EXHIBIT 10.16
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SECURITIES PURCHASE AGREEMENT
among
K & F Industries, Inc.
and
The Purchasers (as defined herein)
September 2, 1994
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SECURITIES PURCHASE AGREEMENT
Table of Contents
Page
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II PURCHASE AND SALE OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.1. Commitments to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.2. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3.1. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3.2. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3.3. Organization and Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3.4. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3.5. No Violation; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3.6. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.7. Offer or Sale of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4.1. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE V CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 5.1. Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE VI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 6.1. Applicability of the Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 6.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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SECURITIES PURCHASE AGREEMENT dated as
of September 2, 1994, among K&F Industries,
Inc. (f.k.a. Opus Acquisition Corporation), a
Delaware corporation (together with its
successors, the "Issuer"), Xxxxxxx X. Xxxxxxxx
("BLS"), Xxxxxx Brothers Capital Partners II,
L.P. ("LBCP"), Xxxxxx Brothers Merchant
Banking Portfolio Partnership L.P. ("LBMB"),
Xxxxxx Brothers Offshore Investment
Partnership L.P. ("LBOP") and Xxxxxx Brothers
Offshore Investment Partnership - Japan L.P.
("LBOJ"; and LBOJ, BLS, LBCP, LBOP, LBMB,
collectively, the "Purchasers").
The Issuer is currently negotiating with Loral Corporation
("Loral") to retire the Issuer's 14.75% Subordinated Convertible Debentures Due
2004 which are held by Loral (the "Proposed Transaction").
To obtain the cash which the Issuer proposes to pay to Loral
in the Proposed Transaction, the Issuer has agreed to sell to the Purchasers,
and the Purchasers have agreed to purchase from the Issuer, shares of the
Issuer's capital stock on the terms and subject to the conditions contained
herein. All of the proceeds from the issuance by the Issuer of capital stock
hereunder will be used to effect the Proposed Transaction.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used and
not otherwise defined herein shall have the meanings given to such terms in the
Securities Purchase Agreement (the "Original Purchase Agreement") dated as of
April 27, 1989, among the Issuer, BLS and Xxxxxx Brothers Holdings Inc.
(formerly known as Shearson Xxxxxx Xxxxxx Holdings Inc.).
ARTICLE II
PURCHASE AND SALE OF SECURITIES
SECTION 2.1. Commitments to Purchase. At the Closing (as
defined below) the Issuer agrees to issue and sell to each Purchaser and each
Purchaser agrees, severally but not jointly,
to purchase from the Issuer the number of shares of Nonvoting Common Stock, par
value $.01 per share (the "Common Shares"), or shares of Series A Nonvoting
Convertible Preferred Stock, par value $.01 per share ("Series A Preferred
Shares" and, together with the Common Shares, the "Shares"), of the Issuer as
are set forth opposite such Purchaser's name on Schedule I attached hereto at
the aggregate purchase price set forth opposite such Purchaser's name on
Schedule I.
SECTION 2.2. Closing. (a) The purchase and sale of the
Shares (the "Closing") will take place at the offices of X'Xxxxxxxx Graev &
Karabell, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 simultaneously with
the execution and delivery hereof.
(b) At the Closing, the Issuer shall deliver to each
Purchaser a stock certificate, registered in the name of such Purchaser,
representing the Shares being purchased by such Purchaser pursuant to Section
2.1.
(c) Delivery of certificates representing Shares shall be
made to each Purchaser against receipt by the Issuer of a wire transfer of
immediately available funds in an amount equal to the aggregate purchase price
to be paid for such Purchaser's Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Issuer hereby represents and warrants to each Purchaser as
follows:
SECTION 3.1. Disclosure. There is no fact known to the
Issuer which has not been disclosed to the Issuer's board of directors at
meetings of the board of directors (other than facts related to general
economic conditions of the economy as a whole) which has resulted in a material
adverse effect, or, insofar as the Issuer can reasonably foresee, is likely to
have a material adverse effect on the properties, business, prospects,
operations, earnings, assets, liabilities or condition (financial or otherwise)
of the Issuer and its subsidiaries taken as a whole (a "Material Adverse
Effect").
SECTION 3.2. Financial Statements. The audited consolidated
balance sheet of the Issuer as of March 31, 1994 and the related consolidated
statements of income, shareholder's equity and cash flow for the year ended
March 31, 1994 fairly present, in conformity with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto), the consolidated financial position of the Issuer and its
consolidated subsidiaries as of the date thereof and their consolidated results
of operations, shareholders' equity and cash flows for the period then ended.
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SECTION 3.3. Organization and Status. The Issuer is a
corporation duly organized, validly existing and in good standing under the
General Corporation Law of the State of Delaware and is duly qualified to
transact business in each jurisdiction in which the character of its business
makes such qualification necessary, except where such failure to qualify would
not have a Material Adverse Effect and the Issuer has all requisite corporate
power and authority and all material governmental licenses, authorizations,
consents and approvals required to own, lease and operate its property and
assets and to transact the business in which it is engaged. Attached as
Exhibits A and B hereto are true and correct copies of the By-laws and
Certificate of Incorporation of the Issuer as amended and restated through the
date hereof.
SECTION 3.4. Authorization. (a) The Issuer has the
requisite corporate power to execute, deliver and perform the terms and
provisions of this Agreement and the Amended and Restated Stockholders
Agreement dated the date hereof among the Issuer and certain stockholders of
the Issuer (the "Stockholders Agreement" and, together with this Agreement, the
"Documents") and has taken all requisite corporate action to authorize the
execution, delivery and performance by it of the Documents. Each Document
constitutes a valid and binding agreement of the Issuer.
(b) The Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will have been
validly issued and will be fully paid and nonassessable, and free and clear of
any Lien or other right or claim, except to the extent set forth in the
Stockholders Agreement, and each Purchaser will acquire good and valid title to
the Shares to be purchased by it free of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such Shares), except as provided in the Stockholders
Agreement and the Issuer's Certificate of Incorporation. The issuance of the
Shares is not subject to any preemptive or similar rights which have not been
satisfied or waived and holders of the Shares will not be entitled to any
preemptive or similar rights, except as set forth in the Issuer's Certificate
of Incorporation and in the Stockholders Agreement.
SECTION 3.5. No Violation; Consents. The execution, delivery
and performance by the Issuer of this Agreement will not (i) contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality by which the
Issuer is bound, (ii) conflict with or constitute a default under, or give rise
to any right of termination or acceleration under any indenture, loan
agreement, contract, lease or other agreement to which the Issuer is a party or
by which it or any of its property or assets is bound or to which it may be
subject, or (iii) violate any provision of the certificate of incorporation or
by-laws of the Issuer. No consent, authorization or order of, or filing or
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registration with, any court or governmental department, agency or authority is
required for the execution, delivery and performance of the Documents by the
Issuer.
SECTION 3.6. Litigation. Except as previously disclosed to
the Issuer's board of directors at meetings thereof, there is no pending or, to
the knowledge of the Issuer, threatened action, suit or proceeding before any
court, governmental or regulatory authority, agency, commission or board of
arbitration against the issuer or which relates to or challenges the legality,
validity or enforceability of this Agreement, or which, if any adverse
determination were made, could have a Material Adverse Effect.
SECTION 3.7. Offer or Sale of Securities. Neither the Issuer
nor anyone acting on its behalf has offered or sold or will offer or sell any
securities or has taken any other action that would subject the issuance and
sale of the Shares to the registration provisions of the Securities Act.
ARTICLE IV
INDEMNIFICATION
SECTION 4.1. Indemnification. The Issuer agrees to indemnify
and hold harmless each Purchaser and its respective Affiliates, the respective
directors, officers, agents and employees of each Purchaser and its Affiliates,
and each other person controlling such Purchaser, any agent of such Purchaser
or any of its respective Affiliates within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act and any partner of any of
them from and against any losses, claims, damages, liabilities or expenses
(including counsel fees and disbursements) arising out of any misrepresentation
or breach of any warranty or covenant made or to be performed by the Issuer
pursuant to this Agreement.
ARTICLE V
CONDITIONS TO CLOSING
SECTION 5.1. Closing Conditions. The obligation of each
Purchaser to purchase the Shares in accordance with the terms hereof is subject
to the receipt of a legal opinion of X'Xxxxxxxx Graev & Karabell, special
counsel to the Issuer, reasonably satisfactory to such Purchaser.
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ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Applicability of the Purchase Agreement. The
parties hereto acknowledge and agree that the Shares purchased hereunder shall
be subject to all the terms, conditions and provisions relating to transfer
restrictions contained in the Original Purchase Agreement and to all of the
provisions of the Stockholders' Agreement.
SECTION 6.2. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
(without giving effect to principles of conflicts of laws).
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IN WITNESS WHEREOF, each of the undersigned has duly executed the
Securities Purchase Agreement as of the 2nd day of September, 1994.
K&F INDUSTRIES, INC.
By: XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
Title:Vice President
XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
XXXXXX BROTHERS CAPITAL
PARTNERS II, L.P.
By: Xxxxxx Brothers Holdings Inc.,
General Partner
By: XXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Sr. Exec. Vice President
XXXXXX BROTHERS MERCHANT
BANKING PORTFOLIO PARTNERSHIP, L.P.
By: Xxxxxx Brothers Merchant
Banking Partners Inc., General
Partner
By: XXXX XXXXXXXXXX
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Name: Xxxx Xxxxxxxxxx
Title: Managing Director
XXXXXX BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP, L.P.
By: Xxxxxx Brothers Offshore
Partners Ltd., General Partner
By: C. XXXXX XXXX
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Name: C. Xxxxx Xxxx
Title: Secretary
XXXXXX BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP - JAPAN L.P.
By: Xxxxxx Brothers Offshore
Partners Ltd., General Partner
By: C. XXXXX XXXX
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Name: C. Xxxxx Xxxx
Title: Secretary
Series A
Nonvoting
Nonvoting Convertible Purchase
Purchasers Common Stock Preferred Price
---------- ------------ ------------- ----------
Xxxxxxx X. Xxxxxxxx 687,273 $ 1,963,636.36
Xxxxxx Brothers Capital 42,232 $ 3,573,500.53
Partners II, X.X.
Xxxxxx Brothers Merchant 61,891 $ 5,236,910.17
Banking Portfolio Partnership, X.X.
Xxxxxx Brothers Offshore Investment 17,015 $ 1,439,750.58
Partnership, X.X.
Xxxxxx Brothers Offshore
Investment Partnership -
Japan L.P. 6,498 $ 549,838.72
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Total: 687,273 127,636 $12,763,636.36
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