EXHIBIT 10.17
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AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
DATED AS OF SEPTEMBER 2, 1994
By and Among
K&F INDUSTRIES, INC.
AND THE
STOCKHOLDERS IDENTIFIED HEREIN
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TABLE OF CONTENTS
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1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Certain Restrictions on Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1. Transfers in Accordance with this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2. Certain Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3. Agreement to be Bound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4. BLS Transfer Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. Certain Permitted Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1. Certain Permitted Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Rights of First Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1. Transfers to Third Parties; Rights of First Offer . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2. Subsequent Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5. Public Offering; Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2. Tag-Along Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6. Put-Sale Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.1. Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.2. Put-Sale Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2. Deliveries at Closing; Method of Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . 23
8. Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9. Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10. Certain Voting and Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.1. Board of Directors of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.2. Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.3. Charter and By-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.4. Certain Stock-Related Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.5. Purchase of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.6. Company Purchase of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11. No Implied Right to Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.1. Recapitalization, Exchanges, etc., Affecting the Common Stock . . . . . . . . . . . . . . . . . . . 31
13.2. Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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13.3. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.4. Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
13.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.6. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.7. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.8. Headings; References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.9. Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SIGNATURES
Schedule I - Addresses for Notices
Exhibit A - Amended and Restated By-laws
Exhibit B - Restated Certificate of Incorporation
Exhibit C - Registration Rights
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT dated as of
September 2, 1994 by and among K&F Industries, Inc. (formerly known as Opus
Acquisition Corporation), a Delaware corporation (the "Company"); ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ("BLS"); ▇▇▇▇▇▇ Brothers Merchant Banking Portfolio Partnership L.P.
("LBMB"), ▇▇▇▇▇▇ Brothers Offshore Investment Partnership L.P. ("LBOI"), ▇▇▇▇▇▇
Brothers Offshore Investment Partnership - Japan L.P. ("LBOIJ"), ▇▇▇▇▇▇
Brothers Capital Partners II, L.P. ("LBCP"; and LBMB, LBOI, LBOIJ and LBCP,
collectively "LBP"), CBC Capital Partners, Inc. ("CBC"), and Loral Corporation
("Loral"). Each of the parties to this Agreement (other than the Company) and
any other Person who shall become a party to or agree to be bound by the terms
of this Agreement after the date hereof is sometimes hereinafter referred to as
a "Stockholder". This Agreement amends and restates the Stockholders Agreement
dated as of April 27, 1989 by and among the Company and certain of the
Stockholders, as amended on July 28, 1989 and shall become effective (the
"Effective Date") on the date hereof. For purposes of this Agreement, CBC
shall be deemed to be a Transferee of LBP.
As of the Effective Date, the Company has an authorized
capital stock consisting of (i) 21,000,000 shares of voting common stock, par
value $.01 per share (the "Voting Common Stock") and 5,300,000 shares of
non-voting common stock, par value $.01 per share (the "Nonvoting Common
Stock"; and together
with the Voting Common Stock the "Common Stock") and (ii) 1,200,000 shares of
Series A Voting Convertible Preferred Stock, par value $.01 per share (the
"Series A Voting Stock"), and 130,000 shares of Series A Nonvoting Convertible
Preferred Stock, par value $.01 per share (the "Series A Nonvoting Stock"; and
the Series A Voting Stock and the Series A Nonvoting Stock, collectively, the
"Series A Preferred Stock"; and the Series A Preferred Stock and the Common
Stock, collectively, the "Stock").
The parties hereto desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the Stock, including both issued
and outstanding shares of Stock as well as shares of Stock which may be issued
hereafter, and to provide for certain rights and obligations in respect thereto
as hereinafter provided.
Accordingly, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the
meanings ascribed to them below:
"Affiliate" shall mean, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person;
provided, however, that for purposes of this Agreement BLS and Loral shall not
be deemed to be Affiliates.
"Alternative Investment Bank" shall have the meaning set forth
in Section 6.1(b).
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"Appraisal Request" shall have the meaning set forth in
Section 6.1(a).
"Appraised Value" shall have the meaning set forth in Section
6.1(a).
"BLS" shall have the meaning set forth in the preamble of
this Agreement.
"BLS Investor" shall mean each Transferee of BLS or a BLS
Investor designated as such by BLS from time to time but shall not include any
LBP Investor or Loral Investor.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Buyer's Notice" shall have the meaning set forth in Section
4.1(a).
"By-laws" shall mean the by-laws of the Company, in the form
of Exhibit A hereto, as amended from time to time.
"Charitable Institution" shall mean an organization described
in section 501(c)(3) of the Code.
"Charter" shall mean the Restated Certificate of Incorporation
of the Company, in the form of Exhibit B hereto, as amended from time to time.
"Charter Documents" shall have the meaning set forth in
Section 10.3(a).
"Closing Date" shall have the meaning set forth in Section 6.1.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
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"Common Equivalents" shall mean outstanding shares of Common
Stock and shares of Common Stock issuable upon the exercise of outstanding
options or rights to acquire Common Stock or upon conversion of outstanding
convertible securities whether or not vested, exercisable, or convertible at
the time of determination.
"Common Stock" shall have the meaning set forth in the
preamble of this Agreement.
"Company" shall have the meaning set forth in the preamble of
this Agreement.
"Effective Date" shall have the meaning set forth in the
preamble of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"First Investment Bank" shall have the meaning set forth in
Section 6.1(b).
"First Offerees" shall have the meaning set forth in Section
4.1(b).
"Initial Public Offering" shall mean the Company's initial
sale of Stock pursuant to an effective registration statement under the
Securities Act (other than a registration statement on Form S-4 or Form S-8 or
otherwise relating to shares of Stock issuable under any employee benefit plan
of the Company or issued in connection with the sale of any debt securities of
the Company).
"LBP" shall have the meaning set forth in the preamble of this
Agreement.
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"LBP Investors" shall mean LBP and each Transferee of LBP or
an LBP Investor designated as such by an LBP Nominee (as defined herein) but
shall not include a BLS Investor or a Loral Investor.
"Loral" shall have the meaning set forth in the preamble of
this Agreement.
"Loral Investor" shall mean each Transferee of Loral or a
Loral Investor designated as such by Loral from time to time but shall not
include a BLS Investor or a LBP Investor.
"Offer Price" shall have the meaning set forth in Section
4.1(a).
"Offered Shares" shall have the meaning set forth in Section
4.1(a).
"Offeree Group" shall have the meaning set forth in Section
4.1(b).
"Offerees" shall have the meaning set forth in Section 4.1(b).
"Original Selling Stockholder" shall have the meaning set
forth in Section 5.2(a).
"Person" shall mean an individual, corporation, partnership,
joint venture, trust, association, joint stock company, unincorporated
organization or a government or any agency or political subdivision thereof.
"Proposed Purchaser" shall have the meaning set forth in
Section 5.2(a).
"Put-Sale Group" shall have the meaning set forth in Section
6.2(b).
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"Put-Sale Notice" shall have the meaning set forth in Section
6.2(b).
"Rule 144 Open Market Transaction" shall mean any sale of
shares of Stock in an open market transaction under Rule 144 of the Securities
Act (or any successor rule) if such sale is in compliance with the requirements
of paragraphs (c), (d), (e), (f) and (g) of such Rule (notwithstanding the
provisions of paragraph (k) of such Rule).
"SEC" shall mean the Securities and Exchange Commission.
"Second Offerees" shall have the meaning set forth in Section
4.1(b).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Seller" shall have the meaning set forth in Section 4.1(a).
"Seller's Notice" shall have the meaning set forth in Section
4.1(a).
"Senior Bank Financing" means the syndicated senior bank loan
financing facilities to which the Company, or any of its subsidiaries, are a
party on the Effective Date and any refinancing thereof.
"Senior Subordinated Debentures" shall mean the Company's
13-3/4% Senior Subordinated Debentures Due 2001.
"Senior Secured Notes" shall mean the Company's 11-7/8% Senior
Notes Due 2003.
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"Stock" shall have the meaning set forth in the preamble to
this Agreement.
"Stockholder" shall have the meaning set forth in the preamble
of this Agreement.
"Tag-Along Stockholder" shall have the meaning set forth in
Section 5.2(a).
"Third Offerees" shall have the meaning set forth in Section
4.1(b).
"Transfer" shall have the meaning set forth in Section 2.1.
"Transferee" shall have the meaning set forth in Section 2.1.
2. Certain Restrictions on Transfers.
2.1. Transfers in Accordance with this Agreement. No
Stockholder shall, directly or indirectly, transfer, sell, assign, pledge,
hypothecate, encumber, or otherwise dispose of any Stock to any Person (any
such act being referred to as a "Transfer" and any Person acquiring Stock from
a Stockholder and any subsequent transferee of any such Person is referred to
as a "Transferee" of such Stockholder), unless such Transfer is permitted under
Section 3.1. The Company shall not register upon its books any Transfer of
Stock by a Stockholder to any Person except a Transfer in accordance with this
Agreement.
2.2. Certain Stockholders. Each Stockholder that is an
entity that was formed for the purpose of acquiring Stock or that has no
substantial assets other than such Stock or interests therein agrees that (a)
its shares of common stock or instruments
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reflecting equity interests therein (and the shares of common stock or
instruments of any similar entities that control it) will note the restrictions
on Transfer contained in this Agreement as if they were Stock and (b) no shares
of stock or other equity interests in any such entities may be transferred to
any Person other than in accordance with the terms of this Agreement as if such
stock or other equity interests were Stock.
2.3. Agreement to be Bound. No Transfer of Stock (other
than Transfers pursuant to the registration rights included in Exhibit C, Rule
144 Open Market Transactions or pursuant to any other bona fide registered
public offering) shall be effective (and the Company shall not transfer on its
books any such Common Stock) unless (i) the certificates representing such
Stock issued to the Transferee shall bear the legends provided in Article 9, if
required by such Section, and (ii) the Transferee (if not already a party
hereto) shall have executed and delivered to the Company, as a condition
precedent to such Transfer, an instrument or instruments in form and substance
reasonably satisfactory to the Company confirming that the Transferee agrees to
be bound by the terms of this Agreement.
2.4. BLS Transfer Limitations. BLS shall not Transfer any
Common Stock to any Person if, after giving effect to such Transfer, BLS and
his immediate family would beneficially own less than 1,350,000 Common
Equivalents; unless (i)(A) LBP approves any such Transfer or LBP and its
Affiliates no longer beneficially own at least 1,000,000 Common Equivalents,
and (B) Loral approves any such Transfer or Loral and its Affiliates
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no longer beneficially own at least 500,000 Common Equivalents, (ii) BLS dies
or is rendered incapable of acting as chairman of the Board of Directors of the
Company for 180 consecutive days due to physical or mental illness, or (iii)
such Transfer consists of a pledge of Common Stock pursuant to Section
3.1(viii) so long as the pledgee is not exercising rights upon default. For
purposes of this Agreement, (i) BLS shall not be deemed to beneficially own any
shares of Stock in which any other Person has any economic or voting interest
other than a partnership, trust or corporation of which the entire equity
interest is held by BLS if BLS retains sole voting and dispository control over
such shares and (ii) BLS and his immediate family shall not be deemed to
beneficially own any Stock in which any other Person has any economic or voting
interest other than a partnership, trust or corporation of which the entire
equity interest is held by BLS and his immediate family if BLS retains sole
voting and dispositive power over such shares. In addition, for purposes of
this Agreement, the "immediate family" of BLS includes only the spouse and
children of BLS.
3. Certain Permitted Transfers.
3.1. Certain Permitted Transfers. None of the restrictions
contained in this Agreement with respect to Transfers of Stock (other than
those set forth in Sections 2.3 and 2.4 and this Section 3.1) shall apply:
(i) to any Transfer (including by gift) by any Stockholder
who is an individual:
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(A) to such Stockholder's spouse or descendants
(collectively, "relatives");
(B) to a Charitable Institution;
(C) to a trust of which there are no beneficiaries
other than one or more of such Stockholder and the relatives
of such Stockholder;
(D) to a partnership of which there are no partners
other than one or more of such Stockholder and the relatives
of such Stockholder;
(E) to a corporation of which there are no
stockholders other than one or more of such Stockholder and
the relatives of such Stockholder;
(F) to a legal representative or guardian of such
Stockholder or a relative of such Stockholder if such
Stockholder or relative becomes mentally incompetent; or
(G) to any Person by will or by the laws of descent;
provided that any such Transferee listed in clauses (A) through (C)
and (E) through (G) above agrees that, notwithstanding the terms of
this Section 3.1, such Transferee shall not thereafter Transfer such
Stock to any Person to whom such transferor Stockholder would not be
permitted to Transfer such Stock pursuant to the terms of this
Agreement;
(ii) to any Transfer of Stock by BLS or any BLS Investor to
BLS, any BLS Investor or any individual who is then employed by, a
consultant to or a director of the Company or any of its subsidiaries;
(iii) to any Transfer of Stock, by any Stockholder that is
not an individual, to any Affiliate thereof; provided that any such
Affiliate agrees that,
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notwithstanding the terms of this Section 3.1, it shall not thereafter
Transfer such Stock to any Person to whom such transferor Stockholder
would not be permitted to Transfer such Stock pursuant to the terms of
this Agreement;
(iv) to any Transfer of Stock by any LBP Investor to
employees, consultants and advisors of any LBP Investor or its
Transferees;
(v) to any Transfer of Stock, by any LBP Investor that is a
partnership, to its general or limited partners; provided that such
Transfer is made pro rata according to the economic interests of such
partners therein as determined under the governing instruments of such
partnership;
(vi) to any Transfer of Stock for cash pursuant to the
registration rights included in Exhibit C or any other bona fide
registered public offering, subject to the rights of first offer
contained in Section 4.1;
(vii) to any Transfer of Stock for cash pursuant to Rule 144
Open Market Transactions occurring after an Initial Public Offering,
subject to the rights of first offer contained in Section 4.1.;
(viii) to any Transfer of Common Stock consisting of the
pledge of Stock by any Stockholder to a commercial bank, savings and
loan institution or any other lending institution as security for a
bona fide loan or loans the proceeds of which are used solely to
purchase Stock provided
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that upon any foreclosure such pledgee shall assume and be bound by
all the terms of this Agreement;
(ix) to any Transfer of Stock pursuant to a bona fide sale to
a third party for cash, subject to the rights of first offer set forth
in Section 4.1;
(x) to any Transfer of Stock by a Tag-Along Stockholder
pursuant to the tag-along rights set forth in Section 5.2, subject to
the rights of first offer contained in Section 4.1;
(xi) to any Transfer of Stock pursuant to the put-sale rights
set forth in Section 6.2; or
(xii) to any Transfer of Stock acquired on the open market in
connection with market-making or investment management activities.
4. Rights of First Offer.
4.1. Transfers to Third Parties; Rights of First Offer. (a)
Except as provided in Section 3.1, if at any time any Stockholder desires to
Transfer any Stock then owned by such Stockholder to any third party (including
upon foreclosure of or similar action with respect to any pledge), such
Stockholder shall first comply with the rights of first offer contained in this
Section 4.1. Such Stockholder shall give written notice to the Company stating
that such Stockholder desires to make such Transfer, the number of shares of
Stock proposed to be Transferred and the cash price per share that such
Stockholder proposes to be paid for such shares of Stock or, in the case of a
Transfer in the form of a registered public offering, a range of
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prices per share the low and high point of which shall not deviate by more than
15% from the midpoint of such range.
For purposes of this Agreement, any notice stating a
Stockholder's desire to Transfer Common Stock pursuant to this Section 4.1 is
referred to as a "Seller's Notice"; the Common Stock covered by any Seller's
Notice is referred to as the "Offered Shares"; the Stockholder giving the
Seller's Notice is sometimes referred to as the "Seller"; the price per share
which the Stockholder proposes to be paid therefor (or, in the case of a
registered public offering, the midpoint of the range of prices proposed
therefor) is referred to as the "Offer Price"; and any notice given by the
Company or any Stockholder pursuant to which the Company or such Stockholder
(as the case may be) elects to purchase Offered Shares and that states (i) the
maximum number of such Offered Shares that the Company or such Stockholder (as
the case may be) elects to purchase, (ii) that the election made in such notice
is irrevocable and (iii) that the Company or such Stockholder (as the case may
be) shall purchase any number of Offered Shares up to such maximum number at
the Offer Price in cash is referred to as a "Buyer's Notice". Each Seller's
Notice shall constitute an irrevocable offer by the Seller to the Company
and/or the other Stockholders, as the case may be, of the Offered Shares at the
Offer Price. The Company shall mail a copy of any Seller's Notice (together
with a description of the offering procedures hereunder) to each Stockholder of
the Company within 5 days of the receipt thereof.
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(b) Offered Shares offered by any Seller pursuant to this
Section 4.1 shall be offered to the Company and other Stockholders in the
following order:
(i) in the case of any offer by BLS, first to the Company and
second to all other Stockholders who are not BLS Transferees;
(ii) in the case of any offer by any BLS Investor or any
other Transferee of BLS, first to BLS, second to the Company and third
to the other Stockholders;
(iii) in the case of any offer by any LBP Investors or any
Transferee of any LBP Investors, first to the other LBP Investors,
second to the Company and third to the other Stockholders; and
(iv) in the case of any offer by any Loral Investor or any
Transferee of Loral or a Loral Investor, first to the other Loral
Investors, second to the Company and third to the other Stockholders.
The first Person or group to whom Offered Shares are so offered is called the
"First Offerees"; the second such Person or group is called the "Second
Offerees"; and the third such Person or group, if any, is called the "Third
Offerees". Each such Person or group is called an "Offeree Group" and all such
Persons and groups are called the "Offerees".
(c) Within 10 days after the date of mailing by the Company
of the Seller's Notice, the First Offerees may elect to purchase Offered Shares
at the Offer Price in a Buyer's Notice to the Seller, with a copy to the
Company.
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(d) If the First Offerees elect to purchase none of, or less
than all of, the Offered Shares, then the Company shall give written notice to
the Second Offerees not later than three days after the expiration of the
10-day period set forth in Section 4.1(c), which notice shall specify the Offer
Price and the number of remaining Offered Shares available for purchase by the
Second Offerees. The Second Offerees may elect to purchase Offered Shares at
the Offer Price in a Buyer's Notice to the Seller, with a copy to the Company,
within 10 days following mailing of the notice from the Company.
(e) If the First Offerees and the Second Offerees elect to
purchase none of, or less than all of, the Offered Shares, then the Company
shall give written notice to the Third Offerees (if applicable) not later than
three days after the expiration of the 10-day period set forth in Section
4.1(d), which notice shall specify the Offer Price and the number of remaining
Offered Shares available for purchase by the Third Offerees. The Third
Offerees may elect to purchase Offered Shares at the Offer Price in a Buyer's
Notice to the Seller, with a copy to the Company, within 10 days following
mailing of the notice from the Company.
(f) If the Offerees fail to elect to purchase all the Offered
Shares, then the Company shall give written notice to the First Offerees, the
Second Offerees and, if applicable, the Third Offerees not later than three
days after the expiration of the last 10-day period set forth in Section 4.1(d)
or (if applicable) Section 4.1(e), which notice shall specify the Offer Price
and
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the number of remaining Offered Shares available for purchase by the Offerees.
Offerees may elect to purchase Offered Shares at the Offer Price in a Buyer's
Notice to the Seller, with a copy to the Company, within 10 days following
mailing of the notice from the Company.
(g) If the Offerees fail to elect to purchase all the Offered
Shares within the time periods specified in this Section 4.1, then the Seller
(i) shall be under no obligation to sell any of the Offered Shares to the
Company or any Stockholder, unless the Seller so elects, and (ii) may, within a
period of three months from the date of the Seller's Notice, sell all or any
Offered Shares to one or more third parties for cash at a price per share not
less than the Offer Price and on other terms which are no more favorable to the
purchaser than those set forth in the Seller's Notice.
(h) In the event of an oversubscription to purchase Offered
Shares in connection with notice given under Sections 4.1(c), (d), (e) or (f)
hereof, each Offeree which delivered a Buyer's Notice thereunder shall be
permitted to purchase its pro rata share of the Offered Shares. Such pro rata
share shall equal the product of (i) the fraction, the numerator of which shall
be the number of Offered Shares such Offeree offered to purchase pursuant to
its Buyer's Notice delivered under Section 4.1(c), (d), (e) or (f), as
applicable, and the denominator of which shall be the aggregate number of
Offered Shares all Offerees offered to purchase under Section 4.1(c), (d), (e)
or (f), as applicable, times (ii) the aggregate number of Offered
-16-
Shares available to be purchased under Section 4.1(c), (d), (e) or (f), as
applicable.
4.2. Subsequent Transfers. If the Company and the
Stockholders do not elect to purchase all the Offered Shares at the Offer Price
in cash and the Seller shall not have Transferred the Offered Shares to any
Transferee prior to the expiration of the three month period specified in
Section 4.1(g), then the rights of first offer under this Article 4 shall again
apply in connection with any subsequent Transfer or offer to Transfer by such
Seller.
5. Public Offering; Tag-Along Rights.
5.1. Registration Rights.
The Company hereby grants to each Stockholder the
registration and other rights set forth in, and each Stockholder agrees to
comply with the terms and conditions contained in, Exhibit C hereto.
5.2. Tag-Along Right. (a) If, at any time, any Stockholder
(or group of Stockholders acting in concert) (individually, the "Original
Selling Stockholder") proposes to Transfer shares of Common Stock (or options
or rights to acquire Common Stock or securities convertible into Common Stock)
representing more than 15% of the Common Equivalents to any Person or group of
Persons (the "Proposed Purchaser") in any transaction or series of related
transactions (other than (i) sales pursuant to a bona fide public offering
under an effective registration statement under the Securities Act and (ii)
Transfers permitted under Section 3.1 (other than clause
-17-
(ix) thereof)), the Original Selling Stockholder shall afford each other
Stockholder (each, a "Tag-Along Stockholder") the opportunity to participate
proportionately in such Transfer in accordance with this Section 5.2. Each
Stockholder shall have the right to Transfer the same percentage of the Common
Equivalents owned by such Stockholder as the percentage of Common Equivalents
the Original Selling Stockholder is proposing to transfer of such Original
Selling Stockholder's Common Equivalents. The Original Selling Stockholder
shall give notice to the other Stockholders of their right to sell Common
Equivalents hereunder (the "Tag-Along Notice") which notice shall state the
number of shares of Common Equivalents proposed to be Transferred, the proposed
offering price and any other material terms and conditions of the Transfer.
(b) Within 10 days after the date of delivery of a Tag-Along
Notice, any Stockholder may elect to participate in such Transfer pursuant to
the terms and conditions of such Notice in a notice given to the Original
Selling Stockholder; provided, however, that the only representations and
warranties which such Tag-Along Stockholder shall be required to give are as to
due authority and execution, good title and the absence of liens with respect
to such Tag-Along Stockholder's Common Equivalents and the only indemnities
which such Tag-Along Stockholder may be required to give are as to the
foregoing matters.
(c) If the Proposed Purchaser is acquiring Common Equivalents
in a single transaction from more than one Stockholder or in a series of
related transactions from one or
-18-
more Stockholders, (i) the price per share or Common Equivalent shall be the
highest of the prices, and the other terms and conditions of the Transfer shall
be the most favorable of the terms and conditions, offered by the Proposed
Purchaser to any Stockholder at or prior to the consummation of such Transfer
and (ii) the form of consideration shall be the same for all Common Equivalents
Transferred in such Transfer.
(d) Any Tag-Along Stockholder exercising Tag-Along rights
hereunder with respect to any Common Equivalent other than shares of Common
Stock shall convert or exercise such Common Equivalent into or for Common Stock
prior to the consummation of any Transfer hereunder.
(e) Any Original Selling Stockholder that proposes to
Transfer shares of Common Stock under this Section 5 shall comply with the
Rights of First Offer provisions set forth in Section 4 hereto. The Seller's
Notice required thereunder shall be given by the Original Selling Stockholder
concurrently with the Tag-Along Notice hereunder and any purchase thereunder
and hereunder shall occur simultaneously.
(f) Any Transfer by the Original Selling Stockholder subject
to this Section 5.2 shall be made within three months of the date of the
Tag-Along Notice and shall be made substantially in accordance with the terms
and conditions described in such Tag-Along Notice. If the Original Selling
Stockholder shall not have effected the Transfer prior to the expiration of
such three-month period, the tag-along rights under this Section 5.2
-19-
shall again apply in connection with any subsequent Transfer or offer to
Transfer by such Original Selling Stockholder.
6. Put-Sale Option.
6.1. Appraisal. (a) At any time and from time to time,
either LBP or BLS may, by notice (an "Appraisal Request") to the Company and
the other party, request an appraisal of the value of the common equity of the
Company (the "Appraised Value"). BLS, LBP and the Company shall cause such
appraisal to be completed within 30 days of delivery of the Appraisal Request
according to the procedures set forth in Section 6.1(b) and (c).
(b) The Appraised Value shall be determined jointly by LBP
and a nationally recognized investment bank selected by BLS (the "First
Investment Bank") or, if LBP and the First Investment Bank fail to agree on an
Appraised Value within 15 days of delivery of the Appraisal Request, by another
nationally recognized investment bank selected jointly by LBP and BLS (the
"Alternative Investment Bank"). Any Appraised Value as determined by any
Alternative Investment Bank shall be between the values determined by LBP and
the First Investment Bank.
(c) The Appraised Value shall be the value of the Company's
common equity (assuming conversion of all Common Equivalents to Common Stock)
that would be realized in a sale of the Company as an entirety with a
reasonable amount of time available to negotiate and consummate such sale;
provided that the Appraised Value shall not be less than the value offered in
any bona fide proposal that may be made to acquire the Company or
-20-
its assets prior to the date upon which the Appraised Value shall be
determined.
(d) The Company shall give LBP, the First Investment Bank and
any Alternative Investment Bank access to the books, records and personnel of
the Company and shall pay all fees and expenses of the appraisers incurred in
connection with the Appraisal.
6.2. Put-Sale Right. (a) Within 15 days after the
Appraised Value has been established, either BLS or LBP (the "Put Party") may,
at its sole option, deliver written notice (the "Put-Sale Notice") to the other
party (the "Other Party") and the Company of its desire to sell all of the
Common Stock owned by the Put Party and any Transferees thereof designated by
the Put Party (the "Put-Sale Group") from among the Put Party and their
Transferees. The purchase price for the shares of Stock shall be an amount
equal to the pro rata share (based on Common Equivalents) of the Appraised
Value of the Common Stock subject to such put.
(b) The Other Party shall have 90 days following receipt of
the Put-Sale Notice to make binding arrangements (including full financing
commitments) for the purchase for cash of the Stock of the Put-Sale Group by
the Other Party or a third party designated by the Other Party. The closing of
such purchase shall be no later than 30 days following the execution of such
binding arrangements, subject to extension with the written consent of the Put
Party, which consent will not be unreasonably withheld. During such 90-day
period, the Other
-21-
Party shall either (i) use its best efforts to arrange for the prompt purchase
of the Stock or (ii) notify the Put Party as soon as the Other Party determines
that it will not or can not purchase, nor arrange for a third party to
purchase, the Stock held by the Put-Sale Group.
(c) In the event that the Other Party is unable or chooses
not to arrange for and consummate the purchase of the Put-Sale Group's Stock
within the time periods set forth in Section 6.1(b), then BLS and LBP shall
cause the Company to be sold as an entirety if such sale can be arranged
yielding proceeds at least equal to the Appraised Value. BLS, LBP and the
Company shall proceed in good faith and use their best efforts to sell the
Company as an entirety as promptly as practicable and in any event within six
months of the expiration of the time periods set forth in Section 6.1(b),
subject to extension with the written consent of BLS and LBP, which consent
will not be unreasonably withheld. If it becomes apparent, in the Put Party's
reasonable judgment, that the Company can not be sold at the Appraised Value,
then the Put Party, at its sole option, may reduce the price for which the
Company is being offered by up to 10% of the Appraised Value. Any sale of the
Company as an entirety hereunder shall include all Stockholders and the
proceeds thereof shall be allocated among the Stockholders in accordance with
their Stock ownership in the Company based on Common Equivalents.
-22-
7. Closing.
7.1. Closing. Any selling Stockholder and any Stockholders
who are purchasing or selling any shares of Stock pursuant to Articles 4, 5 or
6 shall mutually determine a closing date (the "Closing Date") which, subject
to any applicable regulatory waiting periods, shall not be more than 30 days
after the last notice is given with respect to such purchase or after the
expiration of the last notice period applicable to such purchase. The closing
shall be held at 10:00 a.m., local time, on the Closing Date at the principal
office of the Company, or at such other time or place as the parties mutually
agree.
7.2. Deliveries at Closing; Method of Payment of Purchase
Price. On the Closing Date, any selling Stockholder shall deliver (1)
certificates representing the shares of Stock being sold, free and clear of any
lien, claim or encumbrance, (2) any documents representing options, rights or
convertible securities being sold, and (3) such other documents, including
evidence of ownership and authority, as the purchasers may reasonably request.
The purchase price shall be paid by delivery of a cashier's or certified check.
8. Preemptive Rights.
(a) In the case of the proposed issuance of, or the proposed
granting by the Company of warrants, options or other rights to purchase,
shares of Common Stock or securities convertible into or exchangeable for
shares of Common Stock (other than in a transaction specified in Section 8(b))
or participating preferred stock, if any, each Stockholder shall
-23-
have the right, on the same terms as those of the proposal and during a
reasonable time no less than 30 days after the Company has given notice to the
Stockholders of such proposed issuance or granting, to purchase a proportion of
such shares of capital stock or securities, warrants, options or rights equal
to such Stockholder's percentage ownership of the then outstanding Common
Equivalents on a record date not more than 10 days prior to such issuance or
granting. The price or prices for such shares of capital stock, securities,
warrants, options or rights shall not be less favorable to the purchasing
Stockholders than the price or prices at which such shares of capital stock,
securities, warrants, options or rights are proposed to be offered for sale or
granted to others, without deduction of the expenses of and compensation for
the sale, underwriting or purchase of such shares of capital stock, securities,
warrants, options or rights by underwriters or dealers as may be paid by the
Company.
(b) The provisions of Section 8(a) shall not apply to any of
the following transactions: (i) any bona fide public offering under a
registration of shares of Common Stock by the Company pursuant to the
Securities Act or any proposed issuance in connection with the sale of any debt
securities of the Company the proceeds of which will be used to repay the
Senior Bank Financing, Senior Subordinated Debentures or Senior Secured Notes;
(ii) the grant of restricted Common Stock or options to purchase Common Stock
pursuant to employee plans of the Company; (iii) the issuance of Common Stock
upon the exercise of any of the options specified in clause (ii) above; or (iv)
the issuance
-24-
of Stock to Loral, BLS and the LBP Investors in connection with the exchange by
Loral of the Company's 14.75% convertible subordinated debentures for Stock and
cash.
9. Legend.
A copy of this Agreement shall be filed with the Secretary of
the Company and kept with the records of the Company. Each of the Stockholders
hereby agrees that each outstanding certificate representing shares of Stock
issued to any Stockholder, or any certificate issued in exchange for any
similarly legended certificate, shall, unless sold pursuant to a bona fide
registered public offering or pursuant to a Rule 144 Open Market Transaction,
bear a legend reading substantially as follows:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO
REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THIS SECURITY ALSO IS SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN A SECURITIES PURCHASE AGREEMENT AND
AN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, BETWEEN THE
HOLDER HEREOF AND THE COMPANY, COPIES OF WHICH MAY BE OBTAINED
FROM THE COMPANY. NO TRANSFER OF SUCH SHARES WILL BE MADE ON
THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF
COMPLIANCE WITH THE TERMS OF SUCH AGREEMENTS.
10. Certain Voting and Other Agreements.
10.1. Board of Directors of the Company. (a) BLS shall be
entitled, but not required, to designate members (the "BLS Nominees") of the
Board of Directors, such Board of Directors initially to be comprised of 7
members, as follows:
-▇▇-
▇▇▇ ▇▇▇▇▇▇▇▇ constituting all of the Board of Directors not otherwise
designated by LBP as provided in this Section 10.1 (such BLS Nominees
constituting at least a majority of such Board) for as long as BLS and his
immediate family beneficially own at least 1,350,000 shares of Common Stock;
three Nominees for as long as BLS and his immediate family beneficially own at
least 1,000,000 shares of Common Stock; and one BLS Nominee for as long as BLS
and his immediate family beneficially own any outstanding shares of Common
Stock. LBP shall be entitled, but not required, to designate members (the "LBP
Nominees") of the Board of Directors constituting all of the Board of Directors
not otherwise designated by BLS as provided in this Section 10.1 (such LBP
Nominees constituting at least a majority of such Board) for so long as (i) LBP
and its Affiliates beneficially own at least 1,350,000 shares of Common
Equivalents and (ii) either (A) BLS and his immediate family beneficially own
less than 1,350,000 shares of Common Stock or (B) BLS shall have died or become
incapable of acting as chairman of the Board of Directors of the Company for
180 consecutive days due to physical or mental illness; three LBP Nominees for
so long as LBP and Affiliates beneficially own at least 1,000,000 shares of
Common Equivalents; and one LBP Nominee for so long as LBP and its Affiliates
beneficially own any outstanding shares of Common Stock. If and for so long as
Loral and its Affiliates own any shares of Voting Common Stock, at the request
of Loral, the number of members on the Board of Directors shall be increased to
9, Loral shall be entitled to designate one member (the "Loral Nominee") of the
-26-
Board of Directors and the remaining member of the Board of Directors shall be
designated by the Stockholder which at such time has the right hereunder to
designate a majority of the Board of Directors. Each of the Stockholders
agrees to vote its shares of Common Stock, at any regular or special meeting of
the stockholders of the Company called for the purpose of filling positions on
the Board of Directors, or in any written consent executed in lieu of such a
meeting of stockholders, and agrees to take all actions necessary, to ensure
the election to the Board of Directors of the LBP Nominees, BLS Nominees and
Loral Nominee as described herein.
(b) The Company and each Stockholder hereby agrees to use its
best efforts to call, or cause the appropriate officers and directors of the
Company to call, a special meeting of stockholders of the Company and to vote
all of the shares of Common Stock owned or held of record by such Stockholder
for, or to take all actions by written consent in lieu of any such meeting
necessary to cause, the removal (with or without cause) of any LBP Nominee if
LBP (or any Affiliate thereof designated by LBP) requests such director's
removal for any reason, any BLS Nominee if BLS requests such director's removal
for any reason or any Loral Nominee if Loral requests such director's removal
for any reason. LBP and its Affiliates, BLS and Loral shall have the right to
designate a new nominee in the event any LBP Nominee, BLS Nominee or Loral
Nominee, as applicable, shall be so removed or vacate his directorship for any
reason. The number of Directors that shall constitute the entire Board of
Directors may
-27-
be increased or decreased from time to time in accordance with the terms and
provisions of this Agreement and the by-laws.
(c) Subject to Section 10.1(b) hereof, each Stockholder
hereby agrees that, at any time it is then entitled to vote for the election or
removal of directors, it will not vote in favor of the removal of any LBP
Nominee, BLS Nominee or Loral Nominee unless such removal shall be for Cause
otherwise than as required by Section 10.1(b) hereof. For the purposes of this
Section 10.1(c), "Cause" shall mean the willful and continued failure by a
director substantially to perform duties as a director of the Company, the
willful engaging by a director in conduct which is demonstrably and materially
injurious to the Company, or the director's conviction of any crime
constituting a felony.
(d) The Company covenants that it will not, without the
consent of LBP, take any action requiring (under the Company's by-laws) the
approval of at least one LBP Nominee if the only LBP Nominees approving such
action are Persons whose removal from the Board of Directors LBP has requested
at or prior to the time of such action.
(e) The initial LBP Nominees shall be ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. LBP and Loral each acknowledges and agrees that it
will consult BLS with respect to any future LBP Nominees or Loral Nominees,
respectively, designated to replace the initial LBP Nominees or Loral Nominees,
respectively, with a view towards ensuring a harmonious Board of Directors.
-28-
10.2. Chairman of the Board. In the event that BLS shall
have died or become incapable of acting as chairman of the Board of Directors
of the Company for 180 consecutive days due to physical or mental illness, the
successor chairman of the Board shall be selected by LBP from among the LBP
Nominees. Upon such death or disability of BLS, the estate of BLS may, but
shall not be required to, designate a member of the Board of Directors, other
than the Chairman of the Board to replace BLS.
10.3. Charter and By-laws. (a) Exhibits A and B set forth
copies of the Company's Charter and by-laws, each in the form in effect on the
date hereof (the "Charter Documents").
(b) The Company covenants that it will act in accordance with
the Charter Documents and will not (subject to Section 10.1(d)), without the
approval of an LBP Nominee, so long as LBP shall beneficially own 1,000,000 or
more shares of Common Stock, then in office, amend either of the Charter
Documents. Each Stockholder shall vote its Common Stock at any regular or
special meeting of stockholders of the Company or in any written consent
executed in lieu of such a meeting of stockholders, and shall take all actions
necessary to ensure that the Charter Documents do not, at any time, conflict
with the provisions of this Agreement and (unless otherwise specified by LBP)
to ensure that the Charter Documents continue to provide as specified in
Exhibits A or B, as applicable.
10.4. Certain Stock-Related Compensation Plans. Each of the
Stockholders (other than Loral) agrees to vote all of the shares of Common
Stock entitled to vote owned or held of record
-29-
by such stockholder to approve any and all Stock related employee compensation
plan of the Company provided such plan has been approved by the Board of
Directors.
10.5. Purchase of Debt Securities. If, at any time prior to
the first anniversary of the Effective Date, BLS or LBP shall purchase any
Senior Secured Notes, Senior Subordinated Debentures or Senior Bank Financing,
such party shall deliver a written notice to Loral offering to sell to Loral an
amount of the Senior Secured Notes, Senior Subordinated Debentures or Senior
Bank Financing so purchased equal to the face amount of the securities so
purchased multiplied by the percentage of the Common Equivalents then owned by
Loral. Such offer shall be on the same terms and conditions (including price
and payment terms) as were applicable to the purchase by BLS or LBP. Loral
shall have a period of 10-days to accept such offer by delivering a written
notice to BLS or LBP, as applicable, and if no such notice is delivered in a
timely fashion such offer shall expire.
10.6. Company Purchase of Stock. If, at any time prior to
the first anniversary of the Effective Date, the Company shall purchase (an
"Original Repurchase") any Stock from a BLS Investor, LBP Investor or Loral
Investor (each, an "Investor Group"), the Company shall, upon the consummation
of the Original Repurchase, deliver a written notice to each Investor Group
which did not sell Stock in the Original Repurchase, offering to purchase the
same percentage of the Stock owned by the members of such Investor Group as the
percentage of the position of the Investor Group participating in the Original
Repurchase that was
-30-
purchased from the Investor Group which participated in the Original
Repurchase. Each such offer shall be on the same terms as the Original
Repurchase. Each Investor Group shall have a period of 10 days to accept such
offer by delivering a written notice to the Company and if no such notice is
delivered in a timely fashion such offer shall expire.
11. No Implied Right to Employment. Neither this
Agreement nor any provision hereof nor any action taken or omitted to be taken
hereunder shall be deemed to create or confer on any Stockholder who is an
employee of the Company or any Affiliate any right to be retained in the employ
of the Company or any Affiliate thereof, or to interfere with or limit in any
way the right of the Company or any Affiliate thereof to terminate the
employment of such Stockholder at any time.
12. Termination.
12.1. Termination. (a) This Agreement shall terminate
after a public offering as a result of which more than 75% of the then
outstanding shares of Common Equivalents, after giving effect to such offering,
have been sold to the public pursuant to one or more effective registration
statements under the Securities Act or are otherwise owned by Persons other
than Stockholders; provided that the registration rights contained in Exhibit C
hereto shall continue with respect to any remaining shares of Common Stock held
by the Stockholders for so long as they hold such shares.
(b) The provisions contained in Article 10 shall terminate on
the tenth anniversary of the date hereof.
-31-
13. Miscellaneous.
13.1. Recapitalization, Exchanges, etc., Affecting the
Common Stock. The provisions of this Agreement shall (a) apply to the full
extent set forth herein with respect to the shares of Stock and (b) as
appropriate with respect to any and all shares of capital stock of the Company
or any successor or assign of the Company (whether by merger, consolidation,
sale of assets or otherwise) which may be issued in respect of, in exchange
for, or in substitution for the shares of Stock, by reason of any stock
dividend, split, reverse split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. In the event of any
change in capitalization of the Company, as a result of any stock split, stock
dividend or stock combination, the provisions of this Agreement shall be
appropriately adjusted.
13.2. Injunctive Relief. It is hereby agreed and
acknowledged that it will be impossible to measure in money the damages that
would be suffered if the parties fail to comply with any of the obligations
herein imposed on them and that in the event of such failure, an aggrieved
person will be irreparably damaged and will not have an adequate remedy at law.
Any such person shall, therefore, be entitled to injunctive relief, including
specific performance to enforce such obligation, without the posting of any
bond, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law.
-32-
13.3. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, and their
respective successors and assigns; provided that (i) except as expressly
provided herein, neither this Agreement nor any rights or obligations hereunder
may be transferred by the Company and (ii) no rights of any Stockholder under
this Agreement may be assigned except that any Stockholder may transfer its
rights and obligations hereunder, in whole or in part, to a Transferee in
connection with a Transfer of Stock made in compliance with all of the
provisions of this Agreement to a Person who is or thereby becomes a
Stockholder. If any Stockholder shall acquire additional Stock, such Stock
shall, except as expressly provided herein, be held subject to all of the terms
of this Agreement.
13.4. Amendment; Waiver. This Agreement may be amended (i)
by a written instrument signed by the Company and by Stockholders holding an
aggregate of at least 80% of the Common Equivalents held by the Stockholders
and, in the case of any provision of any amendment that adversely affects any
Stockholder or all of the members of any group of Stockholders differently from
any of the other Stockholders, the written consent of such Stockholder or
members of such group of Stockholders holding an aggregate of at least 75% of
the Common Equivalents held by such group of Stockholders, respectively, or
(ii) by a written instrument signed by BLS, LBH and Loral for so long as (x)
BLS and his immediate family beneficially own at least 1,350,000 Common
Equivalents, (y) LBP and its Affiliates beneficially own
-33-
at least 1,000,000 Common Equivalents and (2) Loral and its Affiliates
beneficially own at least 500,000 Common Equivalents.
No provision of this Agreement may be waived orally, but only
by a signed, written instrument. Stockholders shall be bound from and after
the date of the receipt of a written notice from the Company setting forth such
amendment or waiver by a consent authorized by this Section, whether or not the
Common Stock shall have been marked to indicate such consent.
13.5. Notices. Except as otherwise provided in this
Agreement, notices and other communications under this Agreement shall be in
writing (including a writing delivered by facsimile transmission) and shall be
deemed to have been duly given if delivered personally, or sent prepaid, or by
overnight courier guaranteeing next day delivery, or by telex or telecopier,
addressed to the Company or BLS at the Loral Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopier (▇▇▇) ▇▇▇-▇▇▇▇) with a copy thereof to
▇'▇▇▇▇▇▇▇▇, Graev & Karabell at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇ (telecopier (▇▇▇) ▇▇▇-▇▇▇▇) and to the other
parties at the "Address for Notices" specified below its name on Schedule I
hereto. Each Stockholder, by written notice given to the Company in accordance
with this Section 13.5 may change the address to which such notice or other
communications are to be sent to such Stockholder. All such notices and
communications shall be deemed to have been received on the date of delivery
thereof if delivered by hand, on the next day after the sending thereof if by
overnight courier, when answered back if telexed,
-34-
and when receipt is acknowledged if telecopied. Whenever pursuant to this
Agreement any notice is required to be given by such Stockholder to any other
Stockholder or Stockholders, such Stockholder may request from the Company a
list of addresses of all Stockholders of the Company, which list shall be
promptly furnished to such Stockholder.
13.6. Inspection. So long as this Agreement shall be in
effect, this Agreement and any amendments hereto shall be made available for
inspection by a Stockholder at the principal offices of the Company.
13.7. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to the conflicts of law principles thereof.
13.8. Headings; References. Article, section and paragraph
headings are inserted herein for convenience and do not form a part of this
Agreement. All section, paragraph, exhibit and schedule references are to this
Agreement, unless otherwise expressly provided.
13.9. Integration. This Agreement and the documents
referred to herein or delivered pursuant hereto contain the entire
understanding of the parties with respect to the subject matter hereof.
13.10. Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or
-35-
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdictions.
13.11. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
-36-
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
K&F INDUSTRIES, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CBC CAPITAL PARTNERS, INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
LORAL CORPORATION
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇ BROTHERS CAPITAL
PARTNERS II, L.P.
By: ▇▇▇▇▇▇ Brothers Holdings Inc.,
General Partner
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Sr. Exec. Vice President
▇▇▇▇▇▇ BROTHERS MERCHANT
BANKING PORTFOLIO PARTNERSHIP, L.P.
By: ▇▇▇▇▇▇ Brothers Merchant Banking
Partners Inc., General Partner
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP, L.P.
By: ▇▇▇▇▇▇ Brothers Offshore
--------------------------------
Partners Ltd., General Partner
By: C. ▇▇▇▇▇ ▇▇▇▇
--------------------
Name: C. ▇▇▇▇▇ ▇▇▇▇
Title: Secretary
▇▇▇▇▇▇ BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP - JAPAN L.P.
By: ▇▇▇▇▇▇ Brothers Offshore
Partners Ltd., General Partner
By: C. ▇▇▇▇▇ ▇▇▇▇
--------------------
Name: C. ▇▇▇▇▇ ▇▇▇▇
Title: Secretary
SCHEDULE I
Addresses for Notices
LBP INVESTORS:
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
CBC CAPITAL PARTNERS, INC.:
Chemical Venture Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
LORAL INVESTORS:
Loral Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇