STOCK PURCHASE AGREEMENT
This
Stock Purchase Agreement (the “Agreement”) is made and entered into as
of October 16, 2007 between TIMET Finance Management Company, a Delaware
corporation (“Seller”), and CompX International Inc., a Delaware
corporation (“CompX”).
Recitals
A. Seller
wishes to sell to CompX, and CompX wishes to purchase from Seller, on the terms
and subject to the conditions of this Agreement (collectively, the
“Transaction”) 483,600 shares (the “Shares”) of the class A
common stock, $0.01 par value per share, of CompX.
B. The
parties do not wish to close the Transaction until the effectiveness of the
merger (the Merger”) of CompX Group, Inc., a Delaware corporation that
is a parent of CompX, with and into CompX KDL LLC, a Delaware limited liability
company of which CompX is the sole member.
Agreement
The
parties agree as follows:
ARTICLE I.
THE
TRANSACTION
Section 1.1. Purchase
and Sale of Shares. On the effective date of the Merger
(the “Closing Date”) and against payment of the purchase price therefor
as specified in Section 1.2, Seller shall sell, transfer,
assign and deliver to CompX the Shares. The Shares shall be delivered
electronically to an account designated by CompX.
Section 1.2. Purchase
Price and Payment. On the Closing Date, CompX shall
purchase the Shares for a purchase price of $19.50 per Share or an aggregate
purchase price of $9,430,200.00. The aggregate payment for the Shares
shall be made substantially on the terms of the promissory note set forth on
Exhibit A attached to this Agreement (the “Promissory
Note”).
ARTICLE II.
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
Seller
hereby represents and warrants to CompX as of the date of this Agreement, and
as
of the Closing Date as if made at such time, as follows:
Section 2.1. Authority. It
is a corporation validly existing and in good standing under the laws of the
state of its incorporation. It has full corporate power and
authority, without the consent or approval of any other person, to execute
and
deliver this Agreement and to consummate the Transaction. All
corporate action required to be taken by or on behalf of it to authorize the
execution, delivery and performance of this Agreement has been duly and properly
taken.
Section 2.2. Validity. This
Agreement is duly executed and delivered by it and constitutes its lawful,
valid
and binding obligation, enforceable in accordance with its terms. The
execution and delivery of this Agreement and the consummation of the Transaction
by it are not prohibited by, do not violate or conflict with any provision
of,
and do not result in a default under (a) its charter or bylaws; (b) any material
contract, agreement or other instrument to which it is a party or by which
it is
bound; (c) any order, writ, injunction, decree or judgment of any court or
governmental agency applicable to it; or (d) any law, rule or regulation
applicable to it, except in each case for such prohibitions, violations,
conflicts or defaults that would not have a material adverse consequence to
the
Transaction.
Section 2.3. Ownership
of Shares. It is the record and beneficial owner of the
Shares and upon consummation of the transactions contemplated by this Agreement,
CompX will acquire good and marketable title to the Shares, free and clear
of
any liens, encumbrances, security interests, restrictive agreements, claims
or
imperfections of any nature whatsoever, other than restrictions on transfer
imposed by applicable securities laws.
ARTICLE III.
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
CompX
hereby represents and warrants to the Seller as of the date of this Agreement,
and as of the Closing Date as if made at such time, as follows:
Section 3.1. Authority. It
is a corporation validly existing and in good standing under the laws of the
State of Delaware. It has full corporate power and authority, without
the consent or approval of any other person, to execute and deliver this
Agreement and the Promissory Note and to consummate the
Transaction. All corporate and other actions required to be taken by
or on behalf of it to authorize the execution, delivery and performance of
this
Agreement and the Promissory Note have been duly and properly
taken.
Section 3.2. Validity. This
Agreement and the Promissory Note are duly executed and delivered by CompX
and
constitute lawful, valid and binding obligations of CompX, each enforceable
in
accordance with its terms. The execution and delivery of this
Agreement and the Promissory Note and the consummation of the Transaction by
CompX are not prohibited by, do not violate or conflict with any provision
of,
and do not result in a default under (a) its charter or bylaws; (b) any material
contract, agreement or other instrument to which it is a party or by which
it is
bound; (c) any order, writ, injunction, decree or judgment of any court or
governmental agency applicable to it; or (d) any law, rule or regulation
applicable to it, except in each case for such prohibitions, violations,
conflicts or defaults that would not have a material adverse consequence to
the
Transaction.
ARTICLE IV.
GENERAL
PROVISIONS
Section 4.1.
Survival. The representations and warranties set forth
in this Agreement shall survive the execution of this Agreement and the
consummation of the transactions contemplated herein. The covenants
and other agreements set forth in this Agreement shall terminate on the tenth
anniversary of this Agreement.
Section 4.2. Amendment
and Waiver. No amendment or waiver of any provision of
this Agreement shall in any event be effective unless the same shall be in
a
writing referring to this Agreement and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 4.3. Parties
and Interest. This Agreement shall bind and inure to
the benefit of the parties named herein and their respective heirs, successors
and assigns.
Section 4.4. Entire
Transaction. This Agreement contains the entire
understanding among the parties with respect to the transactions contemplated
hereby and supersedes all other agreements and understandings among the parties
with respect to the subject matter of this Agreement.
Section 4.5. Applicable
Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the
State of Delaware or any other jurisdiction) that would cause the application
of
the laws of any jurisdiction other than the State of Delaware.
Section 4.6. Severability. If
any provision of this Agreement is found to violate any statute, regulation,
rule, order or decree of any governmental authority, court, agency or exchange,
such invalidity shall not be deemed to effect any other provision hereof or
the
validity of the remainder of this Agreement and such invalid provision shall
be
deemed deleted to the minimum extent necessary to cure such
violation.
Section 4.7. Notice. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be sent by registered or certified mail, postage prepaid
as
follows:
If
to the
Seller: TIMET
Finance Management Company
Nemours
Building, Suite 1414
0000
Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
Attention: Secretary
If
to the
Purchaser: CompX
International Inc.
0000
XXX
Xxxxxxx
Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000-0000
Attention: General
Counsel
Section 4.8. Headings. The
sections and other headings contained in this Agreement are for reference
purposes only and shall not effect in any way the meaning or interpretation
of
this Agreement.
Section 4.9. Expenses. Except
as otherwise expressly provided herein, each party to this Agreement shall
pay
its own costs and expenses in connection with the transactions contemplated
hereby.
The
parties hereto have caused this Agreement to be executed by their duly
authorized officers as of the date first written above.
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TIMET
Finance Management Company
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By:
/s/ Xxxx Xxxx
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Xxxx Xxxx, President and
Secretary
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CompX
International, Inc.
|
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By:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, Vice
President
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EXHIBIT A
SUBORDINATED
TERM LOAN PROMISSORY
NOTE
$9,430,200.00 October
[__],
2007
For
and
in consideration of value received, the undersigned, COMPX INTERNATIONAL
INC., a corporation duly organized under the laws of Delaware
(“Maker”), promises to pay to the order of TIMET FINANCE MANAGEMENT
COMPANY, a corporation duly organized under the laws of Delaware
(“Payee”), at its address 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx
00000, in lawful money of the United States of America, the principal sum of
Nine Million Four Hundred Thirty Thousand Two Hundred United States Dollars
($9,430,200.00) together with interest from the date hereof on the amount of
principal from time to time outstanding at a rate equal to the three month
United States LIBOR rate as quoted from time to time by The Wall Street Journal
or other reliable source, plus one percent (1.00%) per annum. Interest shall
be
calculated on the basis of a year of 365/366 days and for the actual number
of
days (including the first, but excluding the last day) elapsed and shall be
paid
in arrears quarterly on the last day of each March, June, September and
December, commencing December 31, 2007.
Principal
payments of $44,800 will be due and payable quarterly on the last day of each
March, June, September and December commencing September 30, 2008, with any
and
all remaining outstanding principal and any accrued unpaid interest due on
September 30, 2014 (the “Maturity Date”). All payments on this Note shall be
applied first to accrued and unpaid interest, next to accrued interest not
yet
payable, and then to principal against the scheduled principal payments from
earliest to latest. Maker may prepay principal at any time without penalty.
In
the event that principal or interest is not paid within five days of when due
or
declared due, interest shall thereafter accrue on the full amount of such
payment at the rate of United States LIBOR plus three percent (3%) per
annum.
Notice
of
written demand for payment shall be made by Payee to Maker by certified mail,
postage prepaid and return receipt requested to Maker’s address as set forth
under its signature below. The demand for payment or any other communication
shall be deemed given and effective as of the date of delivery or upon receipt
as set forth on the return receipt.
Upon
the
occurrence and during the continuation of an Event of Default (as defined
below), Payee shall have all of the rights and remedies provided in the
applicable Uniform Commercial Code, this Note or any other agreement between
Maker and in favor of Payee, as well as those rights and remedies provided
by
any other applicable law, rule or regulation. In conjunction with and in
addition to the foregoing rights and remedies of Payee, Payee may declare all
indebtedness due under this Note, although otherwise unmatured, to be due and
payable immediately without notice or demand whatsoever. All rights and remedies
of the holder are cumulative and may be exercised singly or concurrently. The
exercise of any right or remedy will not be a waiver of any other right or
remedy.
For
purposes of this Note, an Event of Default shall mean any one of the following
events:
(a) Maker
fails to pay quarterly principal payments when due or interest payments within
30 days of becoming due;
SUBORDINATED
TERM LOAN PROMISSORY
NOTE
$9,430,200.00 October
[__],
2007
(b) Maker
otherwise fails to perform or observe any other provision contained in this
Note
and such breach or failure to perform shall continue for a period of thirty
days
after notice thereof shall have been given to Makers by the holder
hereof;
(c) Maker
defaults under any loan, extension of credit, security agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
Maker’s ability to repay this Note or perform Maker’s obligations under this
Note; or
(d) Maker
becomes insolvent, a receiver is appointed for any part of Maker’s property,
Maker makes an assignment for the benefit of creditors, or any proceeding is
commenced either by Maker or against Maker under any bankruptcy or insolvency
laws.
In
the
event Payee incurs costs in collecting on this Note, this Note is placed in
the
hands of any attorney for collection, suit is filed on this Note or if
proceedings are had in bankruptcy, receivership, reorganization, or other legal
or judicial proceedings for the collection of this Note, Maker agrees to pay
on
demand to Payee all expenses and costs of collection, including, but not limited
to, reasonable attorneys’ fees incurred in connection with any such collection,
suit, or proceeding, in addition to the principal and interest then
due.
It
is
agreed that time is of the essence on this Note. The failure of the holder
of
this Note to exercise any remedy shall not constitute a waiver on the part
of
the holder of the right to exercise any remedy at any other time. It is the
intention of Maker and Payee to conform strictly to applicable usury laws,
if
any. Accordingly, notwithstanding anything to the contrary in this Note or
any
other agreement entered into in connection herewith, it is agreed as follows:
(i) the aggregate of all interest and any other charges constituting interest
under applicable law and contracted for, chargeable or receivable under this
Note or otherwise in connection with the obligation evidenced hereby shall
under
no circumstances exceed the maximum amount of interest permitted by applicable
law, if any, and any excess shall be deemed a mistake and canceled automatically
and, if theretofore paid, shall, at the option of Payee, be refunded to Maker
or
credited on the principal amount of this Note; and (ii) in the event that the
entire unpaid balance of this Note is declared due and payable by Payee, then
earned interest may never include more than the maximum amount permitted by
applicable law, if any, and any unearned interest shall be canceled
automatically and, if theretofore paid, shall at the option of Payee, either
be
refunded to Maker or credited on the principal amount of this Note.
Maker
expressly waives demand and presentment for payment, notice of nonpayment,
protest, notice of protest, notice of dishonor, notice of intention to
accelerate, notice of acceleration, bringing of suit and diligence in taking
any
action to collect amounts called for hereunder and is and shall be liable for
the payment of all sums owing and to be owing hereon, regardless of and without
any notice, diligence, act or omission as or with respect to the collection
of
any amount called for hereunder or in connection with any right, lien, interest
or property at any and all times had or existing as security for any amount
called for hereunder.
SUBORDINATED
TERM LOAN PROMISSORY
NOTE
$9,430,200.00 October
[__],
2007
If
any
payment of principal on this Note shall become due on a Saturday, Sunday or
public holiday under the laws of Delaware, United States of America, on which
banks are not open for business, such payment shall be made on the next
succeeding business day in which banks are open for business.
Pursuant
to the terms of that certain Subordination Agreement dated October [__], 2007, executed
by
the Payee, the Maker and certain subsidiaries of the Maker, the indebtedness
evidenced by this Note is subordinate and junior in right of payment, to all
principal, interest, charges, expenses and attorneys’ fees arising out of or
relating to all indebtedness, liabilities and obligations of Maker arising
under
that certain Credit Agreement dated December 23, 2005, as amended by that
certain First Amendment to Credit Agreement dated October
[__],
2007, by and between Maker and the Administrative Agent and Lenders set forth
therein and all other amendments and modifications thereto, and the Loan
Documents (as defined in such Credit Agreement), whether outstanding on the
date
of this Note or subsequently incurred to renew, extend, modify, or otherwise
amend such superior indebtedness (the “Superior Debt”). Superior Debt shall
continue to be Superior Debt and entitled to the benefits of these subordination
provisions irrespective of any amendment, modification, or waiver of any term
of
the Superior Debt or extension or renewal of the Superior Debt.
This
Note
shall be governed by and construed in accordance with the domestic laws of
the
state of Delaware, without giving effect to any choice of law or conflict of
law
provision or rule (whether of the state of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than
the
state of Delaware..
MAKER:
By:
Name:
Title:
Address:
