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MANAGEMENT CONTRIBUTION AGREEMENT, dated as of April 7, 2004 (this "Agreement"), by and between AC SAFETY HOLDING CORP., a Delaware corporation (the "Corporation"), and the CONTRIBUTOR whose name is set forth on the signature page hereto (the "Contributor")

Contribution Agreement

MANAGEMENT CONTRIBUTION AGREEMENT, dated as of April 7, 2004 (this You are currently viewing:
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Title: MANAGEMENT CONTRIBUTION AGREEMENT, dated as of April 7, 2004 (this "Agreement"), by and between AC SAFETY HOLDING CORP., a Delaware corporation (the "Corporation"), and the CONTRIBUTOR whose name is set forth on the signature page hereto (the "Contributor")
Governing Law: Delaware     Date: 11/22/2005
Law Firm: Katten Muchin;O'Melveny Myers    

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EXHIBIT 10.13

EXECUTION COPY

MANAGEMENT CONTRIBUTION AGREEMENT, dated as of April 7, 2004 (this "Agreement"),

by and between AC SAFETY HOLDING CORP., a Delaware corporation (the

"Corporation"), and the CONTRIBUTOR whose name is set forth on the signature

page hereto (the "Contributor").

RECITALS

WHEREAS, pursuant to the Agreement and Plan of Merger dated as of March 10,

2004 as amended, supplemented or restated from time to time, (the "Merger

Agreement"), by and among the Corporation, its wholly owned subsidiary AC Safety

Acquisition Corp., a Delaware corporation ("Acquisition"), and Aearo

Corporation, a Delaware corporation ("Aearo"), Acquisition will merge with and

into Aearo, with Aearo being the surviving corporation and a wholly owned

subsidiary of the Corporation (the "Merger");

WHEREAS, in connection with the Merger, the Contributor desires to

contribute, assign, convey, transfer and deliver to the Corporation, and the

Corporation desires to purchase, the number of shares of common stock, par value

$0.01 per share, of Aearo set forth on the signature page hereto (the

"Contributed Shares") valued at the dollar amount listed immediately below the

Number of Contributed Shares on the signature page hereto, subject to the terms

and conditions and for the Consideration Shares (as defined below) set forth

herein (the "Contribution");

WHEREAS, in connection with the Merger, the Corporation desires to issue to

the Contributor, and the Contributor desires to purchase from the Corporation,

the number of shares set forth on the signature page hereto of (i) the

Corporation's common stock, $0.01 par value per share (the "Common Stock"), and

(ii) the Corporation's Series A Preferred Stock, $0.01 par value per share (the

"Preferred Stock"), subject to the terms and conditions and in return for the

Contributed Shares as set forth herein; and

WHEREAS, the Contributor agreed to enter into this Agreement as an

inducement for Corporation to enter into the Merger Agreement and the other

agreements contemplated thereby and the Contributor hereby agrees to be bound by

the terms and provisions hereof, including, without limitation, the restrictions

contained herein, as an inducement for Corporation to enter into this Agreement

and to consummate the Merger and the other transactions contemplated by the

Merger Agreement.

NOW THEREFORE, in consideration of the mutual promises herein made, and in

consideration of the representations, warranties, and covenants herein

contained, the Corporation and the Contributor hereby agree as set forth below.

ARTICLE I

CONTRIBUTION AND ISSUANCE OF CONSIDERATION SHARES;

CONTRIBUTION CLOSING; DELIVERABLES

 

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1.1 CONTRIBUTION OF CONTRIBUTION SHARES; ISSUANCE OF THE CONSIDERATION SHARES.

(a) In accordance with, and subject to, the provisions of this Agreement,

at the Contribution Closing, (i) the Contributor shall contribute, assign,

transfer, convey and deliver to the Corporation the Contributed Shares, free and

clear of all Encumbrances and the Corporation shall acquire the Contributed

Shares for the consideration set forth in this Section 1.1 and (ii) the

Corporation shall issue, sell and deliver the number of shares of Common Stock

and Preferred Stock to the Contributor as set forth on the signature page hereto

(collectively, the "Consideration Shares").

(b) Subject to the terms and conditions contained herein, each party shall

use commercially reasonable efforts to take or cause to be taken all actions and

do or cause to be done all things required under all applicable Laws, in order

to consummate the transactions contemplated by this Agreement.

1.2 CONTRIBUTION CLOSING; DELIVERABLES.

(a) The closing (the "Contribution Closing") with respect to the

Contribution shall take place at the offices of O'Melveny & Myers LLP, Times

Square Tower, 7 Times Square, New York, NY 10036. The Contribution Closing shall

occur on the Closing Date immediately prior to the consummation of the Merger

and the other transactions contemplated by the Merger Agreement (such date, the

"Contribution Closing Date").

(b) At the Contribution Closing, the Corporation shall deliver to the

Contributor:

(i) certificates representing the number of Consideration Shares set

forth on the signature page attached hereto registered in the name of the

Contributor;

(ii) a counterpart to this Agreement duly executed by the Corporation;

(iii) a counterpart to the Buyer Support Agreement, dated as of the

Closing Date (the "Buyer Support Agreement"), among the Corporation, Bear

Stearns Merchant Banking Partners II, L.P., Vestar Equity Partners, L.P.

and the other stockholders of the Corporation whose names are set forth on

the signature pages thereto; and

(iv) a counterpart to the Stockholders' Agreement, dated as of the

Contribution Closing Date (the "Stockholders' Agreement"), among the

Corporation and the other parties thereto, duly executed by the

Corporation.

(c) At the Contribution Closing, the Contributor shall deliver to the

Corporation:

(i) one or more certificates representing the number of Contributed

Shares set forth on the signature page attached hereto (or an affidavit of

lost certificate with respect to such Contributed Shares, in form and

substance reasonably satisfactory to the Corporation);

(ii) a counterpart to this Agreement duly executed by the Contributor;

 

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(iii) a counterpart to the Buyer Support Agreement;

(iv) a counterpart to the Stockholders' Agreement duly executed by the

Contributor; and

(v) if applicable, a Spousal Acknowledgment and Consent as required by

the Stockholders' Agreement duly executed by the spouse of the Contributor.

1.3 SECTION 351 TRANSACTION.

The Corporation and the Contributor agree that the transaction effected

hereby is entered into in connection with the transaction contemplated by (i)

the Merger Agreement, (ii) the Securities Purchase Agreement, dated as of the

date hereof, by and among the Corporation and the Purchasers parties thereto,

(iii) the Management Contribution Agreements, dated as of the date hereof, by

and between the Corporation and the Contributors whose names are set forth on

the signature pages thereto and (iv) the Management Subscription and

Contribution Agreements, dated as of the date hereof, by and between the

Corporation and the Purchasers whose names are set forth on the signature pages

thereto (collectively, the "Related Transactions"), and is intended to, together

with the Related Transactions, constitute a single transaction under Section 351

of the Internal Revenue Code of 1986, as amended, and the regulations

promulgated thereunder (collectively, "Section 351"), so that the Contributors,

along with any other party receiving shares of capital stock in the Corporation

pursuant to the Related Transactions, are treated as contributing property to

the Corporation in exchange for its shares of capital stock and controlling the

Corporation under Section 351 immediately after the Related Transactions are

effected. The Corporation and the Contributor shall report the transaction

effected hereby as a contribution under Section 351, and not take any position

inconsistent with such treatment.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

As a material inducement to the Contributor to enter into and to perform

his obligations under this Agreement, the Corporation represents and warrants to

the Contributor as of the date hereof as set forth below.

2.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER.

The Corporation is duly organized, validly existing and in good standing

under the laws of the State of Delaware, and has all requisite power and

authority to own, lease and operate its properties and assets and to carry on

its business as presently being conducted. The Corporation is qualified or

licensed to do business and is in good standing in every jurisdiction in which

the failure to so qualify, be licensed or be in good standing, individually or

in the aggregate, could have a material adverse effect on the Corporation.

2.2 AUTHORIZATION; ISSUANCE OF CONSIDERATION SHARES.

(a) The Corporation has all requisite power and authority to execute and

deliver this Agreement and any and all instruments necessary or appropriate in

order to effectuate fully the

 

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terms and conditions of this Agreement, and the transactions contemplated

hereby. This Agreement has been duly authorized by all necessary action

(corporate or otherwise) on the part of the Corporation and this Agreement has

been duly executed and delivered by the Corporation and constitutes the valid

and legally binding obligation of the Corporation, enforceable in accordance

with its terms and conditions, subject, as to enforcement, to bankruptcy,

insolvency, reorganization, moratorium and similar laws of general applicability

relating to or affecting creditors' rights and to general equity principles.

(b) The authorization, issuance, sale and delivery of the Consideration

Shares have been duly authorized by all requisite action of the Corporation's

board of directors (the "Board"). The Consideration Shares will be validly

issued and outstanding, fully paid and nonassessable, with no personal liability

attaching to the ownership thereof, free and clear of any Encumbrances

whatsoever and with no restrictions on the voting rights thereof and other

incidents of record and beneficial ownership pertaining thereto, in each case,

created by the Corporation, other than as contemplated by the Stockholders'

Agreement.

(c) The execution, delivery and performance of this Agreement by the

Corporation and the consummation of the transactions contemplated hereby shall

not (i) violate any Law applicable to the Corporation or any of its assets or

(ii) conflict with, or result in any breach of, any of the terms, conditions or

provisions of, or constitute (with due notice or lapse of time, or both) a

default or give rise to any right of termination, cancellation or acceleration,

or result in the creation of any Encumbrance (A) upon any of the Corporation's

assets or (B) under any provision of (i) the Corporation's certificate of

incorporation or bylaws, (ii) any Permit or (iii) any other Contract to which

the Corporation is a party or by which its Assets is or may be bound. The

Corporation has not been and is not required to give any notice to, or make any

filing with, any Governmental Authority or any other Person, or obtain any

Permit, in each case, for the valid execution, delivery and performance by the

Corporation.

2.3 CAPITALIZATION OF THE CORPORATION.

(a) Immediately after the Closing, the authorized capital stock of the

Corporation shall consist of 4,000,000 shares, of which (i) 3,849,999 shares

will be Common Stock, of which (A) 2,510,499 shares will be issued and

outstanding, fully paid and nonassessable and (B) 633,923 shares will be

reserved for issuance pursuant to the Corporation's 2004 Stock Incentive Plan,

(ii) one share will be Class A Common Stock, of which one share will be issued

and outstanding, fully paid and nonassessable, and (iii) 150,000 shares of

preferred stock, $0.01 par value per share, of which 76,000 shares will be

designated as Series A Preferred Stock, 75,188 shares of which will be issued

and outstanding, fully paid and nonassessable.

(b) Except as described in Section 2.3(a) and as contemplated by the

Stockholders' Agreement, there are no (i) outstanding warrants, options,

agreements, convertible securities or other commitments or instruments pursuant

to which the Corporation is or may become obligated to issue or sell any shares

of its capital stock or other securities or (ii) preemptive or similar rights to

purchase or otherwise acquire shares of the capital stock or other securities of

the Corporation.

2.4 OFFERING EXEMPTION.

 

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Assuming the accuracy of the representations and warranties of the

Contributor made in Article III, the offering, sale and issuance of the

Consideration Shares has been, is, and will be, exempt from registration under

the Securities Act of 1933, as amended, and the rules and regulations in effect

thereunder (the "Securities Act"), and such offering, sale and issuance is also

exempt from registration under applicable state securities and "blue sky" laws.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR

As a material inducement to the Corporation to enter into and perform its

obligations under this Agreement, the Contributor represents and warrants to the

Corporation as of the date hereof as set forth below.

3.1 VALID TITLE; POWER AND AUTHORITY; NO CONFLICTS.

(a) The Contributor beneficially owns and has valid title of record to the

Contributed Shares, free and clear of any Encumbrance, subject only to

restrictions as to marketability imposed by securities laws.

(b) Subject only to restrictions as to marketability imposed by securities

laws, the Contributor has full right, power, authority and capacity and all

approvals required by Law, if any, to sell, transfer, assign and deliver the

Contributed Shares hereunder and to enter into this Agreement, and the

Corporation will acquire valid title to the Contributed Shares, free and clear

of any Encumbrance, upon the consummation of the transactions contemplated by

this Agreement.

(c) The Contributor has all requisite power and authority to execute and

deliver this Agreement and any and all instruments necessary or appropriate in

order to effectuate fully the terms and conditions of this Agreement and to

perform and consummate such Contributor's obligations hereunder. This Agreement

and the performance of the Contributor's obligations hereunder, have been duly

authorized by all requisite action on the part of the Contributor, and this

Agreement has been duly and validly executed and delivered by the Contributor

and constitutes a valid and legally binding obligation of the Contributor,

enforceable against the Contributor in accordance with its terms and conditions,

except as enforceability thereof may be limited by any applicable bankruptcy,

reorganization, insolvency or other Laws affecting creditors' rights generally

or by general principles of equity.

(d) The execution, delivery and performance by the Contributor of this

Agreement, and the consummation of the transactions contemplated hereby, shall

not (i) violate any Law applicable to the Contributor or (ii) conflict with or

result in any violation or breach of, any of the terms, conditions or provisions

of, or constitute (with due notice or lapse of time, or both) a default under,

or give rise to any right of termination, cancellation or acceleration or result

in the creation of any Encumbrance upon any of the assets of the Contributor,

any Contracts to which the Contributor is a party or by which the Contributor or

any of the Contributor's assets is or may be bound, in each case, which would

prohibit the Contributor from consummating the transactions contemplated hereby.

The Contributor has not been or is not required to give any

 

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notice to, or make any filing with, any Governmental Authority or any other

Person, or obtain any Permit, in each case, for the valid execution, delivery

and performance by the Contributor of this Agreement.

3.2 CERTAIN INVESTMENT REPRESENTATIONS.

(a) The Contributor is an "accredited investor" as that term is defined in

Rule 501(a) of Regulation D under the Securities Act.

(b) The Contributor is acquiring the Consideration Shares for investment

for the Contributor's own account and not with a view to, or for resale in

connection with, the distribution or other disposition thereof except in

compliance with the Stockholders Agreement and as permitted by law, including

without limitation the Securities Act. The Contributor does not have any present

intent to resell or distribute all or any part of its Consideration Shares. If

the Contributor is a corporation, trust, partnership or other organization, it

was not organized for the specific purpose of acquiring the Consideration

Shares.

(c) The Contributor has been advised that the Consideration Shares have not

been registered under the Securities Act, that the Consideration Shares may not

be sold or otherwise disposed of unless they are registered thereunder or an

exemption from registration is available and that accordingly the Contributor

may be required to bear the economic risk of the investment in the Consideration

Shares for an indefinite period of time. The Contributor also understands that

the Corporation does not have any intention of registering the Consideration

Shares under the Securities Act or of supplying the information which may be

necessary to enable the Contributor to sell Consideration Shares pursuant to

Rule 144 under the Securities Act.

(d) The Contributor has been given the opportunity to obtain any

information or documents, and to ask questions and receive answers about such

documents, the Corporation and its subsidiaries and the business and prospects

of the Corporatio

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