STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (the "Agreement") dated as of December 2, 1998, by
and between KCI Acquisition Corp., a Delaware corporation (the "Company"), and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee of the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Family Trust, u/a/d 8/18/93
(the "Stockholder").
WHEREAS, as of the date hereof the Stockholder owns beneficially and of
record 666,694 shares of Common Stock of Valley Forge Corporation, a Delaware
corporation ("VFC") (all such shares and any shares hereafter acquired by the
Stockholder prior to the termination of this Agreement being referred to herein
as the "Shares");
WHEREAS, concurrently herewith, Key Components, Inc., a New York
corporation, VFC and the Company are entering into an Agreement and Plan of
Merger (as such Agreement may hereafter be amended from time to time, the
"Merger Agreement"); and
WHEREAS, as a condition to the willingness of the Company to enter into the
Merger Agreement, the Company has requested that the Stockholder agree, and, in
order to induce the Company to enter into the Merger Agreement, the Stockholder
has agreed, to vote the Shares as set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations warranties, covenants and agreements set forth herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
1.1 TENDER OF THE SHARES. On or after January 4, 1999 the Stockholder
shall tender the Shares to the Company, pursuant to the Offer contemplated in
Article I of the Merger Agreement and shall not withdraw the Shares therefrom
prior to the termination or expiration of the Offer or the termination of the
Merger Agreement.
1.2 TRANSFER OF SHARES. Except as required by Section 1.1, until the
close of business on the date of the special meeting of stockholders of VFC
(including any adjournments thereof, the "VFC Special Meeting") called to
consider and vote upon the transactions contemplated by the Merger Agreement
(the "Transactions"), the Stockholder will not (a) sell, pledge or otherwise
dispose of any of the Shares, (b) deposit the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to the Shares (other
than this Agreement), or grant any proxy with respect thereto (other than a
proxy naming the Stockholder as one of the proxyholders), or (c) enter into any
contract, option or other arrangement or undertaking with respect to the direct
or indirect sale, assignment, transfer or other disposition of any of the
Shares.
1.3 VOTING OF SHARES; FURTHER ASSURANCES. The Stockholder, by this
Agreement, does hereby constitute and appoint the Purchaser, or any nominee of
the Purchaser, with full power of substitution, during and for the term of this
Agreement, as such Stockholder's true and lawful attorney and proxy, for and in
its name, place and stead, to vote each of the Stockholder's
Shares as such Stockholder's proxy, at the VFC Special Meeting (including the
right to sign the Stockholder's name (as a stockholder) to any consent,
certificate or other document relating to the Company that the DGCL may permit
or require) (a) in favor of the adoption of the Merger Agreement and approval of
the Transactions, (b) in favor of any other matter necessary to the consummation
of the transactions contemplated by the Merger Agreement and considered and
voted upon at the VFC Special Meeting, and (c) against any Acquisition Proposal
or any other action or agreement that would result in a breach of any covenant,
representation or warranty or another obligation or agreement of the Company
under the Merger Agreement or that could result in any of the conditions to the
Parent's or Purchaser's obligations under the Merger Agreement not being
fulfilled. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN
INTEREST. The Stockholder acknowledges receipt and review of a copy of the
Merger Agreement. Nothing in this Section 1.3 or elsewhere in this Agreement
shall affect the Stockholders fiduciary obligations as an officer or director of
VFC.
ARTICLE II
2.1 NOTICES. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered, mailed or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the fax number
specified below:
(a) If to the Company:
KCI Acquisition Corp.
c/o Millbrook Capital management, Inc.
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Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
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Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to the Stockholder:
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c/o Valley Forge Corporation
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Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Husch & Eppenberger, LLC
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Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
2.2 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
2.3 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the provisions hereof are
fulfilled to the extent possible.
2.4 ENTIRE AGREEMENT. This Agreement, together with the Merger Agreement
and the other agreements contemplated thereby, constitute the entire agreement
of the parties and supersedes all prior agreements and undertakings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof. The parties hereto agree that until the sale of the
Shares or the termination of the Offer the stockholder shall retain all benefits
and burdens of ownership of the shares except as otherwise expressly provided
herein.
2.5 CERTAIN EVENTS. The Stockholder agrees that this Agreement and the
obligations hereunder shall be binding upon any person to which legal or
beneficial ownership (as such term is applied under Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of the Shares shall pass, whether by operation
of law or otherwise. Notwithstanding any transfer of Shares, the transferor
shall remain liable for the performance of all obligations under this Agreement
of the transferor.
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2.6 ASSIGNMENT. This Agreement shall not be assigned by operation of law
or otherwise.
2.7 PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, intended to or shall confer upon any person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
2.8 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damages would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
2.9 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to
principles of conflicts of laws.
2.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which, taken
together, shall constitute one and the same agreement.
2.11 TERM. The term of this Agreement shall commence as of the date hereof
and shall continue until the first to occur of (a) the closing of the
transactions contemplated by the Merger Agreement, or (b) the valid termination
of the Merger Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ KCI ACQUISITION CORP.
FAMILY TRUST, U/A/D 8/18/93
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee Name:
Title:
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