Document:

Exhibit 4.4

 

VISTA OUTDOOR INC.

Nonqualified Deferred Compensation Plan

Master Plan Document

 

Vista Outdoor Inc.

 

Nonqualified Deferred Compensation Plan

 

Effective February 9, 2015

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
Selection,   Enrollment, Eligibility
    	
6
    
	
 
    	
 
    	
 
    
	
2.1
    	
Selection
    	
6
    
	
2.2
    	
Enrollment   and Eligibility Requirements; Commencement of Participation
    	
6
    
	
2.3
    	
Termination   of a Participant’s Eligibility
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
Deferral   Commitments; Company Contribution Amounts; Company Restoration Matching   Amounts ;Vesting; Crediting; Taxes
    	
7
    
	
 
    	
 
    	
 
    
	
3.1
    	
Minimum   Deferrals
    	
7
    
	
3.2
    	
Maximum   Deferral
    	
8
    
	
3.3
    	
Election   to Defer; Effect of Election Form
    	
8
    
	
3.4
    	
Withholding   and Crediting of Annual Deferral Amounts
    	
9
    
	
3.5
    	
Company   Contribution Amount
    	
9
    
	
3.6
    	
Company   Restoration Matching Amount
    	
9
    
	
3.7
    	
Crediting   of Amounts after Benefit Distribution
    	
10
    
	
3.8
    	
Vesting
    	
10
    
	
3.9
    	
Crediting   and Debiting of Account Balances
    	
10
    
	
3.10
    	
FICA   and Other Taxes
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE 4
    	
Scheduled   Distribution; Unforeseeable Financial Emergencies
    	
12
    
	
 
    	
 
    	
 
    
	
4.1
    	
Scheduled   Distribution
    	
12
    
	
4.2
    	
Postponing   Scheduled Distributions
    	
13
    
	
4.3
    	
Certain   Benefits Take Precedence Over Scheduled Distributions
    	
13
    
	
4.4
    	
Withdrawal   Payout; Suspensions for Unforeseeable Financial Emergencies
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
Retirement   Benefit
    	
14
    
	
 
    	
 
    	
 
    
	
5.1
    	
Retirement   Benefit
    	
14
    
	
5.2
    	
Payment   of Retirement Benefit
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
Termination   Benefit
    	
15
    
	
 
    	
 
    	
 
    
	
6.1
    	
Termination   Benefit
    	
15
    
	
6.2
    	
Payment   of Termination Benefit
    	
15
    

 

i

 

	
ARTICLE 7
    	
Disability Benefit
    	
16
    
	
 
    	
 
    	
 
    
	
7.1
    	
Disability Benefit
    	
16
    
	
7.2
    	
Payment of Disability Benefit
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE 8
    	
Death Benefit
    	
16
    
	
 
    	
 
    	
 
    
	
8.1
    	
Death Benefit
    	
16
    
	
8.2
    	
Payment of Death Benefit
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE 9
    	
Form of Payment
    	
16
    
	
 
    	
 
    	
 
    
	
9.1
    	
Payment in Cash or Common Stock
    	
16
    
	
9.2
    	
Relation to Stock Incentive Plan
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE 10
    	
Beneficiary Designation
    	
17
    
	
 
    	
 
    	
 
    
	
10.1
    	
Beneficiary
    	
17
    
	
10.2
    	
Beneficiary Designation; Change; Spousal Consent
    	
17
    
	
10.3
    	
Acknowledgement
    	
17
    
	
10.4
    	
No Beneficiary Designation
    	
17
    
	
10.5
    	
Doubt as to Beneficiary
    	
17
    
	
10.6
    	
Discharge of Obligations
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 11
    	
Leave of Absence
    	
18
    
	
 
    	
 
    	
 
    
	
11.1
    	
Paid Leave of Absence
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE 12
    	
Termination of Plan, Amendment or Modification
    	
18
    
	
 
    	
 
    	
 
    
	
12.1
    	
Termination of Plan
    	
18
    
	
12.2
    	
Amendment
    	
19
    
	
12.3
    	
Effect of Payment
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE 13
    	
Administration
    	
19
    
	
 
    	
 
    	
 
    
	
13.1
    	
Committee Duties
    	
19
    
	
13.2
    	
Agents
    	
19
    
	
13.3
    	
Binding Effect of Decisions
    	
19
    
	
13.4
    	
Indemnity
    	
19
    
	
13.5
    	
Employer Information
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE 14
    	
Other Benefits and Agreements
    	
20
    
	
 
    	
 
    	
 
    
	
14.1
    	
Coordination with Other Benefits
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE 15
    	
Claims Procedures
    	
20
    

 

ii

 

	
15.1
    	
Presentation of Claim
    	
20
    
	
15.2
    	
Notification of Decision
    	
20
    
	
15.3
    	
Review of a Denied Claim
    	
21
    
	
15.4
    	
Decision on Review
    	
21
    
	
15.5
    	
Legal Action
    	
22
    
	
15.6
    	
Determinations
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE 16
    	
Trust
    	
22
    
	
 
    	
 
    	
 
    
	
16.1
    	
Establishment of the Trust
    	
22
    
	
16.2
    	
Interrelationship of the Plan and the Trust
    	
22
    
	
16.3
    	
Distributions From the Trust
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE 17
    	
Miscellaneous
    	
23
    
	
 
    	
 
    	
 
    
	
17.1
    	
Status of Plan
    	
23
    
	
17.2
    	
Unsecured General Creditor
    	
23
    
	
17.3
    	
Employer’s Liability
    	
23
    
	
17.4
    	
Nonassignability
    	
23
    
	
17.5
    	
Not a Contract of Employment
    	
23
    
	
17.6
    	
Furnishing Information
    	
23
    
	
17.7
    	
Terms
    	
24
    
	
17.8
    	
Captions
    	
24
    
	
17.9
    	
Governing Law
    	
24
    
	
17.10
    	
Notice
    	
24
    
	
17.11
    	
Successors
    	
24
    
	
17.12
    	
Spouse’s Interest
    	
24
    
	
17.13
    	
Validity
    	
24
    
	
17.14
    	
Incompetent
    	
24
    
	
17.15
    	
Deduction Limitation on Benefit Payments
    	
25
    
	
17.16
    	
Insurance
    	
25
    
	
 
    	
 
    	
 
    
	
APPENDIX   A - PRIOR PLAN STATEMENT                                                A-1
    	
 
    

 

iii

 

VISTA OUTDOOR INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

Effective February 9, 2015

 

History and Purpose

 

Effective January 1, 2003, ALLIANT TECHSYSTEMS INC., a Delaware corporation (hereinafter, “ATK”), established a nonqualified, unfunded deferred compensation plan (the “ATK NQDC Plan”). Deferred compensation credited under the ATK NQDC Plan which related entirely to services performed on or before December 31, 2004 continued to be governed by the terms of the ATK NQDC Plan as in effect prior to the applicability of Code Section 409A.  Liabilities under this Plan for such deferred compensation shall continue to be governed by the Prior Plan Statement, which is attached hereto as Appendix A.  Liabilities for deferred compensation under the ATK NQDC Plan and this Plan relating to services performed on or after January 1, 2005 are governed by the terms set forth herein.

 

The purpose of this Plan is to provide specified benefits to a select group of management or highly compensated Employees who contribute materially to the continued growth, development and future business success of the Company and its subsidiaries.  This Plan is nonqualified and unfunded for tax purposes and for purposes of Title I of ERISA.

 

ARTICLE 1
  Definitions

 

For the purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

 

1.1                               “Account Balance” shall mean, with respect to a Participant, an entry on the records of the Employer equal to the sum of the Participant’s Annual Accounts, and shall include, on the effective date of this Plan, or as of such later date during the term of the Transition Services Agreement between the Company and ATK that the participant transfers from employment with ATK to employment with the Company (the “Transfer Date”), the amount, if any, credited to the Participant’s account under the ATK NQDC Plan as of the day preceding the effective date of this Plan or the Participant’s Transfer Date, if later.  The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

 

1.2                               “Annual Account” shall mean, with respect to a Participant, an entry on the records of the Employer equal to the following amount: (i) the sum of the Participant’s Annual Deferral Amount, Company Contribution Amount and Company Restoration Matching Amount for any one Plan Year, plus (ii) amounts credited or debited to such amounts pursuant to this Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Annual Account for such Plan Year.  The Annual Account shall be a bookkeeping

 

1

 

entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

 

1.3                               “Annual Deferral Amount” shall mean that portion of a Participant’s Base Salary, Performance Cash and Performance Shares that a Participant defers in accordance with Article 3 for any one Plan Year, without regard to whether such amounts are withheld and credited during such Plan Year.  In the event of a Participant’s Retirement, Disability, death or Termination of Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount shall be the actual amount withheld prior to such event.

 

1.4                               “Annual Installment Method” shall be an annual installment payment over the number of years selected by the Participant in accordance with this Plan, calculated as follows: (i) for the first annual installment, the Participant’s vested portion of each Annual Account shall be calculated as of the close of business on the Participant’s Benefit Distribution Date, and (ii) for remaining annual installments, the vested portion of each applicable Annual Account shall be calculated on each anniversary of the Benefit Distribution Date (or if such calculation date is not a business day, the preceding business day).  Each annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due the Participant.  By way of example, if the Participant elects a 10-year Annual Installment Method as the form of Retirement Benefit for an Annual Account, the first payment shall be 1/10 of the vested balance of such Annual Account, calculated as described in this definition.  The following year, the payment shall be 1/9 of the vested balance of such Annual Account, calculated as described in this definition.

 

1.5                               “Annual Performance Share Amount” shall mean the portion of the Participant’s Annual Deferral Amount, if any, representing Performance Shares deferred in accordance with Article 3 of the Plan.  Annual Performance Share Amounts shall be credited to the Performance Share Accounts of Participants, determined by the number of performance shares that would otherwise be paid based upon the achievement of the performance goals and the other requirements for the payment of performance shares, but for the election to defer.

 

1.6                               “Base Salary” shall mean the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, profit sharing contributions, stock options, relocation expenses, incentive payments, non-monetary awards, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income).  Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee.  In no event shall Base Salary include any amounts payable to the Participant prior to the commencement of his or her participation in this Plan.

 

2

 

1.7                               “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 10, that are entitled to receive benefits under this Plan upon the death of a Participant.

 

1.8                               “Beneficiary Designation Form” shall mean the form established from time to time by the Senior Vice President of Human Resources that a Participant completes, signs and returns to the Company to designate one or more Beneficiaries.

 

1.9                               “Benefit Distribution Date” shall mean the date that triggers distribution of a Participant’s vested Account Balance.  A Participant’s Benefit Distribution Date shall be the earliest to occur of any one of the following:

 

(a)                                 If the Participant Retires, his or her Benefit Distribution Date shall be the last day of the six-month period immediately following the date on which the Participant Retires; provided, however, in the event the Participant changes his or her Retirement Benefit election for one or more Annual Accounts in accordance with Section 5.2(a), his or her Benefit Distribution Date for such Annual Account(s) shall be postponed in accordance with such Section 5.2(a); or

 

(b)                                 If the Participant experiences a Termination of Employment, his or her Benefit Distribution Date shall be the last day of the six-month period immediately following the date on which the Participant experiences a Termination of Employment; provided, however, in the event the Participant elects to receive one or more Annual Accounts as of the first anniversary of his or her Termination of Employment in accordance with Section 6.2, his or her Benefit Distribution Date shall be postponed in accordance with such Section 6.2; or

 

(c)                                  The date on which the Company is provided with proof that is satisfactory to the Senior Vice President of Human Resources of the Participant’s death, if the Participant dies prior to the complete distribution of his or her vested Account Balance; or

 

(d)                                 The date on which the PRC (or the Committee in the case of a Section 16 Officer or as otherwise required by Section 15.4 of this Plan) determines the Participant is Disabled.

 

1.10                        “Board” shall mean the board of directors of the Company.

 

1.11                        “CEO” shall mean the Chief Executive Officer of the Company.

 

1.12                        “Claimant” shall have the meaning set forth in Section 15.1.

 

1.13                        “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

1.14                         “Committee” shall mean the Compensation Committee of the Board of Directors of the Company.

 

1.15                        “Company” shall mean VISTA OUTDOOR INC., a Delaware corporation, and any successor to all or substantially all of the Company’s assets or business.

 

1.16                        “Company Contribution Account” shall mean (i) the sum of the Participant’s Company Contribution Amounts, plus (ii) amounts credited or debited to the Participant’s Company Contribution Account in accordance with this Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s Company Contribution Account.

 

3

 

1.17                        “Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.5.

 

1.18                        “Company Restoration Matching Account” shall mean (i) the sum of all of a Participant’s Company Restoration Matching Amounts, plus (ii) amounts credited or debited to the Participant’s Company Restoration Matching Account in accordance with this Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s Company Restoration Matching Account.

 

1.19                        “Company Restoration Matching Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.6.

 

1.20                        “Death Benefit” shall mean the benefit set forth in Article 8.

 

1.21                        “Deduction Limitation” shall mean the limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan, as set forth in Section 17.15.

 

1.22                        “Deferral Account” shall mean (i) the sum of all of a Participant’s Annual Deferral Amounts, plus (ii) amounts credited or debited to the Participant’s Deferral Account in accordance with this Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account.

 

1.23                        “Disability” or “Disabled” shall mean that a Participant is (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Participant’s Employer.

 

1.24                        “Disability Benefit” shall mean the benefit set forth in Article 7.

 

1.25                        “Election Form” shall mean the form, which may be in electronic format, established from time to time by the Committee that a Participant completes, signs and returns to the Company to make an election under the Plan.

 

1.26                        “Employee” shall mean a person who is an employee of any Employer.

 

1.27                        “Employer(s)” shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) that have employees who participate in the Plan.

 

1.28                        “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

1.29                        “401(k) Plan” shall mean a plan adopted by the Employer that is qualified under Code Section 401(a) that contains a cash or deferred arrangement described in Code Section 401(k), as amended from time to time.

 

1.30                         “Participant” shall mean any Employee (i) who is selected to participate in the Plan and (ii) who submits an executed Election Form and Beneficiary Designation Form, which are accepted by the Company.

 

4

 

1.31                        “Performance Cash” shall mean any performance-based cash compensation, in addition to Base Salary, earned by a Participant under any Employer’s annual or long-term bonus and incentive plans for services rendered during a performance period of at least 12 months, as further specified on an Election Form approved by the Committee in its sole discretion.

 

1.32                        “Performance Shares” shall mean any performance-based stock compensation earned by a Participant under any Employer performance award plan for services rendered during a performance period of at least 12 months, as further specified on an Election Form approved by the Committee in its sole discretion.

 

1.33                        “Performance Share Account” shall mean the portion of the Deferral Account equal to (i) the sum of all of a Participant’s Annual Performance Share Amounts, plus (ii) the value of the number of additional share units credited as a result of stock dividends or deemed reinvestment of cash dividends, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Performance Share Account.

 

1.34                        “PIC” shall mean the Vista Outdoor Pension Investment Committee.

 

1.35                        “Plan” shall mean the VISTA OUTDOOR INC. Nonqualified Deferred Compensation Plan, which shall be evidenced by this instrument, as it may be amended from time to time.

 

1.36                        “Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.

 

1.37                        “Prior Plan Statement” shall mean the document attached hereto as Appendix A and which is a part of the Plan, titled “ALLIANT TECHSYSTEMS INC. NONQUALIFIED DEFERRED COMPENSATION PLAN (As amended and Restated March 18, 2003)”.

 

1.38                        “PRC” shall mean the Vista Outdoor Pension and Retirement Committee.

 

1.39                        “Retirement”, “Retire(s)” or “Retired” shall mean, with respect to an Employee, separation from service with all Employers and all entities treated as members of the same controlled group with any Employer under Code Section 414(b) or (c), for any reason other than a leave of absence, death or Disability on or after the attainment of age 55 with two Years of Service.  Controlled group membership shall be determined by substituting “at least 50 percent” for “at least 80 percent” each place it appears in Code Section 1563(a)(1), (2) and (3), and by substituting “at least 50 percent” for “at least 80 percent” each place it appears in Treas. Reg. §1.414(c)-2.

 

1.40                        “Retirement Benefit” shall mean the benefit set forth in Article 5.

 

1.41                        “Scheduled Distribution” shall mean the distribution set forth in Section 4.1.

 

1.42                        “Section 16 Officer” shall mean an “officer” of the Company as defined in the rules promulgated under Section 16 of the Securities Exchange Act of 1934, as amended.

 

1.43                        “Senior Vice President of Human Resources” shall mean the most senior officer of the Company in charge of the human resources function at the time the action is taken with respect to the Plan.

 

1.44                        “Terminate the Plan” or “Termination of the Plan” shall mean a determination by the Committee that (i) all Participants shall no longer be eligible to participate in the Plan, (ii) all deferral elections for such Participants shall terminate, and (iii) such Participants shall no longer be eligible to receive Company contributions under this Plan.

 

5

 

1.45                        “Termination Benefit” shall mean the benefit set forth in Article 6.

 

1.46                        “Termination of Employment” shall mean the separation from service with all Employers and all entities treated as members of the same controlled group with any Employer under Code Section 414(b) or (c), voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence. Controlled group membership shall be determined by substituting “at least 50 percent” for “at least 80 percent” each place it appears in Code Section 1563(a)(1), (2) and (3), and by substituting “at least 50 percent” for “at least 80 percent” each place it appears in Treas. Reg. §1.414(c)-2.

 

1.47                        “Trust” shall mean one or more trusts established by the Company in accordance with Article 16.

 

1.48                        “Unforeseeable Financial Emergency” shall mean an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from (i) a sudden and unexpected illness or accident of the Participant, the Participant’s spouse, or a dependent of the Participant, (ii) a loss of the Participant’s property due to casualty, or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Senior Vice President of Human Resources or, in the case of a Section 16 Officer, the Committee.

 

1.49                        “Years of Service” shall mean an Employee’s period of service with ALLIANT TECHSYSTEMS INC. and VISTA OUTDOOR INC., or a related Employer, measured in full years.  A Participant shall receive credit for one full year of “Service” for each Plan Year in which the Participant had at least 1,000 hours of service for a participating Employer or related Employer.

 

ARTICLE 2

 

Selection, Enrollment, Eligibility

 

2.1                               Selection.  Participation in the Plan shall be limited to a select group of management or highly compensated Employees, as determined by the CEO in his or her sole discretion; provided, however, that all Section 16 Officers shall be eligible to participate in the Plan (while employed as a Section 16 Officer) and need not be selected by the CEO in order to be eligible to participate in the Plan.

 

2.2                               Enrollment and Eligibility Requirements; Commencement of Participation.  As a condition to participation, each selected Employee who is eligible to participate in the Plan effective as of the first day of a Plan Year shall complete, execute and return to the Company an Election Form and a Beneficiary Designation Form prior to the first day of such Plan Year, or such other earlier deadline as may be established by the Senior Vice President of Human Resources in his or her sole discretion.  In addition, the Committee may establish from time to time such other enrollment requirements as it determines, in its sole discretion, are necessary.

 

(a)                                 A selected Employee who first becomes eligible to participate in this Plan after the first day of a Plan Year must complete these requirements within 30 days after he or she first becomes eligible to participate in the Plan, or within such other earlier deadline as may be

 

6

 

established by the Senior Vice President of Human Resources, in his or her sole discretion, in order to participate for that Plan Year.  In such event, such person’s participation in this Plan shall not commence earlier than 30 days after he or she first becomes eligible to participate in the Plan or, in the case of an Employee who is not a Section 16 Officer, on the date determined by the Senior Vice President of Human Resources, and such person shall not be permitted to defer under this Plan any portion of his or her Base Salary, Performance Cash and/or Performance Shares that are paid with respect to services performed prior to his or her participation commencement date, except to the extent permissible under Code Section 409A and related Treasury guidance or Regulations.

 

(b)                                 Each selected Employee who is eligible to participate in the Plan shall commence participation in the Plan only after the Employee has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Company within the specified time period.  Notwithstanding the foregoing, the Company shall process such Participant’s deferral election as soon as administratively practicable after such deferral election is submitted to the Company.

 

(c)                                  If an Employee fails to meet all requirements contained in this Section 2.2 within the period required, that Employee shall not be eligible to participate in the Plan during such Plan Year.

 

2.3                               Termination of a Participant’s Eligibility.   The CEO (or in the case of a Section 16 Officer, the Committee) shall have the right, in his or her sole discretion, to (i) prevent the Participant from making future deferral elections, and/or (ii) take further action that the CEO or the Committee deems appropriate.  Notwithstanding the foregoing, in the event of a Termination of the Plan in accordance with Section 1.43, the termination of the affected Participants’ eligibility for participation in the Plan shall not be governed by this Section 2.3, but rather shall be governed by Section 1.43 and Section 12.1.  In the event that a Participant is no longer eligible to defer compensation under this Plan, the Participant’s Account Balance shall continue to be governed by the terms of this Plan until such time as the Participant’s Account Balance is paid in accordance with the terms of this Plan.

 

ARTICLE 3

 

Deferral Commitments; Company Contribution Amounts;

Company Restoration Matching Amounts; Vesting; Crediting; Taxes

 

3.1                               Minimum Deferrals.

 

(a) Annual Deferral Amount.  For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Base Salary, Performance Cash and/or Performance Shares in the following minimum amounts for each deferral elected:

 

7

 

	
Cash Compensation
    	
 
    	
Minimum Amount
    	
 
    
	
Base   Salary
    	
 
    	
1
    	
%
    
	
Performance   Cash
    	
 
    	
1
    	
%
    

 

	
Equity Compensation
    	
 
    	
Deferral Amount
    	
 
    
	
Performance   Shares
    	
 
    	
1
    	
%
    

 

If, prior to the beginning of a Plan Year, a Participant has made an election for less than the stated minimum amounts, or if no election is made, the amount deferred shall be zero. If, at any time after the beginning of a Plan Year, a Participant has deferred less than the stated minimum amounts for that Plan Year, any amount credited to the Participant’s Account Balance as the Annual Deferral Amount for that Plan Year shall be distributed to the Participant within 60 days after the last day of the Plan Year.

 

(b)                                 Short Plan Year.  Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year the minimum Annual Deferral Amount shall be an amount equal to the minimum set forth above, multiplied by a fraction, the numerator of which is the number of complete months remaining in the Plan Year and the denominator of which is 12.

 

3.2                               Maximum Deferral.

 

(a)                                 Annual Deferral Amount.  For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Base Salary, Performance Cash and/or Performance Shares up to the following maximum percentages for each deferral elected:

 

	
Deferral
    	
 
    	
Maximum Percentage
    	
 
    
	
Base   Salary
    	
 
    	
70
    	
%
    
	
Performance   Cash
    	
 
    	
100
    	
%
    
	
Performance   Shares
    	
 
    	
100
    	
%
    

 

(b)                                 Short Plan Year.  Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, the maximum Annual Deferral Amount shall be limited to the amount of compensation not yet earned by the Participant as of the date the Participant submits an Election Form to the Company for acceptance.

 

3.3                               Election to Defer; Effect of Election Form.

 

(a)                                 First Plan Year.  In connection with a Participant’s commencement of participation in the Plan, the Participant shall make an irrevocable deferral election for the Plan Year in which the Participant commences participation in the Plan, along with such other elections as the Senior Vice President of Human Resources (or in the case of a Section 16 Officer, the Committee) deems necessary or desirable under the Plan.  For these elections to be valid, the Election Form must be completed and signed by the Participant, timely

 

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delivered to the Company (in accordance with Section 2.2 above) and accepted by the Company.

 

(b)                                 Subsequent Plan Years.  For each succeeding Plan Year, an irrevocable deferral election for that Plan Year, and such other elections as the Senior Vice President of Human Resources (or in the case of a Section 16 Officer, the Committee) deems necessary or desirable under the Plan, shall be made by timely delivering a new Election Form to the Company, in accordance with the terms of the Plan, before the end of the Plan Year preceding the Plan Year for which the election is made.  If no such Election Form is timely delivered for a Plan Year, the Annual Deferral Amount shall be zero for that Plan Year.

 

(c)                                  Performance-Based Compensation. Notwithstanding the foregoing, an irrevocable deferral election pertaining to Performance Cash or Performance Shares may be made by timely delivering an Election Form to the Company, in accordance with the terms of the Plan, no later than the earlier of (i) six months before the end of the performance period or (ii) such earlier date as the Senior Vice President of Human Resources may determine, in his or her sole discretion, for the Plan Year.  For any Plan Year the Committee may determine, in its sole discretion, that any such election shall be limited to the portion of Performance Cash and/or Performance Shares designated by the Committee.  “Performance-based compensation” shall be compensation based on services performed over a period of at least 12 months, in accordance with Code Section 409A and related guidance.

 

3.4                               Withholding and Crediting of Annual Deferral Amounts.  For each Plan Year, the Base Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Salary.  The Performance Cash and/or Performance Shares portion of the Annual Deferral Amount shall be withheld at the time the Performance Cash and/or Performance Shares are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself.  Annual Deferral Amounts shall be credited to a Participant’s Deferral Account as soon as reasonably practicable following the time such amounts would otherwise have been paid to the Participant.

 

3.5                               Company Contribution Amount.  For each Plan Year, the CEO (or in the case of a Section 16 Officer, the Committee) may, in his or her sole discretion, credit any amount to any Participant’s Annual Account under this Plan, which amount shall be part of the Participant’s Company Contribution Amount for that Plan Year.  The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a Company Contribution Amount for that Plan Year.  The Company Contribution Amount described in this Section 3.5, if any, shall be credited to the Participant’s Annual Account for the applicable Plan Year on a date or dates to be determined by the CEO (or the Committee as applicable), in his or her sole discretion.

 

3.6                               Company Restoration Matching Amount.  A Participant’s Company Restoration Matching Amount for any Plan Year shall be the amount necessary to make up for the lost share, if any, of matching contributions (but not elective deferred contributions) under the 401(k) Plan

 

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attributable to the Participant’s deferrals under this Plan that would have otherwise been allocated to the account of the Participant under the 401(k) Plan for such Plan Year.  The amount so credited to a Participant under this Plan for any Plan Year (i) may be smaller or larger than the amount credited to any other Participant and (ii) may differ from the amount credited to such Participant in the preceding Plan Year. The Participant’s Company Restoration Matching Amount, if any, shall be credited to the Participant’s Annual Account for the applicable Plan Year as soon as administratively practicable after the amount can be determined for the applicable Plan Year.

 

3.7                               Crediting of Amounts after Benefit Distribution.  Notwithstanding any provision in this Plan to the contrary, if the complete distribution of a Participant’s vested Account Balance occurs prior to the date on which any portion of (i) the Annual Deferral Amount that a Participant has elected to defer in accordance with Section 3.3, (ii) the Company Contribution Amount, or (iii) the Company Restoration Matching Amount, would otherwise be credited to the Participant’s Account Balance, such amounts shall not be credited to the Participant’s Account Balance, but shall be paid to the Participant in a single lump sum as soon as administratively practicable after the amount can be determined.

 

3.8                               Vesting.  A Participant shall at all times be 100% vested in his or her Account Balance; provided, however, that a Participant shall be vested in any Company Contribution Amount credited to his or her Company Contribution Account in accordance with the vesting schedule(s) set forth in his or her employment agreement or any other agreement entered into between the Participant and his or her Employer, or as declared by the CEO (or, in the case of a Section 16 Officer, the Committee).  A different vesting schedule may apply to each Company Contribution Amount credited to the Participant’s Company Contribution Account.  If no vesting schedule is specified in such agreements or declared by the CEO or Committee, as applicable, a Company Contribution Amount shall be 100% vested.

 

3.9                               Crediting and Debiting of Account Balances.  In accordance with, and subject to, the rules and procedures that are established from time to time by the PIC, amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:

 

(a)                                 Measurement Funds.  The Participant may elect one or more of the measurement funds selected by the PIC, in its sole discretion, which are based on certain mutual funds or other collective investment vehicles (the “Measurement Funds”), for the purpose of crediting or debiting additional amounts to his or her Account Balance (other than the Performance Share Account).  As necessary, the PIC may, in its sole discretion, discontinue, substitute or add a Measurement Fund.  Each such action will take effect as of the first day of the first calendar quarter that begins at least 30 days after the day on which the PIC gives Participants advance written notice of such change.

 

(b)                                 Election of Measurement Funds.  A Participant, in connection with his or her initial deferral election in accordance with Section 3.3(a) above, shall elect, on the Election Form, one or more Measurement Fund(s) (as described in Section 3.9(a) above) to be used to determine the amounts to be credited or debited to his or her Account Balance (other than the Performance Share Account).  If a Participant does not elect any of the Measurement Funds as described in the previous sentence, the Participant’s Account Balance (other than the Performance Share Account) shall automatically be allocated into

 

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the money market Measurement Fund, as determined by the PIC from time to time, in its sole discretion.  The Participant may (but is not required to) elect, by submitting an Election Form to the Company that is accepted by the Company, to add or delete one or more Measurement Fund(s) to be used to determine the amounts to be credited or debited to his or her Account Balance (other than the Performance Share Account), or to change the portion of his or her Account Balance (other than the Performance Share Account) allocated to each previously or newly elected Measurement Fund.  If an election is made in accordance with the previous sentence, it shall apply as of the first business day that is administratively practicable, and shall continue thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with the previous sentence.

 

(c)                                  Proportionate Allocation.  In making any election described in Section 3.9(b) above, the Participant shall specify on the Election Form, in increments of 1%, the percentage of his or her Account Balance or Measurement Fund, as applicable, to be allocated/reallocated.

 

(d)                                 Annual Performance Share Amounts.  Annual Performance Shares Amounts shall be allocated to the Vista Outdoor common stock Measuring Fund as of the date on which such performance shares would otherwise have been paid under the applicable Company stock incentive plan, and the Participant’s Performance Share Account shall be credited with the number of units equal to the number of shares of Vista Outdoor common stock that would have otherwise been delivered to the Participant.

 

(i)            Cash Dividends.  An amount shall be credited on any cash dividend payment date in that number of units equal to the number of shares that could have been purchased on the dividend payment date, based upon the closing price of Vista Outdoor common stock as reported on the New York Stock Exchange for such date, with the value of the cash dividends paid on shares of stock equal to the number of units credited to the Performance Share Account as of the record date for such dividend.

 

(ii)           Changes in Vista Outdoor Common Stock.  In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of the Company’s common stock or other securities of the Company, issuance of warrants or other rights to purchase shares of the Company’s common stock or other securities of the Company or other similar corporate transaction or event affects the Company’s common stock such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust the number, value and/or type of units that are credited to the Participants’ Performance Share Account.

 

(iii)          Voting.  No Participant or Beneficiary shall be entitled to any voting rights with respect to any units credited to the Performance Share Account.

 

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(e)                                  Crediting or Debiting Method.  The performance of each Measurement Fund (either positive or negative) will be determined on a daily basis based on the manner in which such Participant’s Account Balance has been hypothetically allocated among the Measurement Funds by the Participant.

 

(f)                                   No Actual Investment.  Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation of his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund.  In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the investments on which the Measurement Funds are based, no Participant shall have any rights in or to such investments themselves.  Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company.

 

3.10                        FICA and Other Taxes.

 

(a)                                 Annual Deferral Amounts.  For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant, the Participant’s Employer(s) shall withhold, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such Annual Deferral Amount.  If necessary, the Company may reduce the Annual Deferral Amount in order to comply with this Section 3.10.

 

(b)                                 Company Restoration Matching Account and Company Contribution Account.  When a Participant’s Annual Account is credited with a Company Restoration Matching Amount and/or Company Contribution Amount (or, if such amount is subject to a vesting schedule, when such Participant is vested in such amount), the Participant’s Employer(s) shall withhold, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such Company Restoration Matching Amount and/or Company Contribution Amount.  If necessary, the Company may reduce the vested portion of the Participant’s Company Restoration Matching Account or Company Contribution Account, as applicable, in order to comply with this Section 3.10.

 

(c)                                  Distributions.  The Participant’s Employer(s), or the trustee of the Trust, shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer(s), or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer(s) and the trustee of the Trust.

 

ARTICLE 4
  Scheduled Distribution; Unforeseeable Financial Emergencies

 

4.1                               Scheduled Distribution.  In connection with each election to defer an Annual Deferral Amount, a Participant may irrevocably elect to receive a Scheduled Distribution, in the form of a lump

 

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sum payment, from the Plan with respect to all or a portion of the Annual Account (excluding Annual Performance Share Amounts and Company Contribution Amounts).  The Scheduled Distribution shall be a lump sum payment in an amount that is equal to the portion of the Annual Account the Participant elected to have distributed as a Scheduled Distribution, plus amounts credited or debited in the manner provided in Section 3.9 above on that amount, calculated as of the close of business on the date on which the Scheduled Distribution becomes payable (or on the immediately preceding business day if such date is not a business day).  Subject to the other terms and conditions of this Plan, each Scheduled Distribution elected shall be paid out during a 60-day period commencing immediately after the first day of any Plan Year designated by the Participant.  The Plan Year designated by the Participant must be at least three Plan Years after the end of the Plan Year to which the Participant’s deferral election described in Section 3.3 relates.  By way of example, if a Scheduled Distribution is elected for Annual Accounts that are earned in the Plan Year commencing January 1, 2005, the Scheduled Distribution would become payable during a 60-day period commencing January 1, 2009.  A Participant’s elections of scheduled distributions under the ATK NQDC Plan shall continue to apply with respect to the portions of his Account Balance attributable to deferred compensation under the ATK NQDC Plan corresponding to those elections.

 

4.2                               Postponing Scheduled Distributions. A Participant may elect to postpone a Scheduled Distribution described in Section 4.1 above, and have such amount paid out during a 60-day period commencing immediately after an allowable alternative distribution date designated by the Participant in accordance with this Section 4.2.  In order to make this election, the Participant must submit a new Scheduled Distribution Election Form to the Company in accordance with the following criteria:

 

(a)                                 Such Scheduled Distribution Election Form must be submitted to and accepted by the Company at least 12 months prior to the Participant’s previously designated Scheduled Distribution Date;

 

(b)                                 The new Scheduled Distribution Date selected by the Participant must be the first day of a Plan Year, and must be at least five years after the previously designated Scheduled Distribution Date; and

 

(c)                                  The election of the new Scheduled Distribution Date shall have no effect until at least 12 months after the date on which the election is made;

 

Provided, however, a Participant may elect to postpone each Scheduled Distribution no more than one time.

 

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4.3                               Certain Benefits Take Precedence Over Scheduled Distributions.  If a Benefit Distribution Date occurs that triggers a benefit under Articles 5, 6, 7 or 8, any Annual Account that is subject to a Scheduled Distribution election under Section 4.1 shall not be paid in accordance with Section 4.1, but shall be paid in accordance with the other applicable Article.  Notwithstanding the foregoing, the Committee shall interpret this Section 4.3 in a manner that is consistent with Code Section 409A and other applicable tax law, including but not limited to guidance issued after the effective date of this Plan.

 

4.4                               Withdrawal Payout; Suspensions for Unforeseeable Financial Emergencies.

 

(a)                                 If the Participant experiences an Unforeseeable Financial Emergency, the Participant may petition the Senior Vice President of Human Resources (or in the case of a Section 16 Officer, the Committee) to receive a partial or full payout from the Plan.  The Participant shall only receive a payout from the Plan to the extent such payout is deemed necessary by the Senior Vice President of Human Resources or the Committee, as applicable, to satisfy the Participant’s Unforeseeable Financial Emergency, plus amounts reasonably necessary to pay taxes reasonably anticipated as a result of the distribution.  If a Participant receives a payout due to an Unforeseeable Financial Emergency, such Participant’s deferrals under this Plan shall cease.  The Participant may not again elect to defer compensation until the enrollment period for the Plan Year that begins at least 12 months after such payout (or such later enrollment period, if required by Code Section 409A and other applicable tax law).

 

(b)                                 The payout shall not exceed the lesser of (i) the Participant’s vested Account Balance, calculated as of the close of business on the date on which the amount becomes payable, as determined by the Senior Vice President of Human Resources or Committee, as applicable, or (ii) the amount necessary to satisfy the Unforeseeable Financial Emergency, plus amounts reasonably necessary to pay taxes reasonably anticipated as a result of the distribution.  Notwithstanding the foregoing, a Participant may not receive a payout from the Plan to the extent that the Unforeseeable Financial Emergency is or may be relieved (A) through reimbursement or compensation by insurance or otherwise, (B) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (C) by suspension of deferrals under this Plan, if the Senior Vice President of Human Resources or the Committee, as applicable, determines that suspension is required by Code Section 409A and other applicable tax law.

 

(c)                                  If the Senior Vice President of Human Resources or the Committee, as applicable, approves a Participant’s petition for payout, the Participant’s deferrals under this Plan shall be suspended as of the date of such approval and the Participant shall receive a payout from the Plan within 60 days of the date of such approval.

 

(d)                                 Notwithstanding the foregoing, the Senior Vice President of Human Resources or the Committee, as applicable, shall interpret all provisions relating to suspension and/or payout under this Section 4.4 in a manner that is consistent with Code Section 409A and other applicable tax law, including but not limited to guidance issued after the effective date of this Plan.

 

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ARTICLE 5

Retirement Benefit

 

5.1                               Retirement Benefit. A Participant who Retires shall receive, as a Retirement Benefit, his or her vested Account Balance, calculated as of the close of business on the Participant’s Benefit Distribution Date.

 

5.2                               Payment of Retirement Benefit.

 

(a)                                 In connection with a Participant’s election to defer an Annual Deferral Amount, the Participant shall elect the form in which his or her Annual Account for such Plan Year will be paid.  The Participant may elect to receive each Annual Account in the form of a lump sum or pursuant to an Annual Installment Method of up to 15 years.  The Participant may change this election one time by submitting an Election Form to the Company in accordance with the following criteria:

 

(i)            The election to modify the form of payment for such Annual Account shall have no effect until at least 12 months after the date on which the election is made;

 

(ii)           The first payment related to such Annual Account shall be delayed at least five years from the originally scheduled Benefit Distribution Date for such Annual Account, as described in Section 1.9(a);

 

(iii)          Notwithstanding the foregoing, the Company, the Committee and the Senior Vice President of Human Resources, as applicable, shall interpret all provisions relating to changing the Annual Account election under this Article 5 in a manner that is consistent with Code Section 409A and other applicable tax law, including but not limited to guidance issued after the effective date of this Plan.

 

The Election Form most recently accepted by the Company shall govern the payout of the Annual Account.  If a Participant does not make any election with respect to the payment of the Annual Account, then such Participant shall be deemed to have elected to receive the Annual Account in a lump sum.  A Participant’s elections of forms of payment under the ATK NQDC Plan shall continue to apply with respect to the portions of his Account Balance attributable to deferred compensation under the ATK NQDC Plan corresponding to those elections.

 

(b)                                 The lump sum payment shall be made, or installment payments shall commence, no later than 60 days after the Benefit Distribution Date.  Remaining installments, if any, shall continue in accordance with the Participant’s election for each Annual Account and shall be paid no later than 60 days after each anniversary of the Benefit Distribution Date.

 

(c)                                  Notwithstanding a Participant’s election to receive payment of an Annual Account in installments, if the Participant’s vested Account Balance, calculated as of the close of business on the Participant’s Benefit Distribution Date (or on the immediately preceding business day if such date is not a business day) is determined to have a value of $25,000

 

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or less, the Participant’s entire Account Balance shall be paid in a single lump sum no later than 60 days after the Benefit Distribution Date.

 

ARTICLE 6
  Termination Benefit

 

6.1                               Termination Benefit.  A Participant who experiences a Termination of Employment shall receive, as a Termination Benefit, his or her vested Account Balance, calculated as of the close of business on the Participant’s Benefit Distribution Date (or the first anniversary thereof, in accordance with the Participant’s election below).  If the calculation date is not a business day, then such calculation shall be made on the immediately preceding business day.

 

6.2                               Payment of Termination Benefit.  In connection with a Participant’s election to defer an Annual Deferral Amount, the Participant shall elect to receive each Annual Account in a lump sum payment:  (i) no later than 60 days after the last day of the six-month period immediately following the date on which the Participant experiences a Termination of Employment or (ii) no later than 60 days after the first anniversary of such Termination of Employment.  If a Participant does not make any election with respect to the payment of the Annual Account, the Annual Account shall be paid to the Participant no later than 60 days after the last day of the six-month period immediately following the date on which the Participant experiences a Termination of Employment.

 

ARTICLE 7
  Disability Benefit

 

7.1                               Disability Benefit.  Upon a Participant’s Disability, the Participant shall receive a Disability Benefit, which shall be equal to the Participant’s vested Account Balance, calculated as of the close of business on the Participant’s Benefit Distribution Date (or on the immediately preceding business day if such date is not a business day).

 

7.2                               Payment of Disability Benefit.  The Disability Benefit shall be paid to the Participant in a lump sum payment no later than 60 days after the Participant’s Benefit Distribution Date.

 

ARTICLE 8
  Death Benefit

 

8.1                               Death Benefit.  The Participant’s Beneficiary(ies) shall receive a Death Benefit upon the Participant’s death which will be equal to the Participant’s vested Account Balance, calculated as of the close of business on the Participant’s Benefit Distribution Date (or on the immediately preceding business day if such date is not a business day).

 

8.2                               Payment of Death Benefit.  The Death Benefit shall be paid to the Participant’s Beneficiary(ies) in a lump sum payment no later than 60 days after the Participant’s Benefit Distribution Date.  In no event, however, shall the Death Benefit be paid later than the later of (i) 90 days after the date of the Participant’s death or (ii) the last day of the calendar year in which the Participant’s death occurs.

 

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ARTICLE 9
  Form of Payment

 

9.1                               Payment in Cash or Common Stock.  Payment of a Participant’s Annual Account shall be made in cash; provided, however, that payment of the portion of the Participant’s Account Balance attributable to the Participant’s Performance Share Account, if any, shall be made, net of withholding taxes, exclusively in shares of the Company’s common stock.

 

9.2                               Relation to Stock Incentive Plan.  Benefits attributable to Performance Share Accounts which are paid in shares of the Company’s common stock are subject to any applicable terms, conditions and restrictions required by the applicable Company stock incentive plan.

 

ARTICLE 10
 Beneficiary Designation

 

10.1                        Beneficiary.  Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant.  The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.

 

10.2                        Beneficiary Designation; Change; Spousal Consent.  A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Company.  A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Company’s rules and procedures, as in effect from time to time.  If the Participant names someone other than his or her spouse as a Beneficiary, the Senior Vice President of Human Resources may, in his or her sole discretion, determine that spousal consent is required to be provided in a form designated by the Senior Vice President of Human Resources, executed by such Participant’s spouse and returned to the Company.  Upon the acceptance by the Company of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled.  The Company shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Company prior to his or her death.

 

10.3                        Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Company.

 

10.4                        No Beneficiary Designation.  If a Participant fails to designate a Beneficiary as provided in Sections 10.1, 10.2 and 10.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse.  If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant’s estate.

 

10.5                        Doubt as to Beneficiary.  If the Senior Vice President of Human Resources has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, he or she shall have the right, exercisable in his or her discretion, to cause the Participant’s Employer to withhold such payments until this matter is resolved to his or her satisfaction.

 

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10.6                        Discharge of Obligations.  The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge the Company, the Employer, the Committee and the Vice President of Human Resources from all further obligations under this Plan with respect to the Participant.

 

ARTICLE 11
  Leave of Absence

 

11.1                        Paid Leave of Absence.  If a Participant is authorized by the Participant’s Employer to take a paid leave of absence from the employment of the Employer, (i) the Participant shall continue to be considered eligible for the benefits provided in Articles 4, 5, 6, 7 or 8 in accordance with the provisions of those Articles, and (ii) the Annual Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 3.3.

 

ARTICLE 12
  Termination of Plan, Amendment or Modification

 

12.1                        Termination of Plan.  Although the Company anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future.  Accordingly, the Company reserves the right to Terminate the Plan (as defined in Section 1.43).  In the event of a Termination of the Plan, the Measurement Funds available to Participants following the Termination of the Plan shall be comparable in number and type to those Measurement Funds available to Participants in the Plan Year preceding the Plan Year in which the Termination of the Plan is effective.  Following a Termination of the Plan, Participant Account Balances shall remain in the Plan until the Participant becomes eligible for the benefits provided in Articles 4, 5, 6, 7 or 8 in accordance with the provisions of those Articles.  The Termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination; provided, however, the Company shall have the right, in its sole discretion, and notwithstanding any elections made by the Participant, to immediately pay all benefits in a lump sum following such Termination of the Plan, if (i)(A) Termination is not proximate to a downturn in the financial health of the Company, (B) the Company terminates all arrangements required to be aggregated with the Plan pursuant to Code Section 409A, (C) lump sum payments are made between 12 and 24 months following Termination of the Plan, and (D) the Company does not establish a new plan that would have been aggregated with the Plan for purposes of Code Section 409A within three years following Termination of the Plan, or (ii) Termination is in connection with dissolution or change in control of the Company, or such other circumstances permitted by applicable guidance, and in accordance with such other corresponding conditions required by Code Section 409A and regulations or other guidance issued thereunder.

 

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12.2                        Amendment.

 

(a)                                 The Committee may, at any time, amend or modify the Plan in whole or in part.  Notwithstanding the foregoing, no amendment shall be effective to decrease the value of a Participant’s vested Account Balance in existence at the time the amendment is made. In no event shall the Company, the Employer or the Committee be responsible for any decline in a Participant’s Account Balance as a result of the selection, discontinuation, addition, substitution, crediting or debiting of the Measurement Funds pursuant to Section 3.9.

 

(b)                                 Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any provision of the Plan may cause amounts deferred under the Plan to become immediately taxable to any Participant under Code Section 409A, and related guidance, the Committee may (i) adopt such amendments to the Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the Plan benefits provided by the Plan and/or (ii) take such other actions as the Committee determines necessary or appropriate to comply with the requirements of Code Section 409A, and related guidance.

 

12.3                        Effect of Payment.  The full payment of the Participant’s vested Account Balance under Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan.

 

ARTICLE 13
 Administration

 

13.1                        Committee Duties.  Except as otherwise provided in this Plan, this Plan shall be administered by the Committee.  The Committee shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and (ii) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan.  When making a determination or calculation, the Company, Committee and the Senior Vice President of Human Resources, as applicable, shall be entitled to rely on information furnished by a Participant.

 

13.2                        Agents.  In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer.

 

13.3                        Binding Effect of Decisions.  The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

 

13.4                        Indemnity.  All Employers shall indemnify and hold harmless the members of the Committee, the PIC, the PRC, the CEO, the Senior Vice President of Human Resources, any Employee to whom duties have been or may be delegated under this Plan, and the Administrator against any 

 

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and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of an individual’s willful misconduct.

 

13.5                        Employer Information.  To enable the Committee and/or Administrator to perform its functions, the Company and each Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the compensation of its Participants, the date and circumstances of the Retirement, Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Committee or Administrator may reasonably require.

 

ARTICLE 14
 Other Benefits and Agreements

 

14.1                       Coordination with Other Benefits.  The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant’s Employer.  The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

 

ARTICLE 15
 Claims Procedures

 

15.1                        Presentation of Claim.  Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the PRC (or in the case of a Section 16 Officer, the Committee) a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant.  All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the Claimant.

 

15.2                        Notification of Decision.  The PRC (or in the case of a Section 16 Officer, the Committee) shall consider a Claimant’s claim within a reasonable time, but no later than 90 days (45 days in the case of a determination of Disability) after receiving the claim.  If the PRC or the Committee, as applicable, determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period (45-day period in the case of a determination of Disability, or initial 30-day extension of such 45-day period).  In no event shall such extension exceed a period of 90 days from the end of the initial period (in the case of a determination of Disability, an initial extension of 30 days, or an additional subsequent extension of an additional 30 days).  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the PRC or the Committee expects to render the benefit determination.  The PRC or the Committee, as applicable, shall notify the Claimant in writing:

 

(a)                                 that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

 

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(b)                                 that the PRC or the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

 

(i)                                     the specific reason(s) for the denial of the claim, or any part of it;

 

(ii)                                  specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

 

(iii)                               a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary;

 

(iv)                              an explanation of the claim review procedure set forth in Section 15.3 below; and

 

(v)                                 a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

 

15.3                        Review of a Denied Claim.  On or before 60 days (180 days in the case of a determination of Disability) after receiving a notice from the PRC (or in the case of a Section 16 Officer, the Committee) that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the PRC or the Committee, as applicable, a written request for a review of the denial of the claim.  The Claimant (or the Claimant’s duly authorized representative):

 

(a)                                 may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits;

 

(b)                                 may submit written comments or other documents; and/or

 

(c)                                  may request a hearing, which the PRC or the Committee (as applicable), in its sole discretion, may grant.

 

15.4                        Decision on Review.  The PRC (or in the case of a Section 16 Officer, the Committee) shall render its decision on review promptly, and no later than 60 days (45 days in the case of a determination of Disability) after the receipt of the Claimant’s written request for a review of the denial of the claim.  If the PRC or the Committee, as applicable, determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 60-day period (45-day period in the case of a determination of Disability).  In no event shall such extension exceed a period of 60 days (45 days in the case of a determination of Disability) from the end of the initial period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the PRC or the Committee, as applicable, expects to render the benefit determination.  In rendering its decision, the PRC or the Committee, as applicable, shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.  Notwithstanding any provisions of this Section 15.4 to the contrary, all decisions on review of a determination of Disability shall be made by the Committee (or the Board in the case of a Section 16 Officer).  The decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

 

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(a)                                 specific reasons for the decision;

 

(b)                                 specific reference(s) to the pertinent Plan provisions upon which the decision was based;

 

(c)                                  a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and

 

(d)                                 a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).

 

15.5                        Legal Action.  A Claimant’s compliance with the foregoing provisions of this Article 15 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.  Any legal action must be brought within two years after the Claimant knew or should have known of the principal facts on which the claim is based or, if earlier, 90 days after the procedure under this Article 15 is completed.

 

15.6                        Determinations.  Benefits under the Plan will be paid only if the PRC (or in the case of a Section 16 Officer, the Committee) decides in its discretion that the applicant is entitled to them.  The PRC or the Committee, as applicable, has discretionary authority to grant or deny benefits under the Plan.  The PRC shall have the sole discretion, authority and responsibility to interpret and construe this Plan Statement and all relevant documents and information, and to determine all factual and legal questions under the Plan, in relation to a person’s (other than a Section 16 Officer) claim for benefits.  The Committee shall have the sole discretion, authority and responsibility to interpret and construe this Plan Statement and all relevant documents and information, and to determine all factual and legal questions under the Plan, including but not limited to the entitlement of all persons to benefits and the amounts of their benefits.  The Committee’s discretionary authority shall include all matters arising under the Plan.

 

ARTICLE 16
 Trust

 

16.1                        Establishment of the Trust.  In order to provide assets from which to fulfill the obligations of the Participants and their beneficiaries under the Plan, the Company may establish a trust by a trust agreement with a third party, the trustee, to which each Employer may, in its discretion, contribute cash or other property to provide for the benefit payments under the Plan, (the “Trust”).

 

16.2                        Interrelationship of the Plan and the Trust.  The provisions of the Plan shall govern the rights of a Participant to receive distributions pursuant to the Plan.  The provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the Company to the assets transferred to the Trust.  The Company shall at all times remain liable to carry out its obligations under the Plan.

 

16.3                        Distributions From the Trust.  The Company’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Company’s obligations under this Plan.

 

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ARTICLE 17
 Miscellaneous

 

17.1                        Status of Plan.  The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1).  The Plan shall be administered and interpreted (i) to the extent possible in a manner consistent with that intent and (ii) in accordance with Code Section 409A and other applicable tax law, including but not limited to Treasury Regulations promulgated pursuant to Code Section 409A.

 

17.2                        Unsecured General Creditor.  Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company.  For purposes of the payment of benefits under this Plan, any and all of the Company’s assets shall be, and remain, the general, unpledged unrestricted assets of the Company.  The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

 

17.3                        Employer’s Liability.  The Company’s liability for the payment of benefits shall be defined only by the Plan.  The Company shall have no obligation to a Participant under the Plan except as expressly provided in the Plan.

 

17.4                        Nonassignability.  Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable.  No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise (including without limitation any domestic relations order, whether or not a “qualified domestic relations order” under section 414(p) of the Code and section 206(d) of ERISA) before the Account Balance is distributed to the Participant or Beneficiary.

 

17.5                        Not a Contract of Employment.  The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Company or any Employer and the Participant.  Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement.  Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Company or any Employer or to interfere with the right of the Company or any Employer to discipline or discharge the Participant at any time.

 

17.6                        Furnishing Information.  A Participant or his or her Beneficiary will cooperate with the Company by furnishing any and all information requested by the Company and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments 

 

23

 

of benefits hereunder, including but not limited to taking such physical examinations as the Company may deem necessary.

 

17.7                        Terms.  Whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

 

17.8                        Captions.  The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

 

17.9                        Governing Law.  Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of Utah without regard to its conflicts of laws principles.

 

17.10                 Notice.  Any notice or filing required or permitted to be given to the Company under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

 

	
 
    	
VISTA   OUTDOOR INC.

Attn:   General Counsel

938 University Park Boulevard, Suite 200

Clearfield, UT 84015
    

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

 

17.11                 Successors.  The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.

 

17.12                 Spouse’s Interest. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.

 

17.13                 Validity.  In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

 

17.14                 Incompetent.  If the Senior Vice President of Human Resources determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, he or she may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person.  The Senior Vice President of Human Resources may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

 

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17.15                 Deduction Limitation on Benefit Payments. The Company may determine that as a result of the application of the limitation under Code Section 162(m), a distribution payable to a Participant pursuant to this Plan would not be deductible if such distribution were made at the time required by the Plan.  If the Company makes such a determination, then the distribution shall not be paid to the Participant until such time as the distribution first becomes deductible.  The amount of the distribution shall continue to be adjusted in accordance with Section 3.9 above until it is distributed to the Participant.  The amount of the distribution, plus amounts credited or debited thereon, shall be paid to the Participant or his or her Beneficiary (in the event of the Participant’s death) at the earliest possible date, as determined by the Company, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Company during which the distribution is made will not be limited by Section 162(m).  Notwithstanding the foregoing, the Committee shall interpret this provision in a manner that is consistent with Code Section 409A and other applicable tax law, including but not limited to guidance issued after the effective date of this Plan.

 

17.16                 Insurance.  The Company, on its own behalf or on behalf of the trustee of the Trust, and, in its sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose.  The Company or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance.  The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Company shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Company has applied for insurance.

 

25Exhibit 10.1

  

Execution Copy

 

 

 

 

 

 

 

STOCK PURCHASE AGREEMENT

 

 

 

made and entered into as of

 

 

 

February 9, 2015

 

 

 

between

 

 

 

DFI
Holdings, LLC, KPS HOLDCO, LLC

 

 

 

And

 

 

 

AMERICAN REPUBLIC INVESTMENT CO.

 

 

    	 

    	 

    

 

TABLE OF
CONTENTS

 

Page

 

	Article 1 SALE AND PURCHASE OF SHARES	2
	Section 1.1   Sale of Shares.	2
	Section 1.2   Consideration.	2
	Article 2 CLOSING	2
	Section 2.1   Closing.	2
	Section 2.2   Closing Deliverables.	2
	Article 3 REPRESENTATIONS AND WARRANTIES OF SELLER	4
	Section 3.1   Capitalization.	4
	Section 3.2   Authority and Due Execution with respect to Transaction Agreements.	4
	Section 3.3   Due Execution of Intercompany Amount Agreement..	4
	Article 4 REPRESENTATIONS AND WARRANTIES OF BUYERS	4
	Section 4.1   Organization; Authority; Due Execution.	5
	Section 4.2   Consents; No Violation.	5
	Section 4.3   Litigation.	5
	Section 4.4   Compliance with Law.	6
	Section 4.5   Brokers and Finders.	6
	Section 4.6   Purchase for Investment.	6
	Section 4.7   Resources Needed for Company Group.	6
	Section 4.8   Diligence.	6
	Section 4.9   Purchase or Sale of AMREP Securities	7
	Section 4.10   Acknowledgements Regarding the Condition of Company Group.	7
	Section 4.11   No Knowledge of Misrepresentations or Omissions.	8
	Article 5 COVENANTS	9
	Section 5.1   Benefit Plans.	9
	Section 5.2   Benefit Plans.	9
	Section 5.3   WARN Act.	9
	Section 5.4   Support Services.	9
	Section 5.5   Tax Matters.	9
	Section 5.6   Insurance.	11
	Section 5.7   Reserved.	12
	Section 5.8   Restrictive Covenants.	12

 

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	Article 6 INDEMNIFICATION	13
	Section 6.1   Indemnification by Seller.	13
	Section 6.2   Indemnification by Buyers.	16
	Section 6.3   Indemnification Procedure for Third Party Claims.	18
	Section 6.4   Indemnification Procedures for Non-Third Party Claims.	19
	Section 6.5   Payment of Losses.	19
	Section 6.6   Characterization of Indemnification Payments.	20
	Article 7 DEFINITIONS	20
	Section 7.1   Definitions.	20
	Article 8 MISCELLANEOUS	25
	Section 8.1   Waiver.	25
	Section 8.2   Notices.	25
	Section 8.3   Governing Law; Consent to Jurisdiction and Waiver of Jury Trial.	25
	Section 8.4   Counterparts.	26
	Section 8.5   Headings.	26
	Section 8.6   Entire Agreement.	26
	Section 8.7   Amendment.	26
	Section 8.8   Binding Effect; Benefits.	26
	Section 8.9   Joint Drafting.	26
	Section 8.10   Severability.	26
	Section 8.11   Interpretation.	27
	Section 8.12   Assignability.	27
	Section 8.13   Specific Performance.	27
	Section 8.14   Expenses.	27
	Section 8.15   Disclosure.	27
	Section 8.16   Independent Counsel..	27

  

    	ii

    	 

    

 

STOCK PURCHASE AGREEMENT

 

This STOCK PURCHASE AGREEMENT (this “Agreement”),
dated as of February 9, 2015, is between American Republic Investment Co., a Delaware corporation (“Seller”),
DFI Holdings, LLC, a Pennsylvania limited liability company (“Distribution Buyer”), KPS Holdco,
LLC, a Pennsylvania limited liability company (“Products Buyer” and together with Distribution
Buyer, each a “Buyer” and collectively, “Buyers”), and, with respect only to
Section 5.8 hereof, Michael P. Duloc. Capitalized terms used in this Agreement without definition shall have the meanings ascribed
to such terms in Article 7.

 

WITNESSETH:

 

WHEREAS, Seller owns all of the issued and
outstanding shares of capital stock of Kable Media Services, Inc., a Delaware corporation (“KMS”);

 

WHEREAS, KMS owns all of the issued and outstanding
shares of capital stock of Kable Distribution Services, Inc., a Delaware corporation (“KDS”), Kable News
Company, Inc., an Illinois corporation (“KNC”), and Kable Product Services, Inc., a Delaware corporation
(“KPS”);

 

WHEREAS, KDS owns all of the issued and outstanding
shares of capital stock of Kable News International, Inc., a Delaware corporation (“KNI”), and KNC owns
all of the issued and outstanding shares of capital stock of Kable Distribution Services of Canada, Ltd., a Canadian corporation
incorporated in Ontario, Canada (“KDSC” together with KMS, KDS, KNI, KNC and KPS, the “Company
Group” and each a “Member of the Company Group”);

 

WHEREAS, KMS had made a dividend of the membership
interests of Kable Staffing Resources LLC, a Delaware limited liability company, prior to the Closing;

 

WHEREAS, in connection with the Closing, each
Member of the Company Group will be released from its obligations to PNC Bank under the Revolving Credit and Security Agreement,
dated May 13, 2010, with PNC Bank, National Association;

 

WHEREAS, Buyers and their Affiliates are sophisticated
investors and understand the risks and challenges associated with the Company Group;

 

WHEREAS, Seller wishes to cause KMS to sell
to Products Buyer, and Products Buyer wishes to purchase, all of the issued and outstanding shares of capital stock of KPS (the
“KPS Shares”) upon the terms of this Agreement; and

 

WHEREAS, Seller wishes to sell to Distribution
Buyer, and Distribution Buyer wishes to purchase, all of the issued and outstanding shares of capital stock of KMS (the “KMS
Shares”) upon the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual
covenants, agreements, representations and warranties herein contained, and upon the terms and subject to the conditions hereinafter
set forth, the Parties hereto hereby agree as follows:

 

    	1

    	 

    

 

Article
1

 

SALE AND PURCHASE OF
SHARES

 

Section
1.1Sale of Shares. Effective as of the Closing Date, Seller will first, (i) cause KMS to sell, assign, and transfer
to Products Buyer, and Products Buyer will purchase and acquire, all of the KPS Shares; and immediately thereafter, (ii) sell,
assign, and transfer to Distribution Buyer, and Distribution Buyer will purchase and acquire, all of the KMS Shares.

 

Section 1.2Consideration.(a)
The purchase price for the Shares to be paid by Buyers to Seller at Closing is Two Million Dollars ($2,000,000) (the “Purchase
Price”). The Parties have negotiated this Agreement and the allocation of risks contained herein to provide limited
representations, warranties, covenants and indemnities by Seller to Buyers. In consideration for purchasing the Shares, the Parties
have agreed on such limited representations, warranties, covenants and indemnities by Seller to Buyers, the Parties have agreed
to provide the rights and obligations of the Parties under the Transaction Agreements and for Buyers to pay Seller the Purchase
Price. The Purchase Price shall be paid as follows: $400,000 of the Purchase Price (the “Cash Purchase Price”)
is to be paid by Buyers to Seller at Closing in immediately available funds by wire transfer to an account of Seller designated
in writing by Seller to Buyers, and $1.6 million of the Purchase Price is to be paid to Seller at Closing by execution of the Buyer
Promissory Note by each of the Buyers.

 

Article
2

 

CLOSING

 

Section
2.1Closing. The closing of the transactions provided for herein (the “Closing”) will
take place on the date of this Agreement (such date, the “Closing Date”) at the offices of Duane Morris
LLP, 1540 Broadway, New York, NY or by electronic exchange of documents, as agreed to by the Parties. All proceedings to be taken
at the Closing and the Closing Deliverables required to be delivered pursuant to Section 2.2 hereof shall be deemed
to have been taken, executed and delivered simultaneously and no proceedings shall be deemed taken nor any documents executed
or delivered until all have been taken, executed and delivered. Closing shall be deemed effective as of 11:59 p.m. New York time
on the date of this Agreement.

 

Section
2.2Closing Deliverables.

 

(a)At
the Closing (unless otherwise noted below), Seller will deliver to Buyers:

 

(i)A
fully executed copy of the Intercompany Amount Agreement (the “Intercompany Amount Agreement”), dated
as of February 8, 2015, between AMREP Corporation and all of its direct and indirect subsidiaries;

 

(ii)the
Transaction Agreements to which Seller or any of its Affiliates are a signatory, executed by Seller or its Affiliates, as applicable;

 

(iii)when
made available to Seller by PNC, stock certificates, in form suitable for transfer, registered in the name of KMS, evidencing the
KPS Shares to be sold to Products Buyer, endorsed in blank or with an executed blank stock transfer power attached;

 

    	2

    	 

    

 

(iv)when
made available to Seller by PNC, stock certificates, in form suitable for transfer, registered in the name of Seller, evidencing
the KMS Shares to be sold to Distribution Buyer, endorsed in blank or with an executed blank stock transfer power attached;

 

(v)certified
copies of the resolutions duly adopted by the board of directors of Seller authorizing the execution, delivery and performance
of each Transaction Agreement to which it is a signatory and the consummation of all transactions contemplated thereby;

 

(vi)a
certificate of the secretary or other appropriate officer of Seller certifying as to the incumbency of the officer(s) of Seller
executing the Transaction Agreements to which it is a signatory, including specimen signatures;

 

(vii)the
minute books, stock certificate books and stock ledgers and similar corporate records of the Company Group, wherever located;

 

(viii)a
certificate of good standing of Seller and each Member of the Company Group certified as of a recent date by the Secretary of State
of the jurisdiction of Seller’s incorporation;

 

(ix)at
Buyers’ sole cost and expense, which amounts shall be paid in advance to Palm Coast Data, LLC, commence packaging and shipment
of the backup AS 400 server located at the facilities of Palm Coast Data, LLC in Palm Coast, Florida used exclusively for JD Edwards
software and Order Power software by certain members of the Company Group, except to the extent that the Parties shall agree to
the later delivery of any such property; and

 

(x)evidence
that the Company Group is no longer party to the Revolving Credit and Security Agreement, dated May 13, 2010, with PNC Bank, National
Association (“PNC”) and that the security interest in favor of PNC in connection therewith has been released.

 

(b)At
the Closing, Buyers will deliver to Seller:

 

(i)the
Cash Purchase Price in immediately available funds by wire transfer to an account of Seller designated in writing by Seller to
Buyers;

 

(ii)the
Transaction Agreements to which Buyers or any of their Affiliates are a signatory, executed by Buyers or their Affiliates, as applicable;

 

(iii)certified
copies of the resolutions duly adopted by the board of managers, manager, or managing member, as the case may be (and as is required
for due authorization under its limited liability company operating agreement), of each Buyer authorizing the execution, delivery
and performance of the Transaction Agreements to which each Buyer is a signatory and the consummation of all transactions contemplated
hereby and thereby;

 

(iv)a
certificate of the secretary, manager, or managing member, as the case may be, of each Buyer, attaching, verifying and attesting
to its (i) certificate of formation, (ii) limited liability company operating agreement, (iii) resolutions or written consent,
as the case may be, of the manager, board of managers, or managing member, as the case may be, authorizing its execution, delivery
and performance of this Agreement and the other Transaction Agreements to which each Buyer is a signatory, and (iv) the incumbency
of authorized individuals executing this Agreement and the other Transaction Agreements to which each Buyer is a signatory; and

 

    	3

    	 

    

 

(v)a
certificate of good standing of each Buyer certified as of a recent date by the Secretary of State of the jurisdiction of each
Buyer’s formation.

 

Article
3

 

REPRESENTATIONS AND WARRANTIES
OF SELLER

 

Seller represents and warrants to Buyers that
each statement contained in this Article 3 is true and correct as of the date hereof.

 

Section
3.1Capitalization. As of the date hereof immediately prior to the Closing, (a) the outstanding capital stock
of KMS is owned entirely by Seller, the outstanding capital stock of KDS, KNC and KPS is owned entirely by KMS, the outstanding
capital stock of KNI is owned entirely by KDS and the outstanding capital stock of KDSC is owned entirely by KNC, in each case
free and clear of all liens, pledges, mortgages, deeds of trust, security interests, charges, claims, easements, encroachments
or other similar encumbrances; (b) there are no outstanding or authorized options, warrants, convertible securities or other rights,
agreements, arrangements or commitments of any character relating to the capital stock of any of the entities included in the
Company Group or obligating Seller or any of its Affiliates to issue or sell any shares of capital stock of, or any other interest
in, the Company Group; (c) none of the entities included in the Company Group have outstanding or authorized any stock appreciation,
phantom stock, profit participation or similar rights; and (d) except for KDS, KNC, KPS, KNI and KDSC, the Seller has no actual
knowledge that KMS owns, or has any interest in any shares or have an ownership interest in, any other Person.

 

Section
3.2Authority and Due Execution with respect to Transaction Agreements. Seller has all requisite corporate power
and authority to enter into the Transaction Agreements to which it is a signatory, to perform its obligations thereunder and to
consummate the transactions contemplated thereby. The execution, delivery and performance by Seller of the Transaction Agreements
to which it is a signatory and the consummation by Seller of the transactions contemplated by the Transaction Agreements to which
it is a signatory have been duly and validly adopted and approved by the board of directors of Seller and no other corporate proceedings
on the part of Seller are necessary with respect to any such matter. The Transaction Agreements to which it is a signatory have
been duly executed and delivered by Seller and constitute the valid, binding and enforceable obligation of Seller, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to or
affecting creditors’ rights generally and the availability of injunctive relief and other equitable remedies.

 

Section 3.3Due
Execution of Intercompany Amount Agreement. The Intercompany Amount Agreement has been duly executed and delivered by Seller
and its respective Affiliates and constitutes the valid, binding and enforceable obligation of Seller and each of its Affiliates
in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar Laws relating to or affecting creditors’ rights generally and the availability of injunctive relief and
other equitable remedies.

 

Article
4

 

REPRESENTATIONS AND WARRANTIES
OF BUYERS

 

Each Buyer represents and warrants to Seller
that each statement contained in this Article 4 is true and correct as of the date hereof as to itself and the other
Buyer.

 

    	4

    	 

    

 

Section
4.1Organization; Authority; Due Execution.

 

(a)Buyer
is a limited liability company duly formed and organized, validly existing and in good standing under the laws of its jurisdiction
of formation and has all requisite limited liability company power and authority to own and operate its properties and assets and
to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign limited liability
company in each jurisdiction where the ownership or operation of its properties or conduct of its business requires such qualification,
except where the failure to be so qualified or in good standing, when taken together with all other such failures, will not prevent,
materially delay or materially impair Buyer’s ability to consummate the transactions contemplated by this Agreement.

 

(b)Buyer
has all requisite limited liability company power and authority to enter into the Transaction Agreements to which it is a signatory,
to perform its obligations thereunder and to consummate the transactions contemplated thereby. The execution, delivery and performance
by Buyer of the Transaction Agreements to which it is a signatory and the consummation by Buyer of the transactions contemplated
by the Transaction Agreements to which it is a signatory, have been duly and validly adopted and approved by the members and managers
of Buyer and no other limited liability company proceedings on the part of Buyer or its members are necessary with respect to any
such matter. The Transaction Agreements to which Buyer is a signatory have been duly executed and delivered by Buyer and constitute
the valid, binding and enforceable obligation of Buyer, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally and general principles
of equity.

 

Section
4.2Consents; No Violation.

 

(a)No
notices, reports or other filings are required to be made with, nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by Buyer from any Governmental Entity or any other Person in connection with the execution and delivery
of the Transaction Agreements to which it is a signatory and the consummation by Buyer of the transactions contemplated thereby
except those that the failure to make or obtain will not, individually or in the aggregate, prevent, materially delay or materially
impair Buyer’s ability to consummate the transactions contemplated by any Transaction Agreement.

 

(b)The
execution, delivery and performance of the Transaction Agreements to which it is a signatory do not, and the consummation of the
transactions contemplated thereby will not, constitute or result in: (i) (with or without notice, lapse of time or both) a breach
or violation of, or a default under, Buyer’s certificate of formation or operating agreement or other governing documents,
or (ii) (with or without notice, lapse of time or both) a breach or violation or a conflict with, or a default under, or the termination
of, or the acceleration under, any contract, debt, obligation, governmental or non-governmental permit or license to which Buyer
is a party or to or by which it is subject or bound; except, in the case of clause (ii) of this Section 4.2(b), for
any violation, default or acceleration, that, individually or in the aggregate, will not prevent, materially delay or materially
impair Buyer’s ability to consummate the transactions contemplated by the Transaction Agreements to which it is a signatory.

 

Section
4.3Litigation. There is no civil, criminal or administrative suit, action, proceeding, investigation, review
or inquiry pending or, to Buyer’s knowledge, threatened against or affecting Buyer, its Affiliates or any of its or their
respective properties or rights, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against or affecting Buyer, its Affiliates or any of its or their respective properties or rights, except such that
will not, individually or in the aggregate, prevent, materially delay or materially impair Buyer’s ability to consummate
the transactions contemplated by this Agreement.

 

    	5

    	 

    

 

Section
4.4Compliance with Law. Buyer is not in violation of any Law, except for violations or possible violations that,
individually or in the aggregate, are not expected to prevent, materially delay or materially impair Buyer’s ability to
consummate the transactions contemplated by this Agreement.

 

Section
4.5Brokers and Finders. Buyer has not employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders’ fees in connection with the transactions contemplated by this Agreement.

 

Section
4.6Purchase for Investment. The KPS Shares purchased by Products Buyer and the KMS Shares purchased by Distribution
Buyer pursuant to this Agreement are being acquired for investment only and not with a view to any public distribution thereof,
and the respective Buyer shall not offer to sell or otherwise dispose of, or sell or otherwise dispose of, the KPS Shares or the
KMS Shares, as the case may be, so acquired by it in violation of any of the registration requirements of the Securities Act of
1933.

 

Section
4.7Resources Needed for Company Group. Buyer understands and acknowledges that additional financial resources
will be immediately needed by the Company Group in order for the Company Group to meet its financial obligations. Buyer has the
financial wherewithal, including cash available or existing borrowing facilities inclusive of the Line of Credit Note, which it
believes to be sufficient to enable Buyer to address the liquidity needs of the Company Group and to satisfy the liabilities of
the Company Group as they become due, assuming, however, that the business does not further decline; provided, however, nothing
in the foregoing shall be deemed a requirement or commitment by Buyer that it make any capital available to the Company Group,
and the provision of any such capital shall be in Buyer’s sole discretion.

 

Section
4.8Diligence.

 

(a)By reason of its or its management’s
business or financial experience, Buyer has the capacity to protect its own interests in connection with the transactions contemplated
in this Agreement. Buyer acknowledges that its purchase of the KPS Shares and the KMS Shares, as the case may be, is highly speculative
and entails a substantial degree of risk. Buyer acknowledges that Buyer has received any information requested by Buyer for Buyer
to make a decision to purchase the Shares. Buyer has had an opportunity to discuss the business, management and financial affairs
of the Company Group with Seller, the Company Group and their respective representatives and has had the opportunity to review
the operations, assets and liabilities, and facilities of the Company Group. Buyer has also had the opportunity to ask questions
of and receive answers from Seller and the Company Group and its management regarding the operations, business, prospects and condition
(financial or otherwise) of the Company Group.

 

(b)Buyer has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and risks of the transactions contemplated by this
Agreement, and is consummating this Agreement and the actions contemplated hereby with a full understanding of all of the terms,
conditions and risks and willingly accepts, adopts and assumes those terms, conditions and risks subject to the terms of this Agreement
and the other Transaction Agreements.

 

(c)Buyer has made its own decision to
consummate the transaction based on its own independent review and consultations with such investment, legal, tax, accounting and
other advisers as it deemed necessary and upon the terms of this Agreement and the other Transaction Agreements. Buyer has made
its own decision concerning the transaction without reliance on any representation or warranty of, or advice from, Seller except
as set forth in this Agreement and in the other Transaction Agreements.

 

    	6

    	 

    

 

(d)Buyer acknowledges and understands
that Seller, its Affiliates and officers, directors, employees, agents or advisors of Seller or its Affiliates possess material
non-public information not known to Buyer that may impact the value of the Shares (the “Information”)
that Seller may not have disclosed to Buyer. Buyer understands, based on its experience, the disadvantage to which Buyer is subject
due to the disparity of information between Buyer and Seller. Notwithstanding this, Buyer has deemed it appropriate to engage in
the transaction contemplated by this Agreement.

 

(e)Buyer agrees that none of Seller,
its Affiliates, any officers, directors, employees, agents or advisors of Seller or its Affiliates or any other person shall have
any liability to Buyer, its Affiliates (including Michael P. Duloc and following the Closing Date, the Company Group) or any third
party whatsoever due to or in connection with the use or non-disclosure of the Information, and Buyer hereby irrevocably waives
any claim that it might have based on the failure of Seller, its Affiliates or officers, directors, employees, agents or advisors
of Seller or its Affiliates to disclose the Information.

 

(f)Buyer acknowledges and agrees that
Seller is relying on Buyer’s representations, warranties and agreements herein as a condition to proceeding with the transactions
contemplated by this Agreement. Without such representations, warranties and agreements, Seller would not engage in the transactions
contemplated by this Agreement.

 

Section
4.9Purchase or Sale of AMREP Securities. None of Buyer or Michael P. Duloc or his wife or any entities or trusts
controlled by any of the foregoing have purchased or sold any securities of AMREP Corporation since September 1, 2014.

 

Section
4.10Acknowledgements Regarding the Condition of Company Group. Buyer understands and acknowledges the following:

 

(a)Buyer
has reviewed the information, documents and materials furnished or made available to Buyer by Seller or its representatives in
certain “data rooms”, management discussions or presentations or any other form in contemplation of the transactions
contemplated by this Agreement;

 

(b)Buyer
has reviewed the filings made by AMREP Corporation with the Securities and Exchange Commission for the past three years (including
any risk factors contained therein), which contain information regarding the Company Group;

 

(c)the
Company Group distributes physical publications in the United States of America, Canada and in other countries and the industry
in which the Company Group operates is highly competitive and financially challenged, with severe and consistent declines in the
volume of print media being distributed resulting in significant decreases in revenue year over year;

 

(d)the
Company Group has substantial liabilities in excess of its assets, including a substantial amount of negative working capital (negative
working capital represents the net payment obligation of the Company Group due to publisher clients and other third parties, which
amount will vary from period to period based on the level of magazine distribution);

 

(e)cash
flow of the Company Group may vary dramatically, and may be negative, during any particular period of time, thereby requiring the
availability of financing sources other than cash flow from operations to meet its payment obligations;

 

    	7

    	 

    

 

(f)the
Company Group regularly has cash expenditures in excess of cash collections;

 

(g)revenues
of the Company Group are derived from sales made on a fully returnable basis and an error in estimating expected returns could
cause a misstatement of revenues for the period affected;

 

(h)the
Company Group is party to litigation, which could have a material adverse effect on the Company Group;

 

(i)the
financial statements of the Company Group had intercompany amounts allocated from, billed to or charged to Seller and its Affiliates
(some of which are legal liabilities or assets and some of which are allocated amounts not representing legal liabilities or assets)
and such amounts have been transferred, offset and contributed in accordance with the Intercompany Amount Agreement prior to the
Closing;

 

(j)the
Company Group could experience increased costs and business disruption if any wholesaler on which the Company Group relies to distribute
publications were to cease operations or fail to pay amounts owed to the Company Group, which has happened frequently over the
past few years;

 

(k)the
Company Group relies on a small number of large publishing clients, including an Affiliate of Seller, and in the event of a loss
of one or more of these large publishing clients, or if revenues from any of these largest clients decline, the Company Group could
be materially adversely affected;

 

(l)publisher
clients of the Company Group face business pressures from reduced advertising revenues and increased costs for paper, printing
and postal rates, which could have a negative effect on their operating income, and this in turn could negatively affect the operations
of the Company Group;

 

(m)the
Company Group and Seller and its Affiliates have certain shared services and assets, including insurance, information technology,
employee benefit plans, leased real estate, line of credit and letters of credit, all of which will cease to be available to the
Company Group as of the date of this Agreement and all of which the Company Group and Buyer will need to address following Closing,
other than as may be provided in the Lease, this Agreement or any of the other Transaction Agreements including without limitation
the Transition Services Agreement or the Line of Credit Note;

 

(n)certain
agreements to which the Company Group is a party may contain provisions requiring the consent of the counterparty in connection
with the sale of the KPS Shares or the KMS Shares, as the case may be, to Buyer, and the absence of such consent may be a default
under such agreements allowing the counterparty to terminate their agreement with the Company Group; and

 

(o)the
employees of the Company Group, including its management team, are integral to the operation of the business of the Company Group,
and such employees are not subject to any non-solicitation or non-competition agreements in favor of the Company Group.

 

Section
4.11No Knowledge of Misrepresentations or Omissions. Buyer does not have any knowledge that any of the representations
and warranties of Seller made in this Agreement are not true and correct.

 

    	8

    	 

    

 

Article
5

 

CERTAIN COVENANTS

 

Section
5.1Benefit Plans. As of the Closing Date, (a) the Company Group shall cease to be participating employers under
the Benefit Plans and the Retirement Plan and (b) the Affected Employees shall cease to be active participants under the Benefit
Plans and the Retirement Plan. Following the Closing Date, the Company Group shall be solely responsible for all obligations and
liabilities under the benefit plans provided to Affected Employees for the period after the Closing Date (and none of Seller or
its Affiliates shall have any obligations or liabilities with respect thereto).

 

Section
5.2Benefit Plans. Buyers shall assume, honor and become solely responsible for payment of all liabilities (including
all premiums and administrative costs) and performance of all other obligations of Seller and its Affiliates (including the Company
Group) under the Benefit Plans in respect of all medical, dental, life insurance and other welfare benefit claims (including short-term
and long-term disability benefits) incurred on or prior to the date of this Agreement by or for Affected Employees and former
employees of the Company Group and their eligible dependents. In addition, Buyers shall be, or shall cause the Company Group to
be, solely responsible for all medical, dental, life insurance and other welfare benefit claims incurred on or after the date
of this Agreement by Affected Employees and their eligible dependents (including short-term and long-term disability benefits
in respect of individuals who became disabled on or prior to the date of this Agreement). Effective as of the Closing Date, Buyers
shall assume all liabilities and obligations of Seller and its Affiliates to Affected Employees and former employees of the Company
Group, and their eligible dependents, in respect of health insurance under the Consolidated Omnibus Budget Reconciliation Act
of 1985, the Health Insurance Portability and Accountability Act of 1996 and applicable state law (“COBRA”).

 

Section
5.3WARN Act. Buyers shall be liable for any liabilities under the Worker Adjustment and Retraining Notification
Act of 1988 (WARN Act) or any other Law respecting reductions in force or the impact on employees of plant closings or sales of
businesses for any actions taken by the Company Group, or Buyers or any of their Affiliates, in each case, prior to, on or after
the Closing Date. Seller shall take no action that would be attributable to any Member of the Company Group for purposes of determining
whether a “plant closing” or a “mass layoff” has occurred.

 

Section
5.4Support Services. Buyers agree that as of the Closing Date, neither Seller nor any of its Affiliates shall
have any obligation to provide any support (except as may expressly be set forth in the Line of Credit Note) or other services
to the Company Group (including any of the services for which allocations were previously paid by the Company Group) other than
those services expressly required to be provided pursuant to the Transition Services Agreement.

 

Section
5.5Tax Matters. 

 

(a)Preparation
and Filing of Tax Returns. 

 

(i) Seller
shall prepare or cause to be prepared and file or cause to be filed all Tax Returns of the Company Group and any Member of the
Company Group for all Tax periods which begin before the Closing Date and end on or prior
to the Closing Date. For all Tax periods, if the applicable Tax Return (consolidated, unitary
or otherwise) does not include Buyers or any Member of the Company Group, Seller shall prepare or cause to be prepared and file
or cause to be filed all Tax Returns of Kable Staffing Resources LLC; provided that, Buyers or any Member of the Company Group
shall execute such Tax Returns to the extent required by applicable Law. 

 

    	9

    	 

    

 

(ii) Buyers shall prepare or cause to be prepared
and file or cause to be filed all Tax Returns of the Company Group, any Member of the Company Group and Kable Staffing Resources
LLC (to the extent not a responsibility of Seller pursuant to Section 5.5(a)(i)) for all Tax periods which (1) begin before the
Closing Date and end after the Closing Date, or (2) begin after the Closing Date. All such Tax Returns referenced in Section 5.5(a)(ii)(1)
shall be prepared in a manner consistent with all prior Tax Returns of the Company Group or any Member of the Company Group. If
Kable Staffing Resources LLC (or any attributes, decisions or determinations regarding Kable Staffing Resources LLC) is included
in any Tax Return pursuant to this Section 5.5(a)(ii), Buyers and the Company Group shall obtain Seller’s written consent
prior to filing such Tax Return.

 

(b)Seller
will be responsible for (i) all U.S. federal income Taxes of each Member of the Company Group with respect to all Tax periods ending
on or prior to the Closing Date, regardless of when due and payable; and (ii) all Taxes due and payable by KMS for all Tax periods
in connection with its ownership of Kable Staffing Resources LLC (including Taxes in connection with the dividending of the membership
interests of Kable Staffing Resources LLC), regardless of when due and payable, solely to the extent that (A) all attributes,
decisions and determinations regarding Kable Staffing Resources LLC have solely been made by Seller regarding such Taxes
and the Tax Returns with respect to such Taxes and (B) if the Tax Returns with respect to such Taxes is the responsibility of Buyers
pursuant to Section 5.5(a)(ii), Seller has provided its prior written consent to the filing
of such Tax Return.

 

(c)Buyers
will be responsible for (i) all U.S. federal income Taxes of each Member of the Company Group, regardless of when due and payable,
with respect to all Tax periods beginning after the Closing Date and (ii) except as provided for in Section 5.5(b)(ii), for all
state income Taxes or any other Taxes of each Member of the Company Group (which shall be allocated among the entities included
in a consolidated or unitary Tax Return pro rata based on income contributed by each entity included in such consolidated or unitary
Tax Return), regardless of when due and payable, with respect to all Tax periods (A) beginning before the Closing Date and ending
before the Closing Date, (B) beginning before the Closing Date and ending after the Closing Date and (C) beginning after the Closing
Date.

 

(d)The
following refunds of Taxes will be for the account of Buyers: refunds of Taxes solely with respect to any Member of the Company
Group and that are the responsibility of the Buyers pursuant to Section 5.5(c). Seller shall pay over to Buyers any such refunds
that Seller may receive immediately upon receipt of such request.

 

(e)All
refunds of Taxes not contemplated by Section 5.5(d) will be for the account of Seller. Buyers shall pay over to Seller any such
refunds that Buyers or any Member of the Company Group may receive immediately upon receipt of such request.

 

(f)Each
Party will promptly notify the other in writing upon receipt by such Party (or in the case of Buyers, of any Member of the Company
Group) of notice of any pending or threatened Tax liabilities of any Member of the Company Group for any (i) Tax period ending
on or before the Closing Date or (ii) Tax period ending after the Closing Date but which includes the Closing Date. Seller will
have the sole right, at its option, (A) to represent the interests of any Member of the Company Group in any proceeding related
to Taxes for (1) Tax periods ending on or before the Closing Date or (2) Tax periods ending after the Closing Date but which includes
the Closing Date and (B) to employ counsel of its choice. Buyers and Seller agree to reasonably cooperate in the defense of any
claim in such proceedings contemplated by the prior sentence. Seller will have the right to participate at its expense in representing
the interests of any Member of the Company Group in any proceeding relating to Taxes for any Tax period ending after the Closing
Date, if and to the extent that such period includes any Tax period before the Closing Date, and to employ counsel of its choice
and at its expense.

 

    	10

    	 

    

 

(g)Cooperation
in Filing Tax Returns; Copies of all Tax Returns. Buyers and Seller shall, and shall each cause its Subsidiaries and Affiliates
to, provide to the other such cooperation and information, as and to the extent reasonably requested, in connection with the filing
of any Tax Return, amended Tax Return or claim for refund, determining liability for Taxes or a right to refund of Taxes in accordance
with the provisions of this Agreement, or in conducting any audit, litigation or other proceeding with respect to Taxes. Following
the Closing, if requested by a Party prior to April 30, 2016, the other Party shall provide a copy of any Tax Return and any supporting
documentation, work papers and related documentation of any Member of the Company Group for any period after April 30, 2008.

 

(h)Payment
of Transfer Taxes and Fees. Buyers shall pay all Transfer Taxes arising out of or in connection with the transactions effected
pursuant to this Agreement, and shall indemnify and defend each Seller Indemnified Person, and hold each Seller Indemnified Person
harmless, with respect to such Transfer Taxes. Buyers shall file all necessary documentation and Tax Returns with respect to such
Transfer Taxes.

 

(i)Carrybacks.
Seller shall not be required to file amended returns for any Pre-Closing Period to permit a carryback of any tax items relating
to any Member of the Company Group. “Pre-Closing Period” means any taxable period or portion thereof
that is not a Post-Closing Period. “Post-Closing Period” means any taxable period or portion thereof
beginning after the Closing Date. If a taxable period begins on or before the Closing Date and ends after the Closing Date, then
the portion of the taxable period that begins on the day following the Closing Date shall constitute a Post-Closing Period.

 

(j)Allocation.
Seller shall prepare an allocation of the Purchase Price (including any other amounts treated as sales consideration for federal
income tax purposes) among the KMS Shares and the KPS Shares in accordance with Seller’s reasonable determination of the
relative fair market values of the KMS Shares and the KPS Shares, which allocation (the “Allocation”)
shall be binding upon Seller and Buyers. Seller shall deliver the Allocation to Buyers within one year after the Closing. Seller
and Buyers shall report, act and file Tax Returns in all respects and for all purposes consistent with the Allocation. Buyers shall
timely and properly prepare, execute, file and deliver all such documents, forms and other information as Seller may reasonably
request to prepare the Allocation. Neither Seller nor any Buyer will voluntarily take any position inconsistent with the Allocation
upon examination of their respective federal tax return, in any claim, in any litigation or otherwise with respect to such tax
return.

 

Section
5.6Insurance.

 

(a)Effective
11:59 p.m. on the Closing Date, the Company Group shall cease to be insured by Seller’s or any of its Affiliates’ insurance
policies. With respect to events or circumstances covered by insurance coverage written on an “occurrence basis”, Seller
and its Affiliates will have no liability for occurrences or Losses that take place on or after 11:59 p.m. on the Closing Date;
provided that with respect to insurance coverage written on an “occurrence basis” and for which any of the Company
Group was an insured under such policies, then (i) for the first 90 days following the day after the Closing Date, the Company
Group shall continue to have rights under such insurance policies to the extent the events giving rise to a claim under such policies
occurred prior to 11:59 p.m. on the Closing Date, and (ii) Seller agrees to cooperate with the Company Group for the first 90 days
following the Closing Date in making claims under Seller’s or its Affiliates’ insurance policies in connection with
insurable events that occurred prior to 11:59 p.m. on the Closing Date and shall promptly (or to the soonest of its commercially
reasonable efforts or ability) remit any recoveries that Seller receives with respect thereto to the applicable Company Group Member.
Buyers acknowledge and agree that Seller and its Affiliates shall have no liability with respect to any failure by any carrier
under such insurance policies to make payment with respect to any such claim. Furthermore, Buyers acknowledge and agree that neither
Seller nor any of its Affiliates shall have any liability to Buyers or any of the Company Group with respect to deductibles and
the failure of any claim to be covered as a result of such deductibles under any insurance coverage with respect to any of the
Company Group. With respect to events or circumstances covered by insurance coverage written on a “claims made basis”,
Seller and its Affiliates will have no liability for claims made on or after 11:59 p.m. on the Closing Date.

 

    	11

    	 

    

 

(b)Notwithstanding
the provisions of Section 5.6(a), from and after the date of this Agreement, neither Seller nor any of its Affiliates
shall have any liability for workers’ compensation claims (whether insured or self-insured) with respect to employees of
any of the Company Group in existence on the date of this Agreement or arising from any event or circumstance taking place or existing
prior to, on or subsequent to the date of this Agreement, all of which shall be assumed by Buyers on the date of this Agreement.
Buyers shall take all steps necessary under any applicable Law to assume the liability for workers’ compensation claims pursuant
to this Section 5.6 and shall fully indemnify Seller and its Affiliates with respect to any Losses arising out of
or relating to any workers’ compensation claim obligations assumed by Buyers hereunder. Buyers shall cooperate with Seller
and its Affiliates in order to obtain the return or release of bonds or securities or indemnifications given by Seller or any of
its Affiliates to any state in connection with workers’ compensation claims with respect to the date of this Agreement; and,
in order to effectuate such return or release, Buyers shall, to the extent required by any state, post their own bonds, letters
of credit, indemnifications or other securities in substitution therefor.

 

Section 5.7Reserved.

 

Section 5.8Restrictive
Covenants.

 

(a)Neither
Buyers nor Michael P. Duloc shall, and Buyers and Michael P. Duloc shall cause (A) Michael P. Duloc, each Buyer and each member
of the Company Group, (B) the most senior executive at each Buyer and (C) the most senior executive at each Member of the Company
Group not to, directly or indirectly, whether as principal, agent, officer, director, partner, employee, independent contractor,
consultant, stockholder, licensor or otherwise, alone or in association with any other Person:

 

(i)For
a period from the Closing Date until two years after the Closing Date, (A) circumvent, interfere with, or assist any other party
in circumventing, or interfering with the Subscription Fulfillment Business of Seller or any of its Affiliates; (B) own, manage,
operate, finance, conduct business, engage, directly or indirectly, alone or as greater than a 2% shareholder, partner, officer,
director, employee, consultant or advisor, or otherwise in any way participate in or become associated with, any other business
that directly competes with the Subscription Fulfillment Business; (C) divert business from or otherwise interfere with the relationship
of Seller or any of its Affiliates in the Subscription Fulfillment Business with any person; and (D) employ or solicit for employment
any employee of Seller or any of its Affiliates, induce any employee of Seller or any of its Affiliates to terminate such employee’s
employment with Seller or any of its Affiliates or offer employment to anyone Seller or any of its Affiliates hires (other than
through or as a result of the placement or sponsorship of a general advertisement for employment not specifically targeted at any
employees of Seller or any of its Affiliates); and

 

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(ii)at
any time (1) knowingly disparage, or knowingly do or say anything that would harm the business or reputation of, Seller or any
of its Affiliates, any customers, stockholders, members, employees, directors, officers or agents of Seller or any of its Affiliates
currently, in the past, or in the future or any other people or organizations associated with Seller or any of its Affiliates currently,
in the past, or in the future and (2) hold itself or themselves out to any customers or any other third parties as a representative
or employee of Seller or any of its Affiliates.

 

(b)Breach
by Michael P. Duloc. Seller’s and any Seller Indemnified Party’s sole remedy permitted to be obtained from Michael
P. Duloc in connection with any breach or threatened breach by Michael P. Duloc of any his covenants and agreements under Section
5.8(a) shall be specific performance pursuant to Section 8.13 of this Agreement, and Michael P. Duloc shall
not be liable to Seller or any Seller Indemnified Person for monetary damages (other than, where Seller or any other Seller Indemnified
Party shall be the prevailing party in an action to obtain the remedy of specific performance, the reasonable fees and expenses
of counsel incident to obtaining such remedy of specific performance, Losses incurred in investigating such breach or threatened
breach by Michael P. Duloc of any his covenants and agreements under Section 5.8(a), or other Losses directly incurred
in enforcing this Section 5.8(b)) for any breach or threatened breach of Section 5.8(a).

 

Article
6

 

INDEMNIFICATION

 

Section
6.1Indemnification by Seller. 

 

(a)Subject
to the limits set forth in this Article 6, Seller agrees to indemnify and defend Buyers, and hold Buyers harmless,
from Indemnified Representation Liability. Subject to the limits set forth in this Article 6, Seller agrees to indemnify
and defend each Buyer Indemnified Person, and hold each Buyer Indemnified Person harmless, from Losses that may be incurred or
suffered arising out of or by reason of or in connection with a breach of any representation or warranty of Seller contained in
Section 3.3.

 

(b)Subject
to the limits set forth in this Article 6, Seller agrees to indemnify and defend each Buyer Indemnified Person, and
hold each Buyer Indemnified Person harmless, from Indemnified Pension Liability, Indemnified Tax Liability and Indemnified Seller
Group Liability.

 

(c)Subject
to the limits set forth in this Article 6, Seller agrees to indemnify and defend each Buyer Indemnified Person, and
hold each Buyer Indemnified Person harmless, from Losses to the extent caused by the failure of Seller to perform any of the covenants
or agreements of Seller set forth in this Agreement or any other Transaction Agreement.

 

(d)Subject
to the limits set forth in this Article 6, Seller agrees to indemnify and defend the members, managers, officers
and employees of Buyers who are individuals, and hold harmless the members, managers, officers and employees of Buyers who are
individuals, from Indemnified Environmental Liability; provided that (i) a Notice of Claim with respect thereto was delivered to
Seller on or prior to one (1) year after the date of this Agreement and (ii) Buyer Indemnified Persons shall not be entitled to
recover any Losses under this Section 6.1(d) in an aggregate amount in excess of One Hundred Thousand Dollars ($100,000).

 

(e)Buyer
Indemnified Persons shall not be entitled to recover pursuant to Section 6.1 for any Losses except to the extent
that the aggregate amount of any such Losses indemnifiable hereunder exceeds the Basket, at which point, Seller will be obligated
to indemnify Buyer Indemnified Persons for all such Losses in excess of the Basket, subject to the other clauses of this Section
6.1;  provided, however, that this Section 6.1(e) shall not apply to any breach of Section 6.1(c).

 

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(f)Notwithstanding
anything to the contrary in this Agreement or any other Transaction Agreement:

 

(i)(I)
IN NO EVENT SHALL SELLER, ITS AFFILIATES (WHICH, FOLLOWING THE CLOSING DATE, SHALL NOT INCLUDE THE COMPANY GROUP), ANY OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR ADVISORS OF SELLER OR ITS AFFILIATES OR ANY OTHER PERSON BE LIABLE UNDER THIS AGREEMENT OR ANY
OF THE OTHER TRANSACTION AGREEMENTS OR OTHERWISE TO BUYERS, THEIR AFFILIATES (INCLUDING MICHAEL P. DULOC AND, FOLLOWING THE CLOSING
DATE, THE COMPANY GROUP), ANY OTHER BUYER INDEMNIFIED PERSON OR ANY THIRD PARTY FOR (A) ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT,
STATUTORY, EXEMPLARY, SPECIAL OR PUNITIVE DAMAGES, INCLUDING ANY DAMAGES FOR BUSINESS INTERRUPTION, DIMINUTION IN VALUE OR LOSS
OF USE, DATA, REVENUE OR PROFIT, WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, OR (B) ANY
INDEMNIFICATION CLAIM THAT ARISES (DIRECTLY OR INDIRECTLY) FROM ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, STATUTORY, EXEMPLARY,
SPECIAL OR PUNITIVE DAMAGES, INCLUDING ANY DAMAGES FOR BUSINESS INTERRUPTION, DIMINUTION IN VALUE OR LOSS OF USE, DATA, REVENUE
OR PROFIT, WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, IN EACH CASE OF CLAUSE (A) AND
CLAUSE (B) REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE AND WHETHER OR NOT SELLER, ITS AFFILIATES, ANY OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR ADVISORS OF SELLER OR ITS AFFILIATES OR ANY OTHER PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE OR (II) THE LIABILITY OF SELLER, ITS AFFILIATES
(WHICH, FOLLOWING THE CLOSING DATE, SHALL NOT INCLUDE THE COMPANY GROUP), ANY OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR ADVISORS
OF SELLER OR ITS AFFILIATES OR ANY OTHER PERSON ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION AGREEMENTS
OR OTHERWISE TO BUYERS, THEIR AFFILIATES (INCLUDING MICHAEL P. DULOC AND, FOLLOWING THE CLOSING DATE, THE COMPANY GROUP), ANY OTHER
BUYER INDEMNIFIED PERSON OR ANY THIRD PARTY, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE)
OR OTHERWISE SHALL BE LIMITED TO DIRECT PROVABLE DAMAGES ONLY.

 

(ii)BUYERS
ACKNOWLEDGE THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE OTHER TRANSACTION AGREEMENTS, NO BUYER INDEMNIFIED
PERSON MAKES ANY COVENANTS, AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING (I) WITH RESPECT
TO ANY MEMBER OF THE COMPANY GROUP, THEIR RESPECTIVE OPERATIONS, ASSETS AND LIABILITIES, THE TRANSACTIONS CONTEMPLATED HEREBY OR
THE SHARES OR (II) AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING ANY MEMBER OF THE COMPANY GROUP FURNISHED OR
MADE AVAILABLE TO BUYERS AND THEIR REPRESENTATIVES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYERS ACKNOWLEDGE THAT THERE
ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. None of Seller, its Affiliates, the
Company Group, any officers, directors, employees, agents or advisors of Seller, its Affiliates or the Company Group or any other
Person shall have or be subject to any liability to Buyers or any other Person with respect to the accuracy or completeness of
any information, documents or materials furnished or made available to Buyers or any other Person by Seller, its Affiliates, the
Company Group or any officers, directors, employees, agents or advisors of Seller, its Affiliates or the Company Group in certain
“data rooms”, management discussions or presentations, filings of AMREP Corporation with the Securities and Exchange
Commission, communications with Buyers or their counsel or other advisors or any other form in contemplation of the transactions
contemplated by this Agreement.

 

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(iii)The
amount which Seller is required to pay to, for or on behalf of any Buyer Indemnified Person pursuant to this Section 6.1
shall be adjusted (including, retroactively) by any insurance proceeds and any indemnity, contribution or other similar payment
actually recovered by or on behalf of such Buyer Indemnified Person in reduction of the related indemnifiable Loss. Each Buyer
Indemnified Person agrees to use its commercially reasonable efforts to pursue and collect on any recovery with respect to any
indemnifiable Loss available under any insurance policies. If a Buyer Indemnified Person shall have received from Seller or Seller
shall have had paid on its behalf a payment in respect of a Loss indemnified under this Section 6.1 and such Buyer
Indemnified Person shall subsequently receive insurance proceeds or other payment in respect of such Loss, then such Buyer Indemnified
Person shall pay to Seller the amount of such insurance proceeds or other payment or, if lesser, the amount of the original payment
made by Seller to or on behalf of Buyer Indemnified Person in respect of such Loss. To the extent that any Buyer Indemnified Person
is entitled to indemnification pursuant to this Section 6.1, Seller shall be entitled to exercise, and shall be subrogated
to, any rights and remedies (including rights of indemnity, rights of contribution and other rights of recovery) that any Buyer
Indemnified Person may have to insurance policies or similar contracts with respect to which such Buyer Indemnified Person is a
beneficiary. Each Buyer Indemnified Person shall take such actions as Seller may reasonably request for the purpose of enabling
Seller to perfect or exercise the right of subrogation of Buyer Indemnified Person under this Section 6.1(f)(iii).

 

(iv)The
amount of any indemnity provided in Section 6.1 shall be reduced (but not below zero) by the amount of any actual
net reduction in cash payments for Taxes realized by any Buyer Indemnified Person as a result of the Losses giving rise to such
indemnity claim. If the indemnity amount is paid prior to any Buyer Indemnified Person realizing any actual reduction in cash payments
for Taxes in connection with the Losses giving rise to such payment, and such Buyer Indemnified Person subsequently realizes such
actual reduction in cash payments for Taxes, then such Buyer Indemnified Person shall pay the amount of such actual reduction in
cash payments for Taxes (but not in excess of the indemnification payment or payments paid by Seller with respect to such Losses)
to Seller.

 

(v)Each
Buyer acknowledges and agrees that its sole and exclusive rights and remedies with respect to any and all matters arising out of,
relating to or connected with this Agreement, any other Transaction Agreement, any of the Company Group or their respective assets
and liabilities, any of the Seller or any of its Affiliates or their respective assets and liabilities, the Shares or the transactions
contemplated by any Transaction Agreement shall be pursuant to the indemnification provisions set forth in this Article 6,
except as provided for in Section 8.13. In furtherance of the foregoing, each Buyer (on behalf of itself and its
Affiliates (including Michael P. Duloc and, following the Closing Date, the Company Group)) hereby waives, from and after the Closing
Date, any and all rights, remedies, claims and causes of action with respect to the foregoing except pursuant to the indemnification
provisions set forth in this Article 6 and except as provided for in Section 8.13.

 

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(vi)No
fact, event, misrepresentation or occurrence that, in the absence of this Section 6.1(f)(iv), would constitute a
liability to be indemnified pursuant to Section 6.1(a) or Section 6.1(d) shall be deemed to constitute a liability
to be indemnified pursuant to Section 6.1(a) or Section 6.1(d) for which any Buyer Indemnified Person would be entitled
to be indemnified pursuant to Section 6.1(a) or Section 6.1(d) if any Buyer Indemnified Person has actual knowledge
of such fact, event, misrepresentation or occurrence on or prior to the Closing Date.

 

(vii)Each
Buyer agrees that, for so long as such Buyer has any right of indemnification under Section 6.1, it will not, and
agrees to use its commercially reasonable efforts to ensure that its Affiliates (including Michael P. Duloc and, following the
Closing Date, the Company Group)) do not, voluntarily or by discretionary action (including conducting any invasive sampling or
testing), accelerate the timing, or increase the cost, of any obligation of Seller under Section 6.1 (any such voluntary
or discretionary action, a “Prohibited Action”); provided, however that the “Prohibited Action”
shall not be deemed to include any action which in the written opinion of Buyer’s legal counsel is required to be taken in
order to be in compliance with applicable Law. Notwithstanding anything to the contrary in this Agreement, Seller shall not be
obligated to indemnify any Buyer Indemnified Person for any Loss arising out of or by reason of or in connection with or due to
any Prohibited Action.

 

(viii)No
Losses of any Buyer Indemnified Person shall be determined or increased based on any multiple of any financial measure (including
earnings, sales or other benchmarks) that might have been used by Buyers in the valuation of the Company Group or their respective
business and operations.

 

Section 6.2Indemnification
by Buyers.

 

(a)Subject
to the limits set forth in this Section 6.2, each Buyer agrees to indemnify and defend each Seller Indemnified Person, and hold
each Seller Indemnified Person harmless, from and in respect of any and all Losses that they may incur or suffer arising out of
or by reason of or in connection with or due to (i) any breach of any representation or warranty of any Buyer Indemnified Person
set forth in this Agreement or any other Transaction Agreement, (ii) the extent caused by the failure to perform any of the covenants
or agreements of any Buyer Indemnified Person set forth in this Agreement or any other Transaction Agreement, and (iii) any Buyer
Indemnified Person or any of the business or operations of any Buyer Indemnified Person (except as specifically enumerated in Section
6.1 as an item for which Seller will indemnify Buyer Indemnified Persons).

 

(b)Subject
to the limits set forth in this Section 6.2, and provided that the Seller Indemnified Party seeking indemnification under this
Section 6.2(b) has not voluntarily or by discretionary action, accelerated the timing, or increased the cost, of such Incremental
Losses under this Section 6.2(b), each Buyer agrees to indemnify and defend each Seller Indemnified Person, and hold each Seller
Indemnified Person harmless, from and in respect of any and all Incremental Losses that they may incur or suffer arising out of
or by reason of or in connection with or due to the Structure Change resulting in, causing or giving rise to:

 

(i)any
Seller Indemnified Party being requested or required to surrender or return any amount of the Purchase Price to any Person for
any reason relating to the Structure Change, including as a result of any claim by any creditor, bankruptcy estate or trustee or
Governmental Entity; provided that, a Notice of Claim with respect thereto was delivered to Buyers on or prior to the three (3)
year anniversary of the date of this Agreement with respect to claims for fraudulent conveyance or an improper or unlawful dividend
and fifteen (15) months after the date of this Agreement with respect to all other claims;

 

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(ii)any
Incremental Losses with respect to or involving any Affected Employee or former employees of any Member of the Company Group; provided
that, a Notice of Claim with respect thereto was delivered to Buyers on or prior to the one (1) year anniversary of the date of
this Agreement;

 

(iii)any
audit, litigation or other legal proceeding;

 

(iv)any
increase in Taxes to any Seller Indemnified Party;

 

(v)any
Incremental Losses with respect to or involving any violation of Law, or relating to the Structure Change being prohibited by or
invalid under any Law;

 

(vi)any
Incremental Losses of which any Buyer Indemnified Person has knowledge on or prior to the Closing; or

 

(vii)(with
or without notice, lapse of time or both) a breach or violation or a conflict with, or a default under, or the termination of,
or the acceleration under, any contract, debt, obligation with or to any customer or vendor of any Member of the Company Group;
provided that, a Notice of Claim with respect thereto was delivered to Buyers on or prior to the one (1) year anniversary of the
date of this Agreement.

 

Except where a period of time is specified for the delivery
of a Notice of Claim, Buyers shall have no liability under this Section 6.2(b) for any Incremental Losses as to which a Notice
of Claim was not delivered to Buyers prior to the two (2) year anniversary of the date of this Agreement, other than for Incremental
Losses with respect to (x) any audit, litigation or legal proceeding under Section 6.2(b)(iii) relating to Taxes and (y) under
Section 6.2(b)(iv), in either case as to which a Notice of Claim was not delivered to Buyers on or prior to the expiration of the
applicable statute of limitations.

 

(c)Notwithstanding
anything to the contrary in this Agreement or in any other Transaction Agreement:

 

(i)EXCEPT
WITH RESPECT TO SECTION 5.8, (i) IN NO EVENT SHALL BUYERS, THEIR AFFILIATES INCLUDING MICHAEL P. DULOC (WHICH FOLLOWING THE CLOSING
DATE, SHALL ALSO INCLUDE THE COMPANY GROUP), ANY OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR ADVISORS OF BUYERS OR ITS AFFILIATES
OR ANY OTHER PERSON BE LIABLE UNDER THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION AGREEMENTS OR OTHERWISE TO SELLER OR ANY SELLER
INDEMNIFIED PERSON OR THEIR RESPECTIVE AFFILIATES OR ANY THIRD PARTY FOR (A) ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, STATUTORY,
EXEMPLARY, SPECIAL OR PUNITIVE DAMAGES, INCLUDING ANY DAMAGES FOR BUSINESS INTERRUPTION, DIMINUTION IN VALUE OR LOSS OF USE, DATA,
REVENUE OR PROFIT, WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, OR (B) ANY INDEMNIFICATION
CLAIM THAT ARISES (DIRECTLY OR INDIRECTLY) FROM ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, STATUTORY, EXEMPLARY, SPECIAL OR PUNITIVE
DAMAGES, INCLUDING ANY DAMAGES FOR BUSINESS INTERRUPTION, DIMINUTION IN VALUE OR LOSS OF USE, DATA, REVENUE OR PROFIT, WHETHER
ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, IN EACH CASE OF CLAUSE (A) AND CLAUSE (B) REGARDLESS
OF WHETHER SUCH DAMAGES WERE FORESEEABLE AND WHETHER OR NOT BUYERS, THEIR AFFILIATES INCLUDING WITHOUT LIMITATION MICHAEL P. DULOC,
ANY OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR ADVISORS OF BUYERS OR THEIR AFFILIATES OR ANY OTHER PERSON HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE OR (ii) THE
LIABILITY OF BUYERS, THEIR AFFILIATES INCLUDING MICHAEL P. DULOC (WHICH, FOLLOWING THE CLOSING DATE, SHALL ALSO INCLUDE THE COMPANY
GROUP), ANY OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR ADVISORS OF BUYERS OR THEIR AFFILIATES OR ANY OTHER PERSON ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION AGREEMENTS OR OTHERWISE TO SELLER, ANY SELLER INDEMNIFIED PERSON OR
ANY OF THEIR RESPECTIVE AFFILIATES OR ANY THIRD PARTY, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE SHALL BE LIMITED TO DIRECT PROVABLE DAMAGES ONLY; AND

 

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(ii)SELLER
ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE OTHER TRANSACTION AGREEMENTS, NO BUYER INDEMNIFIED
PERSONS MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, NOR ANY COVENANT OR AGREEMENT.

 

Section
6.3Indemnification Procedure for Third Party Claims.

 

(a)In
the event that any claim or demand, or other circumstance or state of facts which could give rise to any claim or demand, for which
an Indemnifying Party may be liable to an Indemnified Party hereunder is asserted or sought to be collected by a third party (“Third
Party Claim”), the Indemnified Party shall as soon as practicable notify the Indemnifying Party in writing of such
Third Party Claim (“Notice of Claim”). The Notice of Claim shall (i) state that the Indemnified Party
has paid or properly accrued Losses or anticipates that it will incur liability for Losses for which such Indemnified Party is
entitled to indemnification pursuant to this Agreement, and (ii) specify in reasonable detail each individual item of Loss included
in the amount so stated, the date such item was paid or properly accrued, the basis for any anticipated liability and the nature
of the indemnified claim to which each such item is related and the computation of the amount to which such Indemnified Party claims
to be entitled hereunder. The Indemnified Party shall enclose with the Notice of Claim a copy of all papers served with respect
to such Third Party Claim, if any, and any other documents evidencing such Third Party Claim.

 

(b)The
Indemnifying Party will have 30 days from the date on which the Indemnifying Party received the Notice of Claim to notify the Indemnified
Party that the Indemnifying Party desires to assume the defense or prosecution of such Third Party Claim and any litigation resulting
therefrom with counsel of its choice and at its sole cost and expense (a “Third Party Defense”). If the
Indemnifying Party assumes the Third Party Defense in accordance herewith, (i) the Indemnified Party may retain separate co-counsel
at the Indemnified Party’s sole cost and expense and participate in the defense of the Third Party Claim but the Indemnifying
Party shall control the investigation, defense and settlement thereof, (ii) the Indemnified Party will not file any papers or consent
to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent
of the Indemnifying Party and (iii) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim to the extent such judgment or settlement provides for equitable relief without the prior
written consent of the Indemnified Party. The Indemnified Party will use commercially reasonable efforts to minimize Losses from
Third Party Claims and will act in good faith in responding to, defending against, settling or otherwise dealing with such claims.
The Indemnified Party and the Indemnifying Party will also cooperate in any such defense and give each other reasonable access
to all information relevant thereto. Whether or not the Indemnifying Party has assumed the Third Party Defense, such Indemnifying
Party will not be obligated to indemnify the Indemnified Party hereunder for any settlement entered into or any judgment that was
consented to without the Indemnifying Party’s prior written consent.

 

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(c)If
the Indemnifying Party does not assume the Third Party Defense within 30 days of receipt of the Notice of Claim, the Indemnified
Party will be entitled to assume the Third Party Defense, at the Indemnified Party’s sole cost and expense (or, if the Indemnified
Party incurs a Loss with respect to the matter in question for which the Indemnified Party is entitled to indemnification pursuant
to Sections 6.1 or 6.2, as applicable, at the expense of the Indemnifying Party) upon delivery of notice
to such effect to the Indemnifying Party; provided that the (i) Indemnifying Party shall have the right to participate
in the Third Party Defense at its sole cost and expense, but the Indemnified Party shall control the investigation, defense and
settlement thereof; (ii) the Indemnifying Party may at any time thereafter assume the Third Party Defense, in which event the Indemnifying
Party shall bear the reasonable fees, costs and expenses of the Indemnified Party’s counsel incurred prior to the assumption
by the Indemnifying Party of the Third Party Defense, and (iii) the Indemnifying Party will not be obligated to indemnify the Indemnified
Party hereunder for any settlement entered into or any judgment that was consented to without the Indemnifying Party’s prior
written consent (which consent shall not be unreasonably withheld or delayed).

 

Section
6.4Indemnification Procedures for Non-Third Party Claims. The Indemnified Party will notify the Indemnifying
Party in writing promptly of its discovery of any matter subject to indemnification under this Article 6 that does
not involve a Third Party Claim, such notice to contain the information set forth in the following sentence. The Notice of Claim
shall (i) state that the Indemnified Party has paid or properly accrued Losses or anticipates that it will incur liability for
Losses for which such Indemnified Party is entitled to indemnification pursuant to this Agreement, and (ii) specify in reasonable
detail each individual item of Loss included in the amount so stated, the date such item was paid or properly accrued, the basis
for any anticipated liability and, in the case of Buyer Indemnified Parties, the nature of the indemnified claim to which each
such item is related and the computation of the amount to which such Indemnified Party claims to be entitled hereunder. If the
Indemnifying Party does not acknowledge in writing its obligation to indemnify the Indemnified Party with respect to such Losses
within 30 days after its receipt of the Notice of Claim, the Indemnifying Party will be deemed to have rejected such claim, in
which event the Indemnified Party will be free to pursue such remedies as may be available to it under this Agreement. The Indemnified
Party will use commercially reasonable efforts to minimize Losses from such claims and will act in good faith in responding to
or otherwise dealing with such claims. The Indemnified Party will reasonably cooperate and assist the Indemnifying Party in determining
the validity of any claim for indemnity by the Indemnified Party and in otherwise resolving such matters. Such assistance and
cooperation will include providing reasonable access to and copies of information, records and documents relating to such matters,
furnishing employees to assist in the investigation, defense and resolution of such matters and providing legal and business assistance
with respect to such matters.

 

Section 6.5Payment
of Losses. The obligations of an Indemnifying Party in this Agreement to indemnify, defend and hold harmless shall include
without limitation the obligation of the Indemnifying Party to pay and reimburse the Indemnified Party for Losses (in each case,
subject to the restrictions, limitations and agreements in this Agreement) for which the Indemnified Party shall be indemnified,
defended and held harmless. Once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to
this Article 6, the Indemnifying Party shall satisfy its obligation within ten (10) days by wire transfer of immediately
available funds. If an Indemnifying Party shall not make full payment of any such obligation within such ten (10) day period, 
any amount not paid shall accrue interest from and including the date such payment was due until the date such payment is made,
at a rate per annum equal to twelve percent (12%).

 

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Section
6.6Characterization of Indemnification Payments. Except as otherwise required by applicable Law, the Parties
shall treat any indemnification payment made hereunder as an adjustment to the Purchase Price.

 

Article
7

 

DEFINITIONS

 

Section
7.1Definitions. For purposes of this Agreement, the following terms used in this Agreement shall have the meanings
ascribed to them below:

 

“Affected Employee”
means each individual who is employed by any of the Company Group on the date of this Agreement, including any such individuals
on approved leave of absence (including maternity and paternity leave, vacation, sick leave, short-term or long-term disability,
military leave, jury duty and death leave).

 

“Affiliate” of any
Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is
under common control with, such first Person. For the avoidance of doubt, it is stated that Nicholas G. Karabots and Persons controlled
by him are not Affiliates of any Party or any of their respective Affiliates, members, managers, officers and employees.

 

“Agreement” has
the meaning ascribed to such term in the Preamble.

 

“Allocation” has
the meaning ascribed to such term in Section 5.5(j).

 

“Basket” means $40,000.

 

“Benefit Plans”
means benefit plans maintained or contributed to by Seller or any of its Affiliates (other than solely by the Company Group but
including all benefit plans to which the Company Group contributes as a participating employer) for the benefit of any present
or former directors, officers or employees of the Company Group; provided, however, that the Retirement Plan is not included in
the term “Benefit Plans”.

 

“Business Day” means
any day other than a Saturday, a Sunday or a day on which commercial banking institutions in New York, New York are authorized
or obligated by law or executive order to be closed.

 

“Buyer” and “Buyers”
have the meanings ascribed to such terms in the Preamble.

 

“Buyer Indemnified Persons”
means Buyers, their Affiliates (including each Member of the Company Group) and their respective Affiliates, members, managers,
directors, officers, employees, agents and representatives.

 

“Buyer Promissory Note”
means a promissory note made by Buyers in favor of Seller providing for the payment to Seller of $1.6 million, in form and substance
satisfactory to Seller.

 

“Cash Purchase Price”
has the meaning ascribed to such term in Section 1.2.

 

“Closing” has the
meaning ascribed to such term in Section 2.1.

 

“Closing Date” has
the meaning ascribed to such term in Section 2.1.

 

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“Company Group”
has the meaning ascribed to such term in the Preamble.

 

“Distribution Buyer”
has the meaning ascribed to such term in the Preamble.

 

“Governmental Entity”
means (i) any supranational, federal, state, local, municipal, foreign or other government; (ii) any governmental or quasi-governmental
entity of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal);
or (iii) any body, authority or agency exercising or entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory or taxing authority, including any arbitral tribunal.

 

“Incremental Losses”
mean Losses arising out of or by reason of or in connection with or due to the Structure Change which would not have been incurred
if the Parties had agreed to the One Buyer Structure rather than having agreed to the Two Buyer Structure. Incremental Losses shall
not include Losses to the extent they would have been otherwise incurred if the Parties had agreed to the One Buyer Structure.

 

“Indemnified Environmental Liability”
means Losses (i) incurred by any member, manager, officer or employee of either Buyer who is an individual, (ii) in connection
with any Member of the Company Group not being in material compliance prior to the date of this Agreement with all applicable Laws
relating to protection of the environment with respect to real property owned or leased by any Member of the Company Group, (iii)
for which the Company Group is unable to pay such Losses, (iv) resulting from a claim asserted by a third party that is not instigated
or encouraged by any Buyer Indemnified Person, (iv) solely to the extent such Loss is incurred to comply with applicable Laws relating
to protection of the environment with respect to real property owned or leased by any Member of the Company Group using reasonable
and recognized remediation protocols and techniques that are economically reasonable in relation to other reasonable and recognized
remediation protocols and techniques; provided, however, that Indemnified Environmental Liability shall not include liability for
any Loss to the extent that any Buyer Indemnified Person or any other Person after the Closing Date contributed to the condition
or circumstance forming the basis of such Loss.

 

“Indemnified Party”
means any Person that is seeking indemnification from an Indemnifying Party pursuant to the provisions of this Agreement.

 

“Indemnified Pension Liability”
means any and all Losses that may be incurred or suffered arising out of or by reason of or in connection with or due to the Retirement
Plan.

 

“Indemnified Representation Liability”
means any and all Losses that may be incurred or suffered arising out of or by reason of or in connection with or due to any representation
or warranty of Seller contained in Section 3.1 or Section 3.2.

 

“Indemnified Seller Group Liability”
means any and all Losses that may be incurred or suffered arising out of or by reason of or in connection with or due to any Seller
Indemnified Person or the business or operations of any Seller Indemnified Person, except as specifically enumerated in Section
6.2(a)(i) or Section 6.2(a)(ii) as an item for which Buyers will indemnify Seller Indemnified Persons.

 

“Indemnified Tax Liability”
means any and all Losses that may be incurred or suffered arising out of or by reason of or in connection with or due to Taxes
that are required to be paid by Seller pursuant to Section 5.5(b).

 

“Indemnifying Party”
means any Party from which any Indemnified Party is seeking indemnification pursuant to the provisions of this Agreement.

 

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“Information” has
the meaning ascribed to such term in Section 4.8(d).

 

“Intercompany Amount Agreement”
has the meaning ascribed to such term in Section 2.2(a)(i).

 

“KMS”, “KDS”,
“KNC”, “KNI”, “KDSC”, and “KPS”
each have the meaning ascribed to such term in the Preamble, and each a Member of the Company Group.

 

“KMS Shares” has
the meaning ascribed to such term in the Preamble.

 

“KPS Shares” has
the meaning ascribed to such term in the Preamble.

 

“Law” means any
statute, law, ordinance, rule or regulation of any Governmental Entity.

 

“Line of Credit Note”
means a promissory note made by the Company Group in favor of Seller in the face amount of $2.0 million, pursuant to which Seller
will provide a working capital line of credit to the Company Group on terms and conditions set forth in the Line of Credit Note,
which shall be in form and substance satisfactory to Seller.

 

“Losses” means any
and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations,
costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses,
damages, judgments, extents, executions, claims, demands and reasonable expenses (including reasonable fees and expenses of counsel
incident to any of the foregoing, or incurred in investigating or attempting to avoid the same or to oppose the imposition thereof,
or in enforcing any of the obligations of any Indemnifying Party) of every kind and nature whatsoever, whether now known or unknown,
foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty or equity.

 

“Member of the Company Group”
has the meaning ascribed to such term in the Preamble.

 

“Notice of Claim”
has the meaning ascribed to such term in Section 6.3(a) or Section 6.4, as the case may be.

 

“One Buyer Structure”
has the meaning ascribed to such term in definition of “Structure Change”.

 

“Parties” means
Buyers and Seller, and “Party” means any one of them.

 

“Person” means an
individual, corporation, partnership, limited liability company, trust or unincorporated organization or a Governmental Entity,
or any other entity.

 

“PNC” has
the meaning ascribed to such term in Section 2.2(a).

 

“Post-Closing Period”
has the meaning ascribed to such term in Section 5.5(i).

 

“Pre-Closing Period”
has the meaning ascribed to such term in Section 5.5(i).

 

“Products Buyer”
has the meaning ascribed to such term in the Preamble.

 

“Prohibited Action”
has the meaning ascribed to such term in Section 6.1(l).

 

“Purchase Price”
has the meaning ascribed to such term in Section 1.2.

 

“Retirement Plan”
means the Retirement Plan for Employees of AMREP Corporation.

 

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“Seller Indemnified Persons”
means Seller, its Affiliates (other than the Company Group) and the members, managers, directors, officers, employees, agents and
representatives of Seller or its Affiliates (other than the Company Group).

 

“Seller” has the
meaning ascribed to such term in the Preamble.

 

“Shares” means the
KPS Shares and the KMS Shares.

 

“Structure Change”
means the change in acquisition structure from (i) the acquisition of the Company Group by Distribution Buyer purchasing and acquiring
the KMS Shares from Seller (without Products Buyer purchasing and acquiring the KPS Shares from KMS) (clause (i), the “One
Buyer Structure”) to (ii) the acquisition of the Company Group by (a) Products Buyer first purchasing and acquiring the KPS
Shares from KMS followed by (b) Distribution Buyer purchasing and acquiring the KMS Shares from Seller (clause (ii), the “Two
Buyer Structure”).

 

“Subscription Fulfillment Business”
means the consumer magazine subscription and membership fulfillment services currently being provided by the Seller or any of its
Affiliates. Notwithstanding the foregoing, “Subscription Fulfillment Business” shall not include product packaging
activities, product fulfillment activities, call center/contact center services or database marketing services relating to compilation
of various sources of data subsequently used for target marketing activities.

 

“Tax” or “Taxes”
means any and all federal, state, local or foreign net or gross income, gross receipts, net proceeds, sales, use, ad valorem,
value added, franchise, withholding, payroll, employment, excise, property, deed, stamp, alternative or add-on minimum, profits,
transaction, service, occupation, unemployment, social security, workers’ compensation and capital taxes, assessments, customs,
duties, fees, levies or governmental charges.

 

“Tax Return” means
any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.

 

“Third Party Claim”
has the meaning ascribed to such term in Section 8.3(a).

 

“Third Party Defense”
has the meaning ascribed to such term in Section 8.3(b).

 

“Transaction Agreements”
means

 

(a)this
Agreement;

 

(b)the
Buyer Promissory Note;

 

(c)the
Line of Credit Note;

 

(d)a
guaranty agreement by Buyers and each Member of the Company Group with respect to obligations owing to Seller and its Affiliates
under this Agreement, the Buyer Promissory Note, the Line of Credit Note and related agreements, in favor of Seller, in form and
substance satisfactory to Seller;

 

(e)a
security agreement by Buyers and each Member of the Company Group, with respect to obligations of Buyers and the Company Group
owing to Seller and its Affiliates under this Agreement, that certain related guaranty, and related agreements, in favor of Seller,
in form and substance satisfactory to Seller;

 

    	23

    	 

    

 

(f)deposit
account control agreement(s) for deposit accounts maintained by one or more Members of the Company Group, including financing statements
for each Members of the Company Group, and such other documents, instruments and agreements as Seller may require, each in form
and substance satisfactory to Seller;

 

(g)general
releases releasing Seller and its Affiliates (other than with respect to this Agreement and any other Transaction Agreement and
such other matters are as provided for therein) executed by Buyers and certain of their Affiliates (on behalf of themselves and
their respective Affiliates) in form and substance satisfactory to Seller;

 

(h)general
releases releasing Seller and its Affiliates (other than with respect to this Agreement and any other Transaction Agreement and
such other matters are as provided for therein) executed by the Company Group in form and substance satisfactory to Seller;

 

(i)general
releases releasing the Company Group (other than with respect to this Agreement and any other Transaction Agreement and such other
matters are as provided for therein) executed by Seller in form and substance satisfactory to Seller;

 

(j)the
Transition Services Agreement;

 

(k)software
assignment agreement, by Media Data Resources, LLC in favor of KNC, with respect to certain software owned or licensed by Media
Data Resources, LLC used in the Company Group’s operations, in form and substance satisfactory to Media Data Resources, LLC;

 

(l)software
assignment agreement, by Palm Coast Data LLC in favor of KPS, with respect to certain software licensed by Palm Coast Data LLC
used in the Company Group’s operations, in form and substance satisfactory to Palm Coast Data LLC;

 

(m)acknowledgment
and agreement of consideration, by Buyers, the Company Group and Seller, in form and substance satisfactory to Seller;

 

(n)an
assignment agreement pursuant to which KMS will assign the KPS Shares to Products Buyer;

 

(o)such
other documents, agreements, certificates and instruments required or executed in connection with the foregoing; and

 

(p)any
amendments or modifications of the foregoing agreed to in writing by Seller.

 

“Transfer Taxes”
means sales, use, transfer, real property transfer, recording, documentary, stamp, registration and stock transfer taxes and fees.

 

“Transition Services Agreement”
means the transition services agreement, dated as of the date hereof, between Buyers and Seller, in form and substance satisfactory
to Seller.

 

“Two Buyer Structure”
has the meaning ascribed to such term in definition of “Structure Change”.

 

“$” means United
States dollars.

 

    	24

    	 

    

 

Article
8

 

MISCELLANEOUS

 

Section
8.1Waiver. Any failure of Seller to comply with any of its obligations or agreements herein contained may be
waived only in writing by Buyers. Any failure of Buyers to comply with any of its obligations or agreements herein contained may
be waived only in writing by Seller. No waiver granted hereunder shall be deemed a waiver of any subsequent breach or default
of the same or similar nature. No failure or delay by any Party in exercising any right or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

 

Section
8.2Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall
be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when
received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile
(with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent
after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail,
return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the addresses set forth
below (or to such other address that may be designated by a party from time to time in accordance with this Section):

 

	Buyers: 	
        DFI Holdings, LLC

        KPS Holdco, LLC

        3179 Deer Creek Road

        Collegeville, PA 19426

        Attention: Michael Duloc

        Fax: 815-734-5233

         
	
        with a required copy to (which shall not constitute notice):

        Fox Rothschild LLP

        2700 Kelly Road, Suite 300

        Warrington, PA 18976

        Attention: Jeffrey H. Nicholas

        Fax: 215-345-7507

         

	Seller: 	
        c/o AMREP Corporation

        300 Alexander Park, Suite 204

        Princeton, New Jersey 08540

        Attention: General Counsel

        Fax: 609-716-8255

         
	
        with a required copy to (which shall not constitute notice):

        Duane Morris LLP

        222 Delaware Avenue

        Suite 1600

        Wilmington, DE 19801

        Attention: Christopher Winter

        Fax: 302-397-2455

         

Section 8.3Governing
Law; Consent to Jurisdiction and Waiver of Jury Trial.

 

(a)This
Agreement shall be governed by and construed in accordance with the internal substantive Laws of the State of New York, without
giving effect to any choice of Law or conflict of Laws rules or provisions (whether of the State of New York or any other jurisdiction)
that would cause the application of the Laws of any jurisdiction other than the State of New York.

 

(b)Each
Party irrevocably submits to the exclusive jurisdiction of the federal courts of the Southern District of New York or the courts
of the State of New York located in the City of New York for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby. Each Party further agrees that service of any process, summons, notice or
document by U.S. registered mail to such Party’s respective address set forth in the “Notices” section hereof
shall be effective service of process for any action, suit or proceeding with respect to any matters to which it has submitted
to jurisdiction in this Section. Each Party irrevocably and unconditionally waives any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in federal courts of the Southern
District of New York or the courts of the State of New York located in the City of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

 

    	25

    	 

    

 

Section
8.4Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by delivery
of a facsimile or electronically recorded copy in .pdf file format bearing a copy of the signature of a Party shall constitute
a valid and binding execution and delivery of this Agreement by such Party. Such copies shall constitute enforceable original
documents.

 

Section
8.5Headings. The section headings contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.

 

Section
8.6Entire Agreement. The Transaction Agreements embody the entire agreement and understanding of the Parties
hereto in respect of the subject matter contained herein. The Transaction Agreements supersede all prior agreements and understandings
between the Parties with respect to the subject matter thereof.

 

Section
8.7Amendment. Any provision of this Agreement may be amended if, and only if, such amendment is in writing and
is signed by each Party to this Agreement.

 

Section
8.8Binding Effect; Benefits. This Agreement shall inure to the benefit of and be binding upon the Parties hereto
and their respective successors and permitted assigns; nothing in this Agreement, express or implied, is intended to confer on
any Person other than the Parties and their respective successors and permitted assigns (and, to the extent provided in Article
6, the other Buyer Indemnified Parties and Seller Indemnified Parties) any rights, remedies, obligations or liabilities
under or by reason of this Agreement.

 

Section
8.9Joint Drafting. The Parties have participated jointly in the negotiation and drafting of this Agreement.
In the event an ambiguity or question of intent or interpretation arises, this 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 Agreement.

 

Section
8.10Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable Law. If any provision of this Agreement is held to be prohibited by or invalid under
applicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Agreement. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by applicable
Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

 

    	26

    	 

    

 

Section
8.11Interpretation. When a reference is made in this Agreement to an Article or Section, such reference will
be to an Article or Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes”
or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.”
The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless the context expressly
provides otherwise, any approval, determination, election or authorization required to be obtained from a Party shall be at such
Party’s sole discretion. The word “or” is not exclusive. All terms used herein with initial capital letters
have the meanings ascribed to them herein and all terms defined in this Agreement will have such defined meanings when used in
any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained
in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to
the feminine and neuter genders of such term. Unless otherwise indicated, any agreement, instrument or statute defined or referred
to herein, or in any agreement or instrument that is referred to herein, means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the
case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors and assigns.

 

Section
8.12Assignability. This Agreement shall not be assignable by any Party hereto without the prior written consent
of the other Party.

 

Section
8.13Specific Performance. Buyers and Seller each agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed by them in accordance with the terms hereof and that each Party shall
be entitled to specific performance of the terms hereof (without the need to post bond or any other security), in addition to
any other remedy, subject to Article 6, at law or equity.

 

Section
8.14Expenses. Each Party shall bear its own costs and expenses in connection with this Agreement and the transactions
contemplated hereby, including all legal, accounting, financial advisory, consulting and all other fees and expenses of third
parties, except where specifically provided to the contrary.

 

Section
8.15Disclosure. Buyers consent to Seller or its Affiliates publicly disclosing this Agreement and the other
Transaction Agreements, including by filing such documents with the Securities and Exchange Commission or the New York Stock Exchange.
Nothing in this Agreement or in any other Transaction Agreement shall be deemed to limit Buyers’ right to publicly disclose
this Agreement and any of the other Transaction Agreements.

 

Section 8.16Independent
Counsel. Each Party certifies that it has read the terms of this Agreement, that it understands the terms of this Agreement,
and that it is entering into this Agreement of its own volition. Each Party warrants and represents that it has (a) been represented
by an attorney of its choice in connection with the Transaction and received independent legal advice from its attorney regarding
its decision with respect to the advisability of making and entering into this Agreement, or (b) had sufficient time, opportunity
and means to engage an attorney of its choice in order to be represented by such attorney in connection with the Transaction and
to receive independent legal advice from such attorney regarding its decision with respect to the advisability of making and entering
into this Agreement, and has made a knowing and voluntary decision not to do so.

 

 

 

 

[Remainder of Page Intentionally
Left Blank; Signature page follows]

 

    	27

    	 

    

 

IN WITNESS WHEREOF, the Parties have caused this Stock Purchase
Agreement to be duly executed and delivered as of the date first written above.

 

 

	 	DFI HOLDINGS, LLC	 
	 	 	 
	 	By:	/s/ Michael P. Duloc	 
	 	 	Name:	Michael P. Duloc	 
	 	 	Title:	Manager	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	KPS HOLDCO, LLC	 
	 	 	 
	 	By:	/s/ Michael P. Duloc	 
	 	 	Name:	Michael P. Duloc	 
	 	 	Title:	Manager	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	American republic investment co.	 
	 	 	 
	 	By:	/s/ Peter M. Pizza	 
	 	 	Name:	Peter M. Pizza	 
	 	 	Title:	Vice President	 

 

 

 

 

 

AGREED AND ACCEPTED with respect to Section
5.8 of this Stock Purchase Agreement as of the date first written above.

 

		/s/
    Michael P. Duloc	 
	 	MICHAEL P. DULOC	 

 

 

 

 

 

 

 

 

 

Signature Page to Stock Purchase Agreement

(1/1)

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