UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
REINHOLD INDUSTRIES, INC. (FORMERLY KEENE CORPORATION)
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(Name of Issuer)
Class A Common Stock, par value $.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
75935A109
--------------------------------------
(CUSIP Number)
Richard A. Lippe, Esq.
Managing Trustee
Keene Creditors Trust
The Chancery
190 Willis Avenue
Mineola, New York 11501
(516) 873-1412
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 18, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
_
|_|.
_
Check the following box if a fee is being paid with the statement |_|
The Index to Exhibits is on page [4].
<PAGE>
Page 2 of 4 Pages
This Amendment No. 2 amends and supplements the Schedule 13D filed on August 12,
1996 as amended by Amendment No. 1 (the "Schedule 13D") by the Keene Creditors
Trust (the "Trust") with respect to the Class A Common Stock, par value $.01 per
share (the "Class [A] Common Stock"), of Reinhold Industries, Inc. (formerly
Keene Corporation), a Delaware corporation ("Reinhold"). All capitalized terms
used in this Amendment and not otherwise defined herein have the meaning
ascribed to such terms in the Schedule 13D.
Item 4. Purpose of Transaction
Item 4 of the Schedule 13D is hereby amended by adding the following
paragraphs immediately before the final paragraph of such Item:
Pursuant to the Stock Purchase Agreement, a copy of which is attached as
Exhibit 99.2 hereto, between Reinhold Enterprises, Inc. ("REI") and Keene
Creditors Trust, the holder of all of the Class B Common Stock (the "Trust"),
dated May 18, 1999 (the "Stock Purchase Agreement"), at a closing scheduled to
occur on May 21, 1999, or at such other time as shall be mutually agreed by the
Trust and REI, the Trust will sell 997,475 shares of Class B Common Stock owned
by it to certain purchasers designated by REI at a purchase price of $9.00 per
share. A press release announcing the execution of the Stock Purchase Agreement
is attached as Exhibit 99.3 hereto. These shares represent approximately 49.9%
of the outstanding common stock of the Company. Pursuant to the Company's
Certificate of Incorporation, upon consummation of the sale of the shares to the
Purchasers, all of the outstanding shares of Class B Common Stock will
automatically be converted into shares of Class A Common Stock, and at the next
meeting of the stockholders of the Company called for that purpose, the holders
of the Class A Common Stock, voting as a class, will be entitled to elect all of
the directors of the Company. After the sale is consummated the Trust will
retain 22,525 shares of Class A Common Stock which it has agreed not to sell for
3 years following the closing of the contemplated transaction. The Trust has
also agreed not to acquire shares over the same three year period if that
acquisition would make the Trust a "5% shareholder" of the Company with the
meaning of Section 382 of the Internal Revenue Code of 1986, as amended, or the
regulations thereunder.
The purchasers designated by REI are Massachusetts Mutual Life
Insurance Company, MassMutual High Yield Partners II LLC, MassMutual Corporate
Value Partners Limited, Ralph R. Whitney, Jr., Glenn Scolnik, Forrest E.
Crisman, Jr., Andrew McNally, IV and Ward S. McNally (collectively, the
"Purchasers"). Messrs. Whitney, Scolnik, Crisman, A. McNally and W. McNally are
directors and/or officers of Hammond, Kennedy, Whitney & Company, Inc., a
private equity firm ("HKW"). It is contemplated that each Purchaser will pay for
the shares using his or its own available funds. Pursuant to the Stock Purchase
Agreement, each Purchaser will execute a Qualified Designee Assignment and
Assumption Agreement, a copy of which is attached as Exhibit 99.1 hereto.
The Stock Purchase Agreement provides that it is a condition to the
closing of the sale of the shares that Lawrence H. Diamond and Robert B.
Steinberg, the members of the Board of Directors elected by the Trust (as the
sole holder of Class B Common Stock), shall resign as directors. It is
contemplated that Ralph R. Whitney, Jr. and Andrew McNally IV will be appointed
by the remaining director, Michael T. Furry, as successor directors, following
which the Board of Directors will consist of: Michael T. Furry, Ralph R.
Whitney, Jr., and Andrew McNally IV.
The foregoing is qualified in its entirety by reference to the
Qualified Designee Assignment and Assumption Agreement and the Stock Purchase
Agreement, Exhibits 99.1 and 99.2 respectively.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
See Item 4 above
Item 7. Material To Be Filed as Exhibits
Exhibit Number Title
-------------- -----
99.1 Form of Qualified Designee Assignment and
Assumption Agreement
99.2 Stock Purchase Agreement, dated May 18,
1999
99.3 Press release of Hammond Kennedy Whitney
& Company, Inc.
<PAGE>
Page 3 of 4 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete,
and correct.
Dated: May 20, 1999
Keene Creditors Trust
By: /s/ Richard A. Lippe
____________________________________
Richard A. Lippe, Managing Trustee
<PAGE>
Page 4 of 4 Pages
<TABLE>
<CAPTION>
Exhibit Method of
Number Title Filing Page
------ ----- ------ ----
<S> <C> <C> <C>
99.1 Form of Qualified Designee Filed herewith 15
Assignment and Assumption
Agreement
99.2 Stock Purchase Agreement, Filed herewith 24
dated May 18, 1999
99.3 Press release of Hammond Filed herewith 49
Kennedy Whitney & Company, Inc.
</TABLE>
HT CAPITAL ADVISORS, LLC
PERSONAL & CONFIDENTIAL
July 2, 1998
Richard A. Lippe, Esq.
Managing Trustee
c/o Meltzer, Lippe, Goldstein, Wolf,
Schlissel & Sazer
The Chancery
190 Willis Avenue
Mineola, NY 11501
Dear Mr. Lippe:
This letter will confirm our understanding that Keene Creditors Trust (the
"Trust") has engaged HT Capital Advisors, LLC ("HT") to act as the Trust's
exclusive financial advisor in connection with a Transaction (as defined below)
between the Trust and any other person or entity (any such person or entity
being a "Purchaser").
Section 1. Financial Advisory Services to be Rendered. (a) In connection with
this engagement HT shall:
(i) familiarize itself to the extent it deems appropriate and
feasible with the Trust and with the business, operations,
properties, financial condition and prospects of Reinhold
Industries, Inc. ("Reinhold"), of which the Trust is majority
shareholder, and any prospective Purchaser, it being understood
that HT shall, in the course of such familiarization rely
entirely upon publicly available information and such other
information as may be supplied by the Trust in combination with
Reinhold or the Purchaser, without any obligation of independent
investigation;
(ii) assist the Trust in developing and implementing a strategy to be
used in connection with the Transaction;
(iii) If HT and the Trust believe it to be advisable, HT will assist
the Trust in preparing a memorandum for distribution to
potential Purchasers selected by the Trust and HT, describing
the Trust and Reinhold and its business, operations, properties,
financial condition and prospects, it being specifically agreed
that (x) such memorandum shall be based entirely on information
supplied by the Trust in conjunction with Reinhold, which
information the Trust hereby warrants shall be complete and
accurate in all material respects (y) the Trust shall be solely
responsible for the accuracy and completeness of such
memorandum, and (z) other than as contemplated by this clause
1(a)(iii), such memorandum may not be disclosed publicly or made
available to third parties, except with HT's prior written
consent;
<PAGE>
(iv) Develop a list of potential Purchasers for the Transaction;
(v) Consult with the Trust from time to time as to such potential
Purchasers;
(vi) Hold preliminary discussions with potential Purchasers
concerning their interest in the Transaction;
(vii) With the approval of the Trust, provide potential Purchasers
with information provided to HT by the Trust concerning the
Trust and Reinhold and its business to enable such potential
Purchasers to evaluate the Transaction;
(viii) If requested, introduce the Trust to one or more potential
Purchasers for the purpose of direct negotiations between the
parties and assist the Trust in such negotiations;
(ix) If requested, advise the Trust as to the structure, purchase
price and the terms and conditions of the Transaction;
(x) Perform such other investment banking and financial advisory
services as HT and the Trust may from time to time agree.
(b) This agreement does not constitute a commitment for or expression of
interest in providing or arranging any financing or placing or
underwriting any securities which may be required for consummation of a
Transaction. If HT or any of its affiliates is asked and elects to
provide or arrange any such financing, or to place or underwrite any
such securities, HT or such affiliate and the recipient of such
financing shall enter into a separate agreement setting forth the terms
and conditions of, and the fees payable in connection with, such
financing.
(c) HT agrees that Eric Lomas and Stephen C. Tardio will be assigned to this
engagement and will devote the time necessary to ensure full performance
of HT's duties hereunder.
(d) Notwithstanding the broader definition of "consideration" used herein,
it is understood that the Trustees do not expect to be favorably
disposed to a Transaction on terms other than all cash.
Section 2. Definitions. For purposes of this letter agreement, the following
terms shall have the meanings set forth below:
(a) The term "Transaction" shall mean, whether in one or a series of
transactions (i) any sale, merger, leveraged buy-out, tender or exchange offer,
restructuring or other extraordinary corporate transaction involving a
disposition of the Trust's investment in Reinhold (the "Securities") and a
Purchaser, or (ii) the acquisition by a Purchaser, directly or indirectly,
through public or private purchases, sales or otherwise of all or any portion of
the Securities of the Trust.
(b) The term "Investment Vehicle" shall have the meaning set forth in Section
(a) above.
<PAGE>
(c) The term "Consideration" shall mean the total proceeds and other
consideration paid to the Trust in connection with a Transaction (which
consideration shall be deemed to include amounts paid or to be paid into escrow)
and in any event shall include (in each case to the extent paid to the Trust):
(i) cash, (ii) notes, securities and other property (including all options,
warrants or other instruments or arrangements convertible into or exercisable
for any of the foregoing) at the fair market value thereof; (iii) all long-term
liabilities (including capitalized leases, pension liabilities, guarantees and
indebtedness for borrowed money) of the Trust repaid or retired by the Purchaser
in connection with or in anticipation of a Transaction; (iv) payments to be made
in installments; (v) contingent payments (whether or not related to future
earnings or operations).
The fair market value of non-cash consideration consisting of securities shall
be determined based upon the closing sale price for such securities on the
registered national securities exchange providing the primary market therein on
the last trading day prior to the public announcement of the Transaction, or if
such securities are not so traded, the average of the closing bid and asked
prices as reported by the National Association of Securities Dealers Automated
Quotation System or equivalent quotation system located outside of the United
States on the last trading day prior to the public announcement of the
Transaction. If such securities are not so traded or reported the fair market
value of such securities and any other non-cash Consideration shall be
determined in good faith by HT. If all or any portion of the consideration is to
be paid over time, then that portion of the Transaction Fee attributable thereto
shall be payable as and when such payments are made. If all or any portion of
the Consideration consists of contingent payments, then the portion of the
Transaction Fee attributable thereto shall be payable as and when such payments
are made by the Purchaser.
(d) "Indemnified Person" shall have the meaning assigned thereto in Schedule A
hereof.
Section 3. Term of Engagement. It is understood that HT's services hereunder may
be terminated with or without cause, by the Trust or by HT at any time upon 30
days prior written notice, without liability or continuing obligation; provided
that the provision of Section 2 (Definitions), 4 (Compensation), 5 (Expenses), 6
(Indemnity), 7 (Cooperation), 9 (Payments), 10 (Consent to Jurisdiction) and 12
(Miscellaneous) shall survive termination or expiration of this Agreement.
Section 4. Compensation. As compensation for HT's services hereunder, the Trust
shall pay to HT the following fees in cash as and when set forth below:
(a) A non-refundable retainer of $30,000, payable upon execution of
this agreement;
(b) An additional fee (the "Transaction Fee") equal to the greater
of (i) $150,000 and either (ii) 3% of the consideration, payable
in cash upon the closing of any Transaction if during the term
of this Agreement or, with a party contacted by HT, at any time
within 12 months after the expiration or termination date of
this Agreement; or (iii) 1 1/2% of the consideration payable in
<PAGE>
cash upon the closing of any Transaction with a party not
contacted by HT if at any time within 12 months after the
expiration or termination date of this Agreement (x) such
Transaction is consummated or (y) an agreement is entered into
which subsequently results in a consummated Transaction.
(c) No fee payable to any other financial advisor either by the
Trust or any other entity shall reduce or otherwise affect the
fees payable hereunder to HT.
Section 5. Expenses. In addition to compensation payable pursuant to Section 4
and regardless of whether any Transaction is announced, commences or occurs, the
Trust shall reimburse HT promptly upon request for reasonable expenses incurred
by HT in connection with this engagement, including, without limitation,
reasonable fees and disbursements of legal counsel and other professional
advisors to HT. HT will obtain written approval for all expenditures in excess
of $10,000. Such approval shall not be unreasonably withheld.
Section 6. Indemnification and Contribution. HT and the Trust agree to the
provisions with respect to the Trust's indemnification of HT and other matters
set forth in Schedule A, the terms of which are hereby incorporated by reference
into this Agreement.
Section 7. Cooperation, Confidentiality, Etc. (a) The Trust in combination with
Reinhold shall furnish HT with all information and data which HT shall
reasonably deem appropriate in connection with its activities on the Trust's
behalf (all of which information shall be accurate and complete in all material
respects) and will not withhold or omit any material information, and shall
provide HT reasonable access to the Trust's Trustees, Trust Advisory Committee
and Reinhold's officers, directors, employees and professional advisors. The
Trust shall involve HT in or keep HT apprised of all material discussions
between the Trust and potential Purchasers and shall make available to HT all
material information regarding potential Purchasers which the Trust receives
from any source whatsoever and shall request from potential Purchasers such
information which HT believes appropriate to its engagement hereunder.
(b) The Trust recognizes and consents to the fact that (i) HT will use and rely
on the accuracy and completeness of public reports and other information
provided by others including information provided by the Trust in combination
with Reinhold or potential Purchasers or their respective officers, employees,
auditors, attorneys or other agents in performing the services contemplated by
this Agreement, and (ii) HT does not assume responsibility for, and may rely
without independent verification upon, the accuracy and completeness of any such
information. The Trust acknowledges its understanding that HT will not undertake
an independent evaluation or appraisal of any assets or liabilities of the Trust
or Reinhold or a Purchaser or a physical inspection of the properties or assets
of the Trust or Reinhold or a Purchaser.
(c) The Trust represents and warrants to HT that any information heretofore or
hereafter furnished to HT is and will be true and correct in all material
respects and does not and will not omit any material fact required to make the
information given to HT not misleading. The Trust agrees to notify HT promptly
of any material change in the business or financial condition of the Trust or
Reinhold, during the course of HT's engagement that may require an amendment or
<PAGE>
supplement to any of the information provided to HT so that such information
will not be misleading in any material respect or omit to state any material
fact that is required to be stated or that is necessary in order to make any
such information not misleading given the occurrence of any such change.
(d) The Trust agrees that HT's advice is for the use and information of the
Trust only and may not be relied upon by others. The Trust will not disclose
such advice to others (except the Trust's professional advisors provided,
however, that nothing herein shall prohibit disclosure to the Trustees Advisory
Committee, to the United States Bankruptcy Court for the Southern District of
New York, or as required in connection with any litigation) or summarize or
refer to such advice without, in each case, HT's prior written consent.
Notwithstanding anything to the contrary contained in the foregoing, in the
event the Trust is required by law to make any filings with any governmental
authority (including without limitations the Securities and Exchange Commission
or other regulatory or administrative agency or any court) or any written
disclosure to any third party, which mention HT, or any disclosure to the
holders of its securities concerning HT or the advice rendered by HT hereunder,
the Trust shall afford HT the opportunity to review such disclosure in advance
and to approve the form thereof, such approval not to be unreasonably withheld
or delayed.
(e) The Trust recognizes that HT has been retained by the Trust only to act as
financial advisor to the Trust and that in such capacity HT shall act as an
independent contractor and in no other capacity (including, but not limited to,
that of a fiduciary). It is further agreed that the Trust's engagement of HT is
not deemed to be on behalf of, and is not intended to confer rights upon, any
individual beneficiary of the Trust or any person not a party hereto as against
HT or any Indemnified Person. Unless otherwise expressly agreed by HT in
writing, no one other than the Trust is authorized to rely upon this engagement
of HT or any statements or conduct by HT.
(f) Notwithstanding anything herein to the contrary, it is understood that HT is
not undertaking to provide any legal, accounting or tax advice in connection
with its engagement hereunder, and the Trust shall rely solely upon its own
experts therefore; HT may, however, assist the Trust in coordinating the
obtaining of such advice.
Section 8. Payments. The Trust agrees that all amounts payable to HT hereunder,
whether pursuant to Section 4, 5, 6 or otherwise, shall be paid in New York in
immediately available United States dollars, without set-off and without
deduction for any withholding, value-added or other similar taxes.
Section 9. Consent to Jurisdiction. The Trust hereby irrevocably consents to the
exclusive jurisdiction of any New York State or United States Federal Court
sitting in New York County over any action or proceeding arising out of or
relating to this Agreement, and the Trust hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard in such New York
State or Federal court. The Trust irrevocably consents to the service of any and
all process in any such action or proceeding by the mailing or copies of such
process to it at its address set forth above. The Trust agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdiction by suit on the judgment or in any other manner
provided by law. Notwithstanding anything to the contrary contained herein,
nothing in this Section 9 is intended to prevent either party hereto from
instituting an action in a jurisdiction outside of New York for the sole and
exclusive purpose of enforcing a judgment rendered by a New York State or United
States Federal Court sitting in New York County. Solely for the purposes of
<PAGE>
enforcing the indemnification and contribution provisions of Section 6 of this
Agreement (as set forth in Schedule A), the Trust consents to the jurisdiction
and service of process of any court in which any action, claim or proceeding
which is subject to such provisions is brought and hereby further and
irrevocably and unconditionally waives and agrees not to plead or claim in any
court that such action, claim or proceeding is brought in an inconvenient forum.
Section 10. Publicity. If requested, the Trust shall include a mutually
acceptable reference to HT in any press release or other public announcement
made by the Trust regarding the matters described in this letter. HT may place
advertisements describing its services hereunder in financial and other
newspapers at its own expenses.
Section 11. Miscellaneous. HT may perform its obligations hereunder either
directly or through its affiliates, and the provision of this agreement shall
apply equally to HT and any such affiliates. The Trust may not assign its rights
or obligations hereunder. This Agreement (a) has been duly executed and
delivered on behalf of each of the Trust and HT and constitutes the legal,
valid, binding and enforceable obligation of such party, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles or public policy
considerations; (b) sets forth the entire understanding of the parties relating
to the subject matter hereof and supersedes and cancels any prior
communications, understanding and agreement between the parties; (c) may not be
amended or modified except in a written instrument executed by each of the
parties; (d) may be signed in counterparts, each of which shall continue an
original and which together shall constitute one and the same agreement; and (e)
shall be governed by and construed in accordance with the internal laws of State
of New York, without regard to principles of conflict of law. ANY RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY PROCEEDING ARISING OUT OF OR RELATED TO THE SERVICES
OF HT HEREUNDER AND THE TRANSACTIONS CONTEMPLATED HEREBY IS HEREBY WAIVED OR
DEEMED WAIVED BY HT AND BY THE TRUST.
<PAGE>
If the foregoing terms meet with your approval, please indicate your acceptance
by signing and returning the attached copy of this letter.
Very truly yours,
HT CAPITAL ADVISORS, LLC
By: /s/ Eric Lomas
_______________________________________
Eric J. Lomas, President
Accepted and Agreed:
KEENE CREDITORS TRUST
By: /s/ Richard A. Lippe, Managing Trustee
______________________________________
<PAGE>
Schedule A
INDEMNIFICATION AND CONTRIBUTION
(a) The Trust will indemnify and hold harmless HT and its affiliates, and their
respective officers, directors, advisors, representatives, agents, employees,
and each other person controlling HT or any of its affiliates within the meaning
of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of
the Securities Exchange Act of 1934, as amended (each such party, including HT,
an "Indemnified Person") from and against any and all losses, claims, damages
and liabilities, joint or several (collectively, "Damages"), (i) related to,
arising out of, or in connection with HT's engagement under this Agreement, HT's
performance of any services in connection therewith or any transaction
contemplated thereby, and (ii) reimburse an Indemnified Person immediately upon
request for all expenses as they are incurred (including without limitation,
fees and disbursements of legal counsel and usual and customary expenses for an
Indemnified Person's involvement in discovery proceeding or testimony)
(collectively, "Expenses") to the extent incurred in connection with
investigating, preparing to defend or defending any commenced or threatened
action or legal, administrative or judicial proceeding or investigation
(collectively, "Proceedings"), related to or arising out of any matter referred
to in the Agreement, including an Indemnified Person's service thereunder
(whether or not any Indemnified Person is a party to such Proceedings) except
that this sentence shall not apply with respect to Damages or Expenses arising
out of losses that are finally (and not subject to appeal) judicially determined
to have resulted primarily from an Indemnified Person's willful misconduct or
gross negligence. The indemnification and reimbursement of obligations contained
herein shall apply whether or not HT or any other Indemnified Person is a formal
party to any lawsuit, claim or other proceeding and are expressly intended to
cover, among other things, reimbursement of legal and other expenses incurred in
a deposition or other discovery proceeding. In the event that any reimbursed
expenses are finally judicially determined to have resulted directly and
primarily from such Indemnified Person's gross negligence or willful misconduct
in performing the services which are the subject of the Agreement, HT shall
promptly refund to the Trust the portion of amounts advanced under this Schedule
A in respect of reimbursement of expenses which is attributable to expenses
incurred in relation to the act or omission of such Indemnified Person who is
the subject of such determination. The Company also agrees that no Indemnified
Person shall have any liability to the Trust for or in connection with this
engagement, except for liability for Damages and expenses which are finally
judicially determined to have resulted directly and primarily from the willful
gross negligence of the Indemnified Person. The Trust will promptly notify an
Indemnified Person of the assertion against it or, to its knowledge, any other
person of any claim or the commencement of any action, proceeding or
investigation relating to or arising out of any matter referred to in the
Agreement, including an Indemnified Person's services thereunder.
(b) The Trust and HT agree that if, for any reason, any indemnification sought
pursuant to this Schedule A is unavailable (other than because of gross
negligence or willful misconduct) or is insufficient to hold any Indemnified
Person harmless, then, whether or not HT is the person entitled to the
<PAGE>
indemnification, the Trust and HT shall each contribute to amounts paid or
payable by the Indemnified Person in respect of the Damages and expenses
(including all legal and other fees and expenses incurred in defending any
action or claim) for which such indemnification is unavailable or insufficient
in such proportion as is appropriate to reflect the relative benefits received
(or anticipated to be received) by the Trust and its stockholders, on the one
hand, and HT, on the other hand, in connection with the acts which resulted in
such Damages and expenses; provided that in no event shall the amount to be
contributed by HT exceed the amount of fees actually received by HT hereunder
(excluding any amounts received by HT as reimbursement of expenses). It is
hereby agreed that the relative benefits to the Trust and its stockholders on
the one hand and HT on the other hand with respect to this engagement shall be
deemed to be in the same proportion as (x) the total value paid, transferred,
exchanged or received or proposed to be paid, transferred, exchanged or received
by the Trust, in connection with any Transaction (whether or not consummated)
bears to (y) the fee paid or payable to HT in connection with this engagement.
The Trust and HT agree that if and only if the allocation pursuant to the first
sentence of this paragraph (b) is unavailable or is insufficient to hold any
Indemnified Person harmless, then, whether or not HT is the person entitled to
indemnification, the Trust and HT shall each contribute to amounts paid or
payable by the Indemnified Person in respect of the Damages and expenses
(including all legal and other fees and expenses incurred in defending any
action or claim) for which such indemnification is unavailable or insufficient
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Trust, on the one hand, and HT, on the other
hand, in connection with the matters as to which such Damages relate, as well as
any other equitable considerations. The Trust and HT agree that it would not be
just and equitable if contribution pursuant to this Schedule A were determined
by pro rata allocation or by any other method which does not take into account
the equitable considerations referred to herein.
(c) The Trust and HT agree to consult in advance with one another with respect
to the terms of any proposed waiver, release or settlement of any Proceeding to
which the Trust or an Indemnified Person may be subject as a result of the
matters contemplated by the Agreement and this Schedule A. The Trust further
agrees not to enter into any such waiver, release or settlement without the
prior written consent of an Indemnified Person, unless such waiver, release or
settlement includes an unconditional release of such Indemnified Person from all
liability arising out of such Proceeding.
(d) The agreements of the Trust under this Schedule A shall be in addition to
any liabilities the Trust may otherwise have, shall be binding upon and inure to
the benefit of any successors and personal representatives of the Trust or an
Indemnified Person, and shall apply whether or not HT or any other Indemnified
Person is a formal party to any Proceeding. The agreements set forth in this
Schedule A shall remain in full force and effect following the completion or
termination of the engagement contemplated by the Agreement. ANY RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY PROCEEDING ARISING OUT OF OR RELATED TO THE SERVICES
OF HT HEREUNDER AND THE TRANSACTIONS CONTEMPLATED HEREBY IS HEREBY WAIVED OR
DEEMED WAIVED BY EACH INDEMNIFIED PERSON AND BY THE TRUST.
(e) The Trustees individually shall have no liability hereunder.
EXHIBIT 1.1
QUALIFIED DESIGNEE ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS QUALIFIED DESIGNEE ASSIGNMENT AND ASSUMPTION AGREEMENT (the
"Agreement") is made as of the ____ day of May, 1999 by and among REINHOLD
ENTERPRISES, INC., an Indiana corporation ("REI"), ________________________ (the
"Assignee") and KEENE CREDITORS TRUST (the "Seller"). Capitalized terms used but
not defined in this Agreement shall have the meanings set forth in the Purchase
Agreement (as defined below).
RECITALS:
A. REI and the Seller are parties to that certain Stock Purchase
Agreement dated May ___, 1999 (the "Purchase Agreement") pursuant to
which the Seller agreed to sell, and REI and/or certain Qualified
Designees agreed to purchase, 997,475 Class B Common Shares of
Reinhold Industries, Inc. (the "Company").
B. Upon execution of this Agreement, the Assignee shall for all
purposes under the Purchase Agreement be a Qualified Designee within
the meaning of the Purchase Agreement.
AGREEMENT:
In consideration of the terms and conditions contained herein and in the
Purchase Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. ASSIGNMENT. REI hereby transfers and assigns to the Assignee its right
to purchase [______________] Shares pursuant to the Purchase Agreement and
further transfers and assigns to the Assignee, pro rata with the other Qualified
Designees identified on SCHEDULE 1 attached hereto, all other right, title and
interest of REI in, to and under the Purchase Agreement.
2. ASSUMPTION. The Assignee hereby agrees to purchase [_______] Shares
pursuant to the Purchase Agreement and accepts and, severally (but not jointly)
to the extent of the Assignee's pro rata interest in the Purchase Agreement,
assumes and agrees to be bound by REI's (and, where applicable, Purchaser's)
obligations under the Purchase Agreement except that the Assignee does not
assume the obligations of REI under ARTICLE XII of the Purchase Agreement. The
parties hereby acknowledge and agree that the obligations of REI under ARTICLE
XII of the Purchase Agreement shall remain obligations solely of REI.
3. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNEE. The Assignee hereby
severally (and not jointly) and to the extent of the Assignee's pro rata
interest in the Purchase Agreement represents and warrants to the Seller as
follows:
<PAGE> 2
[A. ORGANIZATION; GOOD STANDING; QUALIFICATION; AND POWER. THE
ASSIGNEE IS A COMPANY, ORGANIZATION, ENTITY, ACCOUNT OR PLAN DULY
ORGANIZED, VALIDLY EXISTING AND, TO THE EXTENT ASSIGNEE IS A
CORPORATION OR OTHER ENTITY, IN GOOD STANDING, UNDER THE LAWS OF THE
STATE OF ITS ORGANIZATION. THE ASSIGNEE HAS ALL REQUISITE POWER AND
AUTHORITY AND ALL GOVERNMENTAL LICENSES, AUTHORIZATIONS, CONSENTS
AND APPROVALS TO EXECUTE AND DELIVER THIS AGREEMENT AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.]<F1>
b. AUTHORITY. [The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by the Assignee
have been duly authorized by all necessary action on the part of the
Assignee.] This Agreement constitutes a valid and legally binding
obligation of the Assignee enforceable against the Assignee in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting creditors' rights
generally or by the principles governing the availability of
equitable remedies.
c. NO CONFLICT OR VIOLATION. The execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated hereby do not and shall not: [(A) VIOLATE OR CONFLICT
WITH THE ORGANIZATIONAL DOCUMENTS OF THE ASSIGNEE;] (b) violate any
provision of law or any order, judgment, or decree of any court or
other governmental or regulatory authority applicable to the
Assignee; or (c) result in a breach of, or constitute a default (or
an event which, with notice or lapse of time or both would
constitute a default) under, or give rise to any right of
termination, cancellation or acceleration of, or result in the
creation of any Lien upon any of the assets or properties of the
Assignee under, any loan agreement, mortgage, security agreement,
indenture, or other agreement or instrument to which the Assignee is
a party or by which the Assignee is bound or to which any of its
properties or assets is subject or prohibit the Assignee from
consummating the purchase and sale of the Shares as contemplated
hereby.
d. NO CONSENT. No authorization, consent, approval, exemption, or
other action by or notice to or filing with any court or
administrative or governmental body or any third party is required
to permit the Assignee to execute and deliver this Agreement, to
consummate the transactions contemplated by this Agreement or to
comply with and fulfill the terms and conditions of this Agreement.
e. SECURITIES MATTERS. The Assignee understands that the offering
and sale of the Shares under the Purchase Agreement is intended to
______________
<F1> Bold representations shall only be given by Qualified Designees other than
individuals.
<PAGE> 3
be exempt from the registration requirements of the Securities Act.
The Shares are being acquired by the Assignee for its own account
and without a view to the public distribution of the Shares or any
interest therein. The Assignee is an "accredited investor" as such
term is defined in Regulation D promulgated under the Securities
Act. The Assignee is not a broker-dealer subject to Regulation T
promulgated by the Board of Governors of the Federal Reserve System.
The Assignee has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits
and risks of its investment in the Shares, and the Assignee is
capable of bearing the economic risks of such investment, including
a complete loss of its investment in the Shares. In evaluating the
suitability of an investment in the Shares, the Assignee has relied
upon the representations, warranties, covenants and agreements made
by the Seller in the Purchase Agreement and on such other
information regarding the Company sufficient to allow the Assignee
to make an informed decision regarding purchase of the Shares. The
Assignee has not relied upon any other representations or other
information (whether oral or written and including any estimates,
projections or supplemental data) made or supplied by or on behalf
of Seller, the Company or any Affiliate, employee, agent or other
representative of Seller or the Company other than as contemplated
by this SECTION 3.E. The Assignee acknowledges that Seller has no
responsibility for any information furnished to it other than as set
forth in the representations and warranties made by Seller in the
Purchase Agreement. The Assignee understands and agrees that it may
not sell or dispose of any of the Shares other than pursuant to a
registered offering or in a transaction exempt from the registration
requirements of the Securities Act and that the Shares will bear an
appropriate legend to that effect.
f. BROKERS OR FINDERS COMMISSIONS. No broker's or finder's fee or
commission or investment banking fee has been or will be payable, or
asserted to be payable by any of the Assignee, the Seller, the
Company or the Subsidiary with respect to the purchase of the Shares
from the Seller or the transactions contemplated by this Agreement
as a result of any agreement entered into by the Assignee.
g. FINANCIAL CONDITION. The Assignee has sufficient liquidity
and financial condition to consummate the purchase of the Shares
at Closing.
h. EXCLUSIVITY OF REPRESENTATIONS. THE REPRESENTATIONS AND
WARRANTIES MADE BY THE ASSIGNEE IN THIS AGREEMENT ARE IN LIEU OF AND
ARE EXCLUSIVE OF ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING
ANY IMPLIED WARRANTIES. THE ASSIGNEE HEREBY DISCLAIMS ANY SUCH OTHER
OR IMPLIED REPRESENTATIONS OR WARRANTIES, NOTWITHSTANDING THE
DELIVERY OR DISCLOSURE TO SELLER OR ITS OFFICERS, DIRECTORS,
<PAGE> 4
EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION.
4. INDEMNIFICATION BY THE ASSIGNEE. The Assignee shall indemnify and hold
harmless the Seller from and against any and all Indemnity Losses which the
Seller may suffer, incur or become subject to as a result of or in connection
with (a) any breach of any representation or warranty made by the Assignee in
this Agreement and (b) any and all suits, actions, investigations, proceedings,
demands, assessments, audits, and judgments arising out of any of the foregoing.
The obligations of the Assignee pursuant to the foregoing sentence shall be
several (and not joint) with the other Qualified Designees and to the extent of
the Assignee's pro rata interest in the Purchase Agreement. Indemnification of
the Seller by the Assignee shall be pursuant to the terms, conditions and
limitations contained in SECTIONS 12.03, 12.04, 12.06, 12.07 and 12.08 of the
Purchase Agreement (except that the reference to Article VI in SECTION 12.08
shall be deemed to refer to SECTION 3 hereof). The representations and
warranties of the Assignee contained in this Agreement shall survive the Closing
indefinitely.
5. OBLIGATIONS OF THE SELLER. Seller hereby acknowledges the assignment
and assumption of the rights and obligations of REI under the Purchase Agreement
by the Assignee. Seller further acknowledges and affirms that the
representations, warranties, covenants and agreements of Seller contained in the
Purchase Agreement, including without limitation, the obligation to indemnify
the REI Indemnified Parties shall inure to the benefit of the Assignee to the
same extent as though the Assignee were a party to the Purchase Agreement.
6. STOCK PRICE ADJUSTMENT. If, on the third anniversary of the date of
this Agreement, the Market Value per Share of the Class A Common Stock of the
Company is less than Eleven and 50/100 Dollars ($11.50) (the amount of any such
deficiency as of such date being referred to as the "Stock Price Deficiency"),
then no later than 15 Business Days thereafter and as additional consideration
for the Shares, the Qualified Designee shall pay in cash to the Seller its pro
rata portion of an amount equal to (a) 22,525, MULTIPLIED BY (b) the Stock Price
Deficiency. Notwithstanding the above, the Qualified Designee shall have the
right to assign its obligations under this Section to a corporation, partnership
or other entity with the prior written consent of Seller, which consent shall
not be unreasonably withheld, conditioned or delayed, and upon the assumption of
the obligations by such corporation, partnership or other entity, the Qualified
Designee shall be released from its obligations under this Section. For purposes
of this Section, "Market Value per Share" shall mean the average trading price
of one share of Class A Common Stock of the Company over the 20 trading days
ending on the third anniversary of the date of this Agreement as quoted in the
National Quotation Bureau Pink Sheets or on such exchange or in such interdealer
quotation system or other trading market as the Class A Common Stock of the
Company is then quoted.
For purposes of this Agreement, "pro rata" shall mean the ratio (expressed
as a percentage) that the number of Shares purchased by the Qualified Designee
hereunder bears to the total number of Shares purchased by all Qualified
Designees (as set forth on SCHEDULE 1 attached hereto) at the Closing.
<PAGE> 5
7. MISCELLANEOUS.
A. Each party hereto shall be responsible for the fees and expenses of
its accountants, attorneys and advisors and any other costs and
expenses incurred by it in the negotiations and consummation of the
transactions contemplated by this Agreement.
B. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served
personally on the party to whom notice is to be given, (b) on the
day of transmission if sent via facsimile transmission to the
facsimile number given below, provided that telephonic
confirmation of receipt is obtained promptly after completion of
transmission, (c) on the day after delivery to a nationally
recognized overnight courier service or the Express Mail service
maintained by the United States Postal Service, or (d) on the
fifth (5th) day after mailing, if mailed to the party to whom
notice is to be given, by first class mail, registered or
certified, postage prepaid, and addressed as follows:
If to Seller, to:
Keene Creditors Trust
The Chancery
Willis Avenue
Mineola, New York 11501
Tel. No. (516) 873-1412
Fax No. (516) 873-1092
With a copy to:
Ed Kaufmann, Esq.
Hughes Hubbard & Reed, LLP
One Battery Place Plaza
New York, New York 10004
Tel. No. (212) 837-6000
Fax No. (212) 422-4726
which copy alone shall not constitute notice for the purposes of this
Purchase Agreement.
<PAGE> 6
If to REI, to:
Reinhold Enterprises, Inc.
c/o Hammond Kennedy Whitney & Company, Inc.
Keystone Crossing, Suite 690
Indianapolis, Indiana 46240
Attention: Glenn Scolnik
Tel. No. (317) 574-6900
Fax. No. (317) 574-7515
With a copy to:
Stephen J. Hackman, Esq.
Ice Miller Donadio & Ryan
One American Square, Box 82001
Indianapolis, Indiana 46282
Tel. No. (317) 236-2100
Fax. No. (317) 236-2219
which copy alone shall not constitute notice for the purposes of this
Purchase Agreement.
If to the Assignee, to the address and/or fax number set forth below such
Assignee's signature below.
Any party may change its address for the purpose of this SECTION 6.B. by
giving the other parties written notice of its new address in the manner set
forth above.
a. The section and paragraph headings in this Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
b. If any provision of this Agreement is declared by any court or
other governmental body to be null, void, or unenforceable, this
Agreement shall be construed so that the provision at issue shall
survive to the extent it is not so declared and that all of the
other provisions of this Agreement shall remain in full force and
effect.
c. This Agreement and the Transaction Documents (and the schedules
hereto and thereto) contain the entire understanding among the
parties hereto with respect to the transactions contemplated hereby
and thereby and supersede and replace all prior and contemporaneous
agreements, understandings, representations or warranties, oral or
written, with regard to those transactions. All SCHEDULES hereto are
expressly made a part of this Agreement as fully as though
completely set forth herein.
<PAGE> 7
d. This Agreement may be amended or modified, and any of the
terms, covenants, representations, warranties, or conditions hereof
may be waived, only by a written instrument executed by the parties
hereto, or in the case of a waiver, by the party waiving compliance.
Any waiver by any party of any condition, or of the breach of any
provision, term, covenant, representation, or warranty contained in
this Agreement, in any one or more instances, shall not be deemed to
be or construed as a further or continuing waiver of any condition
or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.
e. Nothing in this Agreement is intended to confer any rights or
remedies under or by reason of this Agreement on any Person other
than the Seller, REI and the Assignee and their respective
successors and permitted assigns.
f. Except as contemplated by SECTION 6 above, no party hereto
shall assign or delegate this Agreement or any rights or obligations
hereunder without the prior written consent of the other parties
hereto, and any attempted assignment or delegation without prior
written consent shall be void and of no force or effect. This
Agreement shall inure to the benefit of and shall be binding upon
the successors and permitted assigns of the parties hereto.
g. This Agreement shall be construed and enforced in accordance
with, and governed by, the laws of the State of New York applicable
to contracts made and to be performed in such state.
h. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall together
constitute the same instrument.
i. Assignee hereby appoints REI as its authorized representative
for purposes of executing and delivering the receipt specified in
SECTION 3.03(D) of the Purchase Agreement and hereby authorizes and
directs REI to deliver such receipt upon Seller's delivery and REI's
receipt of the items described in SECTION 3.02 of the Purchase
Agreement.
[SIGNATURES FOLLOW NEXT PAGE.]
<PAGE> 8
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
"REI"
REINHOLD ENTERPRISES, INC.
By:_________________________________________
Its:________________________________________
"SELLER"
KEENE CREDITORS TRUST
By:_________________________________________
Richard A. Lippe, Trustee
By:_________________________________________
Archie R. Dykes, Trustee
By:_________________________________________
John J. Robbins, Trustee
"ASSIGNEE"
Address:____________________________________
____________________________________________
____________________________________________
Telephone No. (___)________________________
Fax No. (___)______________________________
<PAGE>
SCHEDULE 1
----------
OTHER QUALIFIED DESIGNEES
-------------------------
QUALIFIED DESIGNEE NUMBER OF SHARES
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 18, 1999
BY AND BETWEEN
REINHOLD ENTERPRISES, INC.
AND
KEENE CREDITORS TRUST
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Purchase Agreement") is entered into as of
the 18th day of May, 1999, by and between Reinhold Enterprises, Inc., an Indiana
corporation ("REI"), and Keene Creditors Trust (the "Seller").
RECITALS
The Seller owns 1,020,000 Class B Common Shares of Reinhold Industries,
Inc., a Delaware corporation (the "Company"). The Company is in the business of
manufacturing advanced composite components and sheet molding compounds for
aerospace, defense and commercial applications (the "Business").
The authorized capital stock of the Company consists of 1,480,000 Class A
Common Shares, par value $0.01 per share, and 1,020,000 Class B Common Shares,
par value $0.01 per share. Simultaneously with the execution of this Purchase
Agreement, REI has delivered to the Seller non-litigation agreements with
certain of the Company's stockholders, all of which stockholders own Class A
Common Shares.
REI or the Qualified Designees (as defined below) desire to purchase from
the Seller 997,475 Class B Common Shares of the Company (the "Shares"), and the
Seller desires to sell the Shares to REI or the Qualified Designees, on the
terms and conditions set forth in this Purchase Agreement.
AGREEMENT
In consideration of the foregoing and of the respective representations,
warranties, covenants, and agreements herein contained, and intending to be
legally bound, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
As used in this Purchase Agreement, the following terms have the meanings
indicated below:
"Adverse Claim" has the meaning set forth in ss. 8-102 of the New York
Uniform Commercial Code.
"Affiliate" with respect to any Person means any Person that directly or
indirectly controls, or is under common control with, or is controlled by such
Person. As used in this definition, "control" (including its correlative
meanings "controlled by" and "under common control with") means possession,
directly or indirectly, of power to direct or cause the direction of management
<PAGE> 2
or policies of such other Person (whether through ownership of securities or
partnership or other ownership interest, by contract or otherwise).
"Aggregate Purchase Price" has the meaning specified in SECTION 2.03.
"Assignment and Assumption Agreement" means an agreement in the form of
EXHIBIT 1.1 hereto pursuant to which (i) a Qualified Designee becomes the
assignee of the rights of REI under the Purchase Agreement (including the right
to purchase a certain number of Shares), severally to the extent of the Shares
purchased assumes the obligations of REI under the Purchase Agreement other than
any indemnity obligations under ARTICLE XII and, to the extent applicable,
severally makes the representations and warranties set forth therein as to
itself and severally agrees to indemnify Seller for breaches of such
representations and warranties and (ii) the Seller acknowledges such assignment
and assumption and agrees to indemnify the Qualified Designee on the terms and
conditions contained in this Agreement as though the Qualified Designee were an
original party to this Agreement.
"Bankruptcy Court" has the meaning specified in SECTION 5.01.
"Business" has the meaning specified in the Recitals of this Purchase
Agreement.
"Business Day" means any day other than Saturday, Sunday, and any day on
which commercial banks in New York, New York are authorized by law to be closed.
"Claimant" has the meaning specified in SECTION 12.03.
"Closing" has the meaning specified in SECTION 3.01.
"Closing Date" has the meaning specified in SECTION 3.01.
"Commission" means the United States Securities and Exchange Commission.
"Company SEC Documents" means the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1998 including all exhibits thereto and
the definitive proxy statement relating to the 1999 annual meeting of the
stockholders of the Company.
"Indemnification Notice" has the meaning specified in SECTION 12.03.
"Indemnifying Party" has the meaning specified in SECTION 12.03.
"Indemnity Loss" has the meaning specified in SECTION 12.01.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
(statutory or other), option, charge, Adverse Claim, or sale agreement or other
rights of third parties.
"Litigation Notice" has the meaning specified in SECTION 12.03.
"Material Adverse Effect" means a material adverse effect on the assets,
operations, business or financial condition of the Company and its Subsidiary
<PAGE> 3
taken as a whole; provided, however, that any material adverse effect arising
out of or resulting from any change in general economic conditions shall not
constitute a Material Adverse Effect.
"Nonrecourse" has the meaning specified in SECTION 13.15.
"Per Share Price" has the meaning specified in SECTION 2.02.
"Person" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust, or
unincorporated organization, or any governmental agency, officer, department,
commission, board, bureau, or instrumentality thereof.
"Plan" has the meaning specified in SECTION 5.04.
"Purchase Agreement" has the meaning specified in the Recitals of this
Purchase Agreement.
"Purchaser" means any Person purchasing Shares hereunder.
"Qualified Designee" means Massachusetts Mutual Life Insurance Company
("Massachusetts Mutual"), any Affiliate of Massachusetts Mutual, MassMutual High
Yield Partners II LLC, MassMutual Corporate Value Partners Limited, any officer
or director of Hammond, Kennedy, Whitney & Company, Inc. or any Affiliate of
such officer or director or any retirement or investment account or plan of such
officer or director, Andrew Management IV, L.P., BJR Management, L.P., ECM
Management, L.P., and any other Person designated by REI to the Seller in
writing at least one Business Day prior to the Closing Date and reasonably
satisfactory to the Seller that in the case of all of the foregoing (i) provides
confirmation that such Person is an "accredited investor" as such term is
defined in Regulation D promulgated under the Securities Act and (ii) executes
an Assignment and Assumption Agreement.
"Registration Rights Agreement" means that certain Registration Rights
Agreement dated July 31, 1996 between the Company and the Seller.
"REI" has the meaning specified in the Recitals of this Purchase
Agreement.
"REI Indemnified Persons" has the meaning specified in SECTION 12.01.
"Securities Act" means the Securities Act of 1933, as amended, and any
similar or successor Federal statute and the rules and regulations of the
Commission thereunder.
"Seller" has the meaning specified in the Recitals of the Purchase
Agreement.
"Seller's Counsel" means Hughes Hubbard & Reed, LLP.
"Shares" has the meaning specified in the Recitals of the Purchase
Agreement.
"Subsidiary" means NP Aerospace Limited.
<PAGE> 4
"Transaction Documents" mean collectively this Purchase Agreement and the
documents and agreements expressly contemplated hereby.
"Trust Agreement" has the meaning specified in SECTION 5.01.
"Trust Persons" has the meaning specified in SECTION 13.15.
"Trustees" has the meaning specified in SECTION 5.01.
ARTICLE II.
PURCHASE AND SALE
SECTION 2.01. PURCHASE OF SHARES. Subject to the terms and conditions set
forth in this Purchase Agreement, on the Closing Date, the Seller shall sell the
Shares to REI or the Qualified Designees, and REI or the Qualified Designees
shall purchase from the Seller the Shares.
SECTION 2.02. PER SHARE PURCHASE PRICE. The purchase price of each Share
sold to REI or the Qualified Designees, as provided for in SECTION 2.01, shall
be Nine Dollars ($9.00) ("Per Share Price").
SECTION 2.03. AGGREGATE PURCHASE PRICE. As full payment for the sale and
delivery of the Shares, REI shall pay or cause the Qualified Designees to pay
the aggregate amount of Eight Million Nine Hundred Seventy-Seven Thousand Two
Hundred Seventy-Five Dollars ($8,977,275) to the Seller (the "Aggregate Purchase
Price"), to be paid in accordance with SECTION 3.
ARTICLE III.
CLOSING
SECTION 3.01. CLOSING, TIME AND PLACE. The closing (the "Closing") of the
transactions contemplated herein shall take place at the offices of Hughes
Hubbard & Reed LLP, New York, New York at 10:00 A. M. (Eastern Daylight Time) on
May 21, 1999 (the "Closing Date") or at such other place and time as shall be
mutually agreed by the Seller and REI.
SECTION 3.02. DELIVERIES TO REI AT THE CLOSING. At the Closing and
simultaneously with the deliveries to the Seller specified in SECTION 3.03, the
Seller shall deliver or cause to be delivered to the Purchasers the following:
(a) Stock certificates representing the Shares, duly endorsed or
accompanied by stock powers duly executed in blank with appropriate
transfer stamps, if any, affixed and any other documents that are
necessary to transfer title from the Seller to REI or the Qualified
Designees, (as directed by REI in its instructions delivered in accordance
with SECTION 9.05), free and clear of Liens and Adverse Claims;
<PAGE> 5
(b) A certificate of trust existence and authority, executed by the
Trustees, substantially in the form of EXHIBIT 3.02(B) attached hereto;
(c) The certificate of the Seller specified in SECTION 10.01;
(d) The certificate of the Seller specified in SECTION 10.02;
(e) A receipt signed by the Trustees acknowledging delivery by the
Purchasers of the items set forth in SECTION 3.03;
(f) A legal opinion of Seller's Counsel, in form and substance as
set forth in EXHIBIT 3.02(F) attached hereto;
(g) An agreement with the Purchasers, assigning the Seller's rights
with respect to the Registration Rights Agreement to the Purchasers,
substantially in the form of EXHIBIT 3.02(G) attached hereto; and
(h) An Assignment and Assumption Agreement with each Qualified
Designee.
SECTION 3.03. DELIVERIES TO THE SELLER AT THE CLOSING. At the Closing and
simultaneously with the deliveries specified in SECTION 3.02, the Purchasers
shall deliver or cause to be delivered to the Seller the following:
(a) The Aggregate Purchase Price by wire transfer in immediately
available federal funds to an account designated by the Seller in writing
to REI two Business Days prior to the Closing Date;
(b) The certificate of REI specified in SECTION 9.01;
(c) The certificate of REI specified in SECTION 9.02;
(d) A receipt signed by an authorized representative of each
Purchaser acknowledging delivery by the Seller of the items set forth in
SECTION 3.02; and
(e) An Assignment and Assumption Agreement with each Qualified
Designee.
ARTICLE IV.
[RESERVED.]
<PAGE> 6
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE
SELLER WITH RESPECT TO THE SELLER AND THE SHARES
The Seller hereby represents and warrants to REI and the Qualified
Designees as follows:
SECTION 5.01. ORGANIZATION; GOOD STANDING; QUALIFICATION; AND Power. The
Seller is a duly organized, validly existing trust organized under the laws of
the State of New York pursuant to an order of the United States District Court
for the Southern District of New York and the United States Bankruptcy Court for
the Southern District of New York (the "Bankruptcy Court") and has all requisite
power and authority and all governmental licenses, authorizations, consents and
approvals necessary to own and transfer the Shares and to execute and deliver
this Purchase Agreement and each of the other Transaction Documents to which it
is a party and to consummate the transactions and perform its obligations
contemplated hereby and thereby. A true and correct copy of the trust agreement,
as amended to date, is attached to this Purchase Agreement as EXHIBIT 5.01 (the
"Trust Agreement"). The names of the Seller's trustees are Richard A. Lippe,
Archie R. Dykes and John J. Robbins (the "Trustees").
SECTION 5.02. TITLE TO SHARES. The Seller has good and marketable title to
the Shares, free and clear of all Liens. The Seller has full right, power and
authority to sell, transfer, convey and deliver the Shares to REI and the
Qualified Designees and, upon delivery of the stock certificates by the Seller
to REI or the Qualified Designees and receipt by the Seller of the Aggregate
Purchase Price as set forth in this Purchase Agreement, Seller shall transfer to
REI, or the Qualified Designees, as the case may be, good and marketable title
to the Shares free and clear of all Liens with respect thereto.
SECTION 5.03. AUTHORITY. The execution and delivery of this Purchase
Agreement and each of the other Transaction Documents to which the Seller is a
party and the consummation of the transactions contemplated hereby and thereby
by the Seller have been authorized pursuant to the Trust Agreement and all
applicable laws. This Purchase Agreement constitutes and the other Transaction
Documents to which the Seller is a party, upon execution and delivery thereof,
shall constitute valid and legally binding obligations of the Seller,
enforceable against the Seller in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws affecting
creditors' rights generally or by the principles governing the availability of
equitable remedies.
SECTION 5.04. NO CONFLICT OR VIOLATION. The execution, delivery, and
performance of this Purchase Agreement and the other Transaction Documents by
the Seller and the consummation of the transactions contemplated hereby and
thereby do not and shall not: (a) violate the Trust Agreement of the Seller; (b)
violate any provision of law or any order, judgment, or decree of any court or
other governmental or regulatory authority applicable to the Seller, including,
without limitation, the Debtor's Fourth Amended Plan of Reorganization (the
"Plan") filed in the Bankruptcy Court in the bankruptcy case of IN RE KEENE
CORPORATION under Case No. 93-B-46090 (SMB); or (c) violate or result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any loan agreement, mortgage, security agreement, indenture or other
<PAGE> 7
agreement or instrument to which the Seller is a party or by which the Seller is
bound or to which any of its properties or assets is subject.
There is no default by any party to any of the contracts, agreements and
binding commitments of the Seller which could reasonably be expected to have a
Material Adverse Effect or prevent the Seller from consummating the sale of
Shares contemplated by this Purchase Agreement.
SECTION 5.05. NO CONSENT. No authorization, consent, approval, exemption,
or other action by or notice to or filing with any court, including but not
limited to the United States District Court for the Southern District of New
York and the Bankruptcy Court, or administrative or governmental body or any
third party is required to permit the Seller to execute and deliver this
Purchase Agreement and the other Transaction Documents, to consummate the
transactions contemplated by this Purchase Agreement and the other Transaction
Documents, to comply with and fulfill the terms and conditions of this Purchase
Agreement and the other Transaction Documents or to convey the Shares to REI or
the Qualified Designees pursuant to this Purchase Agreement.
SECTION 5.06. COMPANY SEC DOCUMENTS. Except as set forth on SCHEDULE 5.06,
to the Seller's actual knowledge, the Company SEC Documents do not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein not misleading.
SECTION 5.07. BROKER'S OR FINDER'S COMMISSIONS. Except for the fee of HT
Capital Advisors, LLC, which fee shall be paid by the Seller, no broker's or
finder's fee or commission or investment banking fee has been or will be
payable, or asserted to be payable by the Seller, the Company, the Subsidiary,
REI or the Qualified Designees with respect to the issuance and sale of the
Shares to REI or the Qualified Designees or the transactions contemplated by
this Purchase Agreement as a result of any agreement entered into by the Seller.
SECTION 5.08. SECURITIES ACT EXEMPTION. The sale and delivery of
Shares to the Purchasers under the circumstances contemplated by this
Purchase Agreement will be exempt from registration under the Securities Act.
SECTION 5.09. EXCLUSIVITY OF REPRESENTATIONS. THE REPRESENTATIONS AND
WARRANTIES MADE BY SELLER IN THIS PURCHASE AGREEMENT ARE IN LIEU OF AND ARE
EXCLUSIVE OF ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED
WARRANTIES. SELLER HEREBY DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR
WARRANTIES NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO REI OR ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION (INCLUDING, WITHOUT LIMITATION, ANY FINANCIAL PROJECTIONS OR OTHER
SUPPLEMENTAL DATA).
<PAGE> 8
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF REI
REI hereby represents and warrants to the Seller as follows:
SECTION 6.01. ORGANIZATION; GOOD STANDING; QUALIFICATION; AND Power. REI
is a corporation duly incorporated and validly existing under the laws of the
State of Indiana. REI has all requisite corporate power and authority and all
governmental licenses, authorizations, consents and approvals to own, lease and
operate its properties and to execute and deliver this Purchase Agreement and
each of the other Transaction Documents to which it is a party and to consummate
the transactions contemplated hereby and thereby.
SECTION 6.02. AUTHORITY. The execution and delivery of this Purchase
Agreement and each of the other Transaction Documents to which REI is a party
and the consummation of the transactions contemplated hereby and thereby by REI
have been duly authorized by all necessary action on the part of REI. This
Purchase Agreement constitutes and the other Transaction Documents to which REI
is a party, upon execution and delivery thereof, will constitute valid and
legally binding obligations of REI, enforceable against REI in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar laws
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies.
SECTION 6.03. NO CONFLICT OR VIOLATION. The execution, delivery and
performance of this Purchase Agreement and the other Transaction Documents and
the consummation of the transactions contemplated hereby and thereby do not and
shall not: (a) violate or conflict with the Articles of Incorporation or By-Laws
of REI; (b) violate any provision of law or any order, judgment, or decree of
any court or other governmental or regulatory authority applicable to REI; or
(c) result in a breach of, or constitute a default (or an event which, with
notice or lapse of time or both would constitute a default) under, or give rise
to any right of termination, cancellation or acceleration of, or result in the
creation of any Lien upon any of the assets or properties of REI under, any loan
agreement, mortgage, security agreement, indenture, or other agreement or
instrument to which REI is a party or by which REI is bound or to which any of
its properties or assets is subject or prohibit REI from consummating the
purchase and sale of the Shares as contemplated hereby.
SECTION 6.04. NO CONSENT. No authorization, consent, approval, exemption,
or other action by or notice to or filing with any court or administrative or
governmental body or any third party is required to permit REI to execute and
deliver this Purchase Agreement and the other Transaction Documents, to
consummate the transactions contemplated by this Purchase Agreement and the
other Transaction Documents or to comply with and fulfill the terms and
conditions of this Purchase Agreement and the other Transaction Documents to
which REI is a party.
SECTION 6.05. SECURITIES MATTERS. REI understands that the offering and
sale of the Shares hereunder is intended to be exempt from the registration
<PAGE> 9
requirements of the Securities Act. The Shares are being acquired by REI for its
own account and without a view to the public distribution of the Shares or any
interest therein. REI (to the extent it purchases Shares) and each Qualified
Designee will be an "accredited investor" as such term is defined in Regulation
D promulgated under the Securities Act. REI is not a broker-dealer subject to
Regulation T promulgated by the Board of Governors of the Federal Reserve
System. REI has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investment
in the Shares, and REI is capable of bearing the economic risks of such
investment, including a complete loss of its investment in the Shares. In
evaluating the suitability of an investment in the Shares, REI has relied upon
the representations, warranties, covenants and agreements made by the Seller
herein and on such other information regarding the Company sufficient to allow
REI to make an informed decision regarding purchase of the Shares. REI has not
relied upon any other representations or other information (whether oral or
written and including any estimates, projections or supplemental data) made or
supplied by or on behalf of Seller, the Company or any Affiliate, employee,
agent or other representative of Seller or the Company other than as
contemplated by this SECTION 6.05. REI acknowledges that Seller has no
responsibility for any information furnished to it other than as set forth in
the representations and warranties made by Seller herein. REI understands and
agrees that it may not sell or dispose of any of the Shares other than pursuant
to a registered offering or in a transaction exempt from the registration
requirements of the Securities Act and that the Shares will bear an appropriate
legend to that effect.
SECTION 6.07. BROKERS OR FINDERS COMMISSIONS. No broker's or finder's fee
or commission or investment banking fee has been or will be payable, or asserted
to be payable by any of REI, the Seller, the Company, the Subsidiary or the
Qualified Designees with respect to the purchase of the Shares from the Seller
or the transactions contemplated by this Purchase Agreement as a result of any
agreement entered into by REI.
SECTION 6.08. FINANCIAL CONDITION. REI and/or the Qualified
Designees have or shall at the Closing have sufficient liquidity and
financial condition to consummate the purchase of the Shares at Closing.
SECTION 6.09. EXCLUSIVITY OF REPRESENTATIONS. THE REPRESENTATIONS AND
WARRANTIES MADE BY REI IN THIS PURCHASE AGREEMENT ARE IN LIEU OF AND ARE
EXCLUSIVE OF ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED
WARRANTIES. REI HEREBY DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR
WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO SELLER OR ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION
OR OTHER INFORMATION.
<PAGE> 10
ARTICLE VII.
COVENANTS OF THE SELLER
SECTION 7.01. ACTIONS BEFORE THE CLOSING DATE. From the date
hereof until the Closing Date, the Seller shall:
(a) not take any action which would cause any representation or
warranty contained in ARTICLE V hereof to become inaccurate or untrue at
any time from the date hereof to the Closing Date;
(b) afford to REI, and to the accountants, counsel, actuaries and
representatives of REI, full and complete access, upon reasonable notice
and during normal business hours prior to the Closing Date (or the earlier
termination of this Purchase Agreement pursuant to ARTICLE XI), to all
books and records relating to the Seller, the Company, the Subsidiary and
the Business and make reasonable efforts, during that period and upon the
preceding terms, to cause their respective Personnel, counsel, actuaries
and independent accountants to make available to REI and its counsel,
actuaries and representatives all information relating to the Seller, the
Company, the Subsidiary and the Business which REI and its counsel,
actuaries and representatives may reasonably deem necessary or desirable,
provided, that such access shall not unreasonably interfere with the
operation of the Company;
(c) use commercially reasonable best efforts (subject to any
conditions set forth in this Purchase Agreement) to perform and satisfy
all obligations, covenants, agreements and conditions to Closing to be
performed or satisfied under this Purchase Agreement by the Seller,
including action necessary to obtain all consents and approvals of third
parties required to be obtained by the Seller to effect the transactions
contemplated by this Purchase Agreement; and
(d) not take any action to cause the Company or the Subsidiary to
operate the Business other than in the ordinary course consistent with the
Company's past practices.
SECTION 7.02. STAND STILL. So long as this Purchase Agreement is in effect
and until the Closing, the Seller shall not, directly or indirectly, solicit any
inquiries or proposals or enter into or continue any discussions, negotiations,
or agreements relating to the sale or exchange of the Shares with any Person
other than REI, or provide any assistance or any information to or otherwise
cooperate with any Person in connection with any such inquiry, proposal, or
transaction; provided, that if at any time prior to the Closing the Trustees
determine in good faith, after consultation with their financial and legal
advisors, that an unsolicited proposal relating to a sale or exchange of the
Shares is superior to the transaction contemplated by this Purchase Agreement,
the Trustees shall be free to enter into discussions, negotiations and
agreements relating to such superior proposal. Notwithstanding the above, the
Seller shall notify REI as soon as practicable following commencement of any
such discussions, negotiations and agreements.
<PAGE> 11
SECTION 7.03. NOTIFICATION OF CERTAIN MATTERS. The Seller shall give
prompt notice to REI of (a) the occurrence, or failure to occur, of any event
which occurrence or failure would be likely to cause any representation or
warranty of the Seller contained in this Purchase Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing Date, and (b) any failure of the Seller to comply with or satisfy any
covenant, condition, or agreement to be complied with or satisfied by the Seller
hereunder. The Seller shall use its commercially reasonable best efforts to
remedy promptly any such failure.
SECTION 7.04. BOARD OF DIRECTORS. Prior to the Closing, the Seller
shall use its best efforts to cause the directors elected by it to resign
from the Board of Directors.
SECTION 7.05. OTHER COVENANT. The Seller shall not, prior to the third
anniversary of the Closing Date: (i) sell, transfer or otherwise dispose of any
of its remaining shares of the Company or (ii) purchase or otherwise acquire any
shares of the Company if after such purchase or acquisition the Seller would be
a "5% shareholder" of the Company within the meaning of Section 382 of the
Internal Revenue Code of 1986, as amended, or the regulations thereunder.
SECTION 7.06. CLAIMS. The Seller shall comply with its obligations under
Section 1.4 of the Trust Agreement. From and after the Closing Date, (a) the
Seller shall not challenge or take any action inconsistent with (i) the validity
of the Permanent Channeling Injunction (as such term is defined in the Plan),
(ii) the status of the Company or any Purchaser as a Protected Party (as such
term is defined in the Plan) thereunder, or (iii) the Seller's discharge of its
obligations under Section 1.4 of the Trust Agreement; (b) the Seller shall not
take any action to amend Section 1.4 of the Trust Agreement or, except as
otherwise required by the Trust Agreement, to terminate the Trust Agreement or
the Seller; and (c) the Seller shall defend any action or claim challenging the
validity of the Permanent Channeling Injunction insofar as such action or claim
affects the Company; PROVIDED, HOWEVER, that if the Seller and the Company agree
that it is appropriate for the Company to defend any such action or claim, the
Company shall defend such action or claim and the Seller shall (x) cooperate and
assist the Company in the conduct of such defense as reasonably requested by the
Company, (y) reimburse the Company for the costs of such defense (including,
without limitation, attorneys' fees and expenses) and (z) indemnify the Company
against any expenses, costs, fees (including attorneys' fees), judgments,
settlements, or other liabilities arising from or incurred in connection with
such action or claim.
ARTICLE VIII.
COVENANTS OF REI
SECTION 8.01. ACTIONS BEFORE THE CLOSING DATE. REI shall not take any
action which shall cause it to be in breach of any representation or warranty
contained in this Purchase Agreement or cause it to be unable to perform in any
material respect its obligations hereunder, and REI shall use commercially
reasonable best efforts (subject to any conditions set forth in this Purchase
Agreement) to perform and satisfy all conditions to Closing to be performed or
satisfied by REI under this Purchase Agreement, including action necessary to
<PAGE> 12
obtain all consents and approvals of third parties required to be obtained by
REI to effect the transactions contemplated by this Purchase Agreement.
SECTION 8.02. NOTIFICATION OF CERTAIN MATTERS. REI shall give prompt
notice to the Seller of (a) the occurrence, or failure to occur, of any event
which occurrence or failure would be likely to cause any representation or
warranty of REI contained in this Purchase Agreement to be untrue or inaccurate
in any material respect at any time from the date hereof to the Closing Date,
and (b) any failure of any of REI to comply with or satisfy any covenant,
condition, or agreement to be complied with or satisfied by any of REI
hereunder. REI shall use commercially reasonable best efforts to remedy promptly
any such failure.
ARTICLE IX.
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
The obligation of the Seller to sell the Shares to REI or the Qualified
Designees on the Closing Date is subject to the fulfillment, at or before the
Closing, of the following conditions, any one or more of which may be waived in
writing by the Seller in its sole discretion:
SECTION 9.01. REPRESENTATIONS AND WARRANTIES OF REI. Each representation
and warranty of REI contained in this Purchase Agreement and each representation
and warranty made by each Qualified Designee in an Assignment and Assumption
Agreement that (a) is qualified by a reference to materiality shall be true and
correct in all respects as of the Closing as though such representation and
warranty was made on and as of such time (except to the extent a different date
is specified therein, in which case such representation and warranty shall be
true and correct as of such date), (b) is not so qualified, shall be true and
correct as of the Closing as though such representation and warranty was made on
and as of such time (except to the extent a different date is specified therein,
in which case such representation and warranty shall be true and correct as of
such date) except with such exceptions in the case of this clause (b) as could
not reasonably be expected to preclude REI or such Qualified Designee, as the
case may be, in any material respect from consummating the transactions
contemplated by this Purchase Agreement. At the Closing, the Seller will have
received a certificate, dated the Closing Date and duly executed by an
authorized officer of REI, to the effect that the conditions set forth in this
SECTION 9.01 have been satisfied with respect to REI.
SECTION 9.02. PERFORMANCE OF THE OBLIGATIONS OF REI. Each covenant and
agreement of REI required by this Purchase Agreement to be performed by it at or
prior to the Closing will have been duly performed and complied with in all
material respects as of the Closing. At the Closing, the Seller will have
received a Certificate, dated the Closing Date and duly executed by an
authorized officer of REI, to the effect that the conditions set forth in this
SECTION 9.02 have been satisfied.
SECTION 9.03. NO VIOLATION OF ORDERS. No preliminary or permanent
injunction or other order issued by any court or governmental or regulatory
authority, domestic or foreign, that declares this Purchase Agreement or any of
the other Transaction Documents invalid or unenforceable in any respect or
<PAGE> 13
prevents the consummation of the transactions contemplated hereby or thereby
shall be in effect, and no proceeding relating to any order shall have
commenced.
SECTION 9.04. REQUIRED APPROVALS. All consents and approvals of any
governmental authority or any third party necessary to permit the consummation
of the transactions contemplated by this Purchase Agreement or any of the other
Transaction Documents, shall have been received.
SECTION 9.05. INSTRUCTIONS. In the event that REI elects to designate
other Persons to purchase the Shares, REI shall have delivered to the Seller at
least one Business Day prior to the Closing Date written instructions setting
forth the name(s) of the Qualified Designee(s) to whom Shares are to be sold at
Closing and the number of shares to be sold to each such Qualified Designee and,
at Closing, an Assignment and Assumption Agreement executed by each Qualified
Designee.
SECTION 9.06. RULE 14F-1 COMPLIANCE. The Company shall have filed the
disclosure required by Rule 14f-1 under the Exchange Act with the Securities and
Exchange Commission and sent such disclosure to all holders of record of the
Company's capital stock as required by such Rule.
ARTICLE X.
CONDITIONS PRECEDENT TO OBLIGATIONS OF REI
The obligation of REI and the Qualified Designees to purchase, acquire,
and accept the Shares from the Seller on the Closing Date is subject to the
fulfillment, at or before the Closing, of the following conditions, any one or
more of which may be waived in writing by REI in its sole discretion:
SECTION 10.01. REPRESENTATIONS AND WARRANTIES OF THE SELLER. Each
representation and warranty of the Seller contained in this Purchase Agreement
that (a) is qualified by a reference to materiality shall be true and correct in
all respects as of the Closing as though such representation and warranty was
made on and as of such time (except to the extent a different date is specified
therein, in which case such representation and warranty shall be true and
correct as of such date), (b) is not so qualified, shall be true and correct as
of the Closing as though such representation and warranty was made on and as of
such time (except to the extent a different date is specified therein, in which
case such representation and warranty shall be true and correct as of such date)
except with such exceptions in the case of clause (b) as could not reasonably be
expected to preclude the Seller from consummating the transactions contemplated
by this Purchase Agreement or individually or in the aggregate to have a
Material Adverse Effect. At the Closing, the Purchasers will have received a
certificate, dated the Closing Date and duly executed by the trustees, to the
effect that the conditions set forth in this SECTION 10.01 have been satisfied.
SECTION 10.02. PERFORMANCE OF THE OBLIGATIONS OF THE SELLER. Each covenant
and agreement of the Seller required by this Purchase Agreement to be performed
<PAGE> 14
by it at or prior to the Closing will have been duly performed and complied with
in all material respects as of the Closing. At the Closing, the Purchasers will
have received a certificate, dated the Closing Date and duly executed by an
authorized officer of REI, to the effect that the conditions set forth in this
SECTION 10.02 have been satisfied.
SECTION 10.03. NO VIOLATION OF ORDERS. No preliminary or permanent
injunction or other order issued by any court or governmental or regulatory
authority, domestic or foreign, which declares this Purchase Agreement or any of
the other Transaction Documents invalid or unenforceable in any respect or
prevents the consummation of the transactions contemplated hereby or thereby
shall be in effect, and no proceeding relating to any such order shall have
commenced.
SECTION 10.04. NO MATERIAL ADVERSE CHANGE IN BUSINESS OR FINANCIAL
CONDITION. Between the date hereof and the Closing, there has been no event,
change or other circumstance that has resulted or is reasonably likely to result
in a Material Adverse Effect.
SECTION 10.05. BOARD OF DIRECTORS. The directors elected by the
Seller shall have resigned from the Board of Directors.
SECTION 10.06. RULE 14F-1 COMPLIANCE. The Company shall have filed the
disclosure required by Rule 14f-1 under the Exchange Act with the Securities and
Exchange Commission and sent such disclosure to all holders of record of the
Company's capital stock as required by such Rule.
ARTICLE XI
TERMINATION
SECTION 11.01. CONDITIONS OF TERMINATION.
(a) Notwithstanding anything to the contrary contained herein, this
Purchase Agreement may be terminated, and the transactions contemplated
hereby may be abandoned, at any time before completion of the Closing, (i)
by mutual consent of the Seller and REI, or (ii) by either REI or the
Seller if all conditions to Closing contained in this Purchase Agreement
have been satisfied on or prior to the Closing Date (other than those set
forth in SECTION 9.05 and those that by their terms are to be satisfied at
the Closing), and the Closing shall not have occurred on such date, or
(iii) by either REI or the Seller if any condition to Closing (other than
those set forth in SECTION 9.05 and those that by their terms are to be
satisfied at the Closing) has not been satisfied on or prior to the
Closing Date, and the Closing shall not have occurred by June 3, 1999;
provided, however, that this Purchase Agreement may not be terminated by a
party if the failure of the Closing to occur by such date is due to the
breach of any provision hereof by such party.
(b) This Purchase Agreement may, by notice given in the manner
hereinafter provided, be terminated and abandoned at any time prior to
completion of the Closing:
<PAGE> 15
(i) by the Seller if there has been a material
misrepresentation in ARTICLE VI hereof by REI or a material default
or breach by REI with respect to REI, due and timely performance of
any of REI, covenants and agreements contained in this Purchase
Agreement, and such misrepresentation, default, or breach shall not
have been cured within ten (10) days after receipt by REI of notice
specifying particularly such misrepresentation, default, or breach;
or
(ii) by the Seller if the Seller accepts an unsolicited
proposal from a third party for purchase of the Shares; or
(iii) by REI if there has been a material misrepresentation in
ARTICLE V hereof by the Seller or a material default or breach by
the Seller with respect to the Seller's due and timely performance
of any of the Seller's covenants and agreements contained in this
Purchase Agreement, and such misrepresentation, default or breach
shall not have been cured within ten (10) days after receipt by the
Seller of notice specifying particularly such misrepresentation,
default or breach.
SECTION 11.02. EFFECT OF TERMINATION. In the event of termination pursuant
to SECTION 11.01, this Purchase Agreement shall terminate and have no further
effect except for the provisions set forth in SECTIONS 5.07, 6.06 and 13.02
which shall remain in effect for an indefinite period following the termination
date and except for liability arising out of a material breach of any
representation, warranty, covenant, or agreement contained herein prior to the
termination date.
ARTICLE XII.
INDEMNIFICATION
SECTION 12.01. INDEMNIFICATION BY THE SELLER. Subject to SECTION 12.05,
the Seller shall indemnify and hold harmless each of the Purchasers and its
shareholders, officers, directors and Affiliates (other than the Company) ("REI
Indemnified Persons") from and against any and all damages, losses, obligations,
demands, liabilities, claims, encumbrances, penalties, costs, and expenses,
including reasonable attorneys' fees (each an "Indemnity Loss"), which any such
Purchaser may suffer, incur or become subject to as a result of or in connection
with (a) any breach of any representation or warranty by the Seller made in this
Purchase Agreement or any Transaction Document, or any breach or failure of the
Seller to perform or fulfill any covenant, agreement or obligation of the
Seller, contained in this Purchase Agreement or any Transaction Document and (b)
any and all actions, suits, investigations, proceedings, demands, assessments,
audits, and judgments arising out of any of the foregoing other than any suit to
enforce the provisions of this Article XII, subject to SECTION 12.07.
SECTION 12.02. INDEMNIFICATION BY REI. REI shall indemnify and hold
harmless the Seller from and against any and all Indemnity Losses which the
Seller may suffer, incur or become subject to as a result of or in connection
with (a) any breach of any representation or warranty made in this Purchase
<PAGE> 16
Agreement or any Transaction Document, or any breach or failure of REI to
perform or fulfill any covenant, agreement or obligation of REI contained in
this Purchase Agreement or any Transaction Document and (b) any and all suits,
actions, investigations, proceedings, demands, assessments, audits, and
judgments arising out of any of the foregoing.
SECTION 12.03. NOTICE. If an indemnified party (the "Claimant") believes
that it has suffered or incurred any Indemnity Loss, it shall so notify the
party which the Claimant believes has an obligation to indemnify (the
"Indemnifying Party") promptly in writing describing such loss or expense, the
amount thereof, if known, and the method of computation of such loss or expense,
all with reasonable particularity (the "Indemnification Notice"). If any action
at law, suit in equity, or administrative action is instituted by or against a
third party with respect to which the Claimant intends to claim any liability or
expense as an Indemnity Loss under this ARTICLE XII, it shall promptly notify
the Indemnifying Party in writing of such action or suit describing such loss or
expenses, the amount thereof, if known, and the method of computation of such
loss or expense, all with reasonable particularity (the "Litigation Notice") in
lieu of an Indemnification Notice.
SECTION 12.04. DEFENSE OF CLAIMS. If the Claimant shall notify the
Indemnifying Party of any claim or demand pursuant to SECTION 12.01, and if such
claim or demand relates to a claim or demand asserted by a third party against
the Claimant which the Indemnifying Party acknowledges is a claim or demand for
which it must indemnify or hold harmless the Claimant under SECTION 12.01, the
Indemnifying Party shall have the right to employ counsel reasonably acceptable
to the Claimant to defend any such claim or demand asserted against the Claimant
for so long as the Indemnifying Party shall continue in good faith to diligently
defend against such action or claim. The Claimant shall have the right to
participate in the defense of any such claim or demand at its own expense. The
Indemnifying Party shall notify the Claimant in writing, as promptly as possible
(but in any case, at least five Business Days before the due date for the answer
or response to a claim) after the date of the notice of claim given by the
Claimant to the Indemnifying Party under SECTION 12.03 of its election to defend
in good faith any such third party claim or demand. So long as the Indemnifying
Party is defending in good faith any such claim or demand asserted by a third
party against the Claimant, the Claimant shall not settle or compromise such
claim or demand without the consent of the Indemnifying Party, which consent
shall not be unreasonably withheld, and the Claimant shall make available to the
Indemnifying Party or its agents all records and other material in the
Claimant's possession, custody or control reasonably required by it for its use
in contesting any third party claim or demand. In the event the Indemnifying
Party elects not to defend such claim or action or if the Indemnifying Party
elects to defend such claim or action but fails to diligently defend such claim
or action in good faith, the Claimant shall have the right to settle or
compromise such claim or action without the consent of the Indemnifying Party,
except that the Claimant shall not settle or compromise any such claim or
demand, unless the Indemnifying Party is given a full and complete release of
any and all liability by all relevant parties relating thereto.
SECTION 12.05. LIMITATIONS ON INDEMNITY. Notwithstanding anything
to the contrary contained in this Agreement,
<PAGE> 17
(a) Seller shall not be required to indemnify and hold harmless any
REI Indemnified Party pursuant to SECTION 12.01 unless the REI Indemnified
Party has asserted a claim with respect to such matters within the
applicable survival period set forth in SECTION 12.08.
(b) The amounts for which Seller shall be liable under SECTION 12.01
shall be net of (i) any insurance payable to REI Indemnified Parties in
connection with the facts giving rise to the right of indemnification and
(ii) any related Tax benefits received by any of the REI Indemnified
Parties.
(c) REI Indemnified Parties may not make any claim hereunder for
punitive damages, except REI Indemnified Parties may make a claim under
this Purchase Agreement for punitive damages constituting Indemnity Losses
payable by the Company or an REI Indemnified Party for a third party claim
to the extent (i) such third party has been awarded specified punitive
damages in respect to such claim and (ii) such punitive damages are based
on events or conduct of the Company, the Seller or their respective
officers, directors, trustees or Affiliates prior to the Closing.
(d) Except with respect to a breach of the representations and
warranties in SECTIONS 5.01, 5.02, 5.03, 5.04, 5.05, 5.07 and 5.08, Seller
shall not be required to indemnify and hold harmless the REI Indemnified
Parties until the aggregate amount of Indemnity Losses exceeds an amount
equal to $150,000, after which Seller shall be obligated to indemnify the
REI Indemnified Parties for Indemnity Losses in excess of such amount.
(e) Except with respect to a breach of the representations and
warranties in SECTIONS 5.01, 5.02, 5.03, 5.04, 5.05, 5.07 and 5.08, the
cumulative indemnification obligation of Seller under SECTION 12.01 shall
in no event exceed an amount equal to 50% of the Aggregate Purchase Price.
With respect to a breach of the representations and warranties in ARTICLE
V, the cumulative indemnification obligation of Seller under SECTION 12.01
shall in no event exceed an amount equal to the Aggregate Purchase Price.
SECTION 12.06. PAYMENT OF LOSSES. The Indemnifying Party shall pay to the
Claimant in cash the amount to which the Claimant may become entitled by reason
of the provisions of this ARTICLE XII, within 15 Business Days after such amount
is determined either by mutual agreement of the parties or on the date on which
both such amount and Claimant's obligation to pay such amount have been
determined by a final, non-appealable judgment of a court or administrative body
having jurisdiction over such proceeding.
SECTION 12.07. COSTS AND ATTORNEYS' FEES. In any legal action or
proceeding brought to enforce the indemnity obligations contained in this
ARTICLE XII, the prevailing party shall be entitled to recover its reasonable
expenses, charges, court costs and attorneys' fees.
SECTION 12.08. SURVIVAL. Notwithstanding the foregoing, the Indemnifying
Party shall have no liability with respect to any Indemnity Loss, incurred or
which may be incurred, notice of which is not received by the Indemnifying Party
pursuant to SECTION 12.03 hereof on or before the second anniversary of the
<PAGE> 18
Closing; PROVIDED, HOWEVER, that the covenants contained in SECTION 7.05
relating to sale of shares and the obligation to indemnify with respect to a
breach thereof shall survive for 30 days following expiration of the three-year
period set forth therein. Notwithstanding the above, the obligations of an
Indemnifying Party with respect to Indemnity Losses arising from a breach of a
representation, warranty or covenant (i) contained in ARTICLE V (other than
SECTION 5.06) and in ARTICLE VI shall survive indefinitely without regard to the
notice requirement set forth in the foregoing sentence and (ii) contained in
SECTION 7.06 shall survive for so long as the Permanent Channeling Injunction
(as such term is defined in the Plan) shall remain in effect.
SECTION 12.09. EXCLUSIVE REMEDY. The sole and exclusive remedy of the REI
Indemnified Parties for breach of any representation and warranty made by the
Seller or any breach of any covenant or agreement to be performed by the Seller
in connection with the transactions contemplated hereby, shall be the remedies
expressly provided in this ARTICLE 12 and the Seller shall have no other
obligations with respect thereto. The provisions of this SECTION 12.09 shall not
prevent the REI Indemnified Parties from bringing an action for fraud.
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.01. PUBLIC ANNOUNCEMENTS. No party shall make any press release
or public announcement concerning the transactions contemplated by this Purchase
Agreement prior to the Closing Date, except as required by law or as agreed upon
by the Seller and REI.
SECTION 13.02. EXPENSES. Each party hereto shall be responsible for the
fees and expenses of its accountants, attorneys and advisors and any other costs
and expenses incurred by it in the negotiations and consummation of the
transactions contemplated by this Purchase Agreement.
SECTION 13.03. NOTICES. All notices, requests, demands, and other
communications under this Purchase Agreement shall be in writing and shall be
deemed to have been duly given (a) on the date of service if served personally
on the party to whom notice is to be given, (b) on the day of transmission if
sent via facsimile transmission to the facsimile number given below, provided
that telephonic confirmation of receipt is obtained promptly after completion of
transmission, (c) on the day after delivery to a nationally recognized overnight
courier service or the Express Mail service maintained by the United States
Postal Service, or (d) on the fifth (5th) day after mailing, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and addressed as follows:
<PAGE> 19
If to Seller, to:
Keene Creditors Trust
The Chancery
Willis Avenue
Mineola, New York 11501
Tel. No. (516) 873-1412
Fax No. (516) 873-1092
With a copy to:
Ed Kaufmann, Esq.
Hughes Hubbard & Reed, LLP
One Battery Place Plaza
New York, New York 10004
Tel. No. (212) 837-6000
Fax No. (212) 422-4726
which copy alone shall not constitute notice for the purposes of this
Purchase Agreement.
If to REI, to:
Reinhold Enterprises, Inc.
c/o Hammond Kennedy Whitney & Company, Inc.
Keystone Crossing, Suite 690
Indianapolis, Indiana 46240
Attention: Glenn Scolnik
Tel. No. (317) 574-6900
Fax. No. (317) 574-7515
With a copy to:
Stephen J. Hackman, Esq.
Ice Miller Donadio & Ryan
One American Square, Box 82001
Indianapolis, Indiana 46282
Tel. No. (317) 236-2100
Fax. No. (317) 236-2219
which copy alone shall not constitute notice for the purposes of this
Purchase Agreement.
Any party may change its address for the purpose of this SECTION 13.03 by
giving the other parties written notice of its new address in the manner set
forth above.
<PAGE> 20
SECTION 13.04. HEADINGS. The article, section, and paragraph
headings in this Purchase Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Purchase Agreement.
SECTION 13.05. CONSTRUCTION.
(a) As used herein, "knowledge of Seller", and "actual knowledge of
Seller" shall mean the actual, collective knowledge of the Trustees, it
being acknowledged that the Trustees have no duty to make an independent
investigation regarding matters contained in the Company SEC Documents.
(b) The words "hereof", "herein", "hereto", "hereunder" and
"hereinafter" and words of similar import, when used in this Purchase
Agreement, shall refer to this Purchase Agreement as a whole and not to
any particular provision of this Purchase Agreement.
(c) The parties have participated jointly in the negotiation and
drafting of this Purchase Agreement, and, in the event of an ambiguity or
a question of intent or a need for interpretation arises, this Purchase
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this
Purchase Agreement.
(d) Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.
(e) The word "including" means "including, without limitation".
SECTION 13.06. SEVERABILITY. If any provision of this Purchase Agreement
is declared by any court or other governmental body to be null, void, or
unenforceable, this Purchase Agreement shall be construed so that the provision
at issue shall survive to the extent it is not so declared and that all of the
other provisions of this Purchase Agreement shall remain in full force and
effect.
SECTION 13.07. ENTIRE AGREEMENT. This Purchase Agreement and the
Transaction Documents (and the exhibits and schedules hereto and thereto)
contain the entire understanding among the parties hereto with respect to the
transactions contemplated hereby and supersedes and replaces all prior and
contemporaneous agreements, understandings, representations or warranties, oral
or written, with regard to those transactions. All EXHIBITS and SCHEDULES hereto
are expressly made a part of this Purchase Agreement as fully as though
completely set forth herein.
SECTION 13.08. AMENDMENTS: WAIVERS. This Purchase Agreement may be amended
or modified, and any of the terms, covenants, representations, warranties, or
conditions hereof may be waived, only by a written instrument executed by the
parties hereto, or in the case of a waiver, by the party waiving compliance. Any
<PAGE> 21
waiver by any party of any condition, or of the breach of any provision, term,
covenant, representation, or warranty contained in this Purchase Agreement, in
any one or more instances, shall not be deemed to be or construed as a further
or continuing waiver of any condition or of the breach of any other provision,
term, covenant, representation, or warranty of this Purchase Agreement.
SECTION 13.09. PARTIES IN INTEREST. Nothing in this Purchase Agreement is
intended to confer any rights or remedies under or by reason of this Purchase
Agreement on any Person other than the Seller, REI and the Qualified Designees
and their respective successors and permitted assigns. The Qualified Designees
are hereby expressly made third party beneficiaries of this Purchase Agreement.
SECTION 13.10. SUCCESSORS AND ASSIGNS. No party hereto shall assign or
delegate this Purchase Agreement or any rights or obligations hereunder without
the prior written consent of the other parties hereto, and any attempted
assignment or delegation without prior written consent shall be void and of no
force or effect; provided, however, that REI may assign its rights and
obligations hereunder to one or more Qualified Designees. This Purchase
Agreement shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the parties hereto.
SECTION 13.11. GOVERNING LAW. This Purchase Agreement shall be construed
and enforced in accordance with, and governed by, the laws of the State of New
York applicable to contracts made and to be performed in such state.
SECTION13.12. COUNTERPARTS. This Purchase Agreement may be
executed in counterparts, each of which shall be deemed an original, but all
of which shall together constitute the same instrument.
SECTION 13.13. SUBSEQUENT DOCUMENTATION. At any time and from time to time
after the Closing Date, the Seller shall, upon the request of REI, and REI
shall, upon the request of the Seller, promptly execute, acknowledge, and
deliver, or cause to be executed, acknowledged, and delivered, such further
instruments and other documents, and perform or cause to be performed such
further acts, as may be reasonably required to evidence or effectuate the
issuance, sale, and delivery hereunder of the Shares.
SECTION 13.14. SPECIFIC PERFORMANCE. Each of the parties agrees that
damages for a breach of or default under this Purchase Agreement would be
inadequate and that in addition to all other remedies available at law or in
equity the parties and their successors and assigns shall be entitled to
specific performance or injunctive relief, or both, in the event of a breach or
a threatened breach of this Purchase Agreement.
SECTION 13.15. NONRECOURSE PROVISIONS. Except in the case of fraud
or other willful misconduct by any Trust Person,
(a) Purchasers agree that, notwithstanding anything to the contrary
in this Purchase Agreement or any other Transaction Document or under any
applicable rule of law or equity, (i) the sole recourse of Purchasers
under the Transaction Documents or otherwise with respect to the matters
contemplated hereby or thereby shall be limited to the Seller and its
<PAGE> 22
assets and (ii) the Seller's obligations and liabilities under all
Transaction Documents and otherwise in connection with the transactions
contemplated therein shall be Nonrecourse to the Trustees and the
beneficiaries, employees, advisors and agents of the Seller (collectively,
"Trust Persons").
(b) "Nonrecourse" shall mean that the obligations and liabilities
are limited in recourse solely to the Seller and the assets of the Seller
(which shall not include any receivables due from or other rights against
Trust Persons), and no Trust Person shall be directly or indirectly
personally liable in any respect for any obligations or liability of the
Seller under any Transaction Document or any transaction contemplated
herein or therein.
(c) Purchasers hereby covenant for themselves and their successors
and assigns that they and their successors and assigns will not make any
claim, or bring, commence, prosecute or maintain any action, either at law
or equity, in any federal, state or local court of the United States or in
any foreign court, against any Trust Person in respect of (i) the payment
of any amount or the performance of any obligation under any Transaction
Document, (ii) the satisfaction of any liability arising in connection
with any such payment or obligation or otherwise, including without
limitation, liability arising in law for tort (including, without
limitation, for active and passive negligence and negligent
misrepresentation), equity (including, without limitation, for
indemnification and contribution) or contract (including, without
limitation, monetary damages for the breach of representation or warranty
or performance of any of the covenants or obligations contained in any
Transaction Document or with the transactions contemplated herein or
therein) or (iii) otherwise in respect of the transactions contemplated
hereby; provided that this SECTION 13.15 shall not limit Purchasers from
naming a Trust Person in any action against the Seller, solely for the
purposes of enforcing the Seller's obligations under the Purchase
Agreement or satisfying any liability of Seller referred to in clauses (i)
and (ii) of this SECTION 13.15(C).
<PAGE> 23
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.)
<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have executed, or caused to be
executed by their duly authorized representatives, this Purchase Agreement as of
the date first above written.
"PURCHASER"
REINHOLD ENTERPRISES, INC.
By:___________________________________
Its:__________________________________
"SELLER"
KEENE CREDITORS TRUST
By:___________________________________
Richard A. Lippe, Trustee
By:___________________________________
Archie R. Dykes, Trustee
By:___________________________________
John J. Robbins, Trustee
FOR IMMEDIATE RELEASE
May 19, 1999
HAMMOND, KENNEDY, WHITNEY & COMPANY, INC.
ANNOUNCES AGREEMENT TO ACQUIRE INTEREST IN REINHOLD INDUSTRIES, INC.
New York, NY - Hammond, Kennedy, Whitney & Company, Inc. ("HKW") announced
today that a newly-formed company has entered into an agreement to acquire 49.9%
of the outstanding capital stock of Reinhold Industries, Inc. ("Reinhold"), from
Keene Creditors Trust for an aggregate purchase price of approximately $8.98
million. The agreement gives the new company the right to designate other
persons to purchase the shares from the Trust, and it is anticipated that the
shares will be purchased by certain officers and directors of HKW and by
Massachusetts Mutual Life Insurance Company and two entities to which it
provides investment advice. As part of the transaction, two of Reinhold's three
directors will resign and Ralph R. Whitney, Jr. and Andrew McNally IV, each a
director of HKW, will join the Reinhold board of directors. The transaction is
expected to be completed within the next ten days.
Reinhold is a manufacturer of advanced custom composite components and
sheet molding compounds for a variety of applications in the defense, aerospace
and other commercial industries. Its corporate headquarters are in Santa Fe
Springs, California.
HKW is a private equity firm with offices in New York, Chicago and
Indianapolis.
The Keene Creditors Trust was created in the bankruptcy of Keene
Corporation, a former manufacturer of asbestos-containing products, for the
purpose of processing and paying holders of asbestos-related bodily injury
claims and asbestos-in-buildings property claims arising out of Keene products.
For more information contact: Ralph R. Whitney, Jr., Ward S. McNally
or Matthew C. Hook of HKW at (212) 867-1010.
