Document:

<PAGE>
                                                                   EXHIBIT 10.18

                                   AGREEMENT

                                  dated as of

                               September 2, 1994

                                    between

                               LORAL CORPORATION

                                      and

                              K&F INDUSTRIES, INC.
<PAGE>
                               TABLE OF CONTENTS*

<TABLE>
<CAPTION>
                                                                                                                        Page
                                                                                                                        ----
<S>                <C>                                                                                                   <C>
                                                        ARTICLE I

                                                       DEFINITIONS

Section 1.1.       Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1

                                                        ARTICLE II

                                     EXCHANGE AND REPAYMENT OF CONVERTIBLE DEBENTURES

Section 2.1.       Exchange and Repayment of Convertible Debentures   . . . . . . . . . . . . . . . . . . . . . . . .    3
Section 2.2.       The Closing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3

                                                       ARTICLE III

                                       REPRESENTATIONS AND WARRANTIES OF THE ISSUER

Section 3.1.       Disclosure   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    4
Section 3.2.       Organization and Status  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    4
Section 3.3.       Authorization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5
Section 3.4.       Financial Statements; Absence of Undisclosed Liabilities   . . . . . . . . . . . . . . . . . . . .    5
Section 3.5.       No Violation; Consents   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6
Section 3.6.       Litigation   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6
Section 3.7.       Investment Company Act   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6

                                                       ARTICLE   IV

                                              REPRESENTATIONS AND WARRANTIES
                                                        OF LORAL

Section 4.1.       Private Placement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
Section 4.2.       Organization and Status  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
Section 4.3.       Authorization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
Section 4.4.       No Violation; Consents   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8
Section 4.5.       Litigation   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8
</TABLE>

__________________________________

*        This Table of Contents is not part of this Agreement.

                                      -i-
<PAGE>
<TABLE>
<CAPTION>
                                                                                                                      Page
                                                                                                                      ----
<S>                <C>                                                                                                  <C>
                                                        ARTICLE V

                                             CONDITIONS PRECEDENT TO CLOSING

Section 5.1.       Conditions to Loral's Obligations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8
Section 5.2.       Conditions to Issuer's Obligations   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

                                                        ARTICLE VI

                                                        COVENANTS

Section 6.1.       Furnishing of Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     11
Section 6.2.       Regulatory Filings   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
Section 6.3.       Public Announcements   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
Section 6.4.       Additional Agreements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
Section 6.5.       Anti-dilution  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

                                                       ARTICLE VII

                                                 LIMITATION ON TRANSFERS

Section 7.1.       Restrictions on Transfers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12
Section 7.2.       Restrictive Legends  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12
Section 7.3.       Notice of Proposed Transfers   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12
Section 7.4.       Registration Rights  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12

                                                       ARTICLE VIII

                                                      MISCELLANEOUS

Section 8.1.       Assignment   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
Section 8.2.       Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
Section 8.3.       Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
Section 8.4        No Waivers; Amendment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
Section 8.5        Survival of Provisions   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
Section 8.6.       Expenses   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
Section 8.7.       Replacement Securities   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
Section 8.8.       Incorporators, Stockholders,  Officers and Directors of Issuer Exempt from
                   Individual Liability   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
Section 8.9.       Entire Agreement   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
Section 8.10.      Section Headings   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
</TABLE>

                                     -ii-
<PAGE>
<TABLE>
<S>                <C>                                                                                                  <C>
Section 8.11.      Counterparts   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
</TABLE>

                                   AGREEMENT

                 AGREEMENT, dated as of September 2, 1994, between Loral
Corporation, a New York corporation ("Loral"), and K&F Industries, Inc., a
Delaware corporation  (the "Issuer").

                 The parties hereto, intending legally to be bound, agree as
follows:

                                   ARTICLE I

                                  DEFINITIONS

                 Section 1.1.     Definitions.  The following terms, as used
herein, have the following meanings:

                 "Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person.  For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise.

                 "Agreement" means this Agreement, as the same may be amended
from time to time.

                 "Amended and Restated Stockholders Agreement" means the
Amended and Restated Stockholders Agreement of the Issuer in the form of
Exhibit A annexed hereto.

                 "BLS" means Bernard L. Schwartz.

                 "Business Day" means each day other than Saturdays, Sundays
and days when commercial banks are authorized to be closed for business in New
York, New York.

                 "Closing" and "Closing Date" have the meanings set forth in
Section 2.2(a).

                 "Commission" means the Securities and Exchange Commission.

                 "Common Stock" means the Voting Common Stock and Non-Voting
Common Stock.
<PAGE>
                 "Convertible Debentures" means the Issuer's 14.75% Convertible
Subordinated Debentures Due April 15, 2004.

                 "Exchange" has the meaning set forth in Section 2.1 of this
Agreement.

                 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                 "Financial Statements" means the Issuer's audited balance
sheet at March 31, 1994 and its unaudited balance sheet at June 30, 1994, and
the related statements of income, stockholders' equity and cash flows for the
fiscal periods ended on such dates, including, in each case, the notes to such
Financial Statements.

                 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.

                 "Issuer" has the meaning set forth in the first paragraph of
this Agreement.

                 "Issuer's Counsel" means O'Sullivan Graev & Karabell.

                 "Lien" means, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such Property.  For the purposes of this Agreement, any Person shall be
deemed to own subject to any Lien any Property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
Property.

                 "Loral" has the meaning set forth in the first paragraph of
this Agreement.

                 "Non-Voting Common Stock" means the non-voting common stock,
$.01 par value, of the Issuer.

                 "Person" means an individual or a corporation, partnership,
association, trust, or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

                 "Property" of any Person means all types of real, personal,
tangible, intangible or mixed property whether or not included in the most
recent consolidated balance sheet of such Person under generally accepted
accounting principles.

                 "Securities Act" means the Securities Act of 1933, as amended.

                 "Senior Bank Financing" has the meaning set forth in the
Amended and Restated Stockholders Agreement.

                 "Senior Secured Notes" has the meaning set forth in the
Amended and Restated Stockholders Agreement.

                                      -2-
<PAGE>
                 "Senior Subordinated Debentures" has the meaning set forth in
the Amended and Restated Stockholders Agreement.

                 "Stockholders Agreement" means the Stockholders Agreement
dated as of April 27, 1989, as amended, among the Issuer, BLS, Lehman Brothers
Holdings Inc. (formerly known as Shearson Lehman Hutton Holdings Inc.) and
certain other stockholders.

                 "Subsidiary" means, with respect to any Person, any
corporation or other entity of which a majority of the capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person.

                 "Transfer" means any disposition of Common Stock that would
constitute a sale thereof under the Securities Act.

                 "Voting Common Stock" means the voting common stock, $.01 par
value, of the Issuer.

                                   ARTICLE II

                EXCHANGE AND REPAYMENT OF CONVERTIBLE DEBENTURES

                 Section 2.1.     Exchange and Repayment of Convertible
Debentures.  Upon the basis of the representations and warranties herein
contained, but subject to the terms and conditions hereinafter stated, the
Issuer hereby agrees to pay to Loral $12,763,636.36 in cash and to issue to
Loral 4,589,938 shares of Non-Voting Common Stock, representing 22.5% of the
Common Stock of the Issuer, on a fully diluted basis (assuming conversion of
all issued and outstanding shares of preferred stock and other common stock
equivalents which are exercisable, convertible or fully vested as of the date
of this Agreement and which have an exercise price less than the per share
value of the Common Stock), immediately after such issuance, in exchange for
the delivery by Loral of $65,370,902.80 aggregate principal amount of
Convertible Debentures, representing all of the Convertible Debentures
beneficially owned by Loral, and any accrued but unpaid interest thereon (all
such transactions being hereafter collectively referred to as the "Exchange").
The parties agree that the consideration to be received by Loral in the
Exchange shall be allocated first to the repayment of the $30,000,000 face
amount of Convertible Debentures originally issued by the Issuer to Loral and
thereafter to the payment of any Convertible Debentures received by Loral as
payment-in-kind for accrued interest thereon.

                 Section 2.2.     The Closing. (a) The Exchange will take place
at a closing (the "Closing") at the offices of O'Sullivan Graev & Karabell, New
York, New York at 10:00 A.M. on September 2, 1994, or such other date and
location as the Issuer and Loral shall agree.  The date and time of Closing are
referred to herein as the "Closing Date."

                                      -3-
<PAGE>
                          (b)     On the Closing Date, Loral shall deliver the
Convertible Debentures to the Issuer for cancellation and the Issuer shall
cancel all such Convertible Debentures.

                          (c)     At the Closing, the Issuer shall deliver,
against receipt of certificates representing the Convertible Debentures, to
Loral (1) by wire transfer of immediately available funds in an amount equal to
$12,763,636.36 to an account specified in writing by Loral not later than one
Business Day prior to the Closing Date and (2) certificates for the Non- Voting
Common Stock in definitive form and registered in such names and in such
denominations as Loral shall request not later than one Business Day prior to
the Closing Date.

                                  ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE ISSUER

                 The Issuer hereby represents and warrants to Loral as follows:

                 Section 3.1.     Disclosure.  (a)  None of the representations
or warranties of the Issuer contained in this Agreement, or in the exhibits
hereto, contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make any of such representations or
warranties in light of the circumstances under which they were made not
misleading.  The Issuer confirms that it has delivered certain projections to
Loral which Loral has relied upon, in part, in connection with its
determination to consummate the Exchange.  The Issuer makes no representation
or warranty concerning any such projections, except that the Issuer has no
reason to believe that such projections are based on other than the good faith
estimates and assumptions of the management of the Issuer which such management
believes to be reasonable.  Notwithstanding the foregoing, it is understood
that events included in such projections and assumptions may or may not occur.

                          (b)     There is no fact known to the Issuer which
the Issuer has not disclosed to Loral or which has not otherwise been publicly
disclosed by the Issuer in any document or report previously filed by the
Issuer pursuant to the Exchange Act (other than facts related to general
economic conditions) which materially adversely affects or, insofar as the
Issuer can reasonably foresee, will materially adversely affect, the
properties, business, prospects, operations, earnings, assets, liabilities or
condition (financial or otherwise) of the Issuer and its Subsidiaries, taken as
a whole, or the ability of the Issuer to perform its obligations under this
Agreement or the Amended and Restated Stockholders Agreement.

                 Section 3.2.     Organization and Status.  The Issuer is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and is duly qualified to transact
business in each jurisdiction in which the character of its business makes such
qualification necessary, except where such failure to

                                      -4-
<PAGE>
qualify would not have a material adverse effect on the business, operations,
prospects, properties or condition (financial or otherwise) of the Issuer and
its Subsidiaries, taken as a whole, and the Issuer has adequate corporate power
and authority to own its property and assets and to transact the business in
which it is engaged.

                 Section 3.3.     Authorization. (a) The Issuer has the
requisite corporate power to execute, deliver and perform the terms and
provisions of this Agreement and the Amended and Restated Stockholders
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement and the Amended and Restated
Stockholders Agreement.  The Issuer has duly executed and delivered this
Agreement and the Amended and Restated Stockholders Agreement, and this
Agreement and the Amended and Restated Stockholders Agreement constitute valid
and binding agreements of the Issuer.

                          (b)     The shares of Non-Voting Common Stock to be
received in the Exchange by Loral pursuant to this Agreement have been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and
nonassessable, and free and clear of any Lien or other right or claim, except
to the extent set forth in the Amended and Restated Stockholders Agreement.
The issuance of the shares of Non-Voting Common Stock is not subject to any
preemptive or similar rights (except under the terms of the Stockholders
Agreement, which will be amended at or prior to the Closing) and holders of the
shares of Common Stock will not be entitled to any preemptive or similar
rights, except as set forth in the Amended and Restated Stockholders Agreement.
After giving effect to the issuance of the Non-Voting Common Stock to be
delivered pursuant to this Agreement, as of the Closing Date, the authorized
capital stock of the Issuer will consist of (i) 26,300,000 shares of common
stock, consisting of 21,000,000 shares of Non-Voting Common Stock and 5,300,000
shares of Voting Common Stock, of which 5,277,211 shares of Non-Voting Common
Stock will be issued and outstanding and 4,846,164 shares of Voting Common
Stock will be issued and outstanding and (ii) 1,330,000 shares of preferred
stock, consisting of 1,200,000 shares of Series A Voting Convertible Preferred
Stock, par value $.01 per share, and 130,000 shares of Series A Non-Voting
Convertible Preferred Stock, par value $.01 per share, of which 899,999 shares
of Series A Voting Convertible Preferred Stock will be issued and outstanding
and 127,636 shares of Series A Non-Voting Convertible Preferred Stock will be
issued and outstanding.  Except as set forth above and as set forth in the
Amended and Restated Stockholders Agreement, the Issuer will have outstanding
no other shares of capital stock and no securities convertible into or
exchangeable for, or options or other rights to acquire from the Issuer, or
other obligations of the Issuer to issue, directly or indirectly, any shares of
capital stock of the Issuer (other than 500,000 shares of Common Stock reserved
for issuance upon the exercise of stock options granted to employees of the
Issuer).  The shares of Non-Voting Common Stock shall have the rights and
privileges set forth in the Issuer's Amended and Restated Certificate of
Incorporation annexed hereto as Exhibit B.  The Issuer has delivered a true,
correct and complete copy of the Stockholders Agreement, as amended through the
date hereof, to Loral.

                                      -5-
<PAGE>
                 Section 3.4.     Financial Statements; Absence of Undisclosed
Liabilities.  The Financial Statements, including the notes thereto, (i) have
been prepared from the books and records of the Issuer in accordance with
generally accepted accounting principles, applied on a consistent basis during
the periods referred to therein, and (ii) present fairly the financial
condition of the Issuer as of their respective dates (subject, in the case of
any unaudited financial statements included therein, to normal year-end audit
adjustments).  Except as set forth in Schedule 3.4, the Issuer does not have
any indebtedness or liability, absolute or contingent, known or unknown,
accrued or unaccrued, which is not shown or provided for on the respective
balance sheets of the Issuer as of the dates included in the Financial
Statements other than liabilities incurred or accrued in the ordinary course of
business since March 31, 1994.

                 Section 3.5.     No Violation; Consents.  The execution,
delivery and performance by the Issuer of this Agreement and the Amended and
Restated Stockholders Agreement, compliance by the Issuer with the respective
terms and provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby (i) will not contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality to which the
Issuer is bound except where such violation would not have a material adverse
effect on the business, operations, prospects, properties or condition
(financial or otherwise) of the Issuer and its Subsidiaries taken as a whole,
(ii) except as disclosed on Schedule 3.5, will not conflict with or constitute
a default under, or give rise to any right of termination or acceleration
under, any indenture, loan agreement, contract, lease or other agreement, to
which the Issuer or any Subsidiary is a party or by which they or any of their
property or assets are bound or to which they may be subject, except where such
conflict, default, termination or acceleration would not have a material
adverse effect on the business, operations, prospects, properties or condition
(financial or otherwise) of the Issuer and its Subsidiaries, taken as a whole,
and except for the amendment to the Stockholders Agreement to be reflected in
the Amended and Restated Stockholders Agreement, and (iii) will not violate any
provision of the certificate of incorporation or by-laws of the Issuer or any
of its Subsidiaries.  Except for (A) registrations, filings and approvals under
Federal or state securities laws or with any applicable national securities
exchanges that will be required in connection with the performance of Article
II of this Agreement, (B) filings required under the HSR Act and (C) consents,
authorizations, orders, filings, or registrations the failure of which to
obtain or make would not have a material adverse effect on the consummation of
the transactions contemplated by this Agreement and the Amended and Restated
Stockholders Agreement or the ability of the Issuer to perform its obligations
hereunder and thereunder, no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
execution, delivery and performance of this Agreement or the Amended and
Restated Stockholders Agreement.

                 Section 3.6.     Litigation.  Except as disclosed in Schedule
3.6, there is no pending or threatened action, suit or proceeding before any
court, governmental or regulatory authority, agency, commission or board of
arbitration against the Issuer or, to the best knowledge of the Issuer, which
relates to or challenges the legality, validity or

                                      -6-
<PAGE>
enforceability of this Agreement or the Amended and Restated Stockholders
Agreement or which would have a material adverse effect on the business,
operations, prospects, properties or condition (financial or otherwise) of the
Issuer and its Subsidiaries, taken as a whole.

                 Section 3.7.     Investment Company Act.  The Issuer is not
required to register as an "investment company" within the meaning of the
Investment Company Act of 1940.

                                   ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF LORAL

                 Loral hereby represents and warrants to the Issuer as follows:

                 Section 4.1.     Private Placement. (a) Loral understands that
(i) the delivery of the Common Stock pursuant to the terms of this Agreement is
intended to be exempt from registration under the Securities Act pursuant to
section 4(2) thereof and (ii) there is no existing public or other market for
the Common Stock and there can be no assurance that Loral will be able to sell
or dispose of the Common Stock.

                          (b)     The Common Stock to be acquired by Loral
pursuant to this Agreement is being acquired for Loral's own account and
without a view to making a distribution thereof or any interest therein in
violation of the Securities Act.

                          (c)     Loral has sufficient knowledge and experience
in financial and business matters so as to be capable of evaluating the merits
and risks of its investment in the Common Stock and Loral is capable of bearing
the economic risks of such investment, including a complete loss of its
investment in the Common Stock.

                          (d)     Loral has been given the opportunity to ask
questions of, and receive answers from the Issuer concerning the terms and
conditions upon which the Common Stock is being issued hereunder and other
related matters.  Loral further represents and warrants to the Issuer that the
Issuer has made available to Loral or its agents all documents and information
relating to an investment in the Common Stock requested by or on behalf of
Loral.  In evaluating the suitability of an investment in the Common Stock,
Loral has not relied upon any other representations or other information
(whether oral or written) made by or on behalf of the Issuer other than as
contemplated by the two preceding sentences.

                          (e)     Loral is an "accredited investor" as such
term is defined in Regulation D of the Securities Act.

                 Section 4.2.     Organization and Status.  Loral is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its

                                      -7-
<PAGE>
incorporation and is duly qualified to transact business in each jurisdiction
in which the character of its business makes such qualification necessary,
except where such failure to qualify would not have a material adverse effect
on its business, operations, prospects, properties or condition (financial or
otherwise), and Loral has adequate corporate power and authority to own its
property and assets and to transact the business in which it is engaged.

                 Section 4.3.     Authorization. (a) Loral has the requisite
corporate power to execute, deliver and perform the terms and provisions of
this Agreement and the Amended and Restated Stockholders Agreement and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Agreement and the Amended and Restated Stockholders Agreement.
Loral has duly executed and delivered this Agreement and the Amended and
Restated Stockholders Agreement, and this Agreement and the Amended and
Restated Stockholders Agreement constitute valid and binding agreements of
Loral.

                 Section 4.4.     No Violation; Consents.  The execution,
delivery and performance by Loral of this Agreement and the Amended and
Restated Stockholders Agreement, compliance by Loral with the respective terms
and provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby (i) will not contravene any applicable
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality to which Loral is bound
except where such violation would not have a material adverse effect on its
business, operations, prospects, properties or condition (financial or
otherwise), (ii) will not conflict with or constitute a default under, or give
rise to any right of termination or acceleration under, any indenture, loan
agreement, contract, lease or other agreement, to which Loral is a party or by
which it or any of its property or assets are bound or to which it may be
subject, except where such conflict, default, termination or acceleration would
not have a material adverse effect on its business, operations, prospects,
properties or condition (financial or otherwise), and (iii) will not violate
any provision of its certificate of incorporation or by-laws.  Except for (A)
registrations, filings and approvals under Federal or state securities laws or
with any applicable national securities exchanges that will be required in
connection with the performance of Article II of this Agreement, (B) filings
required under the HSR Act and (C) consents, authorizations, orders, filings,
or registrations the failure of which to obtain or make would not have a
material adverse effect on the consummation of the transactions contemplated by
this Agreement and the Amended and Restated Stockholders Agreement or the
ability of Loral to perform its obligations hereunder and thereunder, no
consent, authorization or order of, or filing or registration with, any court
or governmental agency is required for the execution, delivery and performance
of this Agreement or the Amended and Restated Stockholders Agreement.

                 Section 4.5.     Litigation.  There is no pending or
threatened action, suit or proceeding before any court, governmental or
regulatory authority, agency, commission or board of arbitration against Loral
or, to the best knowledge of Loral, which relates to or challenges the
legality, validity or enforceability of this Agreement or the Amended

                                      -8-
<PAGE>
and Restated Stockholders Agreement or which would have a material adverse
effect on the business, operations, prospects, properties or condition
(financial or otherwise) of Loral.

                                   ARTICLE V

                        CONDITIONS PRECEDENT TO CLOSING

                 Section 5.1.     Conditions to Loral's Obligations.  Loral's
obligation to consummate the transactions contemplated by this Agreement is
subject to the satisfaction, at or prior to the Closing Date, of the following
conditions:

                          (a)     (i) the representations and warranties of the
Issuer contained herein shall be true and correct in all material respects as
of the Closing Date as if made on and as of such date and (ii) Loral and its
counsel shall be reasonably satisfied that the transactions contemplated by
this Agreement and the Amended and Restated Stockholders Agreement do not and
will not contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction, or decree of any court or governmental
instrumentality, except to the extent any such contravention or contraventions,
singly or in the aggregate, would not materially adversely affect the Issuer,
its Subsidiaries or the transaction;

                          (b)     the Issuer, Bernard L. Schwartz, Loral,
Lehman Brothers Merchant Banking Portfolio Partnership L.P., Lehman Brothers
Offshore Investment Partnership L.P., Lehman Brothers Offshore Investment
Partnership - Japan L.P., Lehman Brothers Capital Partners II, L.P., and CBC
Capital Partners, Inc. shall have entered into the Amended and Restated
Stockholders Agreement, in the form of Exhibit A annexed hereto, and such
Amended and Restated Stockholders Agreement shall be in full force and effect;

                          (c)     there shall be no litigation, proceeding,
inquiry or other action seeking an injunction or other restraining order,
damages or other relief from a court of competent jurisdiction pending or
threatened which, in the judgment of Loral, would adversely affect the
consummation of the transaction contemplated by this Agreement or the Amended
and Restated Stockholders Agreement, and there shall be no other litigation or
proceeding (including, without limitation, any environmental proceeding)
pending or threatened against the Issuer or its Subsidiaries which is
reasonably likely to have a material adverse effect on the business,
operations, prospects, properties or condition (financial or otherwise) of the
Issuer and its Subsidiaries, taken as a whole;

                          (d)     all consents, waivers, authorizations and
approvals of any governmental or regulatory authority, domestic or foreign, and
of any other person, firm or corporation, required in connection with the
execution, delivery and performance of this Agreement and the Amended and
Restated Stockholders Agreement by each of the

                                      -9-
<PAGE>
Issuer and Loral (other than approvals in respect of any filing required under
the HSR Act) shall have been duly obtained and shall be in full force and
effect on the Closing Date;

                          (e)     the Issuer shall have filed with the
Secretary of State of the State of Delaware an amendment to the Issuer's
Certificate of Incorporation, in the form annexed hereto as Exhibit B and
acceptable to Loral and its counsel, amending the Issuer's Certificate of
Incorporation for the purpose of issuing the shares of Non-Voting Common Stock
contemplated by this Agreement, and such amendment shall have become effective
under the General Corporation Law of the State of Delaware;

                          (f)     on the Closing Date, Loral shall have
received an opinion, dated the Closing Date, from Issuer's Counsel in the form
of Exhibit C annexed hereto and otherwise reasonably acceptable to counsel for
Loral.

                          (g)     on the Closing Date, all corporate and other
proceedings taken or to be taken by the Issuer in connection with the
transactions contemplated by this Agreement and the Amended and Restated
Stockholders Agreement and all documents incident thereto other than those
enumerated above, shall be in form and substance reasonably satisfactory to
Loral as being consistent with the satisfaction of the conditions set forth in
this Section 5.1.

                 Section 5.2.     Conditions to Issuer's Obligations.  The
obligation of the Issuer to consummate the transactions contemplated by this
Agreement is subject to the satisfaction, at or prior to the Closing Date, of
the following conditions:

                          (a)     The representations and warranties of Loral
contained herein shall be true and correct in all material respects on and as
of the Closing Date as if made on and as of such date;

                          (b)     Loral shall have performed and complied in
all material respects with all agreements required by this Agreement to be
performed or complied with at or prior to the Closing Date; and

                          (c)     The issue and sale of the Non-Voting Common
Stock by the Issuer shall not be prohibited by any applicable law, court order
or governmental regulation.

                                   ARTICLE VI

                                   COVENANTS

                 Section 6.1.     Furnishing of Information.  Unless the Issuer
is otherwise subject to the reporting requirements of the Exchange Act (in
which event only Section 6.1(c) shall be applicable), so long as Loral owns any
of the Common Stock, the Issuer will deliver to Loral:

                                      -10-
<PAGE>
                          (a)     Quarterly Financial Statements.  Within 60
days after the close of each quarterly accounting period ending after the
Closing Date, the consolidated balance sheet of the Issuer as at the end of
such quarterly period and the related consolidated statements of income,
shareholders' equity and cash flow for such quarterly period and for the
elapsed portion of the fiscal year ended with the last day of such quarterly
period, and in each case setting forth comparative figures for the related
periods in the prior fiscal year, all of which shall be certified by the chief
financial officer of the Issuer to have been prepared in accordance with
generally accepted accounting principles (but not including footnotes), subject
to year-end audit adjustments.

                          (b)     Annual Financial Statements.  Within 90 days
after the close of each fiscal year of the Issuer, the consolidated balance
sheet of the Issuer as of the end of such fiscal year and the related
consolidated statements of income, shareholders' equity and cash flow for such
fiscal year, in each case setting forth comparative figures for the preceding
fiscal year, and certified by independent certified public accountants of
recognized national standing.

                          (c)     Reports and Filings.  No later than five days
after transmission thereof, copies of all financial statements, proxy
statements, notices and reports as the Issuer shall send to its debt or equity
holders and copies of all registration statements (without exhibits), other
than on Form S-8 or any similar successor form, and all reports which the
Issuer files with the Securities and Exchange Commission.

                          (d)     Requested Information.  From time to time
(unless the Issuer is subject to the reporting requirements of the Exchange
Act), such other information or documents (financial or otherwise) as Loral may
reasonably request.

                 Section 6.2.     Regulatory Filings.  As soon as may be
reasonably practicable, but in no event later than 20 days after the Closing
Date, the Issuer and Loral each shall file with the Federal Trade Commission
(the "FTC") and the Antitrust Division of the Department of Justice (the "DOJ")
Notification and Report Forms relating to the purchase effected hereunder as
required by the HSR Act.  The Issuer and Loral each shall promptly (a) supply
the other with any information which may be required in order to effectuate
such filings and (b) supply any additional information which reasonably may be
required by the FTC or the DOJ.

                 Section 6.3.     Public Announcements.  The Issuer and Loral
will consult with each other before issuing any press releases or otherwise
making any public statements with respect to this Agreement and shall not issue
any such press release or make any such public statement without the prior
written consent of the other party (which consent will not be unreasonably
withheld or delayed) except as may be required by law or by obligations
pursuant to any listing agreement with any national securities exchange or as
may be advised by counsel to be appropriate.

                 Section 6.4.     Additional Agreements.  Subject to the terms
and conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or

                                      -11-
<PAGE>
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including using
reasonable efforts to obtain all necessary waivers, consents and approvals and
to effect all necessary registrations and filings, including, but not limited
to, filings under the HSR Act and submissions of information requested by
governmental authorities.

                 Section 6.5.     Anti-dilution.  The Issuer shall not, at any
time prior to the six month anniversary of the date of this Agreement,
consummate any refinancing, refunding, restructuring, renewal, extension or
other modification (collectively, a "Restructuring") of any of its Senior
Secured Notes, Senior Subordinated Debentures or Senior Bank Financing which
would require the Issuer to issue any equity securities to any Person in
connection with any such Restructuring unless, in connection therewith, the
Issuer shall also issue to Loral, simultaneously therewith, a number of shares
of Common Stock, for consideration equal to the par value of such shares of
Common Stock so issued, such that after the consummation of the Restructuring
the relative percentage of Common Stock, on a fully diluted basis, owned by
Loral shall equal the percentage of Common Stock, on a fully diluted basis,
owned by Loral immediately prior to such Restructuring.

                                  ARTICLE VII

                            LIMITATION ON TRANSFERS

                 Section 7.1.     Restrictions on Transfer.  From and after the
Closing Date, neither the Common Stock nor any interest therein shall be
transferable except upon the conditions specified in Sections 7.2 through 7.4,
which conditions are intended to ensure compliance with the provisions of the
Securities Act in respect of the Transfer of any of the Common Stock.  Loral
will cause any proposed transferee of the Common Stock (or any interest
therein) held by it to agree to take and hold such Common Stock (or any
interest therein) subject to the provisions and upon the conditions specified
in Sections 7.2 through 7.4.

                 Section 7.2.     Restrictive Legends.  Each certificate for
Common Stock issued to Loral  or to a subsequent transferee shall (unless
otherwise permitted by the provisions of Section 7.3) include a legend in
substantially the form set forth in the Amended and Restated Stockholders
Agreement.

                 Section 7.3.     Notice of Proposed Transfers.  At least five
Business Days prior to any proposed Transfer of any Common Stock, the holder
thereof shall give written notice to the Issuer of such holder's intention to
effect such Transfer, setting forth the manner and circumstances of the
proposed Transfer in reasonable detail.  Such proposed Transfer may be effected
only if the Issuer shall have received such notice of Transfer accompanied by
(i) an opinion of counsel reasonably satisfactory to the Issuer addressed to
the Issuer, to the effect that the proposed Transfer of the Common Stock may be
effected without registration under the Securities Act, (ii) representation
letters

                                      -12-
<PAGE>
in form and substance reasonably satisfactory to the Issuer to ensure
compliance with the provisions of the Securities Act, and (iii) letters in form
and substance reasonably satisfactory to the Issuer from each such transferee
stating such transferee's agreement to be bound by the terms of this Article
VII.  In addition to the requirements set forth herein, Transfers of the Common
Stock may only be made in compliance with the provisions of the Amended and
Restated Stockholders Agreement.  Each certificate evidencing the Common Stock
transferred as above provided shall bear the legend referred to in Section 7.2,
except that such certificate shall not bear the Securities Act legend if the
opinion of counsel referred to above is to the further effect that neither such
legend nor the restrictions on Transfer in Sections 7.2 and 7.3 are required in
order to ensure compliance with the provisions of the Securities Act.

                 Section 7.4.     Registration Rights.  Loral  shall be
entitled to the registration rights set forth in the Amended and Restated
Stockholders Agreement with respect to the Common Stock.

                                  ARTICLE VIII

                                 MISCELLANEOUS

                 Section 8.1.     Assignment.  Except as otherwise provided in
this Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect.

                 Section 8.2.     Governing Law.  This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York, without regard to the principles of the conflict of laws thereof.

                 Section 8.3.     Notices.  All notices, requests and other
communications to any party hereunder shall be in writing (including telex,
telecopier or similar writing) and shall be given to such party at its address,
telex or telecopier number set forth on the signature pages hereof, or such
other address, telex or telecopier number as such party may hereinafter specify
for the purpose to the party giving such notice.  Each such notice, request or
other communication shall be effective (i) if given by telex or telecopy, when
such telex or telecopy is transmitted to the telex or telecopy number specified
in this Section and the appropriate answerback is received or, (ii) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or, (iii) if given by any other
means, when delivered at the address specified in this Section 9.3.

                 Section 8.4.     No Waivers; Amendments.  (a) No failure or
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a

                                      -13-
<PAGE>
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.  The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

                          (b)     Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Issuer and Loral.

                 Section 8.5.     Survival of Provisions.  The representations
and warranties, covenants and agreements contained in this Agreement shall
survive and remain in full force and effect, regardless of any investigation
made by or on behalf of Loral, or by or on behalf of the Issuer, and shall
survive delivery of the Common Stock and any transfer of the Common Stock other
than any such transfer subsequent to the effectiveness of a registration
statement under the Securities Act covering the Common Stock.

                 Section 8.6.     Expenses.  Each party hereto shall pay all of
its own expenses incurred in connection with the transactions contemplated by
this Agreement and any amendments hereto.

                 Section 8.7.     Replacement Securities.  The Issuer agrees to
issue from time to time replacement Common Stock certificates to facilitate
transfers and assignments.  In addition, after delivery of an indemnity in form
and substance satisfaction to the Issuer, the Issuer also agrees to issue
replacement Common Stock certificates for Common Stock which has been lost,
stolen, mutilated or destroyed.

                 Section 8.8.     Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability.  No recourse under or
upon any obligation, covenant, agreement, representation or warranty contained
this Agreement shall be had against any incorporator, as such, or against any
past, present or future stockholder, officer or director, as such, of the
Issuer or of any successor, either directly or through the Issuer or any
success under any rule of law, statute or constitutional provision by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Common Stock by the holders thereof and as part of the
consideration for the issue of the Common Stock.

                 Section 8.9.     Entire Agreement.  This Agreement, together
with the Amended and Restated Stockholders Agreement, constitute the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, written or oral, relating to the subject
matter hereof.

                 Section 8.10.    Section Headings.  The section headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.

                                      -14-
<PAGE>
                 Section 8.11.    Counterparts.  This Agreement may be signed
in counterparts, each of which shall constitute an original and which together
shall constitute one and the same agreement.

                 (Remainder of Page Intentionally Left Blank.
                     The Next Page is the Signature Page.)

                                      -15-
<PAGE>
                 IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers, as of
the date first above written.

                                        K&F INDUSTRIES, INC.

                                        By  KENNETH M. SCHWARTZ
                                            --------------------------
                                            Name:  Kenneth M. Schwartz
                                            Title: Vice President

                                        LORAL CORPORATION

                                        By  MICHAEL TARGOFF
                                            --------------------------
                                            Name:  Michael Targoff
                                            Title: Senior Vice President

                                      -16-<PAGE>
                                                                   EXHIBIT 10.19

                            K & F INDUSTRIES, INC.
                               600 THIRD AVENUE
                           NEW YORK, NEW YORK 10016

                                                        November 8, 1994

The Signatories to the
      Amended and Restated
      Stockholders Agreement

                 Re:  Amendment of Stockholders Agreement

Gentlemen:

                 Reference is made to (i) the Amended and Restated Stockholders
Agreement (the "Stockholders Agreement") dated September 2, 1994 by and among
K&F Industries, Inc. (formerly known as Opus Acquisition Corporation), a
Delaware corporation (the "Company"); Bernard L. Schwartz; Lehman Brothers
Merchant Banking Portfolio Partnership L.P., Lehman Brothers Offshore
Investment Partnership L.P., Lehman Brothers Offshore Investment Partnership -
Japan L.P., Lehman Brothers Capital Partners II, L.P., CBC Capital Partners,
Inc., and Loral Corporation ("Loral") and (ii) the Certificate of Incorporation
of the Company as amended and restated on the date hereof (the "Certificate").

                 The Certificate has been amended to authorize the Series B
Voting Common Stock, par value $.01 per share of the Company and to remove
certain nonvoting securities from the capitalization of the Company.
Consequently, the second paragraph of the Stockholders Agreement shall be
deleted in its entirety and replaced with the following paragraph in order to
accurately reflect the capitalization of the Company:

                          "The Company has an authorized capital stock
         consisting of (i) 21,000,000 shares of Class A Common Stock, par value
         $.01 per share (the "Class A Common Stock"), 4,600,000 shares of Class
         B Common Stock, par value $.01 per share (the "Class B Common Stock";
         and together with the Class A Common Stock the "Common Stock") and
         (ii) 1,500,000 shares of Preferred Stock, of which 1,027,635 shares
         have been designated Series A Convertible Preferred Stock, par value
         $.01 per share (the "Series A Preferred Stock" and the Series A
         Preferred Stock and the Common Stock, collectively, the "Stock")."
<PAGE>
                 If the foregoing is acceptable, please sign this letter
agreement in the place provided below.

                                        Very truly yours,

                                        K & F Industries, Inc.

                                        By:        KENNETH M. SCHWARTZ
                                             ------------------------------
                                             Name:  Kenneth M. Schwartz
                                             Title: Vice President

Agreed and Accepted:

K&F INDUSTRIES, INC.

By:    KENNETH M. SCHWARTZ
   ----------------------------
   Title: Vice President

          BERNARD L. SCHWARTZ
     ----------------------------
          Bernard L. Schwartz

CBC CAPITAL PARTNERS, INC.

By:       DAVID J. HOFFMAN
   ---------------------------
   Name:  David J. Hoffman
   Title:

LORAL CORPORATION

By:       MICHAEL TARGOFF
   ----------------------------
   Name:  Michael Targoff
   Title: Senior Vice President
<PAGE>
LEHMAN BROTHERS CAPITAL
PARTNERS II, L.P.

By:      Lehman Brothers Holdings Inc.,
         General Partner

By:________________________________
   Name:
   Title:

LEHMAN BROTHERS MERCHANT
BANKING PORTFOLIO PARTNERSHIP, L.P.

By:      Lehman Brothers Merchant Banking
         Partners Inc., General Partner

By:________________________________
   Name:
   Title:

LEHMAN BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP, L.P.

By:      Lehman Brothers Offshore
         Partners Ltd., General Partner

By:________________________________
   Name:
   Title:

LEHMAN BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP - JAPAN L.P.

By:      Lehman Brothers Offshore
         Partners Ltd., General Partner

By:________________________________
   Name:
   Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}]]