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Exhibit 10.2(b)
STOCKHOLDERS’ AGREEMENT
(Section
7.1 Version)
STOCKHOLDERS’ AGREEMENT, dated as of March 5, 2007
(this " Agreement "), among MEGGITT-USA, INC., a
Delaware corporation (" Purchaser "), K & F
INDUSTRIES HOLDINGS, INC., a Delaware corporation (the "
Company "), and the stockholder of the Company listed
on the signature pages hereto (the " Stockholder ")
and the Company.
WHEREAS, Purchaser, Ferndown Acquisition Corp., a Delaware
corporation (" Merger Sub "), and the Company propose
to simultaneously herewith enter into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or
supplemented, the " Merger Agreement "; capitalized
terms used but not defined herein shall have the meanings set forth
in the Merger Agreement) providing for the merger of Merger Sub
with and into the Company;
WHEREAS, as of the date hereof, each Stockholder is both the
record and beneficial owner (as such term is defined in Rule 13d-3
of the Exchange Act) of that number of shares of Common Stock set
forth in column 1 opposite its name on Schedule A to this
Agreement (subject to adjustment as contemplated herein, the "
Owned Shares ");
WHEREAS, pursuant to that certain Securityholders Agreement
dated November 18, 2004, as amended by the First Amendment
dated as of December 27, 2004 and as further amended by the Second
Amendment dated as of April 27, 2005 (as so amended, the "
Securityholders’ Agreement "), the Stockholder
has granted an irrevocable proxy with respect to the power to vote
the Owned Shares to each of (i) Aurora Equity Partners III L.P., a
Delaware limited partnership (" AEP III "), (ii)
Aurora Equity Partners II L.P., a Delaware limited partnership ("
AEP II "), (iii) Aurora Overseas Equity Partners III,
L.P., a Cayman Islands limited partnership (" AOEP
III "), and (iv) Aurora Overseas Equity Partners II, L.P.,
a Cayman Islands limited partnership (" AOEP II, "
and, collectively with AEP III, AEP II and AOEP III, the "
Aurora Entities "); and
WHEREAS, as a condition to the willingness of Purchaser and
Merger Sub to enter into the Merger Agreement, and as an inducement
and in consideration therefor, Purchaser has requested that the
Stockholders enter into this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Representations, Warranties and Covenants of
the Stockholder . The Stockholder hereby represents and
warrants to Purchaser as of the date hereof as follows:
(a)
Authority . The Stockholder has all requisite power
and authority to execute this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery
by the Stockholder of this Agreement and consummation of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Stockholder.
(b)
Execution; Delivery; Securityholders’ Agreement
. The Stockholder has duly executed and delivered this
Agreement, and this Agreement constitutes the valid and
binding obligation of the Stockholder,
enforceable against the Stockholder in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to
general principles of equity. No consent of, or registration
or filing with, any Governmental Entity is required to be obtained
or made by or with respect to the Stockholder in connection with
the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, other than
(i) such reports, schedules or statements under the Exchange Act as
may be required to be filed by the Stockholder in connection with
this Agreement and the transactions contemplated hereby and (ii)
such consents, registrations or filings by the Stockholder the
failure of which to be obtained or made would not have an adverse
effect on the Stockholder’s ability to timely perform its
obligations hereunder. The Securityholders’ Agreement
is the valid and binding obligation of the Stockholder, enforceable
against the Stockholder in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors rights and to general principles of
equity. The Stockholder will not consent or permit any
termination, cancellation, amendment, waiver or modification of the
Securityholders’ Agreement that would, individually or in the
aggregate, reasonably be expected to impair the ability of the
Stockholder to timely perform its obligations under this Agreement
or prevent or delay the consummation of the transactions
contemplated by the Merger Agreement, and will not assert any claim
that the provisions of Section 7.1 of the
Securityholders’ Agreement are invalid.
(c)
The Owned Shares . The Stockholder is the record and
beneficial owner of the Owned Shares set forth in column 1 opposite
its name on Schedule A , free and clear of (i) any
Encumbrances (other than the Merger Agreement and those created by
the Securityholders Agreement) and (ii) any restrictions
whatsoever with respect to the ownership, transfer or voting of the
Owned Shares that would, individually or in the aggregate,
reasonably be expected to impair the ability of the Stockholder to
timely perform its obligations under this Agreement or prevent or
delay the consummation of the transactions contemplated by the
Merger Agreement. None of such Owned Shares are subject to
any voting trust or other voting agreement, except pursuant to the
Securityholders Agreement or as contemplated by this
Agreement. Except for the Owned Shares, the Stockholder does
not own beneficially or of record any common stock or other voting
securities of the Company on the date hereof, and does not,
directly or indirectly, own or have any option, warrant or other
right to acquire any common stock or other securities of the
Company that are or may by their terms become entitled to vote or
any securities that are convertible or exchangeable into or
exercisable for any securities of the Company that are or may by
their terms become entitled to vote under the Company’s
Charter, applicable Law or otherwise.
(d)
No Conflicts . Subject to appropriate filings by the
Stockholder under the Exchange Act (which the Stockholder agrees to
make as and to the extent required by the Exchange Act), to the
extent applicable, the execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof will not, conflict with,
result in a violation or breach of, or constitute a default (or an
event that, with notice or lapse of time or both, would result in a
default) or give rise to any right of termination or acceleration
under, (i) any organizational or constituent document of such
Stockholder (ii) the Securityholders’ Agreement,
(iii) any loan or credit agreement, bond, note, mortgage,
indenture, lease or any other contract, agreement or instrument to
which the
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Stockholder is a party or by which the
Stockholder or any of the Owned Shares is bound or (iv) any
Law or Order applicable to the Stockholder; except, in the case of
clauses (iii) and (iv) above, for any such violation, breach,
default or right of termination or acceleration that does not
impair or materially delay the Stockholder’s ability to
perform its obligations hereunder.
Section 2. Representations and Warranties of
Purchaser. Purchaser hereby represents and warrants to the
Stockholder as follows:
(a)
Authority . Purchaser has all requisite corporate
power and authority to execute this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery
by Purchaser of this Agreement and consummation of the transactions
contemplated hereby have been duly authorized by all necessary
action on the part of Purchaser.
(b)
Execution; Delivery . Purchaser has duly executed and
delivered this Agreement, and this Agreement constitutes the valid
and binding obligation of Purchaser, enforceable against Purchaser
in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors rights and
to general principles of equity. No consent of, or
registration or filing with, any Governmental Entity is required to
be obtained or made by or with respect to Purchaser in connection
with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby, other
than as set forth in the Merger Agreement.
(c)
No Conflicts . Subject to compliance by Purchaser with
the Regulatory Filings, neither the execution and delivery of this
Agreement nor the performance by Purchaser of its obligations
hereunder will result in a violation or breach of, or constitute a
default (or an event that, with notice or lapse of time or both,
would result in a default) or give rise to any right of termination
or acceleration under, (i) Purchaser’s certificate of
incorporation or similar constituent documents, (ii) any loan
or credit agreement, bond, note, mortgage, indenture, lease or any
other contract, agreement or instrument to which Purchaser is a
party or by which Purchaser is bound, or (iii) any Law or
Order applicable to Purchaser; except, in the case of clauses (ii)
and (iii) above, for any such violation, breach, default or right
of termination or acceleration that does not impair or materially
delay the Purchaser’s ability to perform its obligations
hereunder.
Section 3. Capture; No Transfers; Waiver of Appraisal
Rights .
(a)
If the Merger Agreement is terminated pursuant to Sections 7.2(a)
or (c), 7.3(a) or (b) or 7.4(c) of the Merger Agreement (a "
Triggering Termination ") and any of a
Stockholder’s Owned Shares are sold, transferred, exchanged,
canceled or disposed of in connection with, or as a result of
(including any disposition following announcement of), any
Acquisition Proposal within the meaning of Section 7.6(b)(i) of the
Merger Agreement (whether or not such Acquisition Proposal was made
prior to termination of the Merger Agreement or by the same Person)
under circumstances in which the Company is required to pay a
Break-Up Fee under the Merger Agreement at any time after such
termination but prior to (or pursuant to a definitive agreement
entered into prior to) the one year anniversary of the date of the
Triggering Termination (an " Alternative Disposition
") then, simultaneously with the closing of such
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Alternative Disposition, the Stockholders shall
each tender and pay to, or shall cause to be tendered and paid to,
Purchaser, or its designee, in immediately available funds, the
product of (A) .50, multiplied by (B) the number of Owned Shares
owned by such Stockholder and Transferred pursuant to the Alternate
Disposition, and multiplied by (C) the remainder that results when
(y) the Per Share Merger Consideration is subtracted from (z) the
Per Share Alternative Transaction Consideration. As used in
this Section 3, " Per Share Alternative Transaction
Consideration " shall mean all cash, securities, settlement
or termination amounts, notes or other debt instruments, and other
consideration payable or to be paid, directly or indirectly, with
respect to each Owned Share in connection with or as a result of
such Alternative Disposition.
(b)
For purposes of determining Per Share Alternative Transaction
Consideration under this Section 3 : (i) all non-cash
items shall be valued based upon the fair market value thereof as
determined by an independent expert selected by Purchaser and who
is reasonably acceptable to a majority in interest of the
Stockholders, (ii) all deferred payments or consideration shall be
discounted to reflect a market rate of net present value thereof as
determined by the above-referenced independent expert, and (iii)
all contingent payments will be due when paid. In the event
any contingent payments not previously included in the
determination of Per Share Alternative Consideration ultimately are
paid with respect to the Owned Shares pursuant to an Alternative
Disposition, then such Stockholder shall pay to Purchaser fifty
percent of any amounts paid with respect to such Owned Shares in
respect of such uncollected contingent payments promptly after
receipt thereof, and each Stockholder agrees to use its
commercially reasonable efforts to earn, collect and receive such
contingent payments.
(c)
Other than pursuant to this Agreement or as contemplated by the
Merger Agreement, the Stockholder shall not: (i) sell,
transfer, tender, pledge, encumber, assign or other
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