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Exhibit 2.02
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STOCK PURCHASE AGREEMENT
dated September 15, 1997,
among
K & F INDUSTRIES, INC.
and
THE STOCKHOLDERS OF
K & F INDUSTRIES, INC.
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STOCK PURCHASE AGREEMENT dated as of September 15, 1997, among (i) K
& F INDUSTRIES, INC., a Delaware corporation (the "Company"), and (ii) the
securityholders of the Company listed on Schedule I (the "Selling
Stockholders").
Each Selling Stockholder listed under Part A of Schedule I
(collectively, the "Existing Stockholders") is the owner of the number of shares
of (i) Common Stock, $.01 par value (the "Common Stock"), of the Company set
forth opposite the name of such Selling Stockholder under column (1) on Schedule
I or (ii) Preferred Stock, $.01 par value (the "Preferred Stock"), of the
Company set forth opposite the name of such Selling Stockholder under column (2)
on Schedule I. Each Selling Stockholder listed under Part B of Schedule I
(collectively, the "Company Optionholders") is the owner of an option or options
(collectively, the "Company Options") granted by the Company to purchase from
the Company the number of shares of Common Stock set forth opposite the name of
such Selling Stockholder under column (1) on Schedule I. Each Selling
Stockholder listed under Part C of Schedule I (collectively, the "BLS
Optionholders") is the owner of an option or options (collectively, the "BLS
Options") granted by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("BLS") to purchase from BLS the number
of shares of Common Stock set forth opposite the name of such Selling
Stockholder under column (1) on Schedule I. The Company Options and the BLS
Options are referred to as the "Options." The shares of Common Stock or
Preferred Stock owned, or subject to the Options owned, by the Selling
Stockholders are referred to as the "Shares." The Company and the Selling
Stockholders contemplate that the Company purchase certain of the Shares (the
"Purchase Shares"), all upon the terms and subject to the conditions of this
Agreement.
Accordingly, the parties agree as follows:
ARTICLE I
SALE AND PURCHASE OF PURCHASE SHARES
1.1. Sale and Purchase of Purchase Shares.
Upon the terms and subject to the conditions of this Agreement, at
the Closing, each Selling Stockholder shall sell, transfer, convey and assign to
the Company, and the Company shall purchase and acquire from such Selling
Stockholder, out of funds legally available therefor, the number of shares of
(i) Common Stock set forth, or determined in accordance with the formula set
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forth, opposite the name of such Selling Stockholder under column (3) on
Schedule I or (ii) Preferred Stock set forth, or determined in accordance with
the formula set forth, opposite the name of such Selling Stockholder under
column (4) on Schedule I.
1.2. Delivery of Purchase Shares.
At the Closing, in exchange for the delivery by the Company of the
purchase price referred to in Section 1.3, each Selling Stockholder shall
deliver or cause to be delivered to the Company a certificate or certificates
representing the Purchase Shares to be sold by him or it pursuant to this
Agreement, duly endorsed or accompanied by appropriate stock powers duly
executed in blank, with all necessary documentary or transfer tax stamps
affixed, and such other documents or instruments which may be necessary, or
which the Company may reasonably request, in order to vest in the Company good
and marketable title to such Purchase Shares, free and clear of all security
interests, liens, pledges, claims, charges, escrows, encumbrances, options,
rights of first refusal, mortgages, indentures, security agreements or other
agreements, arrangements, contracts, commitments, understandings or obligations
(collectively referred to as "Liens"), whether written or oral and whether or
not relating in any way to credit or the borrowing of money.
1.3. Purchase Price for Purchase Shares.
(a) The price per Share to be paid by the Company for the Purchase
Shares shall be an amount (the "Per Share Price") equal to the quotient obtained
by dividing (i) $625,000,000, plus the Cash Amount, as set forth in the
certificate referred to in paragraph (b) below, minus the Debt Amount, as set
forth in the certificate referred to in paragraph (b) below, minus the Brokerage
Fee (as defined in Section 4.5), by (ii) 2,051,223. "Cash Amount" means the
aggregate amount of cash and cash equivalents held by the Company or its
subsidiaries as of the date of the Closing; and "Debt Amount" means the
aggregate outstanding principal amount of indebtedness of the Company or its
subsidiaries for borrowed money as of the date of the Closing, plus the
aggregate amount of unpaid interest accrued through the date of the Closing on
such indebtedness.
(b) At the Closing, the Company shall deliver to the Selling
Stockholders a certificate setting forth accurately the Cash Amount and the Debt
Amount, as determined in accordance with generally accepted accounting
principles consistently applied.
1.4. Delivery of Purchase Price.
(a) At the Closing, the Company shall deliver or cause to be
delivered to:
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(i) Each Existing Stockholder the aggregate purchase price
for the Purchase Shares sold by such Existing Stockholder;
(ii) each Company Optionholder the aggregate purchase price
for the Purchase Shares sold by such Company Optionholder, minus the sum of (x)
the aggregate exercise price payable by such Company Optionholder pursuant to
his Company Option or Company Options, as set forth opposite the name of such
Company Optionholder under column (5) on Schedule I and (y) any amounts required
to be withheld by the Company for income tax purposes; and
(iii) (A) each BLS Optionholder the aggregate purchase price
for the Purchase Shares sold by such BLS Optionholder, minus the sum of (x) the
aggregate exercise price payable by such BLS Optionholder pursuant to his BLS
Option or BLS Options, as set forth opposite the name of such BLS Optionholder
under column (5) on Schedule I and (y) any amounts required to be withheld by
the Company for income tax purposes, and (B) BLS such aggregate exercise price.
(b) The amount payable by the Company to each Selling Stockholder
shall be payable, at the election of such Selling Stockholder, by check or by
wire transfer to an account designated by such Selling Stockholder.
1.5. Certificate of Amendment; Stockholders' Agreement.
At the Closing, immediately following the sale and purchase of the
Purchase Shares contemplated by this Agreement:
(i) the Company shall file the Amended and Restated
Certificate of Incorporation of the Company (the "Restated Certificate") in the
form attached as Exhibit A with the Secretary of State of the State of Delaware,
which Restated Certificate provides for a reclassification of the outstanding
shares of capital stock of the Corporation into Common Stock;
(ii) (A) the Company, (B) BLS, and (C) ▇▇▇▇▇▇ Brothers Capital
Partners II, L.P., ▇▇▇▇▇▇ Brothers Merchant Banking Portfolio Partnership L.P.,
▇▇▇▇▇▇ Brothers Offshore Investment Partnership L.P., and ▇▇▇▇▇▇ Brothers
Offshore Investment Partnership - Japan, L.P. (the "▇▇▇▇▇▇ Investors"), shall
execute and deliver a Stockholders Agreement, in form and substance satisfactory
to the Company, BLS, and the ▇▇▇▇▇▇ Investors, reflecting the terms set forth on
Exhibit B; and
(iii) the Company shall deliver to BLS and each ▇▇▇▇▇▇
Investor, in exchange for the surrender by such Selling
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Stockholder of all certificates representing Shares owned by such Selling
Stockholder that are not Purchase Shares (the "Retained Shares"), a certificate
representing a number of shares of Common Stock equal to the number of Retained
Shares of such Selling Stockholder.
ARTICLE II
CLOSING
The closing (the "Closing") for the consummation of the transactions
contemplated hereby shall take place at the offices of ▇'▇▇▇▇▇▇▇▇ Graev &
Karabell, LLP, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (or any other offices
designated by the Company), simultaneously with the satisfaction of the
conditions set forth in Article VI.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS
Each Selling Stockholder, severally and only with respect to himself
or itself, represents and warrants to the Company as follows:
3.1. Powers.
Such Selling Stockholder has full power and authority to execute and
deliver this Agreement and consummate the transactions contemplated hereby.
3.2. Authorization.
The execution and delivery by such Selling Stockholder of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all requisite corporate, partnership or other action on the
part of such Selling Stockholder. This Agreement constitutes a legal, valid and
binding obligation of such Selling Stockholder, enforceable in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
rights of creditors generally or by general equitable principles.
3.3. No Conflict.
Assuming satisfaction of, and compliance with, the matters referred
to in Article V, the execution and delivery by such Selling Stockholder of this
Agreement and the consummation
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by such Selling Stockholder of the transactions contemplated hereby (i) to the
knowledge of such Selling Stockholder, will not violate any law, statute, rule
or regulation, (ii) will not conflict with any provision of the certificate of
incorporation, partnership agreement, by-laws, or other organizational or
constitutive instruments, if any, of such Selling Stockholder, (iii) will not
require or make necessary any consent, approval or other action of, or notice
to, any person, except for those that have been obtained or made, and (iv) will
not conflict with, or result in a violation of, any agreement or other document
or instrument to which such Selling Stockholder is a party or by which he or it,
or any of his or its assets or properties, is bound.
3.4. Purchase Shares.
Such Selling Stockholder is, or upon exercise of his Option or
Options will be, the record and beneficial owner of the number of Shares set
forth opposite his or its name under column (1) or (2) on Schedule I. Such
Shares constitute all shares of Common Stock or Preferred Stock such Selling
Stockholder owns or has the right to acquire. The transfer to the Company by
such Selling Stockholder of the Purchase Shares to be sold by him or it pursuant
to this Agreement will pass to the Company good and marketable title to such
Purchase Shares, and all other incidents of record and beneficial ownership
pertaining thereto, free and clear of any Liens. None of such Purchase Shares is
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, written or oral, restricting or otherwise relating
to the voting or disposition of such Purchase Shares, other than (i) this
Agreement, (ii) in the case of the Existing Stockholders, the Amended and
Restated Stockholders Agreement dated as of September 2, 1994 (the "Stockholders
Agreement"), by and among the Company and its stockholders, (iii) in the case of
the Company Optionholders, the K & F Industries, Inc. 1989 Stock Option Plan
(the "Stock Option Plan"), and (iv) in the case of BLS and the BLS
Optionholders, the BLS Options. No proxies have been granted with respect to
such Purchase Shares which have not been revoked, expired or otherwise ceased to
be in effect as of the date hereof. Except as contemplated herein, there are no
outstanding warrants, options, agreements, convertible or exchangeable
securities or other commitments pursuant to which such Selling Stockholder is or
may become obligated to sell any of his or its Purchase Shares.
3.5. Litigation.
There are no actions, suits, claims, investigations, or other legal,
administrative or arbitration proceedings (collectively, "Proceedings") relating
to the transactions contemplated hereby pending or, to the knowledge of such
Selling Stockholder, threatened against such Selling Stockholder. There
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are no judgments, decrees, injunctions, or orders of any court, governmental
department, commission, agency, instrumentality or arbitrator (collectively
"Judgments") against such Selling Stockholder relating to the transactions
contemplated hereby.
3.6. No Brokers.
No broker or finder has acted for such Selling Stockholder in
connection with this Agreement or the transactions contemplated hereby, and no
broker or finder is entitled to any brokerage or finder's fee or other
commission in respect thereof based in any way on any agreement or arrangement
made by such Selling Stockholder.
3.7. Acknowledgment.
Such Selling Stockholder acknowledges that he or it has made its own
analysis of the fairness of the Per Share Price and has not relied on any advice
or recommendation by the Company or its directors, officers or affiliates with
respect to his or its decision to enter into this Agreement and to consummate
the transactions contemplated hereby. Such Selling Stockholder has had
sufficient opportunity to investigate and review the business, management and
financial affairs of the Company, and has had sufficient access to management of
the Company, before his or its decision to enter into this Agreement. Such
Selling Stockholder acknowledges that, in connection with his or its entry into
this Agreement and consummation of the transactions contemplated hereby, (i)
such Selling Stockholder has not relied on any representations or warranties of
the Company, any director, officer or representative of the Company, or any
other Selling Stockholder, except for the representations or warranties of the
Company set forth in Article IV or referred to in Section 6.3(d), and (ii) such
Selling Stockholder has made an independent decision to sell his or its Purchase
Shares pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1. Powers.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation and has full
power and authority to execute and deliver this Agreement and consummate the
transactions contemplated hereby.
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4.2. Authorization.
The execution and delivery by the Company of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate action on the part of the Company. This Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally or by general equitable principles.
4.3. No Conflict.
Assuming compliance with, and satisfaction of, the matters referred
to in Article V, the execution and delivery by the Company of this Agreement and
the consummation of the transaction contemplated hereby (i) will not violate any
law, statute, rule or regulation, (ii) will not conflict with any provision of
the Certificate of Incorporation or By-laws of the Company, (iii) will not
require or make necessary any consent, approval or other action, or notice to,
any person, except for those that have been obtained or made or as set forth in
Section 6.2, and (iv) will not conflict with, or result in a violation of, any
agreement or other document or instrument to which the Company is a party or by
which it or any of its assets or properties is bound. The Company's surplus, as
determined in accordance with the General Corporation Law of the State of
Delaware, is sufficient to permit the purchase of the Purchase Shares
contemplated hereby.
4.4. Litigation.
There are no Proceedings seeking to enjoin the transactions
contemplated hereby pending or, to the knowledge of the Company, threatened
against the Company. There are no Judgments against the Company relating to the
transactions contemplated hereby.
4.5. No Brokers.
Except for a fee of $1,000,000 (the "Brokerage Fee") payable by the
Company to Unterberg Harris, no broker or finder has acted for the Company in
connection with this
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Agreement or the transactions contemplated hereby, and no broker or finder is
entitled to any brokerage or finder's fee or other commission in respect thereof
based in any way on any agreement or arrangement made by the Company.
4.6 Capital Stock.
Upon consummation of the transactions contemplated hereby, the
authorized capital stock of the Company will consist of 1,000,000 shares of
Common Stock, of which only the number of shares equal to the number of Retained
Shares will be issued and outstanding. All such outstanding shares of Common
Stock will have been duly authorized and validly issued and will be fully paid
and non-assessable. Except as set forth in this Section 4.6, upon consummation
of the transactions contemplated hereby, there will be no outstanding (i) shares
of capital stock of the Company, (ii) securities of the Company convertible into
or exchangeable for shares of capital stock of the Company, or (iii) options or
other rights to acquire from the Company, or other obligations of the Company to
issue, any capital stock or securities convertible into or exchangeable for
capital stock of the Company.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Stockholders Agreement; Consent.
Each of the Company and the Existing Stockholders hereby (i) waives
any rights he or it may have under the Stockholders Agreement with respect to
the transactions contemplated by this Agreement, (ii) agrees that the
Stockholders Agreement shall terminate automatically as of the Closing, and
(iii) otherwise consents to the transactions contemplated by the this Agreement
in all respects. Without limiting the generality of the foregoing, BLS and the
▇▇▇▇▇▇ Investors, who will constitute all of the stockholders of the Corporation
immediately following the sale and repurchase of the Purchase Shares
contemplated by this Agreement, acting pursuant to Sections 228 and 242 of the
General Corporation Law of the State of Delaware, hereby approve and adopt the
form, terms and provisions of the Restated Certificate in all respects.
5.2 Exercise of Company Options.
Each Company Optionholder hereby exercises his Company Option or
Company Options in full, such exercise to become effective as of the Closing.
The Company hereby (i) agrees to issue the Shares to be issued upon such
exercise at the Closing, (ii) agrees that payment of the exercise price under
such Company Option or Company Options shall be made at the Closing, as provided
in Section 1.4(a), and (ii) waives any rights it may have under the Stock Option
Plan or such Company Option or Company Options with respect, and hereby
consents, to the sale by such Company Optionholder of his Purchase Shares
pursuant to this
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Agreement. Each Company Optionholder agrees that the consummation of the
transactions contemplated hereby with respect to his Company Options constitutes
full and complete satisfaction of his rights under the Stock Option Plan or such
Company Options.
5.3 Exercise of BLS Options.
Each BLS Optionholder hereby exercises his or its BLS Option or BLS
Options in full, such exercise to become effective as of the Closing. BLS hereby
(i) agrees that payment of the exercise price under such BLS Option or BLS
Options shall be made at the Closing, as provided in Section 1.4(a), and (ii)
waives any rights he may have under such BLS Option or BLS Options with respect,
and hereby consents, to the sale by such BLS Optionholder of his or its Purchase
Shares pursuant to this Agreement. Each BLS Optionholder agrees that the
consummation of the transactions contemplated hereby with respect to his or its
BLS Options constitutes full and complete satisfaction of his or its rights
under such BLS Options.
5.4 Efforts to Consummate.
Subject to the terms and conditions of this Agreement, each party
shall use his or its reasonable commercial efforts to take or cause to be taken
all action reasonably necessary, proper or advisable to consummate the
transactions contemplated by this Agreement, including the obtaining of all
consents, authorizations, orders and approvals of any third party, whether
private or governmental, required in connection with the consummation of such
transactions. Notwithstanding the foregoing, the conditions set forth in Section
6.1 and 6.2 may be asserted by the Company regardless of the circumstances
giving rise to any such condition, including any action or inaction by the
Company.
5.5 Equity Securities.
Except as contemplated by this Agreement, from the date hereof until
the Closing, the Company shall not declare, set aside, pay any dividend or make
any distribution in respect of its capital stock, issue or sell any shares of
any class of its capital stock, or issue or sell any securities convertible
into, exercisable or exchangeable for or options or warrants to purchase or
rights to subscribe for, any shares of any class of its capital stock, or enter
into any agreement, contract or other commitment to do any of the foregoing.
5.6 Conduct of Business.
From the date hereof until the Closing, the Company shall operate
its business
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in the ordinary course of business consistent with past custom and practice.
Without limiting the generality of the foregoing, the Company shall not
accelerate the payment of accounts payable or the incurrence of capital
expenditures other than in the ordinary course of business consistent with past
custom and practice.
5.7 Transfer of Shares.
Except as contemplated by this Agreement, from the date hereof until
the Closing, each Selling Stockholder shall not sell, transfer, convey, pledge
or assign any Shares.
5.8 Expenses.
Each party shall bear its own expenses in connection with the
execution, delivery and performance of this Agreement.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions to Obligations of the Company and the Selling Stockholders.
The obligations of the Company and each Selling Stockholder to
consummate the sale and purchase of the Purchase Shares contemplated hereby are
subject to the satisfaction of the following conditions, unless waived by the
Company and each Existing Stockholder:
(a) No Legal Proceedings. There shall not be (A) any Proceedings
pending by or before any governmental entity (including, without limitation, any
court) or threatened by any governmental entity (i) seeking to make illegal or
to restrain or prohibit the transactions contemplated by this Agreement, or (ii)
seeking to obtain damages from the Company or any of the Selling Stockholders in
connection with the transactions contemplated by this Agreement, (B) any action
taken, or any statute, rule, regulation or order proposed, enacted, enforced,
promulgated, issued or deemed applicable to the transactions contemplated by
this Agreement by any governmental entity which results in any of the
consequences referred to in subclauses (i) and (ii) of clause (A) above.
(b) Solvency Opinion. The Company shall have received a "bring-down"
opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Incorporated, in form and substance satisfactory
to the Company and the Selling Stockholders, to the effect that the conclusions
set forth in the opinion dated September 9, 1997, of such firm are true and
correct on the date of the Closing.
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6.2 Conditions to Obligation of Company.
The obligation of the Company to consummate the sale and purchase of
the Purchase Shares contemplated hereby is subject to the satisfaction of the
following conditions, unless waived by the Company:
(a) Representations and Warranties. The representations and
warranties of each Selling Stockholder contained in Article III shall be true
and correct in all material respects on the date of the Closing as if made on
and as of such date.
(b) Performance of Obligations. The Selling Stockholders shall have
performed, in all material respects, all obligations required to be performed by
each of them under this Agreement.
(c) Required Consents. All consents, approvals and other actions of,
and notices and filings with, all governmental entities and other persons as may
be necessary or required with respect to the execution and delivery by each
Selling Stockholder of this Agreement and the consummation by each Selling
Stockholder of the transactions contemplated hereby shall have been obtained or
made.
(d) Credit Agreement. The Company shall have entered into definitive
financing documentation, with terms satisfactory to the Company, BLS, and the
▇▇▇▇▇▇ Investors, implementing the terms of the commitment letter dated the date
hereof of ▇▇▇▇▇▇ Commercial Paper Inc., providing for a secured credit facility
of up to $372,000,000, and the closing under such documentation shall have
occurred.
(e) Notes Offering. The Company shall have issued $185,000,000
aggregate principal amount of senior subordinated notes (the "New Notes") upon
terms and pursuant to documentation satisfactory to the Company, BLS, and the
▇▇▇▇▇▇ Investors.
(f) Tender Offer. The holders of the Company's 10 3/8% Senior
Subordinated Notes due 2004 shall have tendered, and the Company shall have
accepted for payment, a majority in principal amount of such Senior Subordinated
Notes in accordance with the Offer to Purchase and Consent Solicitation
Statement dated September 12, 1997.
(g) Loral Agreements. All agreements between the Company and Loral
or BLS relating to the provision of services to the Company shall have been
extended, renewed or confirmed upon terms satisfactory to the Company, BLS, and
the ▇▇▇▇▇▇ Investors.
(h) No Material Adverse Change. There shall not have occurred any
event that has a material adverse effect on the assets, properties, liabilities,
operations or business of the Company.
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6.3 Conditions to Obligation of Selling Stockholders.
The obligation of each Selling Stockholder to consummate the sale
and purchase of the Purchase Shares contemplated hereby is subject to the
satisfaction of the following conditions, unless waived by each Existing
Stockholder:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Article IV shall be true and correct in
all material respects on the date of the Closing as if made on and as of such
date.
(b) Performance of Obligations. The Company shall have performed, in
all material respects, all obligations required to be performed by it under this
Agreement.
(c) Required Consents. All consents, approvals and other actions of,
and notices and filings with, all governmental entities and other persons as may
be necessary or required with respect to the execution and delivery by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby shall have been obtained or made.
(d) Reliance on Representations. Such Selling Stockholder shall have
received a certificate or similar statement of the Company, in form and
substance satisfactory to such Selling Stockholder, that such Selling
Stockholder is entitled to rely on those representations and warranties provided
by the Company to the initial purchasers of the New Notes that relate to the
historical and pro forma financial statements, including the notes thereto, set
forth in the offering memorandum used in connection with the offering of the New
Notes.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification by Selling Stockholders.
Each Selling Stockholder shall severally indemnify the Company, the
other Selling Stockholders, and their respective affiliates, subsidiaries and
successors, from, against, for and in respect of all damages, losses,
obligations, liabilities, claims, actions, and reasonable costs and expenses
(including, without limitation, reasonable attorneys', accountants' and other
professional fees and expenses) sustained, suffered or incurred by the Company,
any other Selling Stockholder, or any of their respective affiliates,
subsidiaries or successors, as a result of a breach by such Selling Stockholder
of any representation, warranty or agreement of such Selling Stockholder
pursuant to or contained in this Agreement.
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7.2 Indemnification of Selling Stockholders.
The Company shall indemnify each Selling Stockholder, and its
affiliates, subsidiaries and successors, from, against, for and in respect of
all damages, losses, obligations, liabilities, claims, actions, and reasonable
costs and expenses (including, without limitation, reasonable attorneys',
accountants' and other professional fees and expenses) sustained, suffered
or incurred by such Selling Stockholder, or any of its affiliates, subsidiaries
or successors, as a result of a breach of any representation, warranty or
agreement of the Company contained in or made pursuant to this Agreement.
7.3 Survival.
All representations and warranties contained in this Agreement shall
survive the Closing.
7.4 Remedies Cumulative.
The remedies provided for in this Article VII shall be cumulative
and shall not preclude assertion by the indemnified parties of any other rights
or the seeking of any other remedies against the indemnifying parties.
ARTICLE VIII
TERMINATION
8.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Closing, by:
(i) the mutual consent of the Company and the Existing
Stockholders holding a majority of the Shares held by all Existing Stockholders;
(ii) the Company or any Existing Stockholder, if the
conditions set forth in Section 6.1 shall not have been met on or prior to
October 31, 1997, except if such conditions have not been met solely as a result
of the failure of the party seeking to terminate to fulfill any material
obligation under this Agreement;
(iii) the Company, if the conditions set forth in Section 6.2
shall not have been met on or prior to October 31, 1997; and
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(iv) any Existing Stockholder, if the conditions set forth in
Section 6.3 shall not have been met on or prior to October 31, 1997.
(b) Any termination pursuant to paragraph (a) above shall be
effected by notice from the party or parties so terminating to the other
parties. Any such termination shall not relieve any party of any liability
arising from such party's breach of any representation, warranty, or agreement
contained herein prior to such termination.
ARTICLE IX
MISCELLANEOUS
9.1 Assignment.
Without the prior written consent of all other parties, this
Agreement and the rights hereunder shall not be assignable or transferable by
any party.
9.2 No Third-Party Beneficiaries.
This Agreement is for the sole benefit of the parties and nothing
herein, express or implied, shall give or be construed to give to any person or
entity, other than the parties, any legal or equitable rights hereunder.
9.3 Notices.
All notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or if sent by nationally-recognized overnight
courier, by telecopy, or by registered or certified mail, return receipt
requested and postage prepaid, addressed as follows:
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if to the Company:
K & F Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President
with a copy to:
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
if to any Selling Stockholder, to his or its address set forth on
Schedule II;
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance herewith. Any such
notice or communication shall be deemed to have been received (a) in the case of
personal delivery, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
when sent, (c) in the case of telecopy transmission, when received, and (d) in
the case of mailing, on the third business day following that on which the piece
of mail containing such communication is posted.
9.4 Entire Agreement; Amendments.
This Agreement contains the entire agreement, and supersedes all
prior agreements, between the parties with respect to the subject matter hereof.
This Agreement may be amended only by a written instrument duly executed by the
Company and the Existing Stockholders; provided, however, that any such
amendment shall not discriminate against any other Selling Stockholder without
his or its consent.
9.5 Governing Law.
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17
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without given effect to its principles
governing conflicts of laws, except to the extent the General Corporation Law of
the State of Delaware governs.
9.6 Headings.
The headings of this Agreement are for purposes of reference only
and shall not limit or otherwise affect any of the terms or provisions hereof.
9.7 Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
16
18
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered on the date first above written.
K & F INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
THE SELLING STOCKHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CBC CAPITAL PARTNERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
LORAL SPACE & COMMUNICATIONS
LTD.
By: /s/
--------------------------------------
Name:
Title:
▇▇▇▇▇▇ BROTHERS CAPITAL PARTNERS II, L.P.
By: ▇▇▇▇▇▇ Brothers Holdings
Inc., General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
17
19
▇▇▇▇▇▇ BROTHERS MERCHANT
BANKING PORTFOLIO PARTNERSHIP
L.P.
By: LB I Group Inc., General
Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇ BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP L.P.
By: ▇▇▇▇▇▇ Brothers Offshore
Partners Ltd., General
Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇ BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP - JAPAN L.P.
By: ▇▇▇▇▇▇ Brothers Offshore
Partners Ltd., General
Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
/s/ *
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
18
20
/s/ *
----------------------------------
▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇ ▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇▇▇ Much
/s/ *
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ *
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇. ▇▇▇▇▇▇
19
21
/s/ *
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇. ▇▇▇▇▇▇▇
/s/ *
----------------------------------
▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST DATED
05/10/80
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Trustee
*Signed for by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Attorney in Fact.
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SELLING STOCKHOLDERS
Shares Purchase Shares
----------------------------- -------------------------------------
(1) (2) (3) (4) (5)
Common Preferred Stock Common Stock Preferred Stock Exercise Price
Stock
Name
PART A:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 553,343 - 482,843 - N/A
minus 50% of the
Retained Number (as
defined below)
CBC Capital Partners, 1 44,999 1 44,999 N/A
Inc.
Loral Space &
Communications Ltd. 458,994 -- 458,994 -- N/A
▇▇▇▇▇▇ Brothers Capital
Partners II, L.P. -- 325,156 -- 325,156 N/A
minus 16.55% of
the Retained Number
▇▇▇▇▇▇ Brothers Merchant
Banking Portfolio -- 478,387 -- 478,387 N/A
Partnership L.P.
minus 24.34% of
the Retained Number
▇▇▇▇▇▇ Brothers Offshore
Investment Partnership -- 129,745 -- 129,745 N/A
L.P.
minus 6.60% of
the Retained Number
▇▇▇▇▇▇ Brothers Offshore
Investment Partnership -- 49,348 -- 49,348 N/A
- Japan L.P.
minus 2.51% of
the Retained Number
--------------------------------------------------------------------------------
"Retained Number" means the quotient, rounded up to the next even integer,
obtained by dividing (i) $130,000,000 by (ii) the Per Share Price.
21
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Shares Purchase Shares
----------------------------- -------------------------------------
(1) (2) (3) (4) (5)
Common Preferred Stock Common Stock Preferred Stock Exercise Price
Stock
PART B:
▇▇▇▇▇▇ ▇▇▇▇▇▇ 500 -- 500 -- $ 42,300
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 850 -- 850 -- $ 71,910
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 300 -- 300 -- $ 25,380
▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇ 250 -- 250 -- $ 21,150
▇▇▇▇▇ ▇▇▇▇▇▇▇ 300 -- 300 -- $ 25,380
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 2,500 -- 2,500 -- $211,500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 500 -- 500 -- $ 42,300
▇▇▇▇▇ ▇▇▇▇▇▇▇ 400 -- 400 -- $ 33,840
▇▇▇▇▇ ▇▇▇▇▇▇ 1,500 -- 1,500 -- $126,900
▇▇▇ ▇▇▇▇▇▇ 500 -- 500 -- $ 42,300
▇▇▇▇▇▇▇ Much 300 -- 300 -- $ 25,380
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 500 -- 500 -- $ 42,300
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,500 -- 1,500 -- $126,900
▇▇▇▇▇▇ ▇▇▇▇▇▇ 300 -- 300 -- $ 25,380
▇▇▇▇ ▇▇▇▇▇▇▇ 150 -- 150 -- $ 12,690
▇. ▇▇▇▇▇▇ 500 -- 500 -- $ 42,300
▇▇▇▇▇ ▇▇▇▇▇▇▇ 400 -- 400 -- $ 33,840
------------------------------------------------------------------------------------------------------------------
Total 11,250 -- 11,250 -- $951,750
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Shares Purchase Shares
----------------------------- -------------------------------------
(1) (2) (3) (4) (5)
Common Preferred Stock Common Stock Preferred Stock Exercise Price
Stock
PART C:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,000 -- 1,000 -- $ 40,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 10,000 -- 10,000 -- $ 400,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 5,000 -- 5,000 -- $ 200,000
▇. ▇▇▇▇▇▇▇ 10,000 -- 10,000 -- $ 400,000
▇. ▇▇▇▇▇ 10,000 -- 10,000 -- $ 400,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,500 -- 2,500 -- $ 100,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 12,000 -- 12,000 -- $ 480,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,000 -- 10,000 -- $ 400,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trust dated 05/10/80 10,000 -- 10,000 -- $ 400,000
------------------------------------------------------------------------------------------------------------------------
Total 70,500 -- 70,500 -- $2,820,000
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SCHEDULE II
SELLING STOCKHOLDERS
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Loral Space & Communications Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
CBC Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Loral Space & Communications Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
▇▇▇▇▇▇ Brothers Capital Partners II, ▇.▇.
▇▇▇▇▇▇ Brothers Merchant Banking Portfolio Partnership ▇.▇.
▇▇▇▇▇▇ Brothers Offshore Investment Partnership ▇.▇.
▇▇▇▇▇▇ Brothers Offshore Investment Partnership - Japan L.P.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Much
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
24
26
▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trust dated 05/10/80
c/o K & F Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President
25