Document:

Exhibit 10.1

 

K&F INDUSTRIES HOLDINGS, INC.

(formerly known as K&F PARENT, INC.)

 

AMENDED AND RESTATED 2004
STOCK INCENTIVE PLAN

(Amended
and Restated as of August 7, 2005)

 

Section 1.  PURPOSE OF PLAN

 

The purpose of this
Amended and Restated 2004 Stock Incentive Plan (“Plan”) of K&F Industries
Holdings, Inc. (formerly known as K&F Parent, Inc.), a Delaware
corporation (the “Company”), is to enable the Company to attract, retain and
motivate (i) its employees, non-employee directors, independent contractors
and consultants, (ii) members of the Advisory Committee (the “Advisors”)
of Aurora Capital Partners III L.P., a Delaware limited partnership, and Aurora
Capital Partners II L.P., a Delaware limited partnership (collectively with
Aurora Capital Partners III L.P. “ACP”) and (iii) employees of ACP (the “ACP
Employees”) by providing for or increasing the proprietary interests of such
employees, non-employee directors, independent contractors, consultants,
Advisors and ACP Employees in the Company.

 

Section 2.  PERSONS ELIGIBLE UNDER PLAN

 

Any Advisor, ACP Employee
or employee, non-employee director, independent contractor or consultant of the
Company or any of its subsidiaries (each, a “Participant”), shall be eligible
to be considered for the grant of Awards (as hereinafter defined) hereunder.

 

Section 3.  AWARDS

 

(a)           Subject to Section 3(b), the
Board, on behalf of the Company, is authorized under this Plan to enter into
any type of arrangement with a Participant that is not inconsistent with the
provisions of this Plan and that, by its terms, involves or might involve the
issuance of (i) shares of the Common Stock, par value $0.01, of the
Company (the “Common Shares”) or (ii) a Derivative Security (as such term
is defined in Rule 16a-1 promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), as such rule may be amended
from time to time) with an exercise or conversion privilege at a price related
to the Common Shares or with a value derived from the value of the Common
Shares.  The entering into of any such
arrangement is referred to herein as the “grant” of an “Award.”

 

(b)           Awards are not restricted to any
specified form or structure and may include, without limitation, sales or
bonuses of stock, restricted stock, stock options, reload stock options, stock
purchase warrants, other rights to acquire stock, securities convertible into
or redeemable for stock, stock appreciation rights, phantom stock, dividend
equivalents, performance units or performance shares, and an Award may consist
of one such security or benefit, or two or more of them in tandem or in the
alternative.

 

 

(c)           Awards may be issued, and Common
Shares may be issued pursuant to an Award, for any lawful consideration as
determined by the Board, including, without limitation, services rendered by
the recipient of such Award.

 

(d)           Subject to the provisions of this
Plan, the Board, in its sole and absolute discretion, shall determine all of
the terms and conditions of each Award granted under this Plan, which terms and
conditions may include, among other things:

 

(i)            a provision permitting the recipient
of such Award, including any recipient who is a director or officer of the
Company, to pay the purchase price of the Common Shares or other property
issuable pursuant to such Award, or such recipient’s tax withholding obligation
with respect to such issuance, in whole or in part, by any one or more of the
following:

 

(A)          the delivery of cash;

 

(B)           the delivery of other property deemed
acceptable by the Board;

 

(C)           the delivery of previously owned
shares of capital stock of the Company (including “pyramiding”) or other
property;

 

(D)          a reduction in the amount of Common
Shares or other property otherwise issuable pursuant to such Award (such
reduction to be valued on the basis of the aggregate Fair Market Value, on the
date of exercise, of the additional Common Shares that would have been
delivered to the Participant upon exercise of the Award), provided that the
Company is not then prohibited from purchasing or acquiring Common Shares; or

 

(E)           the delivery of a promissory note of
the recipient or of a third party, the terms and conditions of which shall be
determined by the Board.

 

(ii)           provisions specifying the exercise or
settlement price for any option, stock appreciation right or similar Award, or
specifying the method by which such price is determined, provided that the
exercise or settlement price of any option, stock appreciation right or similar
Award that is intended to qualify as “performance based compensation” for purposes
of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”)
shall be not less than the Fair Market Value of a Common Share on the date such
Award is granted;

 

(iii)          provisions relating to the
exercisability and/or vesting of Awards, lapse and non-lapse restrictions upon
the Common Shares obtained or obtainable under Awards or under the Plan and the
termination, expiration and/or forfeiture of Awards;

 

2

 

(iv)          a provision conditioning or
accelerating the receipt of benefits pursuant to such Award, either
automatically or in the discretion of the Board, upon the occurrence of
specified events, including, without limitation, a change of control of the
Company (as defined by the Board), an acquisition of a specified percentage of
the voting power of the Company, the dissolution or liquidation of the Company,
the financial performance of the Company, a sale of substantially all of the
property and assets of the Company or an event of the type described in Section 7
hereof;

 

(v)           a provision required in order for
such Award to qualify (A) as an incentive stock option under Section 422
of the Code (an “Incentive Stock Option”), (B) as “performance based
compensation” under Section 162(m) of the Code, and/or (C) for an
exemption from Section 16 of the Exchange Act; or

 

(vi)          provisions restricting the
transferability of Awards or Common Shares issued under Awards.

 

(e)           For purposes of any Award under this
Plan, unless provided otherwise in the grant of such Award, the “Fair Market
Value” of a Common Share or other security on any date (the “Determination Date”)
shall be equal to the closing price per Common Share or unit of such other
security on the business day immediately preceding the Determination Date, as
reported in The Wall Street Journal, Western Edition, or, if no closing price
was so reported for such immediately preceding business day, the closing price
for the next preceding business day for which a closing price was so reported, or,
if no closing price was so reported for any of the 30 business days immediately
preceding the Determination Date, the average of the high bid and low asked
prices per Common Share or unit of such other security on the business day
immediately preceding the Determination Date in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotations System or such other system then in use, or, if the Common Shares or
such other security were not quoted by any such organization on such
immediately preceding business day, the average of the closing bid and asked
prices on such day as furnished by a professional market maker making a market
in the Common Shares or such other security selected by the Board of Directors
of the Company (the Board), or, if no such market was made in the Common Shares
or such other security, the value of a Common Share or such other security as
determined by the Board in its sole discretion. 
The Fair Market Value of a Common Share as of the initial effective date
of this Plan as provided in Section 9 hereof was $1,000.00, without giving
effect to the 133.0 for one stock split that was effected by the Company on August 8,
2005.

 

Section 4.  STOCK SUBJECT TO PLAN

 

(a)           The aggregate number of Common Shares
that may be issued pursuant to all Incentive Stock Options granted under this
Plan shall not exceed 1,500,000 subject to adjustment as provided in Section 7
hereof.

 

3

 

(b)           At any time, the aggregate number of
Common Shares issued and issuable pursuant to all Awards (including all
Incentive Stock Options) granted under this Plan shall not exceed 2,500,000,
subject to adjustment as provided in Section 7 hereof.

 

(c)           For purposes of Section 4(b) hereof,
the aggregate number of Common Shares issued and issuable pursuant to Awards
granted under this Plan shall at any time be deemed to be equal to the sum of
the following:

 

(i)            the number of Common Shares that
were issued prior to such time pursuant to Awards granted under this Plan,
other than Common Shares that were subsequently reacquired by the Company
pursuant to the terms and conditions of such Awards and with respect to which
the holder thereof received no benefits of ownership such as dividends; plus

 

(ii)           the number of Common Shares that were
otherwise issuable prior to such time pursuant to Awards granted under this
Plan, but that were withheld by the Company as payment of the purchase price of
the Common Shares issued pursuant to such Awards or as payment of the recipient’s
tax withholding obligation with respect to such issuance; plus

 

(iii)          the maximum number of Common Shares
that are or may be issuable at or after such time pursuant to Awards granted
under this Plan prior to such time.

 

Section 5.  DURATION OF PLAN

 

No Awards shall be made
under this Plan after November 18, 2014. 
Although Common Shares may be issued after November 18, 2014
pursuant to Awards made prior to such date, no Common Shares shall be issued
under this Plan after November 18, 2024.

 

Section 6.  ADMINISTRATION OF PLAN

 

(a)           This Plan shall be administered by
the Board, provided, however, that the Board may, in its sole discretion,
delegate such authority to a committee (the “Committee”) of the Board at any
time.  In the event that the Company
becomes “publicly held” within the meaning of § 162(m) of the Code, then
the Board or any such Committee shall consist of two or more directors, each of
whom:  (i) is a “non-employee
director” (as such term is defined in Rule 16b-3 promulgated under
the Exchange Act, as such Rule may be amended from time to time), and (ii) is
an “outside director” within the meaning of Section 162(m) of the Code.

 

(b)           Subject to the provisions of this
Plan, the Board shall be authorized and empowered to do all things necessary or
desirable in connection with the administration of this Plan, including,
without limitation, the following:

 

(i)            adopt, amend and rescind rules and
regulations relating to this Plan;

 

4

 

(ii)           determine which persons are eligible
to participate in the Plan and to which of such persons, if any, Awards shall
be granted hereunder;

 

(iii)          grant Awards to Participants and
determine the terms and conditions thereof, including the number of Common
Shares issuable pursuant thereto;

 

(iv)          determine whether, and the extent to
which adjustments are required pursuant to Section 7 hereof; and

 

(v)           interpret and construe this Plan and
the terms and conditions of any Award granted hereunder.

 

Section 7.  ADJUSTMENTS

 

If the outstanding
securities of the class then subject to this Plan are increased, decreased or
exchanged for or converted into cash, property or a different number or kind of
securities, or if cash, property or securities are distributed in respect of
such outstanding securities, in either case as a result of a reorganization,
merger, consolidation, recapitalization, restructuring, reclassification,
dividend (other than a regular, quarterly cash dividend) or other distribution,
stock split, reverse stock split or the like, or if substantially all of the
property and assets of the Company are sold, then the Board shall make
appropriate and proportionate adjustments in (a) the number and type of
shares or other securities or cash or other property that may be acquired
pursuant to Incentive Stock Options and other Awards theretofore granted under
this Plan, (b) the maximum number and type of shares or other securities
that may be issued pursuant to Incentive Stock Options and other Awards
thereafter granted under this Plan, and (c) the minimum option exercise
price set forth in Section 3(d)(ii).

 

Section 8.  AMENDMENT AND TERMINATION OF PLAN

 

The Board may amend or
terminate this Plan at any time and in any manner, provided,
however, that no such amendment or termination shall deprive the
recipient of any Award theretofore granted under this Plan, without the consent
of such recipient, of any of his or her rights thereunder or with respect
thereto.

 

Section 9.  EFFECTIVE DATE OF PLAN

 

This Plan shall be
effective as of November 18, 2004, the date as of which it was approved by
the Board; provided, however, that no Common Shares
may be issued under this Plan until it has been approved, directly or
indirectly, by the affirmative votes of the holders of a majority of the
securities of the Company present, or represented, and entitled to vote by
unanimous written consent or at a meeting duly held in accordance with the laws
of the State of Delaware.

 

5Exhibit 10.2

 

AMENDED AND
RESTATED

MANAGEMENT SERVICES AGREEMENT

 

This
Amended and Restated Management Services Agreement (the “Agreement”) is made
and entered into as of August 12, 2005 by and among K&F Industries
Holdings, Inc. (formerly known as K&F Parent, Inc.), a Delaware
corporation (the “Company”), K&F Industries, Inc., a Delaware
corporation (“K&F”), and Aurora Management Partners LLC, a Delaware limited
liability company (“AMP”).

 

WHEREAS,
the Company, K&F and AMP are parties to that certain Management Services
Agreement dated as of November 18, 2004 (the “Original Agreement”)
pursuant to which the Company and K&F assured themselves of the financial
consulting services of AMP upon the terms and conditions set forth in the
Original Agreement (including in connection with a debt offering by the Company
in February 2005 and the initial public offering of common stock of the
Company), which the Company and K&F believe have been beneficial to them
and their respective subsidiaries;

 

WHEREAS,
the Company and K&F desire to terminate the Services (as defined in the
Original Agreement) and the Company’s and K&F’s preexisting payment
obligations with respect to the Services as provided in the Original Agreement
in consideration of the payment of the fee described in this Agreement; and

 

WHEREAS,
the Company and K&F desire to have the opportunity to avail themselves of
certain financial consulting services of AMP in the future upon the terms and
conditions set forth in this Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties agree as follows:

 

1.             Termination of Services Under
Original Agreement.  In payment for
and in consideration of the termination of the provisions of the Original
Agreement relating to the Services, the Company and K&F shall pay or cause
to be paid to AMP a lump sum termination fee of $5,000,000, which shall be
payable in cash on the date hereof to the bank account designated by AMP and
shall not be refundable under any circumstances.  The parties anticipate that the Company will
pay or cause to be paid such specified termination fee.

 

2.             Right of First Refusal to
Provide Services; Certain Fees.

 

(a)           If
the Company, K&F and/or any of their respective subsidiaries determines
that it is advisable for the Company, K&F or such subsidiary, as the case
may be, to hire a financial advisor, consultant, investment banker or any
similar advisor in connection with any merger, acquisition, disposition,
recapitalization, issuance of securities, financing or any similar transaction,
it will notify AMP of such determination in writing.  Promptly thereafter, upon the request of AMP,
the parties will negotiate in good faith to agree upon appropriate services,
compensation and indemnification for the Company, K&F or such

 

 

subsidiary,
as the case may be, to hire AMP or one of its Affiliates (as defined herein)
for such services.  The Company, K&F
and/or its subsidiaries may not hire any person, other than AMP or one of its
Affiliates, to perform any such services unless all of the following conditions
have been satisfied: (i) the parties are unable to agree upon the terms of
the engagement of AMP or its Affiliate to render such services after 30 days
following receipt by AMP of such written notice, (ii) such other person
has a reputation that is at least equal to the reputation of AMP in respect of
such services, (iii) ten business days have elapsed after the Company,
K&F and/or such subsidiary, as the case may be, provides a written notice
to AMP of its intention to hire such other person, which notice shall identify
such other person and shall describe in reasonable detail the nature of the
services to be provided, the compensation to be paid and the indemnification to
be provided, (iv) the compensation to be paid is not more than AMP or its
Affiliate was willing to accept in the negotiations described above and (v) the
indemnification to be provided is not more favorable to such other person than
the indemnification that AMP or its Affiliate was willing to accept in the
negotiations described above.

 

(b)           In
the event that the Company, K&F and/or its subsidiaries hires AMP or one of
its Affiliates in connection with any acquisition, divestiture, refinancing,
recapitalization or similar transaction by the Company, K&F and/or any of
its subsidiaries, as the case may be, and there is an absence of an express
agreement regarding compensation for services to be performed by AMP or any of
its Affiliates in connection with any such transaction, AMP shall be entitled
to receive, for services rendered in connection with any acquisition, sale or
disposition of any division of the Company, K&F or any of their respective
Affiliates, any sale or disposition of the Company or all or substantially all
of the assets of the Company, K&F or any of their respective Affiliates or
any other sale or disposition of any assets of the Company, K&F or any of
their respective Affiliates other than in the ordinary course of business of
such entities (including researching industry information, performing financial
analysis on prospective acquisition candidates, arranging acquisition
financing, and facilitating the close of the transaction), a fee equal to up to
2.0% of the aggregate transaction consideration (including debt assumed by the
purchaser and current assets retained by the seller).

 

(c)           In
addition, if mutually agreed between the Company and/or K&F and AMP, the
Company and/or K&F may engage AMP to provide, by and through itself, its
affiliates and such of their respective officers, employees, representatives
and third parties as AMP in its sole discretion may designate from time to
time, monitoring, advisory and consulting services in relation to the affairs
of the Company, K&F and its subsidiaries, including, without limitation, (i) advice
regarding the structure, distribution and timing of debt and equity offerings
and advice regarding relationships with the Company’s, K&F’s and its
subsidiaries’ lenders and bankers, (ii) advice regarding the strategy of
the Company, K&F and its subsidiaries, (iii) general advice
regarding dispositions and/or acquisitions and (iv) such other advice
directly related or ancillary to the above financial consulting services as may
be reasonably requested by the Company and/or K&F, provided that AMP shall
have no obligation to provide any services to the Company and/or K&F absent
agreement between the Company and/or K&F, as the case may be, and AMP with
respect to the scope of

 

2

 

services
to be provided, the consideration to be paid therefor and other terms of such
engagement.

 

(d)           As used herein, the following terms
are defined as follows:

 

(i)            “Affiliate”
of a specified Person means a Person that controls, is controlled by, or is
under common control with, the specified Person, and in this context, “control”,
“controls” and “controlled” mean the direct or indirect power to direct the
management and policies or affairs of a Person through the ownership of voting
securities or by contract or otherwise and, in the case of a limited
partnership, shall include, but shall not be limited to, all of the limited
partnership’s general partners and their respective Affiliates.

 

(ii)           “Person”
means a natural person, a company,
a corporation, a joint venture, a limited liability company, a partnership, a
trust, an unincorporated association or organization or other legal entity, or
a government or an agency or political subdivision thereof.

 

3.             Reimbursements.  Subject to obtaining the approval of the
Boards of Directors of the Company and K&F (or any committees thereof) that
may be required (if any) from time to time under applicable law or stock
exchange policy, in addition to the fees payable pursuant to this Agreement,
the Company and/or K&F will pay, or cause to be paid, directly, or
reimburse AMP and each of its Affiliates for, their respective Out-of-Pocket
Expenses (as defined below).  For the
purposes of this Agreement, the term “Out-of-Pocket Expenses” means the
reasonable out-of-pocket costs and expenses incurred by AMP and its Affiliates (i) in
connection with the Services provided under the Original Agreement and any
services provided under this Agreement (including prior to the date hereof or
the date of the Original Agreement) or (ii) in order to make Securities
and Exchange Commission and other legally required filings relating to the
ownership of capital stock of the Company or its successor by AMP or its
Affiliates, or otherwise incurred by AMP or its Affiliates from time to time in
the future in connection with the ownership or subsequent sale or transfer by
AMP or its Affiliates of capital stock of the Company or its successor,
including, without limitation, (a) fees and disbursements of any
independent professionals and organizations, including independent accountants,
outside legal counsel or consultants, retained by AMP or any of its Affiliates,
(b) costs of any outside services or independent contractors such as
couriers, business publications, on-line financial services or similar
services, retained or used by AMP or any of its Affiliates and (c) transportation,
per diem costs, word processing expenses or any similar expense not associated
with AMP’s or its Affiliates’ ordinary operations.  All payments or reimbursements for
Out-of-Pocket Expenses will be made by wire transfer in same-day funds promptly
upon or as soon as practicable following request for payment or reimbursement
in accordance with this Agreement, to the bank account indicated to the Company
and/or K&F by the relevant payee.

 

4.             Term.  Unless earlier terminated as provided in Section 5
below, the term of this Agreement shall commence on the date hereof and shall
terminate automatically on the earlier to occur of (i) the date on which
AMP and its Affiliates (in the aggregate) own less than 5% of the equity of the
Company then outstanding and (ii) such earlier date as the Company,
K&F and AMP may mutually agree upon. 
The expiration of the term of this

 

3

 

Agreement
shall not adversely affect AMP’s right to receive any compensation accrued
prior to the date of such termination or any rights to receive reimbursement of
any costs and expenses incurred by AMP prior to the date of such
termination.  The provisions of
Sections 6, 7, 8, 9, 10, 11, 12 and 13 shall survive the expiration of the
term of this Agreement or any termination of this Agreement.

 

5.             Termination for Cause.  The Company, by written notice to AMP
authorized by a majority of the directors (other than those affiliated with
AMP), may terminate this Agreement for justifiable cause, which shall mean any
of the following events:  (a) misappropriation
by AMP of funds or property of the Company, K&F and/or any of its
subsidiaries; (b) gross neglect or willful misconduct by AMP in the fulfillment
of its obligations hereunder; or (c) the conviction of AMP or any person
who is then a member of AMP of a felony involving moral turpitude that has
become final and not subject to further appeal.

 

6.             Confidential Information.  During the term of this Agreement, AMP will
have access to and become acquainted with confidential information of the
Company, K&F and/or any of its subsidiaries, including among other things
customer relationships, processes, and compilations of information, records and
specifications, which are owned by the Company, K&F and/or any of its
subsidiaries.  AMP shall not use or
disclose any of the Company’s, K&F’s and/or any of its subsidiaries
confidential information in any way that is detrimental to the interests of the
Company, K&F and/or any of its subsidiaries, directly or indirectly, either
during or within two (2) years after the term of this Agreement, except as
required in the course of this Agreement. 
AMP shall be responsible for any breaches of this Section 6 by AMP’s
officers, directors, employees and advisors.

 

7.             Notices.  All notices, demands and requests required
under this Agreement shall be in writing and shall be deemed to have been given
if served personally or sent by registered or certified mail, postage prepaid,
or by telegraph or telex addressed to the addressee set forth or such other
addresses as either party may designate by notice to the other:

 

	
  If to the
  Company:

  	
  K&F
  Industries Holdings, Inc.

  
	
   

  	
  50 Main Street,
  4th floor

  
	
   

  	
  White Plains,
  New York 10606

  
	
   

  	
  Telecopier: 914-448-2719

  
	
   

  	
  Attn: General
  Counsel

  
	
   

  	
   

  
	
  If to K&F:

  	
  K&F
  Industries, Inc.

  
	
   

  	
  50 Main Street,
  4th floor

  
	
   

  	
  White Plains,
  New York 10606

  
	
   

  	
  Telecopier: 914-448-2719

  
	
   

  	
  Attn: General
  Counsel

  

 

4

 

	
  If to AMP:

  	
  Aurora Management Partners LLC

  	
   

  
	
   

  	
  10877 Wilshire
  Boulevard

  	
   

  
	
   

  	
  Suite 2100

  	
   

  
	
   

  	
  Los Angeles, CA
  90024

  	
   

  
	
   

  	
  Telecopier No:
  (310) 227-5591

  	
   

  
	
   

  	
  Attn: Richard K.
  Roeder

  	
   

  

 

Notices delivered in person shall be effective when so
delivered.  Notices delivered by courier
shall be effective three (3) business days after delivery by the sender to
an air courier of national reputation who guarantees delivery within such three
(3) business day period.  Telecopied
notices shall be effective when receipt is acknowledged telephonically by the
addressee or its agent or employee. 
Notices sent by mail shall be effective five (5) business days
after the sender’s deposit of such notice in the United States mails, first
class postage prepaid.

 

8.             Assigns and Successors.  The rights and obligations of the Company and
K&F under this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company and K&F, respectively.  The rights and obligations of AMP under this
Agreement may be assigned by AMP in its sole discretion to an Affiliate of AMP.

 

9.             Attorneys’ Fees.  If any legal proceeding is necessary to
enforce or interpret the terms of this Agreement, or to recover damages for
breach thereof, the prevailing party shall be entitled to reasonable attorneys’
fees, as well as costs and disbursements, in addition to any other relief to
which he or she is entitled.

 

10.           Indemnity.  To the same extent as the Company or K&F
provides indemnification (whether through contract or the Company’s or K&F’s
respective Certificate of Incorporation or Bylaws) to its directors and
officers, the Company and K&F, jointly and severally, shall indemnify and
hold each of AMP and their respective partners, members, officers, employees,
agents and Affiliates and the stockholders, partners, members, Affiliates,
directors, officers and employees of any of the foregoing (and representatives
and agents of any of the foregoing designated by AMP from time to time whether
before or after the occurrence of the event giving rise to the claim for
indemnity) (each such person entitled to indemnity hereunder being referred to
as an “Indemnitee”) harmless from any and all losses, costs, liabilities and
damages (including reasonable attorneys’ fees) arising out of or connected
with, or claimed to arise out of or to be connected with, any act performed or
omitted to be performed under this Agreement or otherwise relating to the
business or affairs of the Company, K&F or their respective Affiliates,
provided such act or omission was taken in good faith by such Indemnitee and
did not constitute gross negligence or willful misconduct on the part of the
relevant Indemnitee, and provided further only in the event of criminal
proceedings, that the Indemnitee had no reasonable cause to believe the conduct
of the Indemnitee was unlawful.  An
adverse judgment or plea of nolo contendere shall
not, of itself, create a presumption that the Indemnitee did not act in good
faith or that the Indemnitee had reasonable cause to believe the conduct of the
Indemnitee was unlawful.  Expenses
incurred in defending any civil or criminal action arising out of or relating
to any

 

5

 

event
or circumstance to which this indemnity shall apply shall be paid by the Company
and/or K&F, as the case may be, upon receipt of an undertaking by or on
behalf of the Indemnitee to repay such amount if it be later shown that such
Indemnitee was not entitled to indemnification. 
No Indemnitee shall be liable to the Company, K&F or any of their
respective partners, members, Affiliates, stockholders, directors, officers or
employees or any Affiliates, stockholders, partners, members, directors,
officers, employees, representatives or agents of any of the foregoing or any
other person claiming through any of the foregoing for any act or omission by
AMP in the performance of its duties hereunder or otherwise in relation hereto
which was taken or omitted to be taken in good faith by such Indemnitee and
which did not constitute gross negligence or willful misconduct on the part of
such Indemnitee.

 

11.           Outside Activities of AMP.  AMP shall be entitled to and may have
business interests and engage in business activities in addition to the
activities contemplated by this Agreement. 
Neither AMP, any partner, member, officer, employee or Affiliate of AMP
nor any stockholder, partner, member, director, officer or employee of any of
the foregoing shall have any obligation or duty to offer any investment or
business opportunity (other than an opportunity directly involving the Company
Business (as defined below)) of any kind to the Company and/or K&F or any
of their respective stockholders, directors, officers or employees (under any
doctrine of “corporate opportunity” or otherwise), it being expressly
understood that AMP and their respective partners, members, officers, employees
and Affiliates and the stockholders, partners, members, directors, officers and
employees of any of the foregoing may make investments in, acquire, or provide
management, advisory or consulting services to, entities engaged in businesses
similar to the business of the Company and/or K&F without any duty,
obligation or liability to the Company and/or K&F or their respective
stockholders, partners, members, directors, officers or employees.  As used herein, the “Company Business” means,
at any time of determination, the specific business or businesses actively
conducted by the Company and K&F at such time of determination, it being
agreed that as of the date hereof such business consists of the design,
development and manufacturing of aircraft wheels, brakes and brake control
systems for commercial, military and general aviation aircraft, the manufacture
of aircraft fuel tanks, iceguards, inflatable oil booms and specially coated
fabrics (including bonding and composites materials and components comprising
the interior panel and upholstery contract work of the Company)  with storage, shipping, environmental and
rescue applications for commercial and military uses, and related repair and
overhaul activities.

 

12.           Amendment; Waiver.  This Agreement may be amended, and any right
or claim hereunder waived, only by a written instrument signed by AMP, the
Company and K&F.  Except as provided
in Sections 10 and 11 hereof, nothing in this Agreement, express or
implied, is intended to confer upon any third person any rights or remedies
under or by reason of this Agreement.  No
amendment or waiver of this Agreement requires the consent of any individual,
partnership, corporation or other entity not a party to this Agreement, except
that any amendment of Section 10 shall only operate prospectively as to
any Indemnitee provided therein unless such Indemnitee shall have agreed in
writing to such amendment.

 

13.           Construction, Etc.  This Agreement shall be construed under and
governed by the internal laws of the State of Delaware.  Section headings are for convenience
only and

 

6

 

shall
not be considered a part of the terms and provisions of this Agreement.  This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed an
original and all of which when taken together shall constitute one and the same
instrument.

 

7

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set forth above.

 

	
   

  	
  K&F
  INDUSTRIES HOLDINGS, INC.

  (formerly known as K&F PARENT, INC.)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth M.
  Schwartz

  	
   

  
	
   

  	
  Name:

  	
  K. Schwartz

  	
   

  
	
   

  	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  
	
   

  	
  K & F
  INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth M.
  Schwartz

  	
   

  
	
   

  	
  Name:

  	
  K. Schwartz

  	
   

  
	
   

  	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  
	
   

  	
  AURORA
  MANAGEMENT PARTNERS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard K.
  Roeder

  	
   

  
	
   

  	
   

  	
   Richard K. Roeder, Vice President and

  
	
   

  	
   

  	
   Secretary

  
							

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]