REALLOCATION AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of the
22nd day of May, 1997, by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ("▇▇▇▇▇▇").
WHEREAS, all of the issued and outstanding common stock, $.01
par value per share (the "Valentec Shares"), of Valentec International
Corporation, a Delaware corporation ("Valentec"), is owned by ▇▇▇▇▇, Suozzi and
the Valentec International Corporation Employee Stock Ownership Plan (the
"ESOP");
WHEREAS, simultaneously with the execution of this Agreement,
▇▇▇▇▇ and ▇▇▇▇▇▇ are entering into a Stock Purchase Agreement (the "Stock
Purchase Agreement") with the ESOP and Safety Components International, Inc., a
Delaware corporation ("SCI"), which provides for the sale by ▇▇▇▇▇, Suozzi and
the ESOP of the Valentec Shares in exchange for approximately 1,369,200 shares
of common stock, $.01 par value per share, of SCI (the "SCI Stock");
WHEREAS, immediately prior to the closing of the Stock
Purchase Agreement, Valentec sold its 88.8% equity interest in Valentec
International Limited, a company formed under the laws of the United Kingdom
("VIL"), to ▇▇▇▇▇ for $75,000;
WHEREAS, Suozzi is willing to release (the "Release") each of
Valentec and ▇▇▇▇▇ from any and all obligations under any consulting agreements,
except for the Consulting Agreement dated as of the date hereof between VIL and
Suozzi (the "New Consulting Agreement"), or similar arrangements or obligations
and all other obligations and liabilities of whatsoever nature between Suozzi
and Valentec and/or ▇▇▇▇▇ (collectively, the "Consulting Arrangements"); and
WHEREAS, in consideration of the Release, the number of shares
of SCI Stock to be received by ▇▇▇▇▇ under the terms of the Stock Purchase
Agreement is being reduced by such number of such shares as have an aggregate
value of $400,000, based on the closing sales price of the NASDAQ National
Market on the day immediately preceding the closing of the Stock Purchase
Agreement (the "Reallocated Shares") and the number of shares of SCI Stock to be
received by Suozzi under the terms of the Stock Purchase Agreement is being
increased by the number of Reallocated Shares.
NOW THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
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1. Payment Terms. ▇▇▇▇▇ agrees that the number of shares of
SCI Stock to be received by ▇▇▇▇▇ under the terms of the Stock Purchase
Agreement shall be reduced by 36,430 shares, consistent with the formula set
forth in the preamble to this Agreement and that the number of shares of SCI
Stock to be received by Suozzi under the terms of the Stock Purchase Agreement
shall be correspondingly increased.
2. Release. Suozzi hereby releases and discharges Valentec and
▇▇▇▇▇, and each of their respective successors and assigns, affiliates and
agents and any subsidiaries, officers, directors or heirs, executors and
administrators, as the case may be, from all actions, claims, causes of action,
suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, controversies, agreements, contracts, promises,
trespasses, damages, judgments, extents, and demands whatsoever, in law,
admiralty or equity (collectively, the "Claims"), including without limitation,
any and all Claims arising from the Consulting Arrangements (other than the New
Consulting Agreement).
3. Sale of VIL. Suozzi hereby acknowledges and agrees that the
$75,000 in consideration paid by ▇▇▇▇▇ for the purchase of 88.8% of the capital
stock of VIL represents fair and adequate consideration and that he shall have
no claim or ownership interest whatsoever in any of the capital stock or assets
of VIL.
4. Voting and Sale Restrictions. Suozzi hereby agrees so long
as he is not voted off the board of directors of SCI, for a period of three
years from the date hereof, to vote all shares of SCI Stock beneficially owned
by him on any manner put to a vote of the shareholders of SCI in the same manner
as recommended by a majority of the board of directors of SCI or if no such
recommendation of the board of directors has been made, as directed by ▇▇▇▇▇.
The restrictions contained in this paragraph shall not apply to any transferee
of the shares of SCI Stock.
5. Miscellaneous.
(1) Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties hereto shall be
governed by, the laws of the State of Delaware, without giving effect to the
principles of conflicts of laws thereof.
(2) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered
personally or sent by facsimile transmission, overnight courier or certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally or sent by facsimile transmission (provided
that a confirmation copy is sent by overnight courier), one day after deposit
with an overnight courier, or if mailed, five (5) days after the date of deposit
in the United States mails, as follows:
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If to ▇▇▇▇▇, to: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Suozzi, to: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(3) Severability, Binding Effect. Any provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or unenforceability
of any of the terms and provisions of this Agreement in any other jurisdiction.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
(4) Amendment; Waiver. No provision of this Agreement may be
waived, altered or amended, except by written agreement between the parties
hereto. Any waiver by any party hereto of a breach by the other party hereto of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach of the same or any other provision hereof. No failure to
exercise and no delay in exercising, on the part of any party hereto, any right,
power or privilege under this Agreement shall operate as a waiver thereof nor
shall any partial exercise of any right, power or privilege preclude any other
or further exercise thereof, or the exercise of any other power, right or
privilege.
(5) Entire Agreement. This Agreement and the Stock Purchase
Agreement contain the entire agreement between the parties hereto with respect
to the matters contemplated herein and supersede all prior agreements or
understandings between the parties hereto related to such matters.
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IN WITNESS WHEREOF, the parties hereto have duly caused this
Agreement to be duly executed as of the date first above written.
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