AGREEMENT
This Agreement is made as of July 1, 1997 by and among KII Holding
Corp., a Delaware corporation (the "Corporation") and Greystoke Capital
Management Limited LDC, a Bahamian international business corporation
established as a limited duration company ("Parent"), and Xxxxxxx X. Call,
Xxxxxx X. Xxxxx, Xxxxxxxx X. Xxxxx, Xxxx Xxxxxxxxx, Xxxxxx X. Xxxxx, and Xxxx
Xxxxx (collectively, "Buyers" and individually each a "Buyer") and Xxxxx X.
Xxxxx (Xxxxx X. Xxxxx and Buyers are collectively referred to herein as
"Management Members").
PREAMBLE
KII Acquisition Corp. ("KII Acquisition"), a wholly owned subsidiary of
the Corporation, Xxxxxxxx Industrie Holding AG ("Seller") and Xxxxxxxx
Industries, Inc. ("Xxxxxxxx") have entered into a Stock Purchase Agreement dated
May 23, 1997 (the "Purchase Agreement"), pursuant to which KII Acquisition will
purchase all of the outstanding stock of Xxxxxxxx. In connection therewith,
certain of Buyers and KII Acquisition have entered into a binding letter of
intent dated as of May 22, 1997 regarding certain of the matters set forth
herein (the "Letter of Intent").
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Purchase and Sale of Stock.
(a) Upon the Closing (as hereinafter defined), the Corporation
shall issue and sell to Buyers, and Buyers shall purchase from the
Corporation, a number of shares of the Corporation's Common Stock, such
that immediately following such issuance and all other issuances of the
Corporation's Common Stock to occur on the date of Closing, Buyers will
hold 19.9% (1,990 shares) of the Corporation's Common Stock. In
exchange therefor, Buyers will pay to the Corporation $778,090
("Buyers' Purchase Price"). Such Common Stock shall be issued to
Buyers, and Buyers shall be liable for Buyers' Purchase Price, in the
amounts set forth on Schedule 1(a).
(b) Upon the Closing, the Corporation shall issue and sell to
Parent, and Parent shall purchase from the Corporation, a number of
shares of the Corporation's Common Stock, such that immediately
following such issuance and all other issuances of the Corporation's
Common Stock to occur on the Closing Date, Parent will hold 80.1%
(8,010 shares) of the Corporation's Common Stock. In exchange therefor,
Parent will pay to the Corporation $3,131,910 ("Parent's Common Stock
Purchase Price").
(c) Upon the Closing, the Corporation shall issue and sell to
Parent and Parent shall purchase from the Corporation 84 shares of the
Corporation's Series A Preferred Stock, with a stated value of $10,000
per share (the "Series A Preferred Stock"). In exchange therefor,
Parent will pay to the Corporation $840,000 ("Parent's Preferred Stock
Purchase Price"). The terms of the Series A Preferred Stock are set
forth in a form of Certificate of Serial Designation to be filed with
the Secretary of State of Delaware, attached hereto as Exhibit A.
(d) The closing of the purchase and sale of the Common Stock
and the Series A Preferred Stock to be purchased by Buyers and Parent
hereunder (the "Closing") shall occur simultaneously with the Closing
under and as defined in the Purchase Agreement, and the obligations of
the parties hereunder shall be conditioned upon the occurrence thereof.
At the Closing, the Corporation shall deliver to Buyers and Parent, as
applicable, certificates evidencing the stock purchased by them
hereunder and Buyers and Parent shall deliver Buyers' Purchase Price,
Parent's Common Stock Purchase Price and Parent's Preferred Stock
Purchase Price, as applicable, in immediately available funds.
(e) In the event that Buyers receive additional payments under
their respective Management Participation Plan II agreements, each
dated as of January 1, 1996, among Seller and Xxxxxxxx on the one hand
and each Buyer on the other hand, after the date of the Closing, each
Buyer whose Common Stock has not been redeemed or is not then subject
to an exercised Redemption Right or exercised Put Right pursuant to the
terms of this Agreement will contribute all of such awards, less the
amount of any income taxes due with respect thereto, to the Corporation
in exchange for a number of shares of the Corporation's Series B
Redeemable Preferred Stock, with a stated value of $10,000 per share
(the "Series B Preferred Stock") equal to the amount of such payments
divided by the stated value of the Series B Preferred Stock. The terms
of the Series B Preferred Stock are set forth in a form of Certificate
of Serial Designation to be filed with the Secretary of State of
Delaware, attached hereto as Exhibit B.
2. Representations of the Corporation. The Corporation
represents and warrants to Management Members and Parent as follows:
(a) Organization. The Corporation is a corporation duly
organized, validly existing and in good standing in the State of
Delaware.
(b) Authority. The Corporation has the power and authority to
own its properties and assets, to conduct its business as presently
conducted, to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations
hereunder. The execution and delivery by the Corporation of this
Agreement, the consummation by the Corporation of the transactions
contemplated hereby and the performance by the Corporation of its
-2-
obligations hereunder have been duly and validly authorized by all
necessary corporate proceedings on its part.
(c) Execution and Binding Effect. This Agreement has been
duly and validly executed and delivered by the Corporation and
constitutes a legal, valid and binding obligation of the Corporation
enforceable against it in accordance with its terms.
(d) No Breach or Default. The execution and delivery by the
Corporation of this Agreement, the consummation of the transactions
contemplated hereby and the performance by the Corporation of its
obligations hereunder in accordance with the terms hereof do not and
will not: (i) breach or result in a default (or an event which, with
the giving of notice or the passage of time, or both, would constitute
a default) under, require any consent under or give to others any
rights of termination, acceleration, suspension, revocation,
cancellation or amendment of any contract, agreement, instrument or
document to which the Corporation is a party or by which the
Corporation or any of its assets or properties is bound; or (ii) breach
or otherwise violate any order, writ, judgment, injunction or decree
issued by any governmental authority or entity of the United States of
America or of any state, county, municipality or other political
subdivision.
(e) No Violation of Law. The execution and delivery by the
Corporation of this Agreement, the consummation of the transactions
contemplated hereby and the performance by the Corporation of its
obligations hereunder are not prohibited by, and do not and will not
subject the Corporation to any fine, penalty or similar sanction under
any law, statute, rule, regulations, ordinance, code, order, guideline
or directive of any governmental authority or entity of the United
States of America or of any state, county, municipality or other
political subdivision.
(f) No Consent. No consent, authorization, approval,
exemption or other action by, and, except for the filing of a
Certificate of Serial Designation with the Delaware Secretary of State
with respect to the Series A Preferred Stock and the Series B Preferred
Stock and the filing of a Form D with the Securities and Exchange
Commission and a Notice of Transaction Pursuant to Corporations Code
Section 25102(f) with the California Commissioner of Securities, no
filing, registration or qualification with, any person or governmental
authority or entity is or will be necessary in connection with the
execution and delivery by the Corporation of this Agreement, the
consummation of the transactions contemplated hereby or the performance
by the Corporation of its obligations hereunder in accordance with the
terms hereof.
(g) Capitalization. Immediately after the Closing, the
authorized capitalization and the issued and outstanding shares of the
Corporation will be as
-3-
set forth on Schedule 2(g). Each of the shares of Common Stock and
Series A Preferred Stock issued hereunder will have been duly and
validly authorized and issued, fully paid and non-assessable. Except as
set forth on Schedule 2(g) or provided for in this Agreement, there are
no outstanding (i) options, warrants, agreements or other rights to
acquire any shares of the Corporation's capital stock, (ii) securities
or other obligations of the Corporation which are convertible into such
shares or (iii) to the knowledge of the Corporation, options, sale
agreements, shareholder agreements, pledges, proxies, voting trusts,
powers of attorney, or other agreements or instruments which are
binding on any shareholder of the Corporation and which relate to the
ownership, voting or transfer of such shares.
3. Representations by Management Members. Management Members
represent and warrant to the Corporation as follows:
(a) Capacity. Each Management Member has full capacity, power,
legal right and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to perform his
obligations hereunder.
(b) Execution and Binding Effect. This Agreement has been duly
and validly executed and delivered by each Management Member and
constitutes a legal, valid and binding obligation of each Management
Member enforceable against each Management Member in accordance with
its terms.
(c) No Breach or Default. The execution and delivery by each
Management Member of this Agreement, the consummation of the
transactions contemplated hereby and the performance by each Management
Member of his obligations hereunder do not and will not: (i) breach or
result in a default (or an event which, with the giving of notice or
the passage of time, or both, would constitute a default) under,
require any consent under or give to others any rights of termination,
acceleration, suspension, revocation, cancellation or amendment of any
contract, agreement, instrument or document to which such Management
Member is a party or by which such Management Member or any of his
assets or properties is bound; or (ii) breach or otherwise violate any
order, writ, judgment, injunction or decree issued by any governmental
authority or entity of the United States of America or of any state,
county, municipality or other political subdivision.
(c) No Violation of Law. The execution and delivery by each
Management Member of this Agreement, the consummation of the
transactions contemplated hereby and the performance by each Management
Member of his obligations hereunder are not prohibited by, and do not
and will not subject such Management Member to any fine, penalty or
similar sanction under any law, statute, rule, regulations, ordinance,
code, order, guideline or directive of any
-4-
governmental authority or entity of the United States of America or of
any state, county, municipality or other political subdivision.
(d) No Consent. No consent, authorization, approval, exemption
or other action by, and no filing, registration or qualification with,
any person or governmental authority or entity is or will be necessary
in connection with the execution and delivery by each Management Member
of this Agreement, the consummation of the transactions contemplated
hereby or the performance by each Management Member of his obligations
hereunder.
(e) Investment Representations.
(i) Each Buyer represents that the Common Stock and
Series B Preferred Stock to be purchased by him hereunder is
being acquired for his own account for investment purposes and
not with a view towards resale or distribution.
(ii) Each Buyer represents that: (A) his domicile is
located in the State of California; (B) he is an "accredited
investor" as defined in Regulation D under the Securities Act
of 1933, as amended (the "Securities Act"); (C) he is an
executive officer of the Corporation and/or one of its direct
or indirect subsidiaries; and (D) he has a pre-existing
business relationship with Xxxxxxxx and its subsidiaries and
the business of the Corporation, has such knowledge and
experience in financial and business matters, and regarding
the business of the Corporation particularly, as to be capable
of evaluating the merits and risks of his investment hereunder
and has the ability to bear the economic risks of such
investment.
(iii) Each Buyer understands that: (A) neither the
Common Stock nor the Series B Preferred Stock purchased
hereunder has been registered under the Securities Act, the
California Corporate Securities Law of 1968, as amended
("California Securities Law"), or any other applicable federal
or state securities law; (B) the Corporation will permit
transfers of the Common Stock and the Series B Preferred Stock
purchased hereunder only: (1) in accordance with this
Agreement; and (2) when such securities have been registered
under the Securities Act and any other applicable federal or
state securities law or when the proposed transfer does not
require any such registration and the Corporation has received
an opinion of counsel (which opinion and counsel shall be
acceptable to the Corporation) to such effect; (C) any
transfer made or purportedly made in violation of the
foregoing restrictions shall be null and void and the
Corporation shall not register or record such attempted
transfer in its books and records; and (D) the legends set
forth in Section 16 of this Agreement shall be placed on the
certificates representing any
-5-
of the Common Stock and the legends set forth in the
Certificate of Designation for the Series B Preferred Stock
shall be placed on the certificates representing the Series B
Preferred Stock.
(iv) Each Buyer further understands and covenants
and agrees with the Corporation that:
(A) the Common Stock and the Series B
Preferred Stock purchased hereunder constitute
"restricted securities" as that term is defined in
Rule 144 promulgated under the Securities Act;
(B) only the Corporation can register the
Common Stock and the Series B Preferred Stock
purchased hereunder under the Securities Act and
applicable state securities laws, and the Corporation
has not made any undertaking to Buyers with respect
to such registration, or with respect to compliance
with any exemption therefrom;
(C) there are stringent conditions for any
Buyer to obtain an exemption for the resale of the
Common Stock and/or the Series B Preferred Stock
purchased hereunder under the Securities Act,
California Securities Law and other state securities
laws; and
(D) no Buyer nor anyone acting on Buyer's
behalf has paid or will pay any commission or other
comparable remuneration to any person in connection
with the issuance of the Common Stock or the Series B
Preferred Stock purchased hereunder.
4. Representations of Parent. Parent represents and warrants to
the Corporation as follows:
(a) Organization. Parent is an international business
corporation established as a limited duration company duly organized
and validly existing under Bahamian law.
(b) Authority. Parent has the power and authority to execute
and deliver this Agreement, to consummate the transactions contemplated
hereby and to perform its obligations hereunder. The execution and
delivery by Parent of this Agreement, the consummation by Parent of the
transactions contemplated hereby and the performance by Parent of its
obligations hereunder have been duly and validly authorized by all
necessary actions on its part.
(c) Execution and Binding Effect. This Agreement has been
duly and validly executed and delivered by Parent and constitutes a
legal, valid and binding obligation of Parent enforceable against it in
accordance with its terms.
-6-
(d) No Breach or Default. The execution and delivery by Parent
of this Agreement, the consummation of the transactions contemplated
hereby and the performance by Parent of its obligations hereunder do
not and will not: (i) breach or result in a default (or an event which,
with the giving of notice or the passage of time, or both, would
constitute a default) under, require any consent under or give to
others any rights of termination, acceleration, suspension, revocation,
cancellation or amendment of any contract, agreement, instrument or
document to which Parent is a party or by which Parent or any of its
assets or properties is bound; or (ii) breach or otherwise violate any
order, writ, judgment, injunction or decree issued by any governmental
authority or entity of the United States of America or of any state,
county, municipality or other political subdivision.
(e) No Violation of Law. The execution and delivery by Parent
of this Agreement, the consummation of the transactions contemplated
hereby and the performance by Parent of its obligations hereunder are
not prohibited by, and do not and will not subject Parent to any fine,
penalty or similar sanction under any law, statute, rule, regulations,
ordinance, code, order, guideline or directive of any governmental
authority or entity of the United States of America or of any state,
county, municipality or other political subdivision.
(f) No Consent. No consent, authorization, approval, exemption
or other action by, and no filing, registration or qualification with,
any person or governmental authority or entity is or will be necessary
in connection with the execution and delivery by Parent of this
Agreement, the consummation of the transactions contemplated hereby or
the performance by Parent of its obligations hereunder.
(g) Investment Representations.
(i) Parent represents that the Common Stock and
Series A Preferred Stock to be purchased by it hereunder is
being acquired for its own account for investment purposes and
not with a view towards resale or distribution.
(ii) Parent represents that: (A) it is organized
under the laws of the Bahamas with its primary place of
business located in the Bahamas; (B) it is not a U.S. person
(as defined in Rule 902 promulgated under the Securities Act)
and it is not purchasing on behalf of, for the account of or
for the benefit of a U.S. person; and (C) it has such
knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its
investment hereunder and has the ability to bear the economic
risks of such investment.
(iii) Parent understands that: (A) neither the Common
Stock nor the Series A Preferred Stock purchased hereunder has
been registered
-7-
under the Securities Act, Bahamian securities laws or any
state securities law; (B) the Corporation will permit
transfers of the Common Stock and Series A Preferred Stock
purchased hereunder only: (1) in accordance with this
Agreement; and (2) when such securities have been registered
under the Securities Act and any other applicable federal or
state securities law, in accordance with the Regulation S
promulgated under the Securities Act or when the proposed
transfer does not require any such registration and the
Corporation has received an opinion of counsel (which opinion
and counsel shall be acceptable to the Corporation) to such
effect; (C) any transfer made or purportedly made in violation
of the foregoing restrictions shall be null and void and the
Corporation shall not register or record such attempted
transfer in its books and records; and (D) the legends set
forth in Section 16 of this Agreement shall be placed on the
certificates representing the Common Stock and the legends set
forth in the Certificate of Designation for the Series A
Preferred Stock shall be placed on the certificates
representing the Series A Preferred Stock.
(iv) Parent further understands and covenants and
agrees with the Corporation that:
(A) the Common Stock and the Series A
Preferred Stock purchased hereunder may constitute
"restricted securities" as that term is defined in
Rule 144 promulgated under the Securities Act;
(B) offers and sales of the Common Stock and
the Series A Preferred Stock purchased hereunder may
be subject to a "restricted period" as defined in
Regulation S promulgated under the Securities Act;
(C) only the Corporation can register the
Common Stock and the Series A Preferred Stock
purchased hereunder under the Securities Act and
applicable state securities laws, and the Corporation
has not made any undertaking to Parent with respect
to such registration, or with respect to compliance
with any exemption therefrom;
(D) there are stringent conditions for
Parent to obtain an exemption for the resale of the
Common Stock and/or the Series A Preferred Stock
purchased hereunder under the Securities Act and
other state securities laws; and
(E) neither Parent nor anyone acting on
Parent's behalf has paid or will pay any commission
or other comparable remuneration to any person in
connection with the issuance of the
-8-
Common Stock or the Series A Preferred Stock
purchased hereunder.
5. Stock Appreciation Rights. The Corporation hereby grants to
certain Management Members stock appreciation rights ("SARs") as follows:
(a) Promotional SARs. The grant of SARs under this Section
5(a) (the "Promotional SARs") shall consist of an aggregate of 355 SAR
Credits, the actual number of SARs outstanding at any time being
determined in accordance with Section 5(e) hereof. The SAR Credits
relating to the Promotional SARs shall be allocated among those certain
Management Members (and others) as identified on and in the numbers set
forth on Schedule 5(a) hereto. Each Management Member's Promotional
SARs and all SAR Credits relating thereto shall, subject to Section
5(d) hereof, vest as follows: 10% on the first anniversary of the
Closing, an additional 22.5% on the second anniversary of the Closing,
an additional 22.5% on the third anniversary of the Closing, an
additional 22.5% on the fourth anniversary of the Closing, and an
additional 22.5% on the fifth anniversary of the Closing. In the event
of a sale of all or substantially all of the assets of the Corporation
on a consolidated basis with its direct and indirect subsidiaries, all
of the Promotional SARs and all SAR Credits relating thereto granted
hereunder, which have not been terminated pursuant to Section 5(d),
shall immediately vest.
(b) Incentive SARs. The grant of SARs under this Section 5(b)
(the "Incentive SARs") shall consist of an aggregate of 1,065 SAR
Credits, the actual number of SARs outstanding at any time being
determined in accordance with Section 5(e) hereof. The SAR Credits
relating to the Incentive SARs shall be allocated among those certain
Management Members (and others) identified on and in the numbers set
forth on Schedule 5(b) hereto. The Incentive SARs and all SAR Credits
relating thereto shall, subject to Section 5(d), vest as follows:
As to the applicable Management Member, the determination as to whether
Incentive SARs and SAR Credits relating thereto have vested shall be
measured upon (and shall vest as of) the first to occur of any of the
following (a "Measurement Date"):
(i) the date of an exercise of a Redemption
Right under Section 7(a)(vi) hereof or a Put Right under
Section 8(a)(v) hereof;
(ii) the date of the occurrence of an event giving
rise to any Redemption Right other than under Section 7(a)(vi)
hereof or a Put Right other than under Section 8(a)(v) hereof;
(iii) the date of consummation of a sale of all or
substantially all of the assets of the Corporation on a
consolidated basis with its direct and indirect subsidiaries;
or
-9-
(iv) immediately following the end of the fiscal year
ending December 31, 2002.
In the case of a Measurement Date arising under clauses (i), (ii) or
(iii) above, if more than 85% of each Annual EBITDA Target (as
hereinafter defined) for each fiscal year ending prior to the
Measurement Date has been achieved or in the case of a Measurement Date
arising under clause (iv) above, if more than 85% of the Annual EBITDA
Targets for four of the five fiscal years ending prior to the
Measurement Date have been achieved and the Cumulative EBITDA Target
(as hereinafter defined) for the fiscal year ending prior to the
Measurement Date has been achieved, the percentage of Incentive SARs
and SAR Credits corresponding to the achievement of such Cumulative
EBITDA Target held by such Management Member shall become vested (the
"Measurement Test"); provided, however, that, in the case of any
Measurement Date occurring pursuant to clause (iv) above, even if the
Cumulative EBITDA Target was not achieved, if more than 85% of the
Annual EBITDA Targets for four of the five fiscal years were achieved
and if more than 90% of the Cumulative EBITDA Target was achieved, then
50% of the Incentive SARs and SAR Credits which would have become
vested in such Management Member if the Cumulative EBITDA Target had
been met shall become vested.
All Incentive SARs and SAR Credits not vested as of December 31, 2002
shall immediately terminate. In the event of a sale of all or
substantially all of the assets of the Corporation on a consolidated
basis with its direct and indirect subsidiaries, Incentive SARs and SAR
Credits not vested as of the date of consummation thereof shall
immediately terminate.
As used herein, the applicable "Cumulative EBITDA Targets" and the
corresponding percentage of Incentive SARs and SAR Credits to become
vested if the Measurement Test is met as of the Measurement Date shall
be:
20% if EBITDA (as hereinafter defined) for the fiscal year
ended December 31, 1998 is greater than $6,652,000;
40% if EBITDA for the fiscal years ended December 31, 1998 and
December 31, 1999 is in the aggregate greater than
$14,150,000;
60% if EBITDA for the fiscal years ended December 31, 1998,
December 31, 1999 and December 31, 2000 is in the aggregate
greater than $22,578,000;
80% if EBITDA for the fiscal years ended December 31, 1998,
December 31, 1999, December 31, 2000 and December 31, 2001 is
in the aggregate greater than $32,030,000;
-10-
100% if EBITDA for the fiscal years ended December 31, 1998,
December 31, 1999, December 31, 2000, December 31, 2001 and
December 31, 2002 is in the aggregate greater than
$42,321,000.
As used herein:
The 1998 Annual EBITDA Target is achieved if EBITDA for the
fiscal year ended December 31, 1998 is greater than
$6,652,000;
The 1999 Annual EBITDA Target is achieved if EBITDA for the
fiscal year ended December 31, 1999 is greater than
$7,498,000;
The 2000 Annual EBITDA Target is achieved if EBITDA for the
fiscal year ended December 31, 2000 is greater than
$8,428,000;
The 2001 Annual EBITDA Target is achieved if EBITDA for the
fiscal year ended December 31, 2001 is greater than
$9,452,000;
The 2002 Annual EBITDA Target is achieved if EBITDA for the
fiscal year ended December 31, 2002 is greater than
$10,291,000.
The Cumulative EBITDA Targets and the Annual EBITDA Targets set forth
above may be adjusted by the Board of Directors of the Corporation in
its sole discretion to take into account business acquisitions and
dispositions, accounting policy changes and other material changes in
circumstances.
As used throughout this Agreement, "EBITDA" shall mean, for any period,
determined for KII Acquisition and its direct and indirect subsidiaries
on a consolidated basis in conformity with generally accepted
accounting principles consistently applied (i) the sum of the amounts
for such period of (A) net income (i.e., the net earnings or loss after
taxes), (B) depreciation and amortization expense, (C) interest
expense, and (D) federal, state, local and foreign income taxes, minus
(ii) extraordinary gains, (iii) all as adjusted for (W) the management
fees (exclusive of expenses) paid to Mentmore Holdings Corporation
("Mentmore"), (X) the investment banking fee to be paid to Mentmore
upon the Closing, (Y) inventory adjustment pursuant to APB 16, and (Z)
any adjustment of inventory pursuant to Section 9.2 of the Purchase
Agreement but only to the extent that same results in an offset of the
amounts due under the note payable to Seller pursuant to Section 9.1 of
the Purchase Agreement, all such adjustments in clauses (W), (X), (Y)
and (Z) to be made if and only to the extent such items impact EBITDA.
The Board of Directors may, in its sole discretion, consider other
appropriate adjustments to EBITDA.
(c) Voting Rights. SARs granted hereunder have no voting
rights.
-11-
(d) Non-transferability and Termination. Management Members
shall not sell, assign, give, transfer, pledge, encumber, exchange or
in any manner dispose of, voluntarily or involuntarily, by operation of
law or otherwise (collectively, "Transfer") any legal or beneficial
interest in any SAR Credits or SARs granted hereunder and such SAR
Credits and SARs shall immediately terminate and divest on any Transfer
or attempted Transfer. In the event of a termination of a Management
Member's employment for any reason, whether voluntarily or
involuntarily, such Management Member's unvested SAR Credits and SARs
shall immediately terminate and, prior to the fifth anniversary of the
Closing, upon a voluntary resignation by a Management Member of his
employment prior to Scheduled Retirement (as defined in Section
8(a)(iv)), a termination of a Management Member's employment for Cause
(as defined in Section 8(a)(iii) of this Agreement), or the occurrence
of any event described in Section 7(a)(iii) of this Agreement, such
Management Member shall, in addition, be divested of his vested SAR
Credits and SARs and such vested SAR Credits and SARs shall immediately
terminate; provided, however that a transfer of employment between or
among the Corporation and its direct and indirect subsidiaries shall be
considered as continuing employment and shall not be considered
termination of employment for purposes hereof. In the event that the
stock of the Corporation's direct or indirect subsidiaries by which a
Management Member is employed is sold or transferred to a third party,
such Management Member's unvested SAR Credits and SARs shall
immediately terminate. Furthermore, in the event that outstanding
shares of Common Stock are hereafter changed into or exchanged for a
different number or kind of shares of stock or securities of the
Corporation or another corporation or corporations, whether as a result
of a reorganization, recapitalization, reclassification, merger,
consolidation or otherwise, the unvested SAR Credits and SARs granted
under this Agreement shall immediately terminate.
(e) Determination of Outstanding SARs. The number of
outstanding vested SARs from time to time shall be determined in
accordance with the following formula:
A = G
----------------------------------------
1 - [B/C + (D/.199 x E/F(.1))],
and
G - C = H,
where
A= number of outstanding shares of Common Stock held by persons
other than Management Members
-12-
B= number of outstanding shares of Common Stock held by
Management Members
C= total number of outstanding shares of Common Stock
D= B divided by C
E= vested SAR Credits, which have not been divested pursuant to
Section 5(d) of this Agreement or liquidated pursuant to
Section 7 or 8 of this Agreement
F= SAR Credits granted under this Agreement (i.e., 1,420)
G= number of outstanding shares of Common Stock and vested SARs
H= number of outstanding vested SARs
(f) Nature of SARs. The parties hereto acknowledge that the
SAR Credits and SARs granted hereunder are contractual in nature and do
not constitute securities but rather constitute only contractual
obligations of the Corporation to pay Management Members certain
compensation measured by the value of a security equivalent and that
Management Members shall not be entitled to any rights of a stockholder
of the Corporation under Delaware law or otherwise with respect to the
SAR Credits and SARs.
6. Restrictions on Transfer. Buyers shall not Transfer or attempt to
Transfer any legal or beneficial interest in any Common Stock now owned or
hereafter acquired by them, except as otherwise provided in this Agreement.
7. Redemption. Each Management Member hereby grants to the Corporation
the right to cause such Management Member to sell all, but not less than all, of
any Common Stock held by him and to cause a liquidation and termination of any
vested SARs held by him (which have not been divested pursuant to Section 5(d)
of this Agreement) to the Corporation upon the terms and subject to the
conditions set forth herein (collectively, a "Redemption Right").
(a) Redemption Right. Redemption Rights may be exercised by
the Corporation at any time after the occurrence of any of the
following:
(i) Death. Such Management Member's death.
(ii) Disability. The disability of such Management
Member such that he is, in the opinion of the Corporation, as
determined by a resolution of the Board of Directors,
physically or mentally incapacitated and thereby rendered
incapable of adequately performing the duties of his position
with the Corporation or its direct or indirect subsidiary, as
applicable, for a period of 120 days ("Disability").
(iii) Insolvency, Etc.; Attempted Transfer An
involuntary case shall be commenced against such Management
Member or such Management Member shall commence a voluntary
case or a court shall
-13-
enter a decree or order for relief in respect of such
Management Member under any applicable bankruptcy, insolvency
or other law now or hereafter in effect; a decree or order
shall be entered for the appointment of a receiver,
liquidator, sequestrator, trustee or custodian or other
officer having similar powers over such Management Member or
all or a substantial part of the assets of such Management
Member; a warrant of attachment, execution or similar process
against a substantial portion of the assets of such Management
Member shall be issued; such Management Member shall make an
assignment for the benefit of his creditors; such Management
Member has any shares of Common Stock or any right or interest
under this Agreement attached or levied upon for payment of
his debts; such Management Member is required to transfer any
shares of Common Stock or any right or interest under this
Agreement by order, judgment or decree of any court or other
adjudicatory body for any reason, whether or not related to
such Management Member's financial condition; or such
Management Member shall Transfer or attempt to Transfer or
there shall otherwise occur or purport to occur any Transfer
of any legal or beneficial interest in any shares of Common
Stock or SAR Credits or SARs, in contravention of Section 5(d)
or Section 6 of this Agreement.
(iv) Termination of Employment. Termination of such
Management Member's employment by such Management Member or by
the Corporation or its direct or indirect subsidiary, as
applicable, for any reason.
(v) Sale of Stock of Subsidiary. The stock of the
Corporation's direct or indirect subsidiary by which such
Management Member is employed is sold or transferred to a
third party.
(vi) Five Years. The fifth anniversary of the
Closing.
(b) Exercise. If the Corporation desires to exercise a
Redemption Right, it shall give notice to the applicable Management
Member to such effect and the closing of the purchase by the
Corporation of any Common Stock held by him and/or the liquidation and
termination of any vested SARs held by him shall occur within 90 days
from the date of such notice.
(c) Price. The price at which any Common Stock shall be
purchased hereunder and/or at which any vested SARs shall be liquidated
and terminated hereunder shall be the price set forth in Section 9(a)
of this Agreement.
(d) Payment. The terms upon which payment shall be made with
respect to the purchase of any Common Stock hereunder and/or
liquidation and
-14-
termination of any vested SARs hereunder is set forth in Section 9(b)
of this Agreement.
8. Put. The Corporation hereby grants to each Management Member (and,
in the event of his death or disability, such Management Member's duly appointed
personal representative) the right to cause the Corporation to purchase all, but
not less than all, of any Common Stock held by him and/or to cause the
Corporation to liquidate and terminate any vested SARs held by him (which have
not been divested pursuant to Section 5(d) of this Agreement) upon the terms and
subject to the conditions set forth herein (collectively, a "Put Right").
(a) Put Right. Put Rights may be exercised by a
Management Member upon the occurrence of the following within the
periods specified in Section 8(b):
(i) Death. Such Management Member's death.
(ii) Disability. Such Management Member's
Disability.
(iii) Termination of Employment Without Cause.
Termination of such Management Member's employment by the
Corporation or its direct or indirect subsidiary, as
applicable, Without Cause. As used in this Agreement, "Without
Cause" shall mean any termination of such Management Member's
employment by the Corporation or its direct or indirect
subsidiary, as applicable, other than for Cause (as
hereinafter defined) or by reason of such Management Member's
death or Disability and a termination shall be for "Cause" if
the Corporation or its direct or indirect subsidiary, as
applicable, terminates such Management Member's employment by
reason of (A) such Management Member materially breaching any
of his obligations under any employment agreement entered into
pursuant to Section 13 hereof, (B) such Management Member
failing or neglecting to perform the duties of his position
with the Corporation or its direct or indirect subsidiaries,
as applicable, (C) such Management Member developing or
pursuing interests adverse to the Corporation or any of its
direct and indirect subsidiaries or their affiliates, (D) such
Management Member engaging in any act of dishonesty or fraud
or committing a felony or any crime involving dishonesty or
moral turpitude, or (E) any other material reason which would
justify a reasonably prudent employer in terminating an
employee's employment in similar circumstances.
(iv) Scheduled Retirement. Upon termination of such
Management Member's employment as a result of the achievement
of a retirement date agreed to between such Management Member
and the Board of Directors of the direct or indirect
subsidiary of the Corporation employing such Management Member
(a "Scheduled Retirement").
-15-
(v) Five Years. The fifth anniversary of the
Closing.
(b) Exercise. If a Management Member desires to exercise his
Put Right, he shall give notice to the Corporation to such effect
within 90 days of (i) the appointment of an executor or administrator
to administer such Management Member's estate in the case of a Put
Right arising pursuant to subsection (a)(i); (ii) the determination of
such Management Member's Disability in the case of a Put Right arising
pursuant to subsection (a)(ii); (iii) the date of termination in the
case of a Put Right arising pursuant to subsections (a)(iii) and (iv);
or (iv) the fifth anniversary of the Closing or the end of each fiscal
year thereafter in the case of a Put Right arising pursuant to
subsection (a)(v). The closing of the purchase by the Corporation of
any Common Stock hereunder and/or the liquidation and termination of
any vested SARs hereunder shall occur within 90 days from the date of
such notice.
(c) Price. The price at which any Common Stock shall be
purchased hereunder and/or at which any vested SARs shall be liquidated
and terminated hereunder shall be the price set forth in Section 9(a)
of this Agreement.
(d) Payment. The terms upon which payment shall be made with
respect to the purchase of any Common Stock hereunder and/or
liquidation and termination of any vested SARs hereunder is set forth
in Section 9(b) of this Agreement.
9. Determination and Payment of Price.
(a) Price. The price for any shares of Common Stock purchased
by the Corporation and/or vested SARs liquidated and terminated under
Section 7 or 8 of this Agreement shall be equal to: (a) an amount equal
to (i) EBITDA, in the case of purchases and liquidations prior to
January 1, 1999, as of the twelve month period prior to the Closing
(the "Pre-Closing EBITDA") and in the case of purchases and/or
liquidations on or after January 1, 1999, as of the end of the fiscal
year prior to the date of the event giving rise to such purchase or
liquidation, multiplied by (ii) 5.0, minus (iii) the Funded Debt (as
hereinafter defined) of the Corporation and its direct and indirect
subsidiaries on a consolidated basis as set forth on the balance sheet
as of the end of the month preceding the closing of the purchase and
liquidation hereunder and the stated value of and accrued and unpaid
dividends on the Series A Preferred Stock and the Series B Preferred
Stock, minus (iv) $391.00 multiplied by the number of vested SARs to be
liquidated; multiplied by (b) the percentage which the Common Stock
and/or vested SARs to be purchased and/or liquidated bear to the total
number of outstanding shares of Common Stock and vested SARs of the
Corporation at the time of the purchase and liquidation (i.e., "G" as
calculated in the formula set forth in Section 5(e)).
-16-
As used herein, "Funded Debt" shall mean Debt (as hereinafter defined)
which matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of the debtor, to a date more than one year from such
date or arises under a revolving credit or similar agreement which
obligates the lender or lenders to extend credit during a period of
more than one year from such date, including, without limitation, all
amounts of Funded Debt required to be paid or prepaid from the date of
determination and including any notes issued under this Agreement and
any obligations under this Agreement arising upon the exercise of a
Redemption Right or a Put Right irrespective of the maturity thereof.
As used herein, "Debt" shall mean, as applied to any person or entity
at any time and without duplication, all indebtedness, obligations or
other liabilities of such person or entity (i) for borrowed money or
evidenced by debt securities, debentures, acceptances, notes or other
similar instruments, (ii) under profit payment agreements or in respect
of obligations to redeem, repurchase or exchange any securities of such
person or entity or to pay dividends in respect of any stock (including
any notes issued under this Agreement and any obligations under this
Agreement arising upon the exercise of a Redemption Right or a Put
Right), (iii) with respect to letters of credit issued for such
person's or entity's account (to the extent not accounted for in clause
(i) above), (iv) to pay the deferred purchase price of property or
services, except accounts payable and accrued expenses arising in the
ordinary course of business, or (v) in respect of capital leases.
(b) Payment. Subject to the provisions of Section 10 of this
Agreement, if the Corporation exercises its Redemption Right to
purchase any Common Stock and/or liquidate any vested SARs under this
Agreement prior to the fifth anniversary of the Closing, by reason of a
voluntary resignation by a Management Member of his employment prior to
Scheduled Retirement, a termination of a Management Member's employment
for Cause, or the occurrence of any event described in Section
7(a)(iii) of this Agreement, the Corporation shall, upon the closing of
the purchase and/or liquidation of a Management Member's Common Stock
and/or vested SARs, as applicable, issue to such Management Member a
note in the principal amount of the price determined under Section 9(a)
hereof, payable 90 days after the fifth anniversary of the Closing.
Such note shall not bear interest, shall be unsecured and shall be
subordinated to all other indebtedness of the Corporation. Subject to
the provisions of Section 10 of this Agreement, in the event of a
purchase of any Common Stock and/or liquidation of any vested SARs
under this Agreement under any circumstances and for any reason other
than as set forth above, the price determined under Section 9(a) hereof
shall be paid, in cash, on the closing of such purchase and/or
liquidation.
10. Restrictions on Payment. Notwithstanding any other provision
of this Agreement, if the Corporation shall determine in good faith that: (a) it
is prohibited by applicable law from making payment for any shares of Common
Stock or vested SARs
-17-
purchased or liquidated pursuant to this Agreement; or (b) KII Acquisition or
Xxxxxxxx is prohibited from or restricted in paying a dividend to the
Corporation under its then existing indebtedness and the Corporation is
therefore not in a position to make full payment for any shares of Common Stock
or vested SARs purchased or liquidated pursuant to this Agreement; (c) the
Corporation is prohibited from or restricted in making full payment for any
shares of Common Stock or vested SARs purchased or liquidated pursuant to this
Agreement under its then existing indebtedness; or (d) the Corporation is
prohibited from or restricted in making full payment for any shares of Common
Stock or vested SARs purchased or liquidated pursuant to this Agreement under
the terms of the Series A Preferred Stock or Series B Preferred Stock, then the
Corporation will pay such portion of the price in cash as is not prohibited by
any of clauses (a) through (d) above and shall issue a note for the remainder of
the price to such Management Member to be payable when and to the extent the
Corporation is not prohibited from doing so from time to time by reason of any
of clauses (a) through (d) above. Such note shall bear simple interest at a rate
of 10% per annum, shall be unsecured and shall be subordinated to all other
indebtedness of the Corporation. If any note issued under Section 9(b) of this
Agreement cannot be paid when due by reason of any of clauses (a) through (d),
then such note shall remain outstanding after such date but shall bear interest
and become payable pursuant to the terms of this Section 10.
11. Sale of Corporation. If Parent approves a sale of its Common Stock
to an independent third party or an affiliated group of third parties (whether
by purchase, merger, consolidation or otherwise), Buyers will agree to sell
their Common Stock to such third parties, with the allocation of proceeds from
such sale as between Buyers and other holders of Common Stock to be determined
pursuant to Section 12 of this Agreement.
12. Liquidation. In the event of a sale of all or substantially all of
the assets of the Corporation and its direct and indirect subsidiaries, on a
consolidated basis, and the resulting liquidation of the Corporation or in the
event of a sale of the Common Stock of the Corporation pursuant to Section 11 of
this Agreement, Management Members holding Common Stock and/or vested SARs of
the Corporation which have not been purchased and liquidated pursuant to Section
7 or 8 of this Agreement or divested pursuant to Section 5(d) of this Agreement
shall receive in exchange for their Common Stock and/or SARs: (a) an amount
equal to: (i) the net proceeds received from such sale, minus (ii) the
liabilities of the Corporation and its direct and indirect subsidiaries on a
consolidated basis, including any reserves for contingent liabilities,
determined by the Board of Directors in good faith, and the stated value of and
accrued and unpaid dividends on the Series A Preferred Stock and the Series B
Preferred Stock, minus (iii) $391.00 multiplied by the number of vested SARs to
be liquidated; multiplied by (b) the percentage which the Common Stock and
vested SARs then held by Management Members bear to the total number of
outstanding shares of Common Stock and vested SARs of the Corporation at the
time of the liquidation or sale (i.e., "G" as calculated in the formula set
forth in Section 5(e)). Holders of Common Stock who are not Management Members
shall receive the balance of the net proceeds received from
-18-
such sale; provided, however, that in no event shall the application of this
provision result in holders of Common Stock who are not Management Members
receiving in exchange for their Common Stock an amount less than: (y) an amount
equal to (i) the net proceeds received from such sale, minus (ii) the
liabilities of the Corporation and its direct and indirect subsidiaries on a
consolidated basis, including any reserves for contingent liabilities,
determined by the Board of Directors in good faith, and the stated value of and
accrued and unpaid dividends on the Series A Preferred Stock and the Series B
Preferred Stock, plus (iii) $391.00 multiplied by the number of vested SARs to
be liquidated; multiplied by (z) the percentage which the Common Stock then held
by holders of Common Stock who are not Management Members bear to the total
number of outstanding shares of Common Stock and vested SARs of the Corporation
at the time of the liquidation or sale (i.e., "G" as calculated in the formula
set forth in Section 5(e)).
13. Employment Agreements. Each of Xxxxxxx X. Call, Xxxxxx X. Xxxxx,
Xxxxxxxx X. Xxxxx, Xxxx Xxxxxxxxx, and Xxxxxx X. Xxxxx hereby acknowledge that
their respective Employment Agreements, each dated as of December 1, 1991, have
expired by their terms and hereby agree that as of the Closing, each such
Employment Agreement shall be deemed terminated without any liability whatsoever
on the part of the Corporation or any of its direct or indirect subsidiaries.
Xxxx Xxxxx and Xxxxx X. Xxxxx represent and warrant that they do not have
written employment agreements with the Corporation or any of its direct or
indirect subsidiaries and that any agreement, oral or written, respecting the
terms of their employment shall be deemed terminated without any liability
whatsoever on the part of the Corporation or any of its direct or indirect
subsidiaries. Subsequent to but effective as of the Closing, each Management
Member will enter into a five year employment agreement with the Corporation
and/or the applicable direct or indirect subsidiary. Management Members'
respective current compensation packages (as in effect on December 31, 1996),
including salary, bonus and benefits, will be substantially retained in such
employment agreements, except that: (a) effective upon the Closing, each
Management Member will receive a five percent increase in his annual salary,
except for Xxxx Xxxxx and Xxxxx X. Xxxxx who will receive no increase in annual
salary, and except for Xxxxxxxx X. Xxxxx who will receive a nine percent
increase in annual salary; (b) each Management Member will have the ability to
earn appropriate annual percentage increases in his base salary; (c) the
employment agreements will provide for annual bonuses according to criteria to
be determined, provided that such criteria will not result in substantially
lower bonus opportunities at the same level of performance of KII Acquisition
and/or the applicable subsidiaries than under the Management Incentive Plan as
applicable to each Management Member, it being expressly acknowledged and agreed
by Management Members that the Management Incentive Plan is hereby terminated;
and (d) the existing deferred compensation plan as applicable to each Management
Member, except for Xxxxx X. Xxxxx, will be continued under substantially the
same terms as in effect prior to the Closing, it being acknowledged by Xxxxx X.
Xxxxx that he has no current deferred compensation plan and that no rights with
respect to any deferred compensation arise under or by virtue of this Agreement.
Management Members hereby represent and
-19-
warrant that they have included in their projections and budget provided to the
Corporation and Mentmore the foregoing salary increases and bonuses as well as
insurance premiums and other payments under the deferred compensation plan.
Nothing contained in this Agreement shall give any Management Member any rights
to employment or with respect to his employment or termination thereof except as
shall be set forth in his respective employment agreement.
14. Tax Allocation and Indemnity Agreement. Upon the Closing,
Parent and the Corporation shall enter into a Tax Allocation and Indemnity
Agreement. The parties hereto acknowledge that any distributions to Parent by
the Corporation thereunder shall be permitted and shall not constitute dividends
for any purposes.
15. Board of Directors. Upon the Closing, the Board of Directors
of the Corporation and each of its direct and indirect subsidiaries shall
initially consist of Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx and Xxxxxxx X. Call.
16. Legend. The following legends shall be placed on the Common
Stock to be issued under this Agreement:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE
FEDERAL OR STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNLESS THE PROPOSED TRANSFER DOES NOT
REQUIRE ANY SUCH REGISTRATION AND THE CORPORATION HAS RECEIVED AN
OPINION OF COUNSEL TO SUCH EFFECT.
THE CORPORATION AND ITS SECURITYHOLDERS HAVE ENTERED INTO AN AGREEMENT
DATED JULY 1, 1997 WHICH IMPOSES CERTAIN RESTRICTIONS ON THE RIGHT TO
TRANSFER THE SECURITIES REPRESENTED BY THIS CERTIFICATE. NO TRANSFER
OF THE SECURITIES REPRESENTED HEREBY SHALL BE EFFECTIVE EXCEPT IN
ACCORDANCE WITH SUCH AGREEMENT AND ANY PURCHASER OR OTHER TRANSFEREE OF
SECURITIES OF THE CORPORATION IS BOUND BY THE AGREEMENT AND SHALL BE
CONSIDERED A PARTY THERETO. THE CORPORATION WILL MAIL TO THE SECURITY
HOLDER A COPY OF THE AGREEMENT WITHOUT CHARGE WITHIN TEN DAYS AFTER
RECEIPT OF WRITTEN REQUEST THEREFOR.
17. Miscellaneous.
(a) Action by Management Members. Whenever any consent,
waiver, agreement or other action of Management Members as a group is
required or
-20-
permitted hereunder, such action shall be effective if it is taken by
Management Members holding at least a majority of the aggregate of the
number of shares of Common Stock then owned by all Management Members
and the number of SAR Credits granted to all Management Members and not
terminated or divested pursuant to the terms of this Agreement.
(b) Expenses. Management Members, Parent and the Corporation
shall each bear their own legal, accounting and other out-of-pocket
expenses in connection with the transactions contemplated herein.
(c) Amendments. This Agreement may be amended or terminated
only by a writing signed by the Corporation, Parent and the requisite
number of Management Members set forth in Section 17(a) hereof, and any
such amendment or termination shall be effective only to the extent
specifically set forth in writing.
(d) Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior written and oral agreements, including the Letter
of Intent, and all contemporaneous oral agreements, relating to such
matters. The parties hereto specifically acknowledge the termination of
the Letter of Intent effective as of the date hereof.
(e) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
California.
(f) Notices. Any notice required or permitted to be delivered
under this Agreement shall be in writing and shall be deemed given when
hand delivered or when mailed by certified mail, return receipt
requested, or when sent by a commercially recognized overnight courier
service or when sent by confirmed facsimile (with a copy sent by
ordinary mail) to a party at his or its address set forth below or at
such other address as may be designated by a party in writing,
To the Corporation:
KII HOLDING CORP.
c/o Mentmore Holdings Corporation
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
-21-
with copies to:
Xxxxxxx X. Xxxxxxxx, Vice President and General Counsel
c/o Mentmore Holdings Corporation
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
and
Xxxxx X. Xxxxxxxxxx, Xx., Esq.
Xxxxxx, XxXxxx & Xxxxxxxxxxx
200 Public Square, 00xx Xxxxx
XX Xxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Fax: (000) 000-0000
To Parent:
GREYSTOKE CAPITAL MANAGEMENT LIMITED LDC
c/o Mentmore Holdings Corporation
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
with copies to:
Xxxxxxx X. Xxxxxxxx, Vice President and General Counsel
c/o Mentmore Holdings Corporation
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
and
Xxxxx X. Xxxxxxxxxx, Xx., Esq.
Xxxxxx, XxXxxx & Xxxxxxxxxxx
200 Public Square, 00xx Xxxxx
XX Xxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Fax: (000) 000-0000
To Management Members at their respective addresses as set forth on the
signature pages hereof.
-22-
(g) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions of this
Agreement or affecting the validity or enforceability of such provision
in any other jurisdiction. In the event that a court of competent
jurisdiction determines that any provision or portion of this Agreement
is unreasonable, arbitrary, against public policy or otherwise
unenforceable, such court shall enforce such provision to the extent
the court determines reasonable or in accordance with public policy and
to the maximum extent enforceable by law.
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their heirs,
executors, administrators, legal representatives and permitted
successors and assigns.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
-23-
IN WITNESS WHEREOF, the undersigned has executed this Agreement among
KII Holding Corp., Greystoke Capital Management Limited LDC and the Buyers
listed herein or caused this Agreement to be executed as of the date first above
written.
KII HOLDING CORP.
By: /s/ Xxxxxxx X. Xxxxxx
Its: Vice Chairman
IN WITNESS WHEREOF, the undersigned has executed this Agreement among
KII Holding Corp., Greystoke Capital Management Limited LDC and the Buyers
listed herein or caused this Agreement to be executed as of the date first above
written.
GREYSTOKE CAPITAL MANAGEMENT
LIMITED LDC
By: /s/ Xxxxxxx X. Xxxxxx
Its: Director
IN WITNESS WHEREOF, the undersigned has executed this Agreement among
KII Holding Corp., Greystoke Capital Management Limited LDC and the Buyers
listed herein or caused this Agreement to be executed as of the date first above
written.
/s/ Xxxxxxx X. Call
XXXXXXX X. CALL
Address for notice:
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the undersigned has executed this Agreement among
KII Holding Corp., Greystoke Capital Management Limited LDC and the Buyers
listed herein or caused this Agreement to be executed as of the date first above
written.
/s/ Xxxxxx X. Xxxxx
XXXXXX X. XXXXX
Address for notice:
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
IN WITNESS WHEREOF, the undersigned has executed this
Agreement among KII Holding Corp., Greystoke Capital Management Limited LDC and
the Buyers listed herein or caused this Agreement to be executed as of the date
first above written.
/s/ Xxxxxxxx X. Xxxxx
XXXXXXXX X. XXXXX
Address for notice:
00000 Xxxxxxxx Xxxx
Xxxxxxxxx Xxxxx, XX 00000
IN WITNESS WHEREOF, the undersigned has executed this Agreement among
KII Holding Corp., Greystoke Capital Management Limited LDC and the Buyers
listed herein or caused this Agreement to be executed as of the date first above
written.
/s/ Xxxx Xxxxxxxxx
XXXX XXXXXXXXX
Address for notice:
00000 Xxxxxx Xxxxxxxxxx
Xxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the undersigned has executed this Agreement among
KII Holding Corp., Greystoke Capital Management Limited LDC and the Buyers
listed herein or caused this Agreement to be executed as of the date first above
written.
/s/ Xxxxxx X. Xxxxx
XXXXXX X. XXXXX
Address for notice:
0000 0xx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000
IN WITNESS WHEREOF, the undersigned has executed this Agreement among
KII Holding Corp., Greystoke Capital Management Limited LDC and the Buyers
listed herein or caused this Agreement to be executed as of the date first above
written.
/s/ Xxxx Xxxxx
XXXX XXXXX
Address for notice:
0000 X. Xxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
IN WITNESS WHEREOF, the undersigned has executed this Agreement among
KII Holding Corp., Greystoke Capital Management Limited LDC and the Buyers
listed herein or caused this Agreement to be executed as of the date first above
written.
/s/ Xxxxx Xxxxx
XXXXX XXXXX
Address for notice:
0000 Xxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
SCHEDULE 1(a)
COMMON STOCK
Name Shares of Common Stock Purchase Price
Xxxxxxx X. Call 995.0 shares $389,045.00
Xxxxxx X. Xxxxx 318.4 shares $124,494.40
Xxxxxxxx X. Xxxxx 318.4 shares $124,494.40
Xxxxxx X. Xxxxx 119.4 shares $ 46,685.40
Xxxx Xxxxx 79.6 shares $ 31,123.60
Xxxx Xxxxxxxxx 159.2 shares $ 62,247.20
SCHEDULE 2(g)
CAPITALIZATION
Class Authorized Issued
Common Stock 20,000 10,000
Series A Preferred Stock 400 84
Series B Preferred Stock 75 0
Undesignated Preferred Stock 25 0
SCHEDULE 5(a)
PROMOTIONAL SAR CREDITS
Name SAR Credits
Xxxxxxx X. Call 142.00
Xxxxxx X. Xxxxx 53.25
Xxxxxxxx X. Xxxxx 53.25
Xxxxxx X. Xxxxx 17.75
Xxxx Xxxxx 17.75
Xxxx Xxxxxxxxx 0.00
Xxxxx Xxxxx 28.40
Held in reserve to be granted to future
President of Xxxxx Machining
International to be hired 42.60
SCHEDULE 5(b)
INCENTIVE SAR CREDITS
Name SAR Credits
Xxxxxxx X. Call 426.00
Xxxxxx X. Xxxxx 159.75
Xxxxxxxx X. Xxxxx 159.75
Xxxxxx X. Xxxxx 53.25
Xxxx Xxxxx 53.25
Xxxx Xxxxxxxxx 0.00
Xxxxx Xxxxx 85.20
Held in reserve to be granted to
future President of Xxxxx
Machining International
to be hired 127.80
