Document:

exv10w3

 

Exhibit 10.3

NON-EXCLUSIVE AIRCRAFT LEASE AGREEMENT

Dated as of the 3rd day of October, 2006,

between

Franklin Mountain Assets LLC, a Delaware limited liability company,

as Owner,

and Western Refining Company, L.P., a Delaware limited partnership,

as Lessee,

concerning one Cessna Model 680 Citation Sovereign aircraft bearing

U.S. registration number N345PF,

and

Manufacturer’s serial number 680-0080.

* * *

INSTRUCTIONS FOR COMPLIANCE WITH “TRUTH IN LEASING” REQUIREMENTS UNDER FAR § 91.23.

     Within 24 hours after execution of this Aircraft Lease Agreement:

     Mail a copy of the executed document to the following address via certified mail,
return receipt requested:

Federal Aviation Administration

Aircraft Registration Branch

ATTN: Technical Section

P.O. Box 25724

Oklahoma City, Oklahoma 73125

48 hours prior to the first flight:

     The lessee or conditional buyer, or the registered owner if the lessee is not a citizen of the
United States, must notify by telephone or in person the FAA Flight Standards district office
nearest the airport where the flight will originate. Unless otherwise authorized by that office,
the notification shall be given at least 48 hours before takeoff in the case of the first flight of
that aircraft under that lease or contract.

Carry a copy of this Aircraft Lease Agreement in the aircraft at all times.

* * *

Exhibit B is intentionally omitted for FAA submission purposes.

 

 

     This NON-EXCLUSIVE AIRCRAFT LEASE AGREEMENT (the “Agreement”) is entered into as of this 3rd
day of October, 2006 (the “Effective Date”), by and between Western Refining Company, L.P., a
Delaware limited partnership (“Lessee”), and Franklin Mountain Assets LLC, a Delaware limited
liability company (“Owner”).

WITNESSETH:

     WHEREAS, Owner holds title in and to the Aircraft described and referred to herein;

     WHEREAS, Lessee desires to lease from Owner, and Owner desires to lease to Lessee, the
Aircraft, on a non-exclusive basis, upon and subject to the terms and conditions of this Agreement;
and

     WHEREAS, during the term of this Agreement, the Aircraft may be subject to concurrent leases
to other lessees.

     NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and
valid consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
agree as follows:

     SECTION 1. DEFINITIONS

     1.1 The following terms shall have the following meanings for all purposes of this Agreement:

     “Aircraft” means the Airframe, the Engines, and the Aircraft Documents. Such Engines shall be
deemed part of the “Aircraft” whether or not from time to time attached to the Airframe or on the
ground.

     “Aircraft Documents” means all flight records, maintenance records, historical records,
modification records, overhaul records; manuals, logbooks, authorizations, drawings and data
relating to the Airframe, any Engine, or any Part, that have been provided to Lessee by Owner, or
are required by Applicable Law to be created or maintained with respect to the maintenance and/or
operation of the Aircraft.

     “Airframe” means the aircraft specified in Exhibit A, together with any and all Parts
(including, but not limited to, landing gear and auxiliary power units but excluding Engines or
engines) so long as such Parts shall be either incorporated or installed in or attached to the
Airframe.

     “Applicable Law” means, without limitation, all applicable laws, treaties, international
agreements, decisions and orders of any court, arbitration or governmental agency or authority and
rules, regulations, orders, directives, licenses and permits of any governmental body,
instrumentality, agency or authority, including, without limitation, the FAR and 49 U.S.C. § 41101,
et seq. , as amended.

     “Business Day” means any day of the year in which banks are not authorized or required to
close in the State of Texas.

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     “Engines” means the engine(s) specified in Exhibit A, together with any and all Parts so long
as the same shall be either incorporated or installed in or attached to such Engine. An Engine
shall remain leased hereunder whether or not from time to time attached to the Airframe or on the
ground.

     “Event of Loss” shall mean any of the following events with respect to any property:

          (i) loss of such property or of the use thereof due to theft or disappearance (with loss being
conclusive following 30 days or such other period specified in applicable insurance), destruction,
damage beyond economic repair or rendition of such property permanently unfit for normal use for
any reason;

          (ii) any damage to such property which results in an insurance settlement with respect to such
property on the basis of an actual, constructive or compromised total loss; or

          (iii) the condemnation, confiscation or seizure of, or requisition of title to or use of, such
property by private persons or by any governmental or purported governmental authority.

     “FAA” means the Federal Aviation Administration or any successor agency,

     “FAR” means collectively the Aeronautics Regulations of the Federal Aviation Administration
and the Department of Transportation, as codified at Title 14, Parts 1 to 399 of the United States
Code of Federal Regulations.

     “Flight Hour” means each flight hour of use of the Aircraft by Lessee, as recorded on the
Aircraft hour meter.

     “Lease Period” each lease period shall commence with delivery and conclude with the return of
the Aircraft. If requested by Owner, Lessee shall execute a Delivery and Acceptance Certificate in
the form attached to this Agreement each time the Lessee accepts delivery of the Aircraft.

     “Lien” means any mortgage, security interest, lease or other charge or encumbrance or claim or
right of others, including, without limitation, rights of others under any airframe or engine
interchange or pooling agreement.

     “Operating Base” means that airport described in Exhibit A.

     “Operational Control” has the same meaning given the term in Section 1.1 of the FAR.

     “Parts” means all appliances, components, parts, instruments, appurtenances, accessories,
furnishings or other equipment of whatever nature (other than complete Engines or engines) which
may from time to time be incorporated or installed in or attached to the Airframe or any Engine and
includes replacement parts.

     “Pilot in Command” has the same meaning given the term in Section 1.1 of the FAR.

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     “Rent Payment Date” means the payments dates as outlined in Exhibit A.

     “Taxes” means all sales taxes, use taxes, retailer taxes, duties, fees, excise taxes
(including) without limitation, federal transportation excise taxes), or other taxes of any kind
which may be assessed or levied by any Taxing Jurisdiction as a result of the lease of the Aircraft
to Lessee, or the use of the Aircraft by Lessee, or the provision of a taxable transportation
service by Lessee using the Aircraft.

     “Taxing Jurisdictions” means any federal, state, county, local, airport, district, foreign, or
of governmental authority that imposes Taxes.

     “Term” means the term of this Agreement set forth in Section 3.1.

SECTION 2. LEASE AND DELIVERY OF THE AIRCRAFT

     2.1 Lease. Owner agrees to lease to Lessee, and Lessee agrees to lease from Owner,
the Aircraft, on the terms and conditions of this Agreement.

     2.2 Delivery. The Aircraft shall be delivered to Lessee on a mutually agreed date
(the “Delivery Date”) at the Operating Base and “AS IS,” “WHERE IS,” AND SUBJECT TO EACH AND EVERY
DISCLAIMER OF WARRANTY AND REPRESENTATION AS SET FORTH IN SECTION 4 HEREOF. Owner shall not be
liable for delay or failure to furnish the Aircraft pursuant to this Agreement when such failure is
caused by government regulation or authority, mechanical difficulty, war, civil commotion, strikes
or labor disputes, weather conditions, or acts of God.

     2.3 Non-Exclusivity. Lessee and Owner acknowledge that the Aircraft is leased to
Lessee on a non-exclusive basis, and that the Aircraft will be subject use by Owner, and may also
be subject to non-exclusive lease to others during the Term.

SECTION 3. TERM, SCHEDULING, AND RENT

     3.1 Term. This Agreement may be terminated at the will of the parties at any time the
Aircraft is in the possession of the Owner.

     3.2 Scheduling. Each use of the Aircraft by Lessee shall be subject to Owner’s
approval. Lessee shall submit flight scheduling requests to Owner as far in advance as reasonably
possible. Owner may approve or deny any flight scheduling request in Owner’s sole discretion.

     3.3 Rent. Lessee shall pay rent in an amount equal to the Hourly Rent specified in
Exhibit B, attached hereto, which amount may be amended in writing by mutual agreement of the
parties from time to time, for each Flight Hour of use of the Aircraft by Lessee. All rent shall
be paid to the Owner in immediately available U.S. funds and in form and manner as the Owner in its
sole discretion may instruct Lessee from time to time.

     3.4 Taxes. (a) Neither rent nor any other payments to be made by Lessee under this
Agreement includes the amount of any Taxes which may be assessed or levied by any Taxing

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Jurisdictions as a result of the lease of the Aircraft to Lessee, or the use of the Aircraft
by Lessee, or the provision of a taxable transportation service by Lessee using the Aircraft.
Lessee shall be responsible for, shall indemnify and hold harmless Owner against, and, except as
provided in Section 3.4(b), Lessee shall remit to Owner all such Taxes together with each payment
of rent pursuant to Section 3.3; provided, however, that if any such Taxes shall be due and payable
at an earlier time as a matter of Applicable Law, Lessee shall remit such Taxes to Owner at the
time required by Applicable Law.

     (b) If any Taxes shall be required by Applicable Law to be paid by Lessee directly to the
appropriate Taxing Jurisdiction, Lessee shall remit such Taxes directly to the appropriate Taxing
Jurisdiction promptly at the time required by Applicable Law, and shall provide evidence of such
payment to Owner.

SECTION 4. DISCLAIMER OF WARRANTIES

     4.1 THE AIRCRAFT IS BEING LEASED BY THE OWNER TO THE LESSEE HEREUNDER ON A COMPLETELY “AS IS,”
“WHERE IS,” BASIS, WHICH IS ACKNOWLEDGED AND AGREED TO BY THE LESSEE. THE WARRANTIES AND
REPRESENTATIONS SET FORTH IN THIS SECTION 4 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS
OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND OWNER HAS NOT MADE AND SHALL NOT BE CONSIDERED OR
DEEMED TO HAVE MADE (WHETHER BY VIRTUE OF HAVING LEASED THE AIRCRAFT UNDER THIS AGREEMENT, OR
HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED
TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE) ANY OTHER REPRESENTATION
OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR TO ANY PART THEREOF,
AND SPECIFICALLY, WITHOUT LIMITATION, IN THIS RESPECT DISCLAIMS AS TO THE TITLE, AIRWORTHINESS,
VALUE, CONDITION, DESIGN, MERCHANTABILITY, COMPLIANCE WITH SPECIFICATIONS, CONSTRUCTION AND
CONDITION OF THE AIRCRAFT OPERATION, OR FITNESS FOR A PARTICULAR USE OF THE AIRCRAFT AND AS TO THE
ABSENCE OF LATENT AND OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OR THE LIKE, HEREUNDER OF ANY PATENT, TRADEMARK OR COPYRIGHT AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP
OF THE AIRCRAFT OR ANY PART THEREOF OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED (INCLUDING, ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE
OF TRADE), WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, THE LESSEE HEREBY WAIVES, RELEASES,
DISCLAIMS AND RENOUNCES ALL EXPECTATION OF OR RELIANCE UPON ANY SUCH AND OTHER WARRANTIES,
OBLIGATIONS AND LIABILITIES OF OWNER AND RIGHTS, CLAIMS AND REMEDIES OF THE LESSEE AGAINST OWNER,
EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO (I) ANY IMPLIED
WARRANTY OF MERCHANTABILITY OF FITNESS FOR ANY PARTICULAR USE, (II) ANY IMPLIED WARRANTY ARISING
FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (III) ANY

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OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE
NEGLIGENCE OF OWNER, ACTUAL OR IMPUTED, AND (IV) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY
FOR LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE
AIRCRAFT, OR FOR ANY OTHER DIRECT, INCIDENTAL OR, CONSEQUENTIAL DAMAGES.

SECTION 5. REGISTRATION, USE, OPERATION, MAINTENANCE AND POSSESSION

     5.1 Title and Registration; Subordination. Owner has exclusive and equitable title to
the Aircraft, and exclusive leasehold possessory rights to the Aircraft. Lessee acknowledges that
title to the Aircraft shall remain vested in Owner, and Lessee undertakes, to the extent permitted
by Applicable Law, to do all such further acts, deeds, assurances or things as may, (i) in the
reasonable opinion of the Owner, be necessary or desirable in order to protect or preserve Owner’s
title to the Aircraft, and (ii) in the reasonable opinion of the Owner, be necessary or desirable
in order to protect or preserve Owner’s rights. Notwithstanding anything in this Agreement to the
contrary, any rights Lessee may have in or to the Aircraft by virtue of this Agreement, including
Lessee’s rights to possession and use of the Aircraft, are in all respects subordinate, junior, and
subject to Owner’s rights and interests. To the extent requested by Owner, its successors or
assigns, Lessee shall take all action necessary to continue all right, title and interest of Owner,
its successors or assigns in the Aircraft under applicable law.

     5.2 Use and Operation. Except as otherwise expressly provided herein, Lessee shall be
solely and exclusively responsible for the use, operation and control of the Aircraft while in its
possession during the Term of this Agreement. Lessee (i) shall operate the Aircraft in accordance
with the provisions of Part 91 of the FAR, (ii) shall not operate the Aircraft in commercial
service, as a common carrier, or otherwise on a compensatory or “for hire” basis except to the
limited extent permitted under Subpart F of Part 91 of the FAR, if applicable, (iii) shall not
operate or locate the Airframe or any Engine, or suffer the Airframe or any Engine to be operated
or located, in any area excluded from coverage by any insurance policy in effect or required to be
maintained hereunder with respect to the Airframe or Engines, or in any war zone, (iv) shall not
operate the Airframe or any Engine or permit the Airframe or any Engine to be operated during the
Term except in operations for which Lessee is duly authorized, or use or permit the Aircraft to be
used for a purpose for which the Aircraft is not designed or reasonably suitable, (v) shall not
permit the Airframe or any Engine to be maintained, used or operated during the Term in violation
of any Applicable Law, or contrary to any manufacturer’s operating manuals or instructions, and
(vi) shall not knowingly permit the Aircraft to be used for the carriage of any persons or property
prohibited by law, nor knowingly permit the Aircraft to be used during the existence of any known
defect except in accordance with the FAR.

     5.3 Lessee to Pay All Operating Costs. Other than as expressly provided herein, Lessee
shall arrange for and pay all operating costs associated with Lessee’s use and incurred during the
Term, including, without limitation, costs of pilots, cabin personnel, mechanics, and other ground
support personnel (the foregoing collectively, the “Flight Crew”); fuel; oil; lubricants; landing
and navigation fees; airport charges; passenger service and any and all other expenses of any kind
or nature, arising directly or indirectly in connection with or related to the use,

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movement and operation of the Aircraft by Lessee during the Term. The obligations of Lessee
under this provision shall survive the end of the Term.

     5.4 Maintenance of Aircraft. Owner agrees to deliver the Aircraft to Lessee in a good
and airworthy operating condition and in compliance with applicable maintenance standards and
practices. Lessee shall thereafter be solely responsible for any repairs or maintenance of the
Aircraft that shall be required during the term of this Agreement associated with Lessee’s use,
movement and operation of the Aircraft. Lessee shall coordinate conducting and paying for repairs
and maintenance of the Aircraft with other Lessees of the Aircraft. The term “repairs” shall
include all necessary service, repairs, tests, and maintenance (both routine and extraordinary) of
Aircraft as appropriate to maintain the Aircraft in accordance with Applicable Law. Lessee shall
maintain or cause to be maintained all Aircraft Documents required by the FAA, the Airframe
manufacturer, the Engine manufacturer, and the manufacturers of component Parts, and said Aircraft
Documents shall be maintained in a current, accurate, and complete manner and shall be available at
all reasonable times for examination and inspection by Owner. Lessee also agrees to use its best
efforts promptly to furnish Owner such information with respect to its use of the Aircraft as shall
be required to enable Owner to file all reports required by any government authority relating to
Owner’s ownership of Aircraft. Owner shall have no expense or liability for repair or maintenance
delays and shall not be liable to Lessee for any damage from loss of profit or loss of use of
Aircraft, either before or after delivery of Aircraft to Lessee.

     5.5 Flight Crew. Lessee, at its sole expense, shall locate and retain (either through
direct employment or contracting with an independent contractor for flight services) a
duly-qualified Flight Crew. All members of the Flight Crew shall be fully competent and
experienced, duly licensed, and qualified in accordance with the requirements of Applicable Law and
all insurance policies covering the Aircraft. All members of the Flight Crew who are pilots shall
be fully trained in, accordance with an FAA-approved training program, including initial and
recurrent training and, where appropriate, contractor-provided simulator training.

     5.6 Operational Control. THE PARTIES EXPRESSLY AGREE THAT LESSEE SHALL AT ALL TIMES
WHILE THE AIRCRAFT IS IN ITS POSSESSION DURING THE TERM MAINTAIN OPERATIONAL CONTROL OF THE
AIRCRAFT, AND THAT THE INTENT OF THE PARTIES IS THAT THIS AGREEMENT CONSTITUTE A “DRY” OPERATING
LEASE. Lessee shall exercise exclusive authority over initiating, conducting, or terminating any
flight conducted pursuant to this Agreement, and the Flight Crew shall be under the exclusive
command and control of Lessee in all phases of such flights.

     5.7 Authority of Pilot in Command. Notwithstanding that Lessee shall have operational
control of the Aircraft during any flight conducted pursuant to this Agreement, Owner and Lessee
expressly agree that the Pilot in Command, in his or her sole discretion, may terminate any flight,
refuse to commence any flight, or take any other flight-related action which in the judgment of the
Pilot in Command is necessitated by considerations of safety. The Pilot in Command shall have
final and complete authority to postpone or cancel any flight for any reason or condition which in
his or her judgment would compromise the safety of the flight. No such action of the Pilot in
Command shall create or support any liability for loss, injury, damage or delay to Owner.

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     5.8 Right to Inspect. Owner and its agents shall have file right to inspect the
Aircraft or the Aircraft Documents at any reasonable time, upon giving Lessee reasonable notice, to
ascertain the condition of the Aircraft and to satisfy Owner that the Aircraft is being properly
repaired and maintained in accordance with the requirements of this Agreement. All required
repairs shall be performed as soon as practicable after such inspection.

     5.9 Aircraft Documents. Lessee shall, at its expense, maintain and preserve, or cause
to be maintained and preserved, in the English language, all Aircraft Documents in a complete,
accurate, and up-to-date manner.

SECTION 6. CONDITION DURING TERM AND RETURN OF AIRCRAFT

     6.1 Return. Upon the last Business Day of the Term or the date of earlier termination
hereof, Lessee shall return the Aircraft to the Owner by delivering the same, at the Lessee’s own
risk and expense, to the Operating Base, fully equipped with all Engines installed thereon. The
Aircraft at the time of its return shall be in the condition set forth in this Section 6 and shall
be free and clear of all Liens.

     6.2 Condition of Aircraft. The Aircraft at the time of its return to Owner shall have
been maintained and repaired in accordance with the provisions of this Agreement with the same care
and consideration for the technical condition of the Aircraft as if it were to have been kept in
continued regular service by the Lessee, and shall meet the following requirements:

     (a) Operating Condition. The Aircraft shall be in as good operating condition
as on the Delivery Date, ordinary wear and tear excepted.

     (b) Cleanliness Standards. The Aircraft shall be clean and shall have received
a recent exterior and an interior deep cleaning.

     (c) Certificate of Airworthiness. The Aircraft shall have, and be in compliance
with, a current valid certificate of airworthiness issued by the FAA, and shall be airworthy
according to manufacturer’s specifications and FAA regulations.

     6.3 Aircraft Documents. Lessee shall deliver, or cause to be delivered to Owner, at
the time the Aircraft is returned to Owner, all of the Aircraft Documents, updated and maintained
by Lessee, or on behalf of Lessee, through the date of return of the Aircraft.

SECTION 7. LIENS

     7.1 Lessee shall ensure that no Liens are created or placed against the Aircraft by Lessee or
third parties as a result of Lessee’s actions. Lessee shall notify Owner promptly upon learning of
any Liens not permitted by these terms. Lessee shall, at its own cost and expense, take all such
actions as may be necessary to discharge and satisfy in full any such Lien promptly after the same
becomes known to it. Lessee shall pay all charges related to the Aircraft as they become due and
payable.

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SECTION 8. INSURANCE

     8.1 Liability. Owner shall maintain, or cause to be maintained, bodily injury and
property damage, liability insurance in an amount no less than the amount outlined on Exhibit A.
Combined Single Limit for the benefit of itself, Lessee, and Owner, in connection with the use of
the Aircraft. Said policy shall be an occurrence policy naming Owner, Owner and Lessee as Named
Insured.

     8.2 Hull. Owner shall maintain, or cause to be maintained, all risks aircraft hull
insurance in an amount equal to the fair market value of the Aircraft, which the parties agree is
not less than the amount outlined on Exhibit A, and such insurance shall name Owner and Owner as
loss payees as their interests may appear.

     8.3 Insurance Certificates. Owner will provide Lessee with a Certificate of Insurance
upon execution of this Agreement.

SECTION 9. DEFAULTS AND REMEDIES

     9.1 Upon the occurrence of any failure of Lessee to duly observe or perform any of its
obligations hereunder and at any time thereafter so long as the same shall be continuing, the Owner
may, at its option, declare in writing to the Lessee that this Agreement is in default; and at any
time thereafter, so long as the Lessee shall not have remedied the outstanding default, the Owner
may cancel, terminate, or rescind this Agreement.

SECTION 10. NOTICES

     10.1 All communications, declarations, demands, consents, directions, approvals, instructions,
requests and notices required or permitted by this Agreement shall be in writing and shall be
deemed to have been duly given or made when delivered personally or transmitted electronically by
e-mail or facsimile, receipt acknowledged, or in the case of documented overnight delivery service
or registered or certified mail, return receipt requested, delivery charge or postage prepaid, on
the date shown on the receipt thereof, in each case at the address set forth below:

	 	 	 	 	 
	     If to Owner:

	 	Franklin Mountain Assets LLC
	 	Tel: 915-775-3300
	 

	 	6500 Trowbridge Drive
	 	Fax: 915-775-5587
	 

	 	El Paso, Texas 79905	 	 
	 
	 	 	 	 
	     If to Lessee:

	 	Western Refining Company, L.P.
	 	Tel: 915-775-3300
	 

	 	6500 Trowbridge Drive
	 	Fax: 915-775-5587
	 

	 	El Paso, Texas 79905	 	 

SECTION 11. RISK OF DAMAGE OR LOSS

     11.1 Risk of Loss. At all times while the Aircraft is in under the operational control
of Lessee during the Term, Lessee shall bear the entire risk of an Event of Loss to the Aircraft,
and shall indemnify and hold Owner harmless from and against any Event of Loss (including, without
limitation, destruction, loss, theft, requisition of title, or use, confiscation, taking or

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damage of or to the Aircraft from any cause), and all damages (including consequential, direct
and punitive), claims (in contract, tort or otherwise), suits, actions or proceedings arising from
the use, operation or storage of the Aircraft. In the event of an Event of Loss to the Aircraft,
Lessee shall immediately (i) report the Event of Loss to Owner, the insurance company or companies,
and to any and all applicable governmental agencies, and (ii) furnish such information and execute
such documents as may be required and necessary to collect the proceeds from any insurance
policies.

SECTION 12. MISCELLANEOUS

     12.1 Entire Agreement. This Agreement, and all terms, conditions, warranties, and
representations herein, are for the sole and exclusive benefit of the signatories hereto. This
Agreement constitutes the entire agreement of the parties as of its Effective Date and supersedes
all prior or independent, oral or written agreements, understandings, statements, representations,
commitments, promises, and warranties made with respect to the subject matter of this Agreement.

     12.2 Other Transactions. Except as specifically provided in this Agreement, none of
the provisions of this Agreement, nor any oral or written statements, representations, commitments,
promises, or warranties made with respect to the subject matter of this Agreement shall be
construed or relied upon by any party as the basis of, consideration for, or inducement to engage
in, any separate agreement, transaction or commitment for any purpose whatsoever.

     12.3 Prohibited and Unenforceable Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such ,jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibitions or unenforceability in any jurisdiction. To the extent permitted
by applicable law, each of Owner and Lessee hereby waives any provision of applicable law which
renders any provision hereof prohibited or unenforceable in any respect.

     12.4 Enforcement. This Agreement, including all agreements, covenants, representations
and warranties, shall be binding upon and inure to the benefit of, and may be enforced by Owner,
Lessee, and each of their agents, servants and personal representatives.

     12.5 Headings. The section and subsection headings in this Agreement are for
convenience of reference only and shall not modify, define, expand, or limit any of the terms or
provisions hereof.

     12.6 Counterparts. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.

     12.7 Amendments. No term or provision of this Agreement may be amended, changed,
waived, discharged, or terminated orally, but only by an instrument in writing signed by the party
against which the enforcement of the change, waiver, discharge, or termination is sought.

     12.8 No Waiver. No delay or omission in the exercise or enforcement or any right or
remedy hereunder by either party shall be construed as a waiver of such right or remedy. All

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remedies, rights, undertakings, obligations, and agreements contained herein shall be
cumulative and not mutually exclusive, and in addition to all other rights and remedies which
either party possesses at law or in equity.

     12.9 No Assignments. Neither party may assign its rights or obligations under this
Agreement without the prior written permission of the other.

     12.10 Governing Law. This Agreement shall in all respects be governed by, and
construed in accordance with, the laws of the state designated in Exhibit A, including all matters
of construction, validity and performance, without giving effect to its conflict of laws
provisions.

SECTION 13. TRUTH IN LEASING

     13.1 TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 OF THE FAR’s.

     WITHIN THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE OF THIS AGREEMENT, THE AIRCRAFT HAS
BEEN INSPECTED AND MAINTAINED AND IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF FAR:

CHECK ONE:

     o 91.409(f)(1): A continuous airworthiness inspection program that is part of a
continuous airworthiness maintenance program currently in use by a person holding an air carrier
operating certificate or an operating certificate issued under FAR Part 121, 127, or 135 and
operating that make and model aircraft under FAR Part 121 or operating that make and model under
FAR Part 135 and maintaining it under FAR 135.411(a)(2).

     o 91.409(f)(2): An approved aircraft inspection program approved under FAR 135,419 and
currently in use by a person holding an operating certificate issued under FAR Part 135.

     þ 91.409(f)(3): A current inspection program recommended by the manufacturer.

     o 91.409 (f)(4): Any other inspection program established by the registered owner or operator
of the Aircraft and approved by the Administrator of the Federal Aviation Administration in
accordance with FAR 91.409 (g).

     THE PARTIES HERETO CERTIFY THAT DURING THE “TERM OF THIS AGREEMENT AND FOR OPERATIONS
CONDUCTED HEREUNDER, THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED IN ACCORDANCE WITH THE
PROVISIONS OF FAR:

CHECK ONE:

o
91.409(f)(1)
          
o 91.409(f)(2)            þ 91.409(f)(3)            o 91.409 (f)(4)

     LESSEE ACKNOWLEDGES THAT WHEN IT OPERATES THE AIRCRAFT UNDER THIS AGREEMENT, IT SHALL BE KNOWN
AS, CONSIDERED, AND IN FACT WILL BE THE OPERATOR OF SUCH AIRCRAFT. EACH PARTY HERETO CERTIFIES THAT
IT

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UNDERSTANDS THE EXTENT OF ITS RESPONSIBILITIES, SET FORTH HEREIN, FOR COMPLIANCE WITH
APPLICABLE FEDERAL AVIATION REGULATIONS.

     AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION
REGULATIONS CAN BE OBTAINED FROM THE NEAREST FEDERAL AVIATION ADMINISTRATION FLIGHT STANDARDS
DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE, OR AIR CARRIER. DISTRICT OFFICE.

     THE PARTIES HERETO CERTIFY THAT A TRUE COPY OF THIS AGREEMENT SHALL BE CARRIED ON THE AIRCRAFT
AT ALL TIMES, AND SHALL BE MADE AVAILABLE FOR INSPECTION UPON REQUEST BY AN APPROPRIATELY
CONSTITUTED IDENTIFIED REPRESENTATIVE OF THE ADMINISTRATOR OF THE FAA.

* * *

     IN WITNESS WHEREOF, the Owner and the Lessee have, each caused this Non-Exclusive
Aircraft Lease Agreement to be duly executed as of the Effective Date.

	 	 	 	 	 	 	 
	 	 	OWNER:	 	 
	 
	 	 	 	 	 	 
	 	 	Franklin Mountain Assets LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Print:

Title:
	 	/s/ Paul L. Foster
 

Paul L. Foster

President
	 	 
	 
	 	 	 	 	 	 
	 	 	LESSEE:	 	 
	 
	 	 	 	 	 	 
	 	 	Western Refining Company, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Western Refining GP, LLC	 	 
	 

	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Print:
	 	/s/ Scott D. Weaver
 

Scott D. Weaver
	 	 
	 

	 	Title:
	 	Chief Administrative Officer	 	 

- 11 -

 

NON-EXCLUSIVE AIRCRAFT LEASE AGREEMENT

EXHIBIT A

	 	 	 
	Aircraft Make/Model:

	 	Cessna Model 680 Citation Sovereign
	 
	 	 
	FAA Registration No.:

	 	N345PF
	 
	 	 
	Serial Number:

	 	680-0080
	 
	 	 
	Engine Manufacturer:

	 	Pratt and Whitney
	 
	 	 
	Base Airport:

	 	El Paso International Airport
	 
	 	 
	Controlling State Law:

	 	Texas

A-1

 

NON-EXCLUSIVE AIRCRAFT LEASE AGREEMENT

EXHIBIT B

Hourly Rent: $1,775.29 per Flight Hour

B-1exv10w1

 

Exhibit 10.1

EXECUTIVE SECURITIES AGREEMENT 

     THIS EXECUTIVE SECURITIES AGREEMENT (this “Agreement”) is made as of July 31, 2006, by
and among The Hillman Companies, Inc., a Delaware corporation (the “Company”), Hillman
Investment Company, a Delaware corporation (“Invesco”) and James M. Honerkamp
(“Executive”). Certain capitalized terms used herein are defined in Section 5
hereof.

     WHEREAS, the Company and Executive desire to enter into an agreement pursuant to which
Executive will purchase from the Company, and the Company will sell to Executive, 88.000 shares of
Class A Preferred Stock, par value $0.01 per share of the Company (the “Preferred Stock”)
and 4.396 shares of the Class A Common Stock, par value $0.01 per share of the Company (the
“Common Stock”).

     WHEREAS, the Company and Executive desire to enter into an agreement pursuant to which
Executive will purchase from Invesco, and Invesco will sell to Executive 62.000 shares of Class A
Preferred Stock, par value $0.01 per share of Invesco (the “Invesco Preferred Stock”). All
Preferred Stock, Common Stock and Invesco Preferred Stock are referred to herein as “Executive
Securities.”

     WHEREAS, the parties hereto desire to enter into this Agreement for purposes, among others, of
(i) assuring continuity in the management and ownership of the Company and (ii) limiting the manner
and terms by which the Executive Securities may be transferred.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to this Agreement hereby agree as follows:

     1. Purchase and Sale of Executive Securities.

     (a) Purchased Equity.

   (i) Upon execution of this Agreement, Executive will purchase, and the Company will
sell, 88.000 shares of Preferred Stock at a price of $1,000 per share. The Company will
deliver to Executive a copy of the certificate(s) representing such Preferred Stock, and
Executive will deliver to the Company a cashier’s or certified check or wire transfer of
immediately available funds in an aggregate amount equal to $88,000 as payment for such
Preferred Stock.

   (ii) Upon execution of this Agreement, Executive will purchase, and the Company will
sell, 4.396 shares of Common Stock at a price of $2,275 per share. The Company will deliver
to Executive a copy of the certificate(s) representing such Common Stock, and Executive will
deliver to the Company a cashier’s or certified check or wire transfer of immediately
available funds in an aggregate amount equal to $10,000 as payment for such Common Stock.

1

 

   (iii) Upon execution of this Agreement, Executive will purchase, and Invesco will sell,
62.000 shares of Invesco Preferred Stock at a price of $1,000 per share. The Company will
deliver to Executive a copy of the certificate(s) representing such Invesco Preferred Stock,
and Executive will deliver to the Company a cashier’s or certified check or wire transfer of
immediately available funds in an aggregate amount equal to $62,000 as payment for such
Invesco Preferred Stock.

   (iv) The shares of Common Stock, Preferred Stock and Invesco Preferred Stock issued to
Executive pursuant to this Section 1(a) are collectively referred to hereafter as
the “Purchased Equity.”

     (b) Possession of Stock Certificates. Until released upon the occurrence of a Sale of
the Company or a Public Offering as provided below, all certificates evidencing Executive
Securities shall be held by the Company for the benefit of Executive and the other holder(s) of
Executive Securities. Upon the occurrence of a Sale of the Company, the Company will return the
certificates for the Executive Securities to the record holders thereof. Upon the occurrence of a
Public Offering, the Company will return to the record holders thereof certificates representing
the Executive Securities (other than with respect to any Executive Securities that remain
unvested).

     (c) Closing. The closing of the transactions contemplated by Section 1(a)
(the “Closing”) shall take place at the offices of Kirkland & Ellis LLP, 200 East Randolph
Drive, Chicago, Illinois at 10:00 a.m. on the date hereof, or at such other place or on such other
date as may be mutually agreeable to the Company, Invesco and Executive.

     (d) Representations and Warranties. Executive represents and warrants that:

   (i) the Executive Securities to be acquired by Executive pursuant to this Agreement
shall be acquired for the Executive’s own account and not with a view to, or intention of,
distribution thereof in violation of the Securities Act, or any applicable state securities
laws, and the Executive Securities shall not be disposed of in contravention of the
Securities Act or any applicable state securities laws;

   (ii) Executive is an executive officer of the Company or a Subsidiary thereof, is
sophisticated in financial matters and is able to evaluate the risks and benefits of the
investment in the Executive Securities;

   (iii) Executive is able to bear the economic risk of his or her investment in the
Executive Securities for an indefinite period of time. Executive understands that the
Executive Securities have not been registered under the Securities Act and, therefore,
cannot be sold, and in certain circumstances, transferred, unless subsequently registered
under the Securities Act or an exemption from such registration is available;

   (iv) Executive has had an opportunity to ask questions and receive answers concerning
the terms and conditions of the offering of the Executive Securities and has

2

 

had full access to such other information concerning the Company as he or she has
requested; and

   (v) this Agreement constitutes the legal, valid and binding obligation of Executive,
enforceable in accordance with its terms, and the execution, delivery and performance of
this Agreement by Executive does not and shall not conflict with, violate or cause a breach
of any agreement, contract or instrument to which the Executive is a party or any judgment,
order or decree to which the Executive is subject.

   (vi) Executive is an accredited investor under the Securities Act.

   (vii) Executive is a resident of the State of Ohio.

     (e) No Employment Obligation. As an inducement to the Company to issue the Executive
Securities to Executive hereunder, and as a condition thereto, Executive acknowledges and agrees
that:

   (i) neither the issuance of the Executive Securities to Executive hereunder nor any
provision contained herein shall entitle Executive to remain in the employment of the
Company or any of its Subsidiaries or affect the right of the Company or any of its
Subsidiaries to terminate Executive’s employment at any time; and

   (ii) neither the Company nor its Subsidiaries shall have any duty or obligation to
disclose to Executive, and Executive shall have no right to be advised of, any information
regarding the Company or its Subsidiaries (except in connection with a determination of the
Fair Market Value of the Executive Securities) at any time prior to, upon or in connection
with the repurchase of the Executive Securities upon the termination of Executive’s
employment with the Company or any of its Subsidiaries or as otherwise provided hereunder.

     (f) Stock Powers. At the Closing, (i) Executive shall execute in blank ten stock
transfer powers in the form of Exhibit A attached hereto (the “Stock Powers”) with
respect to the Common Stock, the Preferred Stock and the Invesco Preferred Stock represented by
certificates and shall deliver such Stock Powers to the Company and Invesco, respectively. The
Stock Powers shall authorize the Company or Invesco, as applicable, to assign, transfer and deliver
the Executive Securities represented by certificates to the appropriate acquirer thereof pursuant
to Section 3 below or Section 6 of the Stockholders Agreement and under no other
circumstances and (ii) Executive’s spouse shall execute the consent in the form of Exhibit
B attached hereto.

     2. Restrictions on Transfer of Executive Securities; Restriction on Conversion of Common
Stock.

     (a) Transfer of Executive Securities. The holders of Executive Securities shall not
sell, transfer, assign, pledge or otherwise dispose of (a “Transfer”) any interest in any
Executive Securities, except pursuant to (i) the provisions of Sections 5 and 6 of the Stockholders

3

 

Agreement, (ii) the provisions of Section 3 of the Invesco Stockholders Agreement, (iii) a
Sale of the Company, (iv) the provisions of Section 2(b) hereof or (v) the provisions of
Section 3 hereof.

     (b) Certain Permitted Transfers. The restrictions set forth in Section 2(a)
shall not apply with respect to any Transfer of Executive Securities made (i) pursuant to
applicable laws of descent and distribution or to such Person’s legal guardian in case of any
mental incapacity or among such Person’s Family Group, or (ii) at such time as the Investor Group
sells Common Stock in a Public Sale, but in the case of this clause (ii) only an amount (the
“Transfer Amount”) equal to the number of shares of Common Stock issued hereunder and owned
by Executive multiplied by a fraction (the “Transfer Fraction”), the numerator of which is
the number of shares of Common Stock sold by the Investor Group in such Public Sale and the
denominator of which is the total number of shares of Common Stock held by the Investor Group prior
to the Public Sale; provided that, if at the time of a Public Sale by the Investor Group,
Executive chooses not to Transfer the Transfer Amount, Executive shall retain the right to Transfer
an amount of shares of Common Stock at a future date equal to the number of shares of Common Stock
issued hereunder and owned by Executive at such future date multiplied by the Transfer Franction;
provided further that, the restrictions contained in this Section 2 will continue
to be applicable to the Executive Securities after any Transfer of the type referred to in clause
(i) and the transferees of such Executive Securities will agree in writing to be bound by the
provisions of this Agreement. Any transferee of Executive Securities pursuant to a transfer in
accordance with the provisions of this Section 2(b) is herein referred to as a
“Permitted Transferee.” Upon the transfer of Executive Securities pursuant to this
Section 2(b), the transferring Executive will deliver a written notice (a “Transfer
Notice”) to the Company. In the case of a Transfer pursuant to clause (i) hereof, the Transfer
Notice will disclose in reasonable detail the identity of the Permitted Transferee(s).

     (c) Termination of Restrictions. The restrictions set forth in Sections 2(a) and
2(b) above will continue with respect to each of the Executive Securities until the earlier of
(i) the date on which such Executive Securities have been transferred in a Public Sale as permitted
by this Section 2 or (ii) the consummation of a Sale of the Company.

     (d) Legends. The certificates representing the Executive Securities will bear a
legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED AS OF JULY
31, 2006, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS
SET FORTH IN AN EXECUTIVE SECURITIES AGREEMENT BETWEEN THE COMPANY AND AN EXECUTIVE
OF THE COMPANY DATED AS OF

4

 

JULY 31, 2006. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”

3. Repurchase of Executive Securities.

(a) Repurchase of Purchased Equity.

     (i) If Executive’s employment terminates due to termination by the Company or any of
its Subsidiaries with Cause, then the Company, Invesco (in the case of Executive Securities
of Invesco) and the Investor Group shall have the right to repurchase Executive’s Purchased
Equity at a price per share of Purchased Equity equal to the lesser of the Fair Market Value
and the Original Cost thereof.

     (ii) Upon a resignation by Executive without Good Reason, Executive shall have the
right to require the Company or Invesco (in the case of Executive Securities of Invesco) to
repurchase his Purchased Equity (a “Purchased Equity Put”), or if Executive does not
exercise the Purchased Equity Put in accordance with the terms hereof, the Company, Invesco
(in the case of Executive Securities of Invesco) and the Investor Group shall have the right
to repurchase Executive’s Purchased Equity, in either case, at a price per share of
Purchased Equity equal to the Fair Market Value thereof; provided that after the closing of
the Purchased Equity Put with Executive (including delivery of all the Executive Securities
by Executive), the Company, Invesco (in the case of Executive Securities of Invesco) or the
Investor Group shall be permitted to postpone payment of the amount owed in connection with
the Purchased Equity Put exercised pursuant to this Section 3(a)(ii) for up to 2
years from the date of such resignation.

     (iii) If Executive’s employment terminates due to (A) termination by the Company or any
of its Subsidiaries without Cause, (B) death or Disability, (C) Retirement or (D)
resignation by Executive for Good Reason, then Executive shall have a Purchased Equity Put,
or if Executive does not exercise the Purchased Equity Put in accordance with the terms
hereof, the Company, Invesco (in the case of Executive Securities of Invesco) and the
Investor Group shall have a right to repurchase Executive’s Purchased Equity, in either
case, at a price per share of Purchased Equity equal to the Fair Market Value.

(b) Put Option Procedures.

     (i) In the event that Executive becomes entitled to exercise a Put Option pursuant to
this Section 3 (a “Put Event”), Executive (or his personal representative,
if Executive is deceased or incompetent) may, at his or her discretion, exercise all (but
not less than all) of the Put Options then exercisable for all (but not less than all) of
the Executive Securities subject to the Put Options by delivering written notice (the
“Put Notice”) to the Company specifying the number of Executive Securities to be

5

 

repurchased by the Company within 40 days following the occurrence of the Put Event
(the “Put Option Exercise Period”).

     (ii) Upon the delivery of the Put Notice and subject to the provisions herein and in
the Put Notice, the Company or Invesco (in the case of Executive Securities of Invesco), as
the case may be, shall, in accordance with the terms hereof promptly determine the purchase
price for the Executive Securities (the “Put Price”), and, within 20 days after the
determination of the Put Price, shall purchase and Executive shall sell the number of the
Executive Securities specified in the Put Notice at a mutually agreeable time and place.

     (iii) Notwithstanding any provision herein to the contrary and subject to Section
3(d) hereof, the maximum amount that the Company or Invesco collectively shall be
required to pay during each calendar year in connection with the Put Options held by
Executive and any other executives party to an Executive Securities Agreement with the
Company and/or Invesco (collectively, the “Executive Securityholders”) is $5,000,000
(the “Put Option Cap”). In the event that the aggregate purchase price for the Put
Options exercised by the Executive Securityholders in any calendar year exceeds the Put
Option Cap, the amount of such excess shall be applied to the Put Option Cap for the next
calendar year or succeeding years.

     (iv) The Company and Invesco will be entitled to receive customary representations and
warranties from the sellers regarding such sale and to require that all sellers’ signatures
be guaranteed.

(c) Repurchase Option Procedures.

     (i) Repurchase Option Procedure for the Company. With respect to any
repurchase option other than a Put Option (which shall be governed by the procedures set
forth in Section 3(b)) and subject to Executive’s prior right to exercise a Put
Option upon the occurrence of a Put Event, the Company or Invesco (in the case of Executive
Securities of Invesco) may elect to repurchase all or any portion of the Executive
Securities subject to repurchase as provided herein (the “Available Securities”) of
Executive whose employment with the Company or any of its Subsidiaries has terminated (the
“Termination”) as described in Section 3(a) (the “Repurchase
Option”) by delivery of written notice (a “Repurchase Notice”) to the holders of
such Executive Securities within 120 days after the date of the Termination (the
“Repurchase Notice Period”) if a Put Event has not occurred, or if a Put Event has
occurred, within 120 days following the expiration of the Put Option Exercise Period. The
Repurchase Notice shall set forth the aggregate consideration to be paid for such Available
Securities and the time (not to be later than 20 days after such notice) and place for the
closing of the transaction.

     (ii) Repurchase Option Procedure for Investor Group. If for any reason the
Company or Invesco (in the case of Executive Securities of Invesco) does not elect to
purchase all of the Available Securities, the Investor Group shall be entitled to exercise

6

 

the Repurchase Option for all or any portion of the Available Securities. As soon as
practicable after the Company or Invesco (in the case of Executive Securities of Invesco)
has determined that it will not purchase all of the Available Securities, but in any event
within 80 days after the Termination if a Put Event has not occurred, or if a Put Event has
occurred, within 80 days following the expiration of the Put Option Exercise Period, the
Company or Invesco (in the case of Executive Securities of Invesco) shall give written
notice (the “Option Notice”) to each member of the Investor Group setting forth the
number of Available Securities and the purchase price for the Available Securities. The
members of the Investor Group may elect to purchase all or any portion of the Available
Securities by giving written notice to the Company or Invesco (in the case of Executive
Securities of Invesco) within 30 days after the Option Notice has been delivered to such
member of the Investor Group by the Company or Invesco (in the case of Executive Securities
of Invesco). If the members of the Investor Group elect to purchase an aggregate amount of
Available Securities in excess of the amount of Available Securities specified in the Option
Notice, the Available Securities shall be allocated among the members of the Investor Group
based on the amount of such type or types of Stockholder Shares (as defined in the
Stockholders Agreement) owned by each member of the Investor Group on the date of the Option
Notice and the type of Available Securities. Any member of the Investor Group may condition
his, her or its election to purchase such Available Securities on the election of one or
more other members of the Investor Group to purchase Available Securities. As soon as
practicable, and in any event within ten days after the expiration of the 30-day period set
forth above, the Company or Invesco (in the case of Executive Securities of Invesco) shall
deliver a notice to the holders of such Available Securities setting forth the aggregate
consideration to be paid by the respective members of the Investor Group for such Available
Securities and the time (not to be later than 20 days after such notice) and place for the
closing of the transaction. At the time the Company or Invesco (in the case of Executive
Securities of Invesco) delivers such notice to the holders of such Available Securities, the
Company or Invesco (in the case of Executive Securities of Invesco) shall also deliver
written notice to each member of the Investor Group setting forth the amount of securities
such member is entitled to purchase, the aggregate purchase price and the time and place of
the closing of the transaction.

     (iii) Representations and Warranties; Signatures. The Company, Invesco (in the
case of Executive Securities of Invesco) and the Investor Group, as the case may be, will be
entitled to receive customary representations and warranties from the sellers regarding such
sale and to require that all sellers’ signatures be guaranteed.

     (iv) Revocation. Notwithstanding anything to the contrary contained in this
Agreement, if in connection with a Repurchase Option the holder of Executive Securities
delivers the notice of disagreement described in the definition of Fair Market Value, or if
the Fair Market Value of the Executive Securities is determined to be an amount more than
10% greater than the repurchase price for Executive Securities originally determined by the
Board, each of the Company, Invesco (in the case of Executive Securities of Invesco) and
each member of the Investor Group who has exercised its, their or his

7

 

Repurchase Option shall have the right to revoke its, their or his exercise of the
Repurchase Option, as the case may be, for all or any portion of the Executive Securities
elected to be repurchased by it, them or him by delivering notice of such revocation in
writing to the holder of the Executive Securities during (A) the thirty-day period beginning
on the date the Company, Invesco (in the case of Executive Securities of Invesco) and the
relevant members of the Investor Group receive Executive’s written notice of disagreement or
(B) the thirty-day period beginning on the date the Company, Executive, Invesco (in the case
of Executive Securities of Invesco) and the relevant members of the Investor Group are given
written notice that the Fair Market Value of the Executive Securities was finally determined
to be an amount more than 10% greater than the repurchase price for such Executive
Securities originally determined by the Board. The closing of the transaction shall be
postponed until the expiration of the thirty-day period described in the preceding sentence
and shall in any event be postponed until the Fair Market Value of the Executive Securities
is finally determined pursuant to the procedure described in the definition of Fair Market
Value.

     (d) Manner of Payment. The Company, Invesco and/or a member of the Investor Group, as
applicable, shall pay for the Executive Securities to be repurchased pursuant to the Repurchase
Option or a Put Option by delivery of a cashier’s check or wire transfer of funds. Alternatively,
the Company or Invesco (in the case of Executive Securities of Invesco) may pay the purchase price
for the Executive Securities to be repurchased pursuant to the Repurchase Option or a Put Option by
offsetting against any indebtedness or obligations for advanced or borrowed funds owed by Executive
to the Company or Invesco. Notwithstanding anything to the contrary contained in this Agreement,
all repurchases of Executive Securities by the Company or Invesco shall be subject to applicable
federal and state laws and to restrictions contained in the Company’s and its Subsidiaries’ debt
financing arrangements. If any such laws or restrictions prohibit the repurchase of Executive
Securities hereunder which the Company or Invesco is otherwise entitled to make, the time periods
provided in this Section 3 shall be suspended, and the Company or Invesco may make such
repurchases as soon as it is permitted to do so under such laws or restrictions. Alternatively, if
and to the extent any such laws or restrictions prohibit the repurchase of Executive Securities
hereunder for cash, the Company or Invesco (in the case of Executive Securities of Invesco) may, at
its sole option, repurchase such Executive Securities, in which case the amount of the purchase
price which is not able to be paid in cash shall be paid for by the issuance of a subordinated
promissory note, which, subject to the approval of the senior and senior subordinated lender(s) of
the Company and its Subsidiaries, shall be payable as soon as the Company or Invesco is permitted
to pay such note under such laws or restrictions and shall bear interest (payable annually) at a
floating rate per annum equal to the prime or base rate of interest (as established and publicly
announced in The Wall Street Journal).

     (e) Termination of Certain Repurchase Options. The Repurchase Options and Put Options
set forth in this Section 3 shall terminate with respect to the Executive Securities upon
(i) the date on which such Executive Securities have been transferred in a Public Sale as permitted
by Section 2 or (ii) consummation of a Sale of the Company.

8

 

     4. Transfer. Prior to transferring any Executive Securities (other than in a Public
Sale, a Sale of the Company, Section 3 hereof, Section 5 of the Stockholders Agreement and
Section 3 of the Invesco Stockholders Agreement) to any Person, the transferring Executive will
cause the prospective transferee to be bound by this Agreement and to execute and deliver to the
Company a counterpart to this Agreement. Any Transfer or attempted Transfer of any Executive
Securities in violation of any provision of this Agreement shall be void, and the Company shall not
record such Transfer on its books or treat any purported transferee of such Executive Securities as
the owner of such units for any purpose.

     5. Definitions.

     “Affiliate” means with respect to any Person, any other Person controlling, controlled
by, or under common control with such first Person and in the case of a Person which is a
partnership, any partner of that Person.

     “Board” means the Board of Directors of the Company.

     “Cause” means (i) the willful failure to substantially perform duties required in
connection with Executive’s employment commensurate with position, other than due to Disability,
(ii) a willful act which constitutes gross misconduct or fraud and which is injurious to the
Company or its Subsidiaries; (iii) conviction of, or plea of guilty or no context to, a felony; or
(iv) any material breach of confidentiality, noncompete or non-solicitation agreements with the
Company or any of its Subsidiaries which is not cured within 10 days after written notice from the
Company.

     “CHS” means Code Hennessy & Simmons IV LP, a Delaware limited partnership and any
Affiliate thereof.

     “Class B Common Stock” means the Company’s Class B Common Stock, par value $0.01 per
share.

     “Class C Common Stock” means the Company’s Class C Common Stock, par value $0.01 per
share.

     “Disability “ means Executive’s inability to carry out effectively his duties and
obligations to the Company or any of its Subsidiaries or to participate effectively and actively in
the management of the Company or any of its Subsidiaries for a period of more than 26 weeks in any
12-month period as a result of any mental or physical disability or incapacity as defined in the
Americans with Disabilities Act or as otherwise determined in the reasonable good faith judgment of
the Board.

     “Executive Securities” shall mean the Purchased Equity. Executive Securities will
continue to be Executive Securities in the hands of any holder other than Executive (except for the
Company, Invesco and other Stockholders, and except for transferees in a Sale of the Company), and
except as otherwise provided herein, each such other holder of Executive

9

 

Securities will succeed to all rights and obligations attributable to Executive as a holder of
Executive Securities hereunder. Executive Securities will also include the Company’s and Invesco’s
securities issued with respect to Executive Securities by way of a stock split or stock dividend
and securities into which such shares of stock or rights to acquire stock may be changed by reason
of a recapitalization, reorganization, merger, consolidation or any other change in the structure
or capitalization of the Company, including but not limited to debt or shares of common stock
and/or preferred stock and/or options of any corporate successor to the business of the Company or
Invesco, whether issued in connection with a public offering of securities of such entity or
otherwise.

            “Fair Market Value” of any Executive Securities means the composite closing price of
the sales of such Executive Securities on the securities exchanges on which such Executive
Securities may at the time be listed (as reported in The Wall Street Journal), or, if there
have been no sales on any such exchange on any day, the average of the highest bid and lowest asked
prices on all such exchanges at the end of such day, or, if such Executive Securities are not so
listed, the closing price (or last price, if applicable) of sales of such Executive Securities on
The Nasdaq Stock Market (as reported in The Wall Street Journal), or if such Executive
Securities are not quoted in The Nasdaq Stock Market but are traded over-the-counter, the average
of the highest bid and lowest asked prices on such day in the over-the-counter market as reported
by the National Quotation Bureau Incorporated, or any similar successor organization, in each such
case averaged over a period of 21 days consisting of the day as of which the Fair Market Value is
being determined and the 20 consecutive business days prior to such day. If at any time such
Executive Securities are not listed on any securities exchange, quoted in The Nasdaq Stock Market,
or quoted in the over-the-counter market, the “Fair Market Value” of such Executive
Securities shall mean the fair market value of such Executive Securities as determined by the Board
reasonably and in good faith on an enterprise basis, taking into account all relevant factors
determinative of value (including the lack of liquidity of such Executive Securities due to the
Company’s status as a privately held corporation, but without regard to any discounts for minority
interests), using valuation techniques then prevailing in the securities industry (e.g., discounted
cash flows and/or comparable companies) and assuming full disclosure of all relevant information
and a reasonable period of time for effectuating such sale; provided that upon Executive’s
request the Board shall provide Executive with reasonable supporting information regarding the
Board’s determination of the Fair Market Value; and further provided that if
Executive disagrees with the Board’s determination of the Fair Market Value, then Executive shall
provide notice of his disagreement to the Company and the Investor Group within thirty days after
the Board provides notice to Executive of its determination, in which case the “Fair Market Value”
shall be determined by an investment banking firm agreed upon by the Company and Executive, which
firm shall submit to the Company and Executive a report within 30 days of its engagement setting
forth such determination. If the parties are unable to agree on an investment banking firm within
20 days after Executive provides notice to the Board of his disagreement, the Company and Executive
shall each select an investment bank of recognized national standing and such two investment
banking firms shall select a third investment banking firm. Such third investment banking firm
shall render a determination within 30 days of its engagement. The determination of such firm will
be final and binding upon all parties. If an

10

 

investment banking firm is to make the Fair Market Value determination hereunder, Executive,
on the one hand, and the Company, on the other hand, shall submit in writing their respective
estimates of the Fair Market Value at the time the investment banking firm is requested to make
such determination, and such investment banking firm’s determination of the Fair Market Value shall
not be higher than the highest estimate nor lower than the lowest estimate as submitted by the
Company and Executive. The fees, costs and expenses of the investment banking firm shall be
allocated between the Company, on the one hand, and Executive, on the other hand, in the same
proportion that the amount by which such party’s estimate of the Fair Market Value so submitted to
the investment banking differs from the Fair Market Value (as finally determined by the investment
banking firm) bears to the amount of the difference between such party’s estimate of the Fair
Market Value and the other party’s estimate of the Fair Market Value. If the Company, Invesco (in
the case of Executive Securities of Invesco) or the Investor Group exercise their revocation rights
under Section 3(c)(iv), then the expenses of the investment banking firm shall be borne by
the Company in all cases. The Company may require that the investment banking firm keep
confidential any non-public information received as a result of this paragraph pursuant to
reasonable confidentiality arrangements. Regardless of when a transaction based on a Fair Market
Value valuation is executed, the Fair Market Value shall be determined as of the date of the
Termination of Executive’s employment with the Company or any of its Subsidiaries. Notwithstanding
the foregoing, Executive shall not have any appraisal right hereunder if a similar appraisal right
has been exercised by an employee of any the Company or its Subsidiaries within the six months
preceding the day as of which Fair Market Value is being determined hereunder, and Fair Market
Value has been determined pursuant to such exercise of such appraisal right.

     “Family Group” means (i) a Person’s spouse and descendants (whether natural or
adopted), (ii) any trust solely for the benefit of the Person and/or any of the Person’s spouse
and/or descendants and (iii) any entity wholly owned by the Person.

     “Good Reason” means Executive’s termination of his employment with the Company and its
Subsidiaries due to (i) any material diminution in Executive’s position, authority or duties with
the Company or its Subsidiaries; (ii) the Company or any of its Subsidiaries reassigning Executive
to work at a location that is more than seventy-five (75) miles from his current work location or
(iii) the failure of the Company and its Subsidiaries to pay Executive’s compensation or bonuses or
to provide benefit as agreed by the Company or its Subsidiaries and Executive or, as to benefits,
as generally made available to employees in Executive’s position with the Company or its
Subsidiaries, which is not cured within ten (10) days after written notice from Executive.
Executive’s resignation for Good Reason must be delivered within thirty (30) days after the
occurrence of the event giving rise to the resignation.

     “Invesco Stockholders Agreement” means that certain Stockholders Agreement dated as
March 31, 2004 by and among Invesco and certain stockholders of Invesco, as amended.

     “Investor Common Stock” means any Common Stock, Class B Common Stock and Class C
Common Stock issued to or held by the Investor Group.

11

 

     “Investor Group” means those persons set forth on Schedule A to this
Agreement.

     “Original Cost” with respect to (i) shares of Preferred Stock and Invesco Preferred
Stock shall be equal to $1,000 per share and (ii) shares of Common Stock shall be equal to $2,275
per share (in each case as adjusted for stock splits, stock dividends or other recapitalizations
occurring after the date hereof).

     “Person” means an individual, a partnership, a corporation, an association, a limited
liability company, a joint stock company, a trust, a joint venture, an unincorporated organization
or any other entity (including, without limitation, any governmental entity or any department,
agency or political subdivision thereof).

     “Public Offering” means an underwritten initial public offering and sale, registered
under the Securities Act, of shares of the Company’s Common Stock.

     “Public Sale” means any sale of Executive Securities (i) to the public pursuant to an
offering registered under the Securities Act or (ii) to the public through a broker, dealer or
market maker pursuant to the provisions of Rule 144 (or any similar provision then in effect)
adopted under the Securities Act (other than Rule 144(k) prior to a Public Offering).

     “Put Option” means the Purchased Equity Put.

     “Registration Agreement” means the Registration Agreement dated as March 31, 2004 by
and among the Company and certain Stockholders of the Company.

     “Retire” or “Retirement” means Executive’s retirement from employment with the
Company or any of its Subsidiaries at any time after he reaches age 61.

     “Sale of the Company” means any transaction or series of transactions pursuant to
which any Person(s) or a group of related Persons (other than the Investor Group and their
Affiliates) in the aggregate acquire(s) (i) capital stock of the Company possessing the voting
power (other than voting rights accruing only in the event of a default, breach or event of
noncompliance) to elect a majority of the Board (whether by merger, consolidation, reorganization,
combination, sale or transfer of the Company’s capital stock, shareholder or voting agreement,
proxy, power of attorney or otherwise) or (ii) all or substantially all of the Company’s assets
determined on a consolidated basis; provided, that a Sale of the Company shall not include
a Public Offering.

     “Securities Act” means the Securities Act of 1933, as amended from time to time.

     “Stockholder” means any Person, other than the Company, who is a party to the
Stockholders Agreement dated as of March 31, 2004.

     “Stockholders Agreement” means that certain Stockholders Agreement dated as March 31,
2004 by and among the Company and certain stockholders of the Company, as amended from time to time
in accordance with its terms.

12

 

     “Subsidiaries” means, with respect to any Person, any corporation, limited liability
company, partnership, association or other business entity of which (i) if a corporation, a
majority of the total voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more Subsidiaries of such Person or entity or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited
liability company, partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership, association or other
business entity gains or losses or shall be or control any managing director or general partner of
such limited liability company, partnership, association or other business entity.

     6. Miscellaneous.

     (a) Amendment and Waiver. The provisions of this Agreement may be amended and waived
only with the prior written consent of the Company, the holders of a majority of the Investor
Common Stock then outstanding, Executive and, for so long as Ontario Teachers’ Pension Plan Board,
an Ontario corporation (“Teachers”), owns Stockholder Shares and shares of Invesco
Preferred with an aggregate Original Cost (as defined in the Stockholders Agreement) to Teachers of
at least $25,000,000, Teachers. The failure of any party to enforce any of the provisions of this
Agreement will in no way be construed as a waiver of such provisions and will not affect the right
of such party thereafter to enforce each and every provision of this Agreement in accordance with
its terms.

     (b) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.

     (c) Agreement. Except as otherwise expressly set forth herein, in the Stockholders
Agreement or Registration Agreement, this Agreement, those documents expressly referred to herein
(including the Stockholders Agreement) and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written or oral, which may
have related to the subject matter hereof in any way.

     (d) Successors and Assigns. Except as otherwise provided herein, this Agreement will
bind and inure to the benefit of and be enforceable by the Company and its successors and

13

 

assigns, Invesco and its successors and assigns, and the Investor Group and their respective
successors and assigns, so long as they hold shares of Investor Common Stock.

     (e) Third Party Beneficiaries. The members of the Investor Group are intended to be
third-party beneficiaries of this entire Agreement and the rights and obligations of the parties
hereto. It is understood and agreed by the parties hereto that this Agreement shall be enforceable
by the holders of a majority of the Investor Common Stock then outstanding in accordance with this
Agreement’s terms as though such holders of Investor Common Stock were a party to every provision
hereof. Except as expressly provided herein, no other third party beneficiaries are intended by
the parties hereto to be beneficiaries hereof.

     (f) Counterparts; Facsimile Signature. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together shall constitute one
and the same agreement. This Agreement may be executed by facsimile signature.

     (g) Remedies. Each of Company, Invesco, the Investor Group and Executive shall be
entitled to enforce its rights under this Agreement specifically to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that each of the Company, Invesco, the
Investor Group (acting by a majority vote of the Investor Common Stock) and Executive may in its
sole discretion apply to any court of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.

     (h) Notices. Any notice provided for in this Agreement must be in writing and must be
either personally delivered, sent via facsimile, sent by first class mail (postage prepaid and
return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the
Company, Invesco and Executive at the addresses set forth below and to any member of the Investor
Group at the address set forth on Schedule A attached hereto, or subsequent holder of
Executive Securities subject to this Agreement, at such address as is indicated in the Company’s
records, or at such address or to the attention of such other Person as the recipient party has
specified by prior written notice to the sending party. Notices will be deemed to have been given
hereunder when delivered personally, when confirmed if sent by facsimile, three days after deposit
in the U.S. mail and one day after deposit with a reputable overnight courier service.

If to the Company:

The Hillman Companies, Inc.

c/o Code Hennessy & Simmons LLC

10 South Wacker Drive, Suite 3175

Chicago, IL 60606

Facsimile: (312) 876-3854

Attn:     Peter M. Gotsch

14

 

 with copies to:

Code Hennessy & Simmons IV LP

c/o Code Hennessy & Simmons LLC

10 South Wacker Drive, Suite 3175

Chicago, IL 60606

Facsimile: (312) 876-3854

Attn:      Peter M. Gotsch

and

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, IL 60601

Facsimile: (312) 861-2200

Attn:     Stephen L. Ritchie, P.C. and Michael H. Weed

If to Invesco:

Hillman Investment Company

c/o Code Hennessy & Simmons LLC

10 South Wacker Drive, Suite 3175

Chicago, IL 60606

Facsimile: (312) 876-3854

Attn:     Peter M. Gotsch

with copies to:

Code Hennessy & Simmons IV LP

c/o Code Hennessy & Simmons LLC

10 South Wacker Drive, Suite 3175

Chicago, IL 60606

Facsimile: (312) 876-3854

Attn:     Peter M. Gotsch

and

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, IL 60601

Facsimile: (312) 861-2200

Attn:     Stephen L. Ritchie, P.C. and Michael H. Weed

15

 

If to the Executive:

James M. Honerkamp

c/o The Hillman Companies, Inc.

10590 Hamilton Avenue

Cincinnati, OH 45231

with a copy to:

James M. Honerkamp

1217 Restwood Drive

Loveland, OH 45140

     (i) Governing Law. The corporate law of the State of Delaware shall govern all issues
and questions concerning the relative rights and obligations of the Company, Invesco and their
respective Stockholders. All other issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits hereto shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State
of Delaware.

     (j) MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES HERETO,
WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR
INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY AND/OR THE RELATIONSHIP
ESTABLISHED AMONG THE PARTIES HEREUNDER.

     (k) Business Days. If any time period for giving notice or taking action hereunder
expires on a day which is a Saturday, Sunday or holiday in the state in which the Company’s chief
executive office is located, the time period shall be automatically extended to the business day
immediately following such Saturday, Sunday or holiday.

     (l) Indemnification and Reimbursement of Payments on Behalf of Executive. The Company
and its Subsidiaries shall be entitled to deduct or withhold from any amounts owing from the
Company or any of its Subsidiaries to Executive any federal, state, local or foreign

16

 

withholding taxes, excise taxes, or employment taxes (“Taxes”) imposed with respect to
Executive’s compensation or other payments from the Company or any of its Subsidiaries or
Executive’s ownership interest in the Company and Invesco, including, without limitation, wages,
bonuses, dividends, the receipt or exercise of equity options and/or the receipt or vesting of
restricted equity. In the event the Company or any of its Subsidiaries does not make such
deductions or withholdings, Executive shall indemnify the Company and its Subsidiaries for any
amounts paid with respect to any such Taxes, together with any interest, penalties and related
expenses thereto.

     (m) Adjustments of Numbers. All numbers set forth herein that refer to per share
prices or amounts will be appropriately adjusted to reflect stock splits, stock dividends,
combinations of stock and other recapitalizations affecting the subject class of equity.

     (n) Deemed Transfer of Executive Securities. If the Company (and/or the Investor
Group or any other Person acquiring securities) shall make available, at the time and place and in
the amount and form provided in this Agreement, the consideration for the Executive Securities to
be repurchased in accordance with the provisions of this Agreement, then from and after such time,
the Person from whom such Executive Securities are to be repurchased shall no longer have any
rights as a holder of such Executive Securities (other than the right to receive payment of such
consideration in accordance with this Agreement) and such Executive Securities shall be deemed
purchased in accordance with the applicable provisions hereof and the Company (and/or the Investor
Group and/or any other Person acquiring securities) shall be deemed the owner and holder of such
Executive Securities, whether or not the certificates therefor have been delivered as required by
this Agreement.

     (o) No Pledge or Security Interest. The purpose of the Company’s retention of
Executive’s certificates is solely to facilitate the repurchase provisions set forth in Section
3 herein and Section 6 of the Stockholders Agreement and does not constitute a pledge by
Executive of, or the granting of a security interest in, the underlying equity.

     (p) Rights Granted to Investors and their Affiliates. Any rights granted to an
Investor and its Affiliates hereunder may also be exercised (in whole or in part) by their
designees.

     (q) Descriptive Headings. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.

* * * * *

17

 

     IN WITNESS WHEREOF, the parties hereto have executed this Executive Securities Agreement on
the day and year first above written.

	 	 	 	 	 	 	 
	COMPANY:	 	THE HILLMAN COMPANIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	INVESCO:	 	HILLMAN INVESTMENT COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	EXECUTIVE:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	James M. Honerkamp	 	 

18

 

SCHEDULE A

Code Hennessy & Simmons IV LP

10 South Wacker Drive

Suite 3175

Chicago, IL 60606

Attention: Peter M. Gotsch

CHS Associates IV

10 South Wacker Drive

Suite 3175

Chicago, IL 60606

Ontario Teachers’ Pension Plan Board

5650 Yonge Street

Toronto, Ontario M2M4H5

Attention: Shael Dolman

19

 

EXHIBIT A

FORM OF ASSIGNMENT

     FOR VALUE RECEIVED,                      (“Executive”) does hereby sell, assign and transfer
unto
                                        , a                     , (a) ___ shares of Common Stock of The
Hillman Companies, Inc., a Delaware corporation (the “Company”), standing in the
undersigned’s name on the books of the Company, represented by
Certificate Nos. ___ herewith,
(b) ___ shares of Preferred Stock of the Company, standing in the undersigned’s name on the
books of the Company, represented by Certificate Nos.
___ herewith, , and (c) ___ shares of
Class A Preferred Stock, par value $0.01 per share, of Hillman Investment Company, a Delaware
corporation (“Invesco”), pursuant to, and limited to the terms of, Section 1(g) of the
Executive Securities Agreement dated ___ ___, 2006 between Executive, the Company and Invesco, and
for such purpose only does hereby irrevocably constitute and appoint each principal of Code
Hennessy & Simmons IV LP (acting alone or with one or more other such principals) as attorney to
transfer said shares of stock on the books of the Company or Invesco, as applicable, with full
power of substitution in the premises.

	 	 	 	 	 
	Dated: ___ ___, 2006

	 	 

James M. Honerkamp
	 	 

 

EXHIBIT B

SPOUSAL CONSENT

     The undersigned spouse of Executive hereby acknowledges that I have read the foregoing
Executive Securities Agreement and the Stockholders Agreements and Registration Agreement referred
to therein, each executed by Executive and dated as of the date hereof, and that I understand their
contents. I am aware that the foregoing Executive Securities Agreement, Stockholders Agreements
and Registration Agreement provide for the repurchase of my spouse’s securities and certain options
to acquire securities under certain circumstances and/or impose other restrictions on such
securities and certain options to acquire securities (including, without limitation, the transfer
restriction thereof). I agree that my spouse’s interest in these securities and certain options to
acquire securities is subject to these restrictions and any interest that I may have in such
securities and certain options to acquire securities shall be irrevocably bound by these agreements
and further, that my community property interest, if any, shall be similarly bound by these
agreements.

	 	 	 	 	 	 	 
	 

	 	Spouse’s Signature:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Date: July 31, 2006	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Witness’ Signature:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Date: July 31, 2006	 	 	 	 

21

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