-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JfG90cecpnhFM2JSdp95MN0E8PiC+S3efGykBr1Y6xUaSKyC38Kb6jx56tzWrl2i 5buflnaITsI7bRyTR9dO5w== 0001019687-05-000007.txt : 20050104 0001019687-05-000007.hdr.sgml : 20050104 20050104145337 ACCESSION NUMBER: 0001019687-05-000007 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20050104 DATE AS OF CHANGE: 20050104 GROUP MEMBERS: LEONARD TOBOROFF GROUP MEMBERS: LEONARD TOBOROFF P.C. PROFIT SHARING TRUST 002 GROUP MEMBERS: ROBERT E. NEDERLANDER FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NEDERLANDER ROBERT E ET AL CENTRAL INDEX KEY: 0001141105 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: 510 PARK AVENUE STREET 2: 10B CITY: NEW YORK STATE: NY ZIP: 10022 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ALLIS CHALMERS CORP CENTRAL INDEX KEY: 0000003982 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 390126090 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-30534 FILM NUMBER: 05506372 BUSINESS ADDRESS: STREET 1: 5075 WESTHEIMER #890 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 713-369-0550 MAIL ADDRESS: STREET 1: 5075 WESTHEIMER STREET 2: SUITE 890 CITY: HOUSTON STATE: TX ZIP: 77056 FORMER COMPANY: FORMER CONFORMED NAME: ALLIS CHALMERS MANUFACTURING CO DATE OF NAME CHANGE: 19710614 SC 13D 1 nederlander_13d-122204.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 ALLIS-CHALMERS CORPORATION (Name of Issuer) Common Stock, par value $.01 per share (Title of Class of Securities) 019645 506 (CUSIP Number) Joseph P. Bartlett, Esq. Greenberg Glusker Fields Claman Machtinger & Kinsella LLP 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 22, 2004 (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [_]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 019645506 Page 2 of 8 pages - -------------------------------------------------------------------------------- 1. Name of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Robert E. Nederlander - -------------------------------------------------------------------------------- 2. Check the Appropriate Box If a Member of a Group (See Instructions) (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) PF - -------------------------------------------------------------------------------- 5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [_] - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7. Sole Voting Power NUMBER OF 675,594 SHARES ----------------------------------------------------------------- BENEFICIALLY 8. Shared Voting Power OWNED BY None EACH ----------------------------------------------------------------- REPORTING 9. Sole Dispositive Power PERSON 675,594 WITH ----------------------------------------------------------------- 10. Shared Dispositive Power None - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 675,594 - -------------------------------------------------------------------------------- 12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [X] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 5.2% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- CUSIP No. 019645506 Page 3 of 8 pages - -------------------------------------------------------------------------------- 1. Name of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Leonard Toboroff - -------------------------------------------------------------------------------- 2. Check the Appropriate Box If a Member of a Group (See Instructions) (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) PF - -------------------------------------------------------------------------------- 5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [_] - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7. Sole Voting Power NUMBER OF 655,595 SHARES ----------------------------------------------------------------- BENEFICIALLY 8. Shared Voting Power OWNED BY None EACH ----------------------------------------------------------------- REPORTING 9. Sole Dispositive Power PERSON 655,595 WITH ----------------------------------------------------------------- 10. Shared Dispositive Power None - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 655,595 - -------------------------------------------------------------------------------- 12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [X] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 5.0% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- CUSIP No. 019645506 Page 4 of 8 pages - -------------------------------------------------------------------------------- 1. Name of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Leonard Toboroff P.C. Profit Sharing Trust 002 - -------------------------------------------------------------------------------- 2. Check the Appropriate Box If a Member of a Group (See Instructions) (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) PF - -------------------------------------------------------------------------------- 5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [_] - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7. Sole Voting Power NUMBER OF 42,860 SHARES ----------------------------------------------------------------- BENEFICIALLY 8. Shared Voting Power OWNED BY None EACH ----------------------------------------------------------------- REPORTING 9. Sole Dispositive Power PERSON 42,860 WITH ----------------------------------------------------------------- 10. Shared Dispositive Power None - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 42,860 - -------------------------------------------------------------------------------- 12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [X] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 0.3% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) OO - -------------------------------------------------------------------------------- CUSIP No. 019645506 Page 5 of 8 pages SCHEDULE 13D ALLIS-CHALMERS CORPORATION Certain of the shares covered by this Schedule 13D Statement (this "Schedule 13D") were previously reported (a) in a "group" Schedule 13D Statement originally filed on September 16, 1992 by Robert E. Nederlander and Leonard Toboroff, among others, as amended and supplemented by Amendment No. 1 to the Statement on Schedule 13D relating to the event date of May 9, 2001 and Amendment No. 2 to the Statement of Schedule 13D relating to the event date of December 19, 2001 (which Amendment No. 2 had terminated the "group") and (b) in a "group" Schedule 13D Statement filed on April 13, 2004 by Robert E. Nederlander and Leonard Toboroff, among others (collectively, the "Original Schedule 13D"). ITEM 1. SECURITY AND ISSUER Security: Common Stock of Allis-Chalmers Corporation ("Common Stock") Issuer: Allis-Chalmers Corporation (the "Issuer") 7660 Woodway, Suite 200 Houston, TX 77063 ITEM 2. IDENTITY AND BACKGROUND (a) Pursuant to Rule 13d-1(a) of Regulation 13D-G of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Act"), this Schedule 13D is hereby filed by RER Corp., Robert E. Nederlander, Leonard Toboroff and the Leonard Toboroff P.C. Profit Sharing Trust 002 (the "Toboroff Trust") (collectively, the "Reporting Persons"). (b) The principal address and/or office of Leonard Toboroff and the Toboroff Trust is 39 North Moore Street, Apt. 6B, New York, NY 10013. The principal address and/or office of RER Corp. and Robert E. Nederlander is c/o Nederlander Company L.L.C., 1450 Broadway, 20th Floor, New York, NY 10018. (c) Mr. Nederlander has been President and/or a Director since November 1981 of the Nederlander Organization, Inc., owner and operator of one of the world's largest chains of live theaters, and is also Co-Managing Partner of Nederlander Company L.L.C., owner and/or operator of theaters outside New York City. Mr. Nederlander became Chairman of the Board of the Issuer in May 1989; from 1993 through October 1996 he was Vice Chairman, and thereafter has served as a director. Mr. Toboroff has been a director and Vice-Chairman of the Board since May 1989 and served as an Executive Vice President of the Issuer from May 1989 until February 2002. Mr. Toboroff is currently a consultant to the Company. Mr. Toboroff has been a practicing attorney continuously since 1961. The Toboroff Trust is a trust whose sole trustee and sole beneficiary is Leonard Toboroff. (d) and (e) During the past five years, none of the Reporting Persons has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Each of Mr. Nederlander and Mr. Toboroff is a United States citizen. The Toboroff Trust is a trust organized under the laws of the state of New York. ITEM 3. SOURCE AND AMOUNT OF FUNDS The shares of Common Stock owned by RER Corp., Robert E. Nederlander and Leonard Toboroff prior to November 18, 2004 are described in the Original Schedule 13D. On November 18, 2004, Robert E. Nederlander and the Toboroff Trust purchased 100,000 shares and 30,000 shares, respectively, of the Common Stock from Energy Spectrum Partners LP. On December 23, 2004, Robert E. Nederlander and Leonard Toboroff each purchased 30,000 shares of Common Stock from Energy Spectrum Partners LP. The purchase price for all purchased shares was $3.00 per share. The source of funds was personal funds. CUSIP No. 019645506 Page 6 of 8 pages ITEM 4. PURPOSE OF TRANSACTION Each of the Reporting Persons acquired shares of Common Stock as an investment. Each of the Reporting Persons may seek to acquire or dispose of shares of Common Stock through open market or privately negotiated transactions from time to time in its or his discretion. Any such purchases will depend upon the market prices for the shares of Common Stock, the number of shares which may become available for purchase at prices which each of the Reporting Persons regard as attractive and various other factors which each of the Reporting Persons may determine to be relevant. In connection with the acquisition of securities in April 2004, as described in the Original Schedule 13D, the Reporting Persons and others entered into a stockholders agreement dated April 2, 2004 (the "Stockholders Agreement") pursuant to which the parties have agreed to vote for the election to the board of directors of the Issuer four persons nominated by other stockholders of the Issuer and two persons nominated by the a group that includes the Reporting Persons. In addition, the parties to the Stockholders Agreement and the Issuer agreed that in the event the Issuer has not completed a public offering of its shares prior to September 30, 2005, then, at the request of Energy Spectrum Partners LP, the Issuer will retain an investment banking firm to identify candidates for a transaction involving the sale of the Issuer or its assets. A more complete description of the rights and obligations of the parties is set forth in the Stockholders Agreement, a copy of which is attached as an exhibit to this Schedule 13D and incorporated herein by reference. In addition to the foregoing, the Issuer and the parties to the Stockholders Agreement entered into a registration rights agreement with Issuer and other parties named therein dated April 2, 2004, pursuant to which the parties were granted certain registration rights with respect to the Common Stock owned or to be owned by such parties. Except for the foregoing, no Reporting Person has any present plans or proposals which relate to or would result in any of the actions or events described in paragraphs (a) through (j) of Item 4 of Schedule 13D. However, the Reporting Persons retain their respective rights to modify their plans with respect to the transactions described in this Schedule 13D, to acquire or dispose of securities of the Issuer and to formulate plans and proposals which could result in the occurrence of any such events, subject to applicable laws and regulations. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) and (b) The number of shares of Common Stock beneficially owned by Mr. Nederlander includes: (i) 256,666 shares of Common Stock held by RER Corp., a Michigan corporation controlled by Mr. Nederlander, (ii) 17,862 shares of Common Stock held by Q.E.N. Inc., a New York corporation controlled by Mr. Nederlander, (iii) 266,666 shares of Common Stock issuable upon exercise of a warrant issued to RER Corp. that is currently exercisable, (iv) 132,000 shares of Common Stock held by Mr. Nederlander (v) 2,400 shares of Common Stock issuable upon exercise of options issued to Mr. Nederlander that are currently exercisable, and (vi) 6,766,813 shares of Common Stock which Mr. Nederlander may be deemed to beneficially own pursuant to Rule 13d-3 of the Securities and Exchange Commission as a result of RER Corp. being a party to the Stockholders Agreement described in the Original Schedule 13D. Mr. Nederlander disclaims beneficial ownership of the Common Stock deemed to be beneficially owned by Mr. Nederlander as a result of the Stockholders Agreement. Accordingly, based upon the foregoing, Mr. Nederlander may be deemed to be the beneficial owner of only 675,594 shares of Common Stock, or 5.2% of the outstanding shares of Common Stock as of the date hereof. The number of shares of Common Stock beneficially owned by Mr. Toboroff includes: (i) 102,400 shares of Common Stock issuable to Mr. Toboroff upon exercise of options issued by the Issuer that are currently exercisable, (ii) 42,860 shares held by Leonard Toboroff P.C. Profit Sharing Trust 002, a trust of which Mr. Toboroff is the sole trustee and sole beneficiary (iii) 5,001 shares held by Lenny Corp., a corporation controlled by Mr. Toboroff, (iv) 266,666 shares of Common Stock issuable upon exercise of a warrant issued to Mr. Toboroff that is currently exercisable, (v) 238,666 shares of Common Stock owned by Mr. Toboroff, and (vi) 6,786,814 shares of Common Stock which Mr. Toboroff may be deemed to beneficially own pursuant to Rule 13d-3 of the Securities and Exchange Commission as a result of being a party to the Stockholders Agreement. Mr. Toboroff disclaims beneficial ownership of the Common Stock deemed to be beneficially owned by Mr. Toboroff as a result of being a party to the Stockholders Agreement. Accordingly, based upon the foregoing, Mr. Toboroff may be deemed to be the beneficial owner of only 655,595 shares of Common Stock, or 5.0% of the outstanding shares of Common Stock as of the date hereof. CUSIP No. 019645506 Page 7 of 8 pages The number of shares held by the Toboroff Trust include 42,860 shares owned directly by the Toboroff Trust. The Toboroff Trust may also be deemed to own 7,399,547 shares of Common Stock pursuant to Rule 13d-3 of the Securities and Exchange Commission as a result of being a party to the Stockholders Agreement. The Toboroff Trust disclaims beneficial ownership of the Common Stock deemed to be beneficially owned by the Toboroff Trust as a result of being a party to the Stockholders Agreement. Accordingly, based upon the foregoing, the Toboroff Trust may be deemed to be the beneficial owner of only 42,860 shares of Common Stock, or 0.3% of the outstanding shares of Common Stock as of the date hereof. The number of shares beneficially owned by each of the Reporting Persons and the percentage of outstanding shares represented thereby, have been computed in accordance with Rule 13d-3 under the Act. The ownership of the Reporting Persons is based on 13,041,231 outstanding shares of Common Stock of the Issuer as of the date hereof, according to information provided by the Issuer. (c) None, except as set forth in Item 4. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER To the best knowledge of each Reporting Person, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) between any of the Reporting Persons and any other person with respect to any securities of the Issuer, including but not limited to, transfer or voting of any of the securities of the Issuer, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a pledge or contingency the occurrence of which would give another person voting power over the securities of the Issuer, except for the following: Mr. Toboroff, Mr. Nederlander, the Toboroff Trust and others are parties to the Stockholders Agreement, the Registration Rights Agreement and the Purchase Agreement described in the Original Schedule 13D. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 7.1: Stock Purchase Agreement dated November 29, 2004, by and among Robert E. Nederlander, the Leonard Toboroff P.C. Profit Sharing Trust 002 and Energy Spectrum Partners LP. Exhibit 7.2: Stock Purchase Agreement dated December 22, 2004, by and among Robert E. Nederlander, Leonard Toboroff and Energy Spectrum Partners LP. Exhibit 7.3: Stockholders Agreement dated April 2, 2004 by and among Robert E. Nederlander, Leonard Toboroff and others. SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. LEONARD TOBOROFF P.C. PROFIT SHARING TRUST 002 BY: /S/ LEONARD TOBOROFF ---------------------------------- LEONARD TOBOROFF, TRUSTEE /S/ ROBERT E. NEDERLANDER ---------------------------------- ROBERT E. NEDERLANDER /S/ LEONARD TOBOROFF ---------------------------------- LEONARD TOBOROFF DATED: JANUARY 3, 2005 CUSIP No. 019645506 Page 8 of 8 pages AGREEMENT OF JOINT FILING In accordance with Rule 13d-1(k) under the Act, the undersigned hereby agree to the joint filing with the other persons signatory below of a statement on Schedule 13D or any amendments thereto, with respect to the Common Stock, and that this Agreement be included as an attachment to such filing. This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same Agreement. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement on the 3rd day of January, 2005. LEONARD TOBOROFF P.C. PROFIT SHARING TRUST 002 BY: /S/ LEONARD TOBOROFF ---------------------------------- LEONARD TOBOROFF, TRUSTEE /S/ ROBERT E. NEDERLANDER ---------------------------------- ROBERT E. NEDERLANDER /S/ LEONARD TOBOROFF ---------------------------------- LEONARD TOBOROFF EX-7.1 2 neder_13dex7-1.txt EXHIBIT 7.1 STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (this "Agreement"), dated November 29, 2004, is made by and among Energy Spectrum Partners LP, a Delaware limited partnership ("Seller") and the purchasers (the "Purchasers") listed on Schedule 1.1 hereto with respect to the Common Stock of Allis-Chalmers Corporation, a Delaware corporation (the "Company"). RECITALS WHEREAS, Seller proposes to sell to Purchasers, and Purchasers desire to purchase from the Seller, shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), on the terms set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. PURCHASE. 1.1 PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of this Agreement, Seller will sell to each Purchaser, and each Purchaser severally agrees to purchase from Seller, the number of shares of the Company's Common Stock (the "Shares") set forth with respect to such Purchaser on Schedule 1.1 hereto, at a price per share equal to $3.00 per share. The closing (the "Closing") of the sale of the Shares shall be effected via facsimile currently with the execution and delivery of this Agreement. At the Closing, each Purchaser shall deliver the full amount of such Purchaser's aggregate purchase price by wire transfer of immediately available funds to Seller's bank account, and Seller shall promptly send to the Company's transfer agent certificates, assignments and instructions sufficient to transfer the Shares into the names of the Purchasers. Funds shall be wired to Seller's bank account at: Bank One, Texas NA ABA #111000614 For Credit to Energy Spectrum Partners, LP Account #1823413297 1.2 LEGENDS. All certificates representing the Shares shall bear the following legend (in addition to any legend required by the blue sky or securities laws of any state or jurisdiction to the extent such laws are applicable to the shares represented by the certificate so legended): "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS." 1.3 STOP TRANSFER ORDERS. All certificates representing the Shares will be subject to a stop transfer order with the Company's transfer agent that restricts the transfer of such shares except in compliance with this Agreement and applicable law. 2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby makes the following representations and warranties to the Purchasers: 2.1 ORGANIZATION, ETC. The Seller is duly organized and validly existing and in good standing under the laws of the State of Delaware. 2.2 AUTHORITY; TITLE. The Seller has the partnership power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The sale of the Shares has been duly authorized and if, as and when delivered to the Purchasers, the Shares will be free of any Encumbrance (as defined below), other than those imposed pursuant to or contemplated by this Agreement and securities laws of general application. As used in this Agreement, "Encumbrance" shall mean any claim, lien, pledge, option, charge, easement, security interest, deed of trust, mortgage, conditional sales agreement, encumbrance or other right of third parties, whether voluntarily incurred or arising by operation of law, and includes, without limitation, any agreement to give any of the foregoing in the future, and any contingent sale or other title. 1 2.3 ENFORCEABILITY. This Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding agreement and obligation of the Seller enforceable against it in accordance with its terms subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights. 2.4 NO VIOLATION. The execution and the delivery by the Seller of this Agreement and the performance by the Seller of its obligations hereunder, including the sale of the Shares, does not and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in a violation of, or (iv) require any authorization, consent or approval not heretofore obtained pursuant to, any binding written or oral agreement or instrument including, without limitation, any charter, bylaw, trust instrument, indenture or evidence of indebtedness, lease, contract or other obligation or commitment (each, a "Contractual Obligation") binding upon the Seller or any of its subsidiaries or any of their respective properties or assets, or any law, rule, regulation, restriction, order, writ, judgment, award, determination, injunction or decree of any court or government, or any decision or ruling of any arbitrator (each, a "Requirement of Law") binding upon or applicable to the Seller or any subsidiary or any of their respective properties or assets. 2.5 BROKERS. Seller has not agreed to pay or incurred any obligation in respect of any finder's fee, brokerage fee or other commission in connection with the sale of Shares contemplated by this Agreement. 3. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each Purchaser, severally and not jointly, hereby makes the following representations and warranties as to such Purchaser: 3.1 ORGANIZATION. Purchaser, if not a natural person, is duly organized and validly existing and in good standing under the laws of the state of its organization. 3.2 AUTHORITY. Purchaser has the corporate or other authority to execute and deliver this Agreement and to perform Purchaser's obligations hereunder. 3.3 ENFORCEABILITY. This Agreement constitutes the legal, valid and binding obligation of Purchaser and is enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights. 3.4 NO VIOLATION. The execution and the delivery by Purchaser of this Agreement, the purchase of the Shares and the consummation of the transactions contemplated hereby or to be effected concurrently herewith do not and will not (a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in a violation of, or (d) require any authorization, consent or approval not heretofore obtained pursuant to, any Contractual Obligation or Requirement of Law to which Purchaser is a party or is otherwise subject. 3.5 BROKERS. Purchaser has not agreed to pay or incurred any obligation in respect of any finder's fee, brokerage fee or other commission in connection with the sale of Shares contemplated by this Agreement. 3.6 INVESTMENT INTENT. Purchaser is acquiring the Shares for Purchaser's own account for investment and not with a view to, or for resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1993, as amended (the "Securities Act"). Purchaser is an "accredited investor" as such term is defined in Regulation D under the Securities Act. Purchaser acknowledges that the Shares shall be "restricted securities" within the meaning of Rule 144 ("Rule 144") under the Securities Act, will contain a transfer restriction legend and may only be resold pursuant to an effective registration statement filed with the SEC under the Securities Act, or pursuant to Rule 144 or another valid exemption from the registration requirements of the Act as established by an opinion of counsel reasonably acceptable to the Company. 2 3.7 INVESTIGATION. Purchaser represents and warrants that such Purchaser is familiar with the business of the Company, has conducted such investigation of the Company's business and affairs as such Purchaser deems appropriate, and is not relying upon the Seller to provide any information regarding the Company. Purchaser acknowledges that the Company files reports with the Securities and Exchange Commission that are publicly available, including an Annual Report on Form 10-K for the year ended December 31, 2003, and a Quarterly Report on Form 10-Q for the quarter ended September 30, 2004. 4. REGISTRATION; LOCK UP. Concurrently with the execution and delivery of this Agreement, each Purchaser who is not a party to that certain Lock Up Agreement dated August 10, 2004, between the Company and certain stockholders of the Company, has entered into a Lock Up Agreement with the Company pursuant to which the Company will agree to use commercially reasonable efforts to register the Shares under the Securities Act, and the Purchaser thereby agrees to certain restrictions on the sale of the Shares. 5. MISCELLANEOUS PROVISIONS. 5.1 DELIVERIES. The Seller and Purchasers hereby covenant and agree to use their respective best efforts to perform each of their obligations hereunder, to deliver all certificates and to satisfy all other conditions set forth in this Agreement. 5.2 SUCCESSORS AND ASSIGNS. This Agreement is executed by, and shall be binding upon and inure to the benefit of, the parties hereto and each of their respective successors and assigns. 5.3 NOTICES. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery: if to the Purchasers at the address set forth on the signature page hereof: if to the Seller at the following address: Energy Spectrum Partners LP 5956 Sherry Lane, Suite 900 Dallas, Texas 75225 Attn: James W. Spann Fax: (214) 987-6110 with a copy to: Jackson Walker L.L.P. 901 Main Street, Suite 6000 Dallas, Texas 75202 Attn: Frank McEachern, Esq. Fax: (214) 953-5822 All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; five business days after being deposited in the mail, postage prepaid, if mailed; and when receipt is acknowledged, if telecopied. 5.4 COUNTERPARTS. This Agreement may be executed in any number of counterparts, and each such counterpart will for all purposes be deemed an original, and all such counterparts shall constitute one and the same instrument. 5.5 GOVERNING LAW. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware applicable to contracts entered into and to be wholly performed therein. 5.6 ATTORNEYS' FEES. If any party should institute any action to enforce or interpret any term or provision of this Agreement, the party prevailing in such action, after all appeals have been exhausted, shall be entitled to its attorneys' fees, out-of-pocket disbursements and all other expenses from the non-prevailing party in such action. 3 5.7 ENTIRE AGREEMENT. This Agreement (together with all Exhibits and Schedules hereto) constitutes the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous written and oral negotiations, discussions, agreements and understandings with respect to such subject matter. 5.8 SECTION HEADINGS. The section and subsection headings contained in this Agreement are included for convenience only and form no part of the agreement between the parties. [remainder of page intentionally left blank] 4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective representatives hereunto duly authorized as of the date first above written. ENERGY SPECTRUM PARTNERS LP, a Delaware limited partnership By: Energy Spectrum Capital LP General Partner By: Energy Spectrum LLC General Partner /s/ James W. Sparr - ---------------------------------- Name Chief Investment Officer - ---------------------------------- Title PURCHASER PURCHASER - Leonard Toboroff P.C. Profit Sharing Trust dated 10/24/92 /s/ Robert E. Nederlander /s/ Leonard Toboroff - ---------------------------------- ----------------------------------- Signature Signature Robert E. Nederlander Leonard Toboroff - ---------------------------------- ----------------------------------- Name Name Trustee - ---------------------------------- ----------------------------------- Title Title Address: Address: c/o Nederlander Company L.L.C. 39 N. Moore Street, Apt. 6B 1450 Broadway, 20th Flr. New York, NY 10013 New York, NY 10018 (212) 586-5862 (212) 888-5674 - ---------------------------------- ----------------------------------- Facsimile Facsimile 5 SCHEDULE 1.1 INVESTORS NAME NUMBER OF SHARES PURCHASE PRICE - ------------------------------------------------------------------- --------------------------- --------------------- Leonard Toboroff P.C. Profit Sharing Trust dated 10/24/92, 30,000 $90,000 Leonard Toboroff, Trustee - ------------------------------------------------------------------- --------------------------- --------------------- Robert E. Nederlander 100,000 $300,000 - ------------------------------------------------------------------- --------------------------- --------------------- John E. McConnaughy, Jr. 300,000 $900,000 - ------------------------------------------------------------------- --------------------------- --------------------- Joseph P. Bartlett 25,000 $75,000 - ------------------------------------------------------------------- --------------------------- --------------------- Bestin Worldwide Limited 100,000 $300,000 - ------------------------------------------------------------------- --------------------------- --------------------- Theodore F. Pound III 5,000 $15,000 - ------------------------------------------------------------------- --------------------------- --------------------- Dave Wilde 5,000 $15,000 - ------------------------------------------------------------------- --------------------------- --------------------- Dick Backest 5,000 $15,000 - ------------------------------------------------------------------- --------------------------- --------------------- David Bryan 12,000 $36,000 - ------------------------------------------------------------------- --------------------------- --------------------- James Davey 3,000 $9,000 =================================================================== =========================== ===================== TOTAL 585,000 $1,755,000.00 - ------------------------------------------------------------------- --------------------------- ---------------------
EX-7.2 3 neder_13dex7-2.txt EXHIBIT 7.2 STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (this "Agreement"), dated December 22, 2004, is made by and among Energy Spectrum Partners LP, a Delaware limited partnership ("Seller") and Leonard Toboroff (the "Purchaser") with respect to the Common Stock of Allis-Chalmers Corporation, a Delaware corporation (the "Company"). RECITALS WHEREAS, Seller proposes to sell to Purchaser, and Purchaser desires to purchase from the Seller, shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), on the terms set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. PURCHASE. 1.1. PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of this Agreement, Seller will sell to each Purchaser, and each Purchaser severally agrees to purchase from Seller, the number of shares of the Company's Common Stock (the "Shares") set forth with respect to such Purchaser on Schedule 1.1 hereto, at a price per share equal to $3.00 per share. The closing (the "Closing") of the sale of the Shares shall be effected via facsimile currently with the execution and delivery of this Agreement. At the Closing, each Purchaser shall deliver the full amount of such Purchaser's aggregate purchase price by wire transfer of immediately available funds to Seller's bank account, and Seller shall promptly send to the Company's transfer agent certificates, assignments and instructions sufficient to transfer the Shares into the names of the Purchasers. Funds shall be wired to Seller's bank account at: Bank One, Texas NA ABA #111000614 For Credit to Energy Spectrum Partners, LP Account #1823413297 1.2. LEGENDS. All certificates representing the Shares shall bear the following legend (in addition to any legend required by the blue sky or securities laws of any state or jurisdiction to the extent such laws are applicable to the shares represented by the certificate so legended): "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS." 1.3. STOP TRANSFER ORDERS. All certificates representing the Shares will be subject to a stop transfer order with the Company's transfer agent that restricts the transfer of such shares except in compliance with this Agreement and applicable law. 2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby makes the following representations and warranties to the Purchasers: 2.1. ORGANIZATION, ETC. The Seller is duly organized and validly existing and in good standing under the laws of the State of Delaware. 2.2. AUTHORITY; TITLE. The Seller has the partnership power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The sale of the Shares has been duly authorized and if, as and when delivered to the Purchasers, the Shares will be free of any Encumbrance (as defined below), other than those imposed pursuant to or contemplated by this Agreement and securities laws of general application. As used in this Agreement, "Encumbrance" shall mean any claim, lien, pledge, option, charge, easement, security interest, deed of trust, mortgage, conditional sales agreement, encumbrance or other right of third parties, whether voluntarily incurred or arising by operation of law, and includes, without limitation, any agreement to give any of the foregoing in the future, and any contingent sale or other title. 1 2.3. ENFORCEABILITY. This Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding agreement and obligation of the Seller enforceable against it in accordance with its terms subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights. 2.4. NO VIOLATION. The execution and the delivery by the Seller of this Agreement and the performance by the Seller of its obligations hereunder, including the sale of the Shares, does not and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in a violation of, or (iv) require any authorization, consent or approval not heretofore obtained pursuant to, any binding written or oral agreement or instrument including, without limitation, any charter, bylaw, trust instrument, indenture or evidence of indebtedness, lease, contract or other obligation or commitment (each, a "Contractual Obligation") binding upon the Seller or any of its subsidiaries or any of their respective properties or assets, or any law, rule, regulation, restriction, order, writ, judgment, award, determination, injunction or decree of any court or government, or any decision or ruling of any arbitrator (each, a "Requirement of Law") binding upon or applicable to the Seller or any subsidiary or any of their respective properties or assets. 2.5. BROKERS. Seller has not agreed to pay or incurred any obligation in respect of any finder's fee, brokerage fee or other commission in connection with the sale of Shares contemplated by this Agreement. 3. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each Purchaser, severally and not jointly, hereby makes the following representations and warranties as to such Purchaser: 3.1. ORGANIZATION. Purchaser, if not a natural person, is duly organized and validly existing and in good standing under the laws of the state of its organization. 3.2. AUTHORITY. Purchaser has the corporate or other authority to execute and deliver this Agreement and to perform Purchaser's obligations hereunder. 3.3. ENFORCEABILITY. This Agreement constitutes the legal, valid and binding obligation of Purchaser and is enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights. 3.4. NO VIOLATION. The execution and the delivery by Purchaser of this Agreement, the purchase of the Shares and the consummation of the transactions contemplated hereby or to be effected concurrently herewith do not and will not (a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in a violation of, or (d) require any authorization, consent or approval not heretofore obtained pursuant to, any Contractual Obligation or Requirement of Law to which Purchaser is a party or is otherwise subject. 3.5. BROKERS. Purchaser has not agreed to pay or incurred any obligation in respect of any finder's fee, brokerage fee or other commission in connection with the sale of Shares contemplated by this Agreement. 3.6. INVESTMENT INTENT. Purchaser is acquiring the Shares for Purchaser's own account for investment and not with a view to, or for resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1993, as amended (the "Securities Act"). Purchaser is an "accredited investor" as such term is defined in Regulation D under the Securities Act. Purchaser acknowledges that the Shares shall be "restricted securities" within the meaning of Rule 144 ("Rule 144") under the Securities Act, will contain a transfer restriction legend and may only be resold pursuant to an effective registration statement filed with the SEC under the Securities Act, or pursuant to Rule 144 or another valid exemption from the registration requirements of the Act as established by an opinion of counsel reasonably acceptable to the Company. 2 3.7. INVESTIGATION. Purchaser represents and warrants that such Purchaser is familiar with the business of the Company, has conducted such investigation of the Company's business and affairs as such Purchaser deems appropriate, and is not relying upon the Seller to provide any information regarding the Company. Purchaser acknowledges that the Company files reports with the Securities and Exchange Commission that are publicly available, including an Annual Report on Form 10-K for the year ended December 31, 2003, and a Quarterly Report on Form 10-Q for the quarter ended September 30, 2004. 4. REGISTRATION; LOCK UP. Concurrently with the execution and delivery of this Agreement, each Purchaser who is not a party to that certain Lock Up Agreement dated August 10, 2004, between the Company and certain stockholders of the Company, has entered into a Lock Up Agreement with the Company pursuant to which the Company will agree to use commercially reasonable efforts to register the Shares under the Securities Act, and the Purchaser thereby agrees to certain restrictions on the sale of the Shares. 5. MISCELLANEOUS PROVISIONS. 5.1. DELIVERIES. The Seller and Purchasers hereby covenant and agree to use their respective best efforts to perform each of their obligations hereunder, to deliver all certificates and to satisfy all other conditions set forth in this Agreement. 5.2. SUCCESSORS AND ASSIGNS. This Agreement is executed by, and shall be binding upon and inure to the benefit of, the parties hereto and each of their respective successors and assigns. 5.3. NOTICES. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery: if to the Purchasers at the address set forth on the signature page hereof: if to the Seller at the following address: Energy Spectrum Partners LP 5956 Sherry Lane, Suite 900 Dallas, Texas 75225 Attn: James W. Spann Fax: (214) 987-6110 with a copy to: Jackson Walker L.L.P. 901 Main Street, Suite 6000 Dallas, Texas 75202 Attn: Frank McEachern, Esq. Fax: (214) 953-5822 All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; five business days after being deposited in the mail, postage prepaid, if mailed; and when receipt is acknowledged, if telecopied. 5.4. COUNTERPARTS. This Agreement may be executed in any number of counterparts, and each such counterpart will for all purposes be deemed an original, and all such counterparts shall constitute one and the same instrument. 5.5. GOVERNING LAW. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware applicable to contracts entered into and to be wholly performed therein. 5.6. ATTORNEYS' FEES. If any party should institute any action to enforce or interpret any term or provision of this Agreement, the party prevailing in such action, after all appeals have been exhausted, shall be entitled to its attorneys' fees, out-of-pocket disbursements and all other expenses from the non-prevailing party in such action. 3 5.7. ENTIRE AGREEMENT. This Agreement (together with all Exhibits and Schedules hereto) constitutes the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous written and oral negotiations, discussions, agreements and understandings with respect to such subject matter. 5.8. SECTION HEADINGS. The section and subsection headings contained in this Agreement are included for convenience only and form no part of the agreement between the parties. [remainder of page intentionally left blank] 4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective representatives hereunto duly authorized as of the date first above written. ENERGY SPECTRUM PARTNERS LP, a Delaware limited partnership By: Energy Spectrum Capital LP General Partner By: Energy Spectrum LLC General Partner - ---------------------------------- Name - ---------------------------------- Title PURCHASER PURCHASER /s/ Robert E. Nederlander /s/ Leonard Toboroff - ---------------------------------- ----------------------------------- Signature Signature Robert E. Nederlander Leonard Toboroff - ---------------------------------- ----------------------------------- Name Name Trustee - ---------------------------------- ----------------------------------- Title Title Address: Address: c/o Nederlander Company L.L.C. 39 N. Moore Street, Apt. 6B 1450 Broadway, 20th Flr. New York, NY 10013 New York, NY 10018 (212) 586-5862 (212) 888-5674 - ---------------------------------- ----------------------------------- Facsimile Facsimile 5 SCHEDULE 1.1 INVESTORS - ----------------------------------- --------------------- --------------------- NAME NUMBER OF SHARES PURCHASE PRICE - ----------------------------------- --------------------- --------------------- Leonard Toboroff 30,000 $90,000 - ----------------------------------- --------------------- --------------------- Robert E. Nederlander 30,000 $90,000 =================================== ===================== ===================== TOTAL 60,000 $180,000 - ----------------------------------- --------------------- --------------------- EX-7.3 4 neder_13dex7-3.txt EXHIBIT 7.3 STOCKHOLDERS AGREEMENT This Stockholders Agreement (this "AGREEMENT") dated as of April 2, 2004 is made by and among Energy Spectrum Partners, LP ("ENERGY SPECTRUM"), the Investors Group (as defined in Section 1.1 below), the Directors Group (as defined in Section 1.1 below), and Allis-Chalmers Corporation, a Delaware corporation (the "COMPANY"). Energy Spectrum, the Investors Group, and the Directors Group shall, as long as each such Person or group of Persons owns Stock, be collectively referred to herein as the "STOCKHOLDERS". RECITALS WHEREAS, the Company is currently required, pursuant to the terms of the Certificate of Designation, Preferences and Rights, as amended (the "CERTIFICATE OF DESIGNATION"), of the Series A 10% Cumulative Convertible Preferred Stock ($0.01 par value) of the Company (the "PREFERRED STOCK, SERIES A"), to redeem all except one share of the shares of Preferred Stock, Series A held by Energy Spectrum; WHEREAS, the Company and its directors recognize and acknowledge that it is in the best interest of the Company for Energy Spectrum to waive its right to mandatory redemption, and to instead convert its shares of Preferred Stock, Series A into shares of Common Stock pursuant to the conversion terms of the Certificate of Designation; WHEREAS, in light of the foregoing Recital, Energy Spectrum has agreed to waive its right to mandatory redemption, and to convert all of its shares of Preferred Stock, Series A into shares of Common Stock (as defined in Section 1.1 below), on the conversion terms set forth in the Certificate of Designation and in the Preferred Stock Conversion Agreement (the "Conversion Agreement"), by and between Energy Spectrum and the Company, dated the date hereof; WHEREAS, Energy Spectrum is willing to enter into the Conversion Agreement in reliance upon the Company, the Directors Group and the Investors Group fulfilling their respective obligations under this Agreement; WHEREAS, it is a condition of the consummation of the transactions contemplated hereby that A-C will, prior to or concurrently with the execution of this Agreement: (1) obtain a one year extension on the maturity date of certain loan obligations, and (2) enter into a Stock and Warrant Purchase Agreement (the "SWP Agreement") pursuant to which it will issue and sell to the Investor Group 3,100,000 shares of its Common Stock and warrants (the "Warrants") to purchase as additional 4,000,000 shares of Common Stock; WHEREAS, the Company and its directors recognize and acknowledge that, in waiving its right to mandatory redemption, Energy Spectrum is waiving a valuable right, both in economic terms and in non-economic terms, and that Energy Spectrum would not agree to waive its mandatory redemption right without assurances that the Company would honor its obligations under this Agreement; WHEREAS, the Company and its directors recognize and acknowledge that the directors of the Company have certain fiduciary duties to the common stockholders of the Company; including the duties of loyalty, care and good faith; WHEREAS, the Company and its directors recognize and acknowledge that under certain circumstances, the fiduciary duties of the directors of the Company to its stockholders may require the directors to sell or consider the sale of the Company; WHEREAS, the parties to this Agreement recognize that Energy Spectrum would not agree to convert its shares of Preferred Stock, Series A pursuant to Article 3 of this Agreement without assurances that, if no Qualified Public Offering occurs on or before September 30, 2005, Energy Spectrum will have the rights, and the Company will perform its obligations under, Article 4 of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1 1. DEFINITIONS; USAGE 1.1. DEFINITIONS. For the purposes of this Agreement, unless the context otherwise requires, capitalized terms used and not otherwise defined in this Agreement shall have the following meanings: "AFFILIATE"--as defined in the rules promulgated under the Securities Act. "AGREEMENT"--as defined in the first paragraph of this Agreement. "ALTERNATIVE INVESTMENT BANK NOTICE"--as defined in Section 4.3(a). "AS CONVERTED BASIS" -means after giving effect to the exercise and or conversion of all securities exercisable for or convertible into Common Stock. "BOARD"--the board of directors of the Company. "CERTIFICATE OF DESIGNATION"--as defined in the Recitals above. "COMMON STOCK"--the common stock of the Company, par value $0.15 per share, any stock into which such stock shall have been converted or changed, or any stock resulting from any reclassification of such stock and all other stock of any class or classes (however designated) of the Company, the holders of which have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference. "COMPANY"--as defined in the first paragraph of this Agreement. "COMPANY RESPONSE"--as defined in Section 4.2(a). "CONSENT"--any approval, consent ratification, waiver, or other authorization. "CORPORATE TRANSACTION"--either of the following transactions to which the Company is a party: (a) a merger, reorganization, consolidation or share exchange in which securities possessing more than 50% of the total combined voting power of the Company's securities outstanding immediately prior thereto are transferred to, or in the event of a share exchange more than 50% of the total combined voting power of the Company's outstanding securities immediately thereafter come to be held by, a Person or Persons different from the Person or Persons holding such voting power immediately prior to such transaction; or (b) the sale, transfer or other disposition of all or substantially all of the Company's assets. "DIRECTORS GROUP"--each of Munawar H. Hidayatallah, Jens Mortensen and Saeed Sheikh. "DIRECTORS GROUP DESIGNEE"--the director the Directors Group has the right to designate for election to the Board pursuant to Section 2.2(c). "ENERGY SPECTRUM"--as defined in the first paragraph of this Agreement. "ENERGY SPECTRUM DESIGNEES"--the directors Energy Spectrum has the right to designate for election to the Board pursuant to Section 2.2(a). "ENERGY SPECTRUM RESPONSE"--as defined in Section 4.2(b). "INVESTMENT BANK"--the investment banking firm retained pursuant to Section 3 hereof. "INVESTMENT BANK NOTICE"--as defined in Section 4.1. "INVESTORS GROUP"--each of the persons so designated on Exhibit "A." "INVESTORS GROUP DESIGNEES"--the directors the Investors Group has the right to designate for election to the Board pursuant to Section 2.2(b). "PERSON"--any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body. "PREFERRED STOCK, SERIES A"--as defined in the Recitals above. 2 "QUALIFIED PUBLIC OFFERING"--the closing of an underwritten public offering of Common Stock by means of a registration statement filed by the Company under the Securities Act, which offering: (i) does not exclusively relate to securities under an employee stock option, bonus or other compensation plan; (ii) is at a price of not less than $0.50 per share of Common Stock (such amount to be ratably adjusted to reflect any stock splits, subdivisions, combinations or any other action that would cause an adjustment pursuant to any antidilution provisions); and (iii) yields net proceeds to the Company of not less than $10,000,000 (net of underwriting discounts and other expenses and including proceeds received by the Company upon exercise of any over-allotment option by underwriters). "SECURITIES ACT"--the Securities Act of 1933, as amended. "STOCK"--means all capital stock of the Company held by a Stockholder. "STOCKHOLDER"--Energy Spectrum, each Person in the Investors Group, each Person in the Directors Group, and each additional stockholder of the Company who becomes a party to this Agreement by executing a counterpart to this Agreement and delivering it to the Company. 1.2. USAGE. In this Agreement, unless a clear contrary intention appears: (a) the singular number includes the plural number and vice versa; (b) reference to any Person includes such Person's successors and assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually; (c) reference to any gender includes each other gender or, in the case of an entity, the neuter; (d) reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof; (e) reference to any law means such law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any section or other provision of any law means that provision of such law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision; (f) "hereunder", "hereof", "hereto" and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section or other provision thereof; (g) "including" (and with correlative meaning "include") means including without limiting the generality of any description preceding such term; (h) "or" is used in the inclusive sense of "and/or"; (i) with respect to the determination of any period of time, "from" means "from and including" and "to" means "to but excluding"; and (j) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto. 2. BOARD OF DIRECTORS; VOTING 2.1. BOARD SIZE. At all meetings (and written consents in lieu of meetings) of stockholders of the Company, each Stockholder shall vote all of such Stockholder's Stock and other securities entitled to vote in respect of the election of the directors of the Company and take all other actions as may be necessary to cause the number of directors on the Board to be not less than nine (9) directors. 2.2. ELECTION OF DIRECTORS. At all meetings (and written actions in lieu of meetings) of stockholders of the Company at which directors are to be elected, each Stockholder shall vote all of such Stockholder's Stock and other securities entitled to vote in respect of the election of the directors of the Company to elect as directors of the Company the Energy Spectrum Designees, Investors Group Designees and Directors Group Designees: 3 (a) ENERGY SPECTRUM DESIGNEES. At each of the Company's annual or special meetings of stockholders at which directors are to be elected, Energy Spectrum shall have the right to designate in writing: (i) three (3) nominees for election to the Board, so long as Energy Spectrum and/or its Affiliates collectively hold a number of shares of Stock (on an As Converted Basis) greater than 66% of the number of shares of Stock held by them (on an As Converted Basis) at the date hereof, after making ratable adjustments in the event of any stock splits, stock dividends or stock combinations; (ii) two (2) nominees for election to the Board, so long as Energy Spectrum and/or its Affiliates collectively hold a number of shares of Stock (on an As Converted Basis) greater than 33%, but less than or equal to 66%, of the number of shares of Stock held by them (on an As Converted Basis) at the date hereof, after making ratable adjustments in the event of any stock splits, stock dividends or stock combinations; and (iii) one (1) nominee for election to the Board, so long as Energy Spectrum and/or its Affiliates collectively hold a number of shares of Stock (on an As Converted Basis) greater than five percent (5%) of the outstanding Common Stock on an As Converted Basis, but less than or equal to 33%, of the number of shares of Stock held by them (on an As Converted Basis) at the date hereof, after making ratable adjustments in the event of any stock splits, stock dividends or stock combinations. This Agreement does not grant Energy Spectrum the right to have more than: three (3) directors on the Board at any time if designating directors pursuant to Section 2.2(a)(i), two (2) directors on the Board at any time if designating directors pursuant to Section 2.2(a)(ii), or one (1) director on the Board at any time if designating directors pursuant to Section 2.2(a)(iii). (b) INVESTORS GROUP DESIGNEES. At each of the Company's annual or special meetings of stockholders at which directors are to be elected, the Investors Group shall have the right to designate in writing the following: (i) two (2) nominees for election to the Board, so long as the Investors Group and/or Affiliates of any member of the Investors Group collectively hold a number of shares of Stock (on an As Converted Basis) greater than 50%, of the number of shares of Stock held by them (on an As Converted Basis) at the date hereof, after making ratable adjustments in the event of any stock splits, stock dividends or stock combinations; and (ii) one (1) nominee for election to the Board, so long as the Investors Group and/or Affiliates of any member of the Investors Group collectively hold a number of shares of Stock (on an As Converted Basis) greater than five percent (5%) of the outstanding Common Stock on an As Converted Basis, but less than or equal to 50%, of the number of shares of Stock held by them (on an As Converted Basis) at the date hereof, after making ratable adjustments in the event of any stock splits, stock dividends or stock combinations. This Agreement does not grant the Investors Group the right to have more than: two (2) directors on the Board at any time if designating directors pursuant to Section 2.2(b)(i) or one (1) director on the Board at any time if designating directors pursuant to Section 2.2(b)(ii). (c) DIRECTORS GROUP DESIGNEE. At each of the Company's annual or special meetings of stockholders at which directors are to be elected, the Directors Group shall have the right to designate in writing one (1) nominee for election to the Board, so long as the Directors Group and/or Affiliates of any member of the Directors Group collectively hold a number of shares of Stock (on an As Converted Basis) greater than five percent (5%) of the outstanding Common Stock on an As Converted Basis. 2.3. REMOVAL. Each Stockholder agrees to vote such Stockholder's Stock (calculated on an As Converted Basis), at all meetings (and written actions in lieu of meetings) of stockholders of the company, for removal of a certain director as directed by the Person or Persons having the right to designate such director pursuant to Section 2.2(a), (b) or (c) above. 2.4. VACANCIES. Each Stockholder agrees to vote such Stockholder's Stock (calculated on an As Converted Basis), at all meetings (and written actions in lieu of meetings) of stockholders of the Company, to fill any vacancy on the Board caused by the resignation, death or removal of any director designated under 2.2(a), (b) or (c) with a nominee selected as provided therein. 4 3. CORPORATE TRANSACTION 3.1. NO QUALIFIED PUBLIC OFFERING. If a Qualified Public Offering does not occur on or before September 30, 2005, then at any time on or after October 1, 2005, Energy Spectrum may send notice to the Company that the Energy Spectrum recommends that the Company retain an Investment Bank (the "INVESTMENT BANK NOTICE") to seek and report on candidates interested in entering into a Corporate Transaction, with a view toward maximizing stockholder value. 3.2. INVESTMENT BANK PROCESS. Within 45 days of receipt of the Investment Bank Notice, the Board of Directors shall appoint an investment banking firm to seek and report on candidates interested in entering into a Corporate Transaction, with a view toward maximizing stockholder value. If the Company does not give Energy Spectrum the Company's response of its selection (the "Company Response") within the 45-day period described in this Section 3.2, Energy Spectrum may elect, in its sole discretion, to give the Company the Alternative Investment Bank Notice as set forth in Section 3.3(a). If Energy Spectrum elects to give the Company the Alternative Investment Bank Notice, the Company shall relinquish its rights under this Section 3.2, and the parties' rights under this Article 3 shall be governed by Section 3.3. 3.3. ALTERNATIVE PROCESS. (a) If the Company does not give Energy Spectrum the Company Response within the 45-day period set forth in Section 3.2 above, Energy Spectrum may elect, in its sole discretion and at any time after the expiration of such 45-day period, to give a list of three (3) investment banking firms to the Company (the "ALTERNATIVE INVESTMENT BANK NOTICE"), each of which investment banking firms shall, by virtue of being recommended by Energy Spectrum, be considered an Investment Bank for purposes of this Agreement if eventually retained by the Company pursuant to and for the purposes set forth in this Article 3. (b) Within thirty 30 days of its receipt of the Alternative Investment Bank Notice, the Company shall retain one (1) Investment Bank listed in the Alternative Investment Bank Notice. 3.4 RETENTION. The Investment Bank selected pursuant to this Section 3 shall be engaged to seek and report on candidates interested in entering into a Corporate Transaction, with a view toward maximizing stockholder value. 4. GENERAL PROVISIONS 4.1. NOTICES. All notices, Consents, waivers, and other communications required or permitted by this Agreement must be in writing and will be deemed to have been given to a party when: (a) Delivered to the appropriate address by hand or by nationally recognized overnight courier service, costs prepaid (with written confirmation of receipt); (b) Sent by facsimile or email with confirmation of transmission by the transmitting equipment; or (c) Received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses, facsimile numbers or email addresses and marked to the attention of the designated Person (by name or title), or to such other address, facsimile number, email address or Person as a party may designate by notice to the other parties: The Company: Allis Chalmers Corporation 7660 Woodway, Suite 200 Houston, Texas 77063 with a copy to: Joseph P. Bartlett Spolin Silverman Cohen & Bartlett LLP 1620 26th Street, Suite 2000 North Santa Monica, California 90404 5 Stockholders: The contact information of each Stockholder is provided on Exhibit A hereto, which shall be updated by the Company whenever a transferee delivers a counterpart to this Agreement to the Company. 4.2. RESTRICTIVE LEGEND ON STOCK CERTIFICATES. The Company and each Stockholder agree that all certificates representing all shares of Common Stock of the Company which at any time are subject to the provisions of this Agreement shall have endorsed upon them in boldface type the following legend: THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER OBLIGATIONS CONTAINED IN A STOCKHOLDERS AGREEMENT BETWEEN THE CORPORATION AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH IS ON FILE WITH THE CORPORATION AND WILL BE FURNISHED WITHOUT COST TO THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION. 4.3. TRANSFEREES. Under no circumstances shall any sale or other transfer of any Stock subject hereto be valid until the proposed transferee thereof shall have executed a counterpart and become a party to this Agreement, and thereby shall have become subject to all of the provisions hereof, unless the requirement is waived by written consent of the parties hereto; provided that this Agreement shall terminate with respect to any shares sold in an offering registered under the Securities Act or in a broker's transaction pursuant to Rule 144 under the Securities Act. 4.4. FURTHER ASSURANCES. Each party hereto agrees to perform any further acts and to execute and deliver any further documents which may be reasonably necessary to carry out the provisions of this Agreement. 4.5. REMEDIES. If a breach of any party to this Agreement occurs, any party may pursue any available remedy by proceeding at law or in equity to enforce the performance of any provision of this Agreement. Except as otherwise provided by law or as otherwise provided in this agreement, a delay or omission by any such party in exercising any right or remedy accruing upon any such breach shall not impair the right or remedy or constitute a waiver of or acquiescence in any such breach. No remedy is exclusive of any other remedy. All available remedies are cumulative. 4.6. SEVERABILITY. In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby. 4.7. GOVERNING LAW. This Agreement has been executed in and shall be governed by the laws of the State of Delaware. 4.8. INUREMENT; ASSIGNMENTS. Subject to the restrictions against transfer or assignment as herein contained, the provisions of this Agreement shall inure to the benefit of and shall be binding on the heirs, assigns, successors in interest, personal representatives, estates, heirs, and legatees of each of the parties hereto. 4.9. AMENDMENT. This Agreement may only be amended by the written consent of all then current parties to this Agreement. 4.10. ENTIRE AGREEMENT. This Agreement contains the entire understanding between the parties hereto concerning the subject matter contained herein. 4.11. COUNTERPARTS. This Agreement may be executed simultaneously in multiple counterparts, each of which when so executed shall be deemed to be an original and such counterparts shall together constitute one and the same instrument. 4.12. REPRESENTATION BY COUNSEL. All of the Stockholders represent that they have consulted, or have had an opportunity to consult, separate counsel in negotiating and executing this Agreement. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.] 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective on and after April 2, 2004. THE COMPANY: /S/ MUNAWAR HIDAYATALLAH -------------------------------------------- MUNAWAR HIDYATALLAH, CHIEF EXECUTIVE OFFICER DIRECTORS GROUP: /S/ MUNAWAR HIDAYATALLAH -------------------------------------------- MUNAWAR H. HIDAYATALLAH /S/ JENS H. MORTENSEN -------------------------------------------- JENS H. MORTENSEN /S/ SAEED M. SHEIKH -------------------------------------------- SAEED M. SHEIKH INVESTORS GROUP: /S/ LEONARD TOBOROFF -------------------------------------------- LEONARD TOBOROFF ENGEL INVESTORS DEFINED BENEFIT PLAN /S/ DONALD ENGEL -------------------------------------------- BY: TITLE: RER CORP. /S/ ROBERT NEDERLANDER -------------------------------------------- BY: TITLE: /S/ DONALD ENGEL -------------------------------------------- DONALD ENGEL /S/ CHRISTOPHER ENGEL -------------------------------------------- CHRISTOPHER ENGEL ENERGY SPECTRUM PARTNERS LP By: Energy Spectrum Capital LP, General Partner By: Energy Spectrum LLC, General Partner BY: /S/ JAMES W. SPANN ---------------------------------------- NAME: JAMES W. SPANN TITLE: CHIEF INVESTMENT OFFICER 7 EXHIBIT A LIST OF STOCKHOLDERS AND ADDRESS FOR NOTICE - ------------------------------------------ ------------------------------------- STOCKHOLDER ADDRESS FOR NOTICE - ------------------------------------------ ------------------------------------- Energy Spectrum 5956 Sherry Lane, Suite 900 Dallas, TX 75225 Attention: Thomas Whitener - ------------------------------------------ ------------------------------------- Directors Group Munawar H. Hidayatallah 7660 Woodway, Suite 200 Houston, Texas 77063 Jens H. Mortensen 7660 Woodway, Suite 200 Houston, Texas 77063 Saeed M. Sheikh 1050 17th Street, N.W. Suite 450 Washington DC 20036 - ------------------------------------------ ------------------------------------- Investors Group RER Corp 1450 Broadway 20th Floor New York, NY 10022 Engel Investors Defined Benefit Plan 570 Park Avenue New York, NY 10021 Donald Engel 570 Park Avenue New York, NY 10021 Christopher Engel 1075 Park Avenue New York, NY 10128 Leonard Toboroff 39 N. Moore Street New York, NY 10013 -----END PRIVACY-ENHANCED MESSAGE-----