement (the "Agreement") is entered into
as of the 22nd day of November, 2002, by and among National Waterworks Holdings,
a Delaware corporation (the "Company"), and the persons set forth on the
signature page hereto as Purchasers (the "Purchasers").
WHEREAS, the Purchasers wish to purchase from the Company, and the
Company wishes to issue and sell to the Purchasers shares of the Company's 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 Purchasers, severally and not jointly, do hereby subscribe
for and agree to purchase concurrently with the Closing (as defined below), and
the Company does hereby agree to sell to the Purchasers concurrently with the
Closing, the number of shares of Class B Common Stock set forth below the name
of each Purchaser on the signature pages hereto (collectively, the "Shares") for
the total purchase price set forth below the name of each Purchaser on the
signature pages hereto (the "Purchase Price"). Neither the Company nor any
Purchaser shall be obligated to proceed with the Closing unless each other party
hereto is prepared to simultaneously proceed with the Closing.
1.2 Closing. The issuance, sale and purchase of the shares of Class B
Common Stock hereunder shall occur at a closing (the "Closing") to be held
immediately prior to 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"), United States
Filter Corporation and National Waterworks, Inc. (f/k/a Blue Acquisition Corp.).
Payment of the Purchase Price shall be made by each Purchaser (against receipt
of a share certificate delivered by the Company) to the Company or its designee
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 each Purchaser 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 Sponsor 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 Purchasers
Each Purchaser, separately and not jointly, represents and warrants to
the Company and each other Purchaser that:
3.1 Authorization. This Agreement, when executed and delivered by it,
will constitute its 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) The Shares to be received by it will be acquired by it for
investment for its 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, and it has no current intention of selling,
granting participation in or otherwise distributing the same, in each case, in
violation of applicable federal and state securities laws. By executing this
Agreement, such Purchaser further represents that it 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 each case, in violation of applicable federal and state securities
laws.
(b) Such Purchaser 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.
- 2 -
(c) It has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of its
investment. Such Purchaser further represents that it has had access, during the
course of the transactions contemplated hereby and prior to its 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 it has had, during the course
of the transactions contemplated hereby and prior to its 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 it or to which it had access. Such
Purchaser 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 this investment.
(d) Such Purchaser 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. Such
Purchaser must be prepared to bear the economic risk of this investment for an
indefinite period of time. In particular, such Purchaser acknowledges that it 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. Such Purchaser represents that, in the absence of an effective
registration statement covering the Shares, it will sell, transfer or otherwise
dispose of the Shares only in a manner consistent with its representations set
forth herein and then only in accordance with the Stockholders' Agreement
referred to in Article VI.
(e) Such Purchaser 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. Such
Purchaser acknowledges that: (i) it has adequate means of providing for its
current needs and possible personal contingencies and has no need for liquidity
in this investment; (ii) its commitment to investments which are not readily
marketable is not disproportionate to its net worth; and (iii) its investment in
the Shares will not cause its overall financial commitments to become excessive.
ARTICLE IV
Conditions to Obligations of each
Purchaser at Closing
The obligations of each Purchaser under Article I of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
- 3 -
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 Purchaser 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 Performance. The Purchasers shall have performed in all material
respects all of its obligations and materially complied with each and all of its
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 the Purchasers 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' Agreement to be dated the date of the Closing.
ARTICLE VII
- 4 -
Miscellaneous
7.1 No Waiver; Modifications in Writing. This 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 the Purchasers. 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.
7.2 Notices. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:
If to the Company: National Waterworks Holdings, Inc.
American Plaza
000 Xxxx Xxxxxxx 0
Xxxxx 000
Xxxx, Xxxxx 00000
If to the Purchasers: X.X. Xxxxxx Partners, LLC
c/o X.X. Xxxxxx Partners, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Official Notices Clerk
FBO: Xxxxxxx Xxxxxx
and
Xxxxxx X. Xxx Partners, L.P.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
With a copy to: Weil, Gotshal & Xxxxxx LLP
- 5 -
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
and
O'Melveny & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
All such notices, requests, consents and other communications shall be
deemed to have been delivered (a) in the case of personal delivery or delivery
by telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the
posting thereof.
7.3 Costs, Expenses and Taxes. The Company agrees to pay on demand all
expenses incurred by the Purchasers and their affiliates or any of them in
connection with this Agreement, including but not limited to the fees and
disbursements of Weil, Gotshal & Xxxxxx LLP and O'Melveny & Xxxxx LLP, counsel
to the Purchasers, and any other consultants or advisors retained by the
Purchasers, including but not limited to the preparation, negotiation and
execution of this Agreement or the transactions contemplated hereby. 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 issuance of the Shares or any capital stock of the Company
issued upon the redemption or exchange of the Shares but excluding all federal,
state and local income or similar taxes and shall save and hold the Purchasers
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying, or omission to pay, such taxes.
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
Purchasers 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 person other than the parties to
this Agreement, and their respective successors and assigns. This Agreement
shall be binding upon the Company and each Purchaser and its 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.
- 6 -
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 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 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 Purchasers, 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.
7.12 Indemnification. The Company hereby agrees to indemnify, exonerate
and hold each Purchaser, and its respective partners, shareholders, affiliates,
directors, officers, fiduciaries, employees and agents and each of the partners,
shareholders, affiliates, directors, officers, fiduciaries, employees and agents
of each of the foregoing (collectively, the "Indemnitees") free and harmless
from and against any and all actions, causes of action, suits, losses,
liabilities and damages, and expenses in connection therewith, including without
limitation reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to the execution, delivery,
performance, enforcement or existence of this Agreement or the transactions
contemplated hereby except for any such Indemnified Liabilities arising on
account of such Indemnitee's gross negligence or willful misconduct, and if and
to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. None of the Indemnitees shall be liable to the
Company or any of its affiliates for any act or omission suffered or taken by
such Indemnitee that does not constitute gross negligence or willful misconduct.
- 7 -
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 Secretary
Aggregate Number of Shares of Class
B Common Stock to be sold: 4,138,702
Aggregate sale price for Shares of
Class B Common Stock: $ 206,935,100
PURCHASERS:
Xxxxxx X. Xxx Equity Fund V, L.P.
By: THL Equity Advisors V, LLC, its
general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors, LLC, its
general partner
/s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Principal Managing Director
Number of Shares of Class B Common
Stock to be purchased: 1,586,701
Aggregate purchase price for Shares
of Class B Common Stock:
$79,335,050
- 8 -
Xxxxxx X. Xxx Parallel Fund V, L.P.
By: THL Equity Advisors V, LLC,
its general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors, LLC,
its general partner
/s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Principal Managing Director
Number of Shares of Class B Common
Stock to be purchased: 411,684
Aggregate purchase price for Shares
of Class B Common Stock:
$20,584,200
Xxxxxx X. Xxx Equity (Cayman) Fund
V, L.P.
By: THL Equity Advisors V, LLC, its
general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors, LLC,
its general partner
/s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Principal Managing Director
Number of Shares of Class B Common
Stock to be purchased: 21,863
Aggregate purchase price for Shares
of Class B Common Stock:
$1,093,150
- 9 -
Xxxxxx Investments Holdings, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
Number of Shares of Class B Common
Stock to be purchased: 12,398
Aggregate purchase price for Shares
of Class B Common Stock:
$ 619,900
Xxxxxx Investments Employees'
Securities Company I LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
Number of Shares of Class B Common
Stock to be purchased:10,656
Aggregate purchase price for Shares
of Class B Common Stock:
$532,800
Xxxxxx Investments Employees'
Securities Company II LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
Number of Shares of Class B Common
Stock to be purchased: 9,516
Aggregate purchase price for Shares
of Class B Common Stock:
$ 475,800
- 10 -
1997 Xxxxxx X. Xxx Nominee Trust
By: State Street Bank and Trust
Company, not personally, but solely
as Trustee under the 1997 Xxxxxx X.
Xxx Nominee Trust
By: /s/ Xxxxxx X. Xxx
-----------------
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
Number of Shares of Class B Common
Stock to be purchased: 2,503
Aggregate purchase price for Shares
of Class B Common Stock:
$ 125,150
Xxxxxx X. Xxx Investors Limited
Partnership
By: THL Investment Management Corp.,
its general partner
By: /s/ Xxxxxx X. Xxx
-----------------
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
Number of Shares of Class B Common
Stock to be purchased: 4,030
Aggregate purchase price for Shares
of Class B Common Stock:
$ 201,500
- 11 -
X.X. XXXXXX PARTNERS (BHCA), L.P.
By: JPMP MASTER FUND MANAGER, L.P.,
its general partner
By: JPMP CAPITAL CORP.,
its general partner
By: /s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Title: Partner
Number of Shares of Class B Common
Stock to be purchased:
1,622,232.59
Aggregate purchase price for Shares
of Class B Common Stock:
$ 81,111,630
X.X. XXXXXX PARTNERS GLOBAL
INVESTORS, L.P.
By: JPMP GLOBAL INVESTORS, L.P.,
its general partner
By: JPMP CAPITAL CORP.,
its general partner
By: /s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Title: Partner
Number of Shares of Class B Common
Stock to be purchased:
257,062.33
Aggregate purchase price for Shares
of Class B Common Stock:
$ 12,853,117
- 12 -
X.X. XXXXXX PARTNERS GLOBAL
INVESTORS (CAYMAN), L.P.
By: JPMP GLOBAL INVESTORS, L.P.,
a general partner
By: JPMP CAPITAL CORP.,
its general partner
By: /s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Title: Partner
Number of Shares of Class B Common
Stock to be purchased:130,472.86
Aggregate purchase price for Shares
of Class B Common Stock:
$ 6,523,643
X.X. XXXXXX PARTNERS GLOBAL
INVESTORS A, L.P.
By: JPMP GLOBAL INVESTORS, L.P.,
a general partner
By: JPMP CAPITAL CORP.,
its general partner
By: /s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Title: Partner
Number of Shares of Class B Common
Stock to be purchased: 35,042.82
Aggregate purchase price for Shares
of Class B Common Stock:
$ 1,752,141
- 13 -
X.X. XXXXXX PARTNERS GLOBAL
INVESTORS (CAYMAN) II, L.P.
By: JPMP GLOBAL INVESTORS, L.P.,
a general partner
By: JPMP CAPITAL CORP.,
its general partner
By: /s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Title: Partner
Number of Shares of Class B Common
Stock to be purchased: 14,540.40
Aggregate purchase price for Shares
of Class B Common Stock:
$ 727,020
- 14 -
Xxxxxx XX Investment, LLC
By: /s/ Xxxx Xxxxxxx
----------------
Name: Xxxx Xxxxxxx
Title: Manager
Number of Shares of Class B Common
Stock to be purchased: 20,000
Aggregate purchase price for Shares
of Class B Common Stock:
$ 1,000,000
- 15 -