Exhibit
10.1


 


STOCK
PURCHASE AGREEMENT


 


by and
among


 


POLYPORE
INC.


 


AND THE
SELLERS NAMED HEREIN,


 


 


and


 


 


PP
ACQUISITION CORPORATION


 


 


dated as of
January 30, 2004


 

















 


TABLE OF
CONTENTS


 


	
  1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Basic Transaction

  	
   

  
	
   

  	
  (a)

  	
  Purchase and Sale of
  the Shares

  	
   

  
	
   

  	
  (b)

  	
  The Closing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Representations
  and Warranties of the Company and the Sellers

  	
   

  
	
   

  	
  (a)

  	
  Authorization of Transaction

  	
   

  
	
   

  	
  (b)

  	
  Noncontravention

  	
   

  
	
   

  	
  (c)

  	
  Brokers’ Fees

  	
   

  
	
   

  	
  (d)

  	
  Title

  	
   

  
	
   

  	
  (e)

  	
  Capitalization

  	
   

  
	
   

  	
  (f)

  	
  Subsidiaries

  	
   

  
	
   

  	
  (g)

  	
  Financial
  Statements

  	
   

  
	
   

  	
  (h)

  	
  Absence of Certain
  Developments

  	
   

  
	
   

  	
  (i)

  	
  Undisclosed Liabilities

  	
   

  
	
   

  	
  (j)

  	
  Legal
  Compliance

  	
   

  
	
   

  	
  (k)

  	
  Tax Matters

  	
   

  
	
   

  	
  (1)

  	
  Real Property and Assets

  	
   

  
	
   

  	
  (m)

  	
  Intellectual
  Property

  	
   

  
	
   

  	
  (n)

  	
  Contracts

  	
   

  
	
   

  	
  (o)

  	
  Insurance

  	
   

  
	
   

  	
  (p)

  	
  Litigation

  	
   

  
	
   

  	
  (q)

  	
  Employees

  	
   

  
	
   

  	
  (r)

  	
  Employee
  Benefits

  	
   

  
	
   

  	
  (s)

  	
  Environmental
  Matters

  	
   

  
	
   

  	
  (t)

  	
  Certain
  Business Relationships with the Company

  	
   

  
	
   

  	
  (u)

  	
  Products
  Liability

  	
   

  
	
   

  	
  (v)

  	
  Customers
  and Suppliers

  	
   

  
	
   

  	
  (w)

  	
  Prohibited
  Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Representations and
  Warranties of the Buyer

  	
   

  
	
   

  	
  (a)

  	
  Organization of the Buyer

  	
   

  
	
   

  	
  (b)

  	
  Authorization of
  Transaction

  	
   

  
	
   

  	
  (c)

  	
  Noncontravention

  	
   

  
	
   

  	
  (d)

  	
  Brokers’ Fees

  	
   

  
	
   

  	
  (e)

  	
  Availability
  of Funds

  	
   

  
	
   

  	
  (f)

  	
  Acquisition of
  the Shares for Investment

  	
   

  
	
   

  	
  (g)

  	
  Other Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Pre-Closing Covenants

  	
   

  
	
   

  	
  (a)

  	
  General

  	
   

  



 


i

















 


	
   

  	
  (b)

  	
  Notices
  and Consents

  	
   

  
	
   

  	
  (c)

  	
  Operation
  of Business

  	
   

  
	
   

  	
  (d)

  	
  Equity
  Issuances; Dividends and Distributions

  	
   

  
	
   

  	
  (e)

  	
  Restrictions on Transfer

  	
   

  
	
   

  	
  (f)

  	
  Preservation of Business

  	
   

  
	
   

  	
  (g)

  	
  Access
  to Books and Records and Customers and Suppliers

  	
   

  
	
   

  	
  (h)

  	
  Notice
  of Developments

  	
   

  
	
   

  	
  (i)

  	
  No
  Additional Representations or Warranties

  	
   

  
	
   

  	
  (j)

  	
  Disclaimer
  Regarding Estimates and Projections

  	
   

  
	
   

  	
  (k)

  	
  Financing

  	
   

  
	
   

  	
  (1)

  	
  No
  Solicitation

  	
   

  
	
   

  	
  (m)

  	
  2003 Audited Financial
  Statements

  	
   

  
	
   

  	
  (n)

  	
  Selling Expense Schedule

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Post-Closing Covenants

  	
   

  
	
   

  	
  (a)

  	
  General

  	
   

  
	
   

  	
  (b)

  	
  Litigation
  Support

  	
   

  
	
   

  	
  (c)

  	
  Tax Matters

  	
   

  
	
   

  	
  (d)

  	
  Performance of
  Obligations by the Buyer

  	
   

  
	
   

  	
  (e)

  	
  Directors’ and
  Officers’ Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Conditions to
  Obligation to Close

  	
   

  
	
   

  	
  (a)

  	
  Conditions to Obligation
  of the Buyer

  	
   

  
	
   

  	
  (b)

  	
  Conditions to
  Obligation of the Sellers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Remedies for
  Breaches of this Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Termination

  	
   

  
	
   

  	
  (a)

  	
  Termination of Agreement

  	
   

  
	
   

  	
  (b)

  	
  Effect
  of Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Miscellaneous

  	
   

  
	
   

  	
  (a)

  	
  Press Releases
  and Public Announcements

  	
   

  
	
   

  	
  (b)

  	
  Third-Party Beneficiaries

  	
   

  
	
   

  	
  (c)

  	
  Entire
  Agreement

  	
   

  
	
   

  	
  (d)

  	
  Succession and Assignment

  	
   

  
	
   

  	
  (e)

  	
  Counterparts

  	
   

  
	
   

  	
  (f)

  	
  Headings

  	
   

  
	
   

  	
  (g)

  	
  Notices

  	
   

  
	
   

  	
  (h)

  	
  Governing Law; Jurisdiction

  	
   

  
	
   

  	
  (i)

  	
  Amendments
  and Waivers

  	
   

  
	
   

  	
  (j)

  	
  Severability

  	
   

  
	
   

  	
  (k)

  	
  Expenses

  	
   

  
	
   

  	
  (1)

  	
  Construction

  	
   

  
	
   

  	
  (m)

  	
  Incorporation
  of Exhibits and Schedules

  	
   

  
	
   

  	
  (n)

  	
  Disclosure
  Schedule

  	
   

  



 


ii

















 


EXHIBITS


 


	
  Exhibit
  A

  	
   

  	
  Historical
  Financial Statements

  
	
  Exhibit
  B

  	
   

  	
  Terms
  of Transition Services Agreement

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  
	
  Indebtedness Schedule (§2(b)(ii)(B))

  
	
  Seller Disclosure Schedule (§3 and §5(h)(i))

  
	
  Buyer Disclosure Schedule (§4)

  
	
  Notices Schedule (§10(g))

  



 


iii

















 


STOCK
PURCHASE AGREEMENT


 


This Stock Purchase Agreement is made as of January 30, 2004, by
and among PP Acquisition Corporation, a Delaware corporation (the “Buyer”),
Polypore Inc., a Delaware corporation (the “Company”), and the persons
listed as Shareholders on the signature pages hereto (collectively referred to
herein as “Sellers” and individually as “Seller”). The Buyer, the
Company and the Sellers are each referred to in this Agreement as a “Party”
and collectively as the “Parties.”


 


The authorized capital stock of the Company consists of 20,000 shares
of Class A Preferred Stock, par value $.01 per share (the “Class A Preferred”),
10,000 shares of Class B-1 Preferred Stock, par value $.01 per share (the “Class
B-1 Preferred”), 5,000 shares of Class B-2 Preferred Stock, par value $.01
per share (the “Class B-2 Preferred”), 40,000 shares of Class C
Preferred Stock, par value $.01 per share (the “Class C Preferred” and
together with the Class A Preferred, Class B-1 Preferred and Class B-2
Preferred, the “Preferred Stock”), 250,000 shares of Class A Common
Stock, par value $.01 per share (the “Class A Common”), 50,000 shares of
Class B Common Stock, par value $.01 per share (the “Class B Common”)
25,000 shares of Class C Common Stock, par value $.01 per share (the “Class
C Common” and together with the Class A Common and Class B Common, the “Common
Stock”). The Class B Common and Class C Common are convertible into shares
of Class A Common.


 


As of the date of this
Agreement, there are 14,000 outstanding shares of Class A Preferred (the “Preferred
Shares”), 141,292 outstanding shares of Class A Common (the “Class A
Shares”), 6,040 outstanding shares of Class B Common (the “Class B
Shares”) and 7,754 outstanding shares of Class C Common (the “Class C
Shares”). The Preferred Shares, Class A Shares, Class B Shares and the
Class C Shares are collectively referred to in this Agreement as the “Shares.”
There are no shares of Class B-1 Preferred, Class B-2 Preferred, or Class C
Preferred outstanding as of the date of this Agreement.


 


The persons listed as
Shareholders on the signature pages hereto (collectively referred to herein as
“Shareholders” and individually as a “Shareholder”) own
beneficially and of record all of the issued and outstanding Shares. The Buyer
desires to purchase from each of the Shareholders, and each of the Shareholders
desires to sell to the Buyer, all of the Shares owned by such Shareholder as of
the Closing Date, subject to the terms and conditions set forth in this
Agreement.


 


NOW, THEREFORE, in
consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties and covenants contained
herein, the Parties agree as follows.


 


1.            Definitions.


 


“2003 Audited Financial
Statements” means the Company’s audited balance sheet and statements of income,
stockholders’ equity and cash flows as of and for the fiscal year ended
January 3, 2004.


 

















 


“Affiliate”
has the meaning set forth in Rule 12b-2 of the regulations promulgated under
the Securities Exchange Act.


 


“Asbestos”
includes chrysotile, amosite, crocidolite, tremolite asbestos, anthophyllite
asbestos, actinolite asbestos, asbestos winchite, asbestos richterite, and any
of these minerals that have been chemically treated and/or altered and any asbestiform
variety, type or component thereof and any Asbestos-Containing Material.


 


“Asbestos-Containing
Material” means any material containing Asbestos, including, without
limitation, any Asbestos-containing products, automotive or industrial parts or
components, equipment, improvements to real property and any other material
that contains asbestos in any chemical or physical form.


 


“Buyer”
has the meaning set forth in the preface above.


 


“Cash”
means cash and cash equivalents (including marketable securities and short term
investments and checks received by the Company prior to the Closing Date)
calculated in accordance with GAAP applied on a basis consistent with the
preparation of the Financial Statements.


 


“Class A
Common” has the meaning set forth in the preface above.


 


“Class A
Preferred” has the meaning set forth in the preface above.


 


“Class A
Shares” has the meaning set forth in the preface above.


 


“Class B
Common” has the meaning set forth in the preface above.


 


“Class B
Shares” has the meaning set forth in the preface above.


 


“Class B-l
Preferred” has the meaning set forth in the preface above.


 


“Class B-2
Preferred” has the meaning set forth in the preface above.


 


“Class C
Common” has the meaning set forth in the preface above.


 


“Class C
Preferred” has the meaning set forth in the preface above.


 


“Class C
Shares” has the meaning set forth in the preface above.


 


“Closing”
has the meaning set forth in §2(b)(i) below.


 


“Closing
Cash Consideration” has the meaning set forth in §2(a) below.


 


“Closing Date”
has the meaning set forth in §2(b)(i) below.


 


“Closing Transactions” has the meaning set
forth in §2(b)(ii) below.


 


2

















 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


“Commitments”
has the meaning set forth in §4(e) below. 


 


“Common
Stock” has the meaning set forth in the preface above.


 


“Company”
has the meaning set forth in the preface above. 


 


“Company
Representative” has the meaning set forth in §5(k) below.


 


“Competition
Laws” means United States or foreign statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines and other laws that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade, including without limitation
the Hart-Scott-Rodino Act and the EC Merger Regulation.


 


“Confidentiality
Agreement” has the meaning set forth in §5(g) below.


 


“Constitutive
Documents” means, with respect to any Person, such Person’s articles or certificate
of incorporation and by-laws, certificate of formation and limited liability
company agreement or operating agreement, trust agreement or other constitutive
documents, as applicable.


 


“Credit
Agreement” means that certain Credit Agreement, dated as of
December 15, 1999, as amended from time to time, among the Company,
Daramic Holdings S.A., Daramic S.A., certain Subsidiaries of the Company, the
lenders party thereto and The Chase Manhattan Bank, as Administrative Agent.


 


“Debt
Financing” has the meaning set forth in §4(e) below.


 


“Disclosure
Schedule” has the meaning set forth in §3 below.


 


“EBITDA”
means the sum, for the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), of the
following: (a) net earnings (or loss) after taxes for such period plus
(b) amounts deducted from net revenues for such period in determining such net
earnings (or loss) on account of (i) interest expense, (ii) federal, state or
foreign income taxes and (iii) depreciation and amortization minus (c)
non-recurring gains for such period plus (d) non-recurring losses for
such period plus (e) any Selling Expenses paid or accrued during such
period. Notwithstanding the foregoing, EBITDA shall not include any unrealized
foreign currency translation gains or losses resulting from the remeasurement
of United States dollar-denominated indebtedness (including, without
limitation, the loans outstanding under the Credit Agreement) of any entity
into the functional currency of such entity (if such functional currency is a
currency other than United States dollars) for financial reporting purposes.


 


“EC Merger
Regulation” means Council Regulation No. 4064/89 of the European Community.


 


3

















 


“Employee”
means a person employed by the Company or any of its Subsidiaries.


 


“Employee
Pension Benefit Plan” has the meaning set forth in ERISA §3(2).


 


“Employee
Welfare Benefit Plan” has the meaning set forth in ERISA §3(1).


 


“Environmental
Law” shall mean any foreign, federal, state, or local law, statute, rule,
regulation, order or other requirement of law relating to (A) the manufacture,
transport, use, emission, treatment, storage, disposal, exposure, release or
threatened release of pollutants, contaminants, chemicals or wastes, or (B) the
protection of employee health and safety or the environment (including, without
limitation, natural resources, air, and surface or subsurface land or waters).


 


“Equity Financing” has the meaning set forth
in §4(e) below.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


“Financial
Statements” has the meaning set forth in §3(g) below.


 


“Funded
Indebtedness” has the meaning set forth in §2(b)(ii)(B) below.


 


“GAAP”
means United States generally accepted accounting principles as in effect from
time to time.


 


“Hart-Scott-Rodino
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.


 


“Hazardous
Substance” means any pollutant, contaminant, chemical, waste, or any other
carcinogenic, toxic or hazardous substances or materials, including but not
limited to Asbestos or Asbestos Containing Material, petroleum, including crude
oil and any fractions thereof, or other wastes, chemicals, substances or
materials subject to regulation or remediation under any Environmental Law.


 


“Indemnified
Parties” has the meaning set forth in §6(e) below.


 


“Intellectual
Property” means all patents, patent applications, patent disclosures and
inventions; trademarks, service marks, trade dress, logos, trade names,
corporate names and Internet domain names, together with all goodwill
associated therewith (including all translations, adaptations, derivations and
combinations of the foregoing); copyrights and copyrightable works; and
registrations, applications and renewals for any of the foregoing.


 


“Knowledge”
means, with respect to (i) the Company, the actual knowledge of Jerry Zucker,
Lynn Amos, Frank Nasisi, Stefan Geyler, Brad Reed, Rob Whitsett and Jeff
Winkler and (ii) Buyer, the actual knowledge of Kevin Kruse, David Barr and
Mike Graff.


 


“Leased
Real Property” has the meaning set forth in §3(l)(ii) below.


 


4

















 


“Liquidation
Value” shall mean the sum of $1,000, with respect to each outstanding share
of Class A Preferred.


 


“Material
Adverse Effect” means, with respect to the Company or its Subsidiaries, an
event, occurrence or circumstance that has had or is reasonably likely to have
a material adverse effect on the business, assets, financial condition or
results of operations of the Company and its Subsidiaries taken as a whole; provided, however, that the term “Material
Adverse Effect” shall not include any effect attributable to (i) any event,
occurrence, circumstance or trend, including but not limited to a diminution in
value, relating to the Company or its Subsidiaries, their business, assets,
financial condition or results of operations that, to the Knowledge of the
Buyer, exist as of the date hereof; (ii) a change (after the date hereof) in
law or GAAP or the interpretation thereof that applies generally to the
industry in which the Company and its Subsidiaries operate that does not have a
disproportionate and adverse effect on the Company and its Subsidiaries; (iii)
any change or event relating to the general economy of any nation or region in
which the Company or any of its Subsidiaries operates that does not have a
disproportionate and adverse effect on the Company and its Subsidiaries; and
(iv) any change or event relating to the industries in which the Company or any
of its Subsidiaries operates that does not have a disproportionate and adverse
effect on the Company and its Subsidiaries.


 


“Most
Recent Balance Sheet” means the balance sheet contained within the Most
Recent Financial Statements.


 


“Most
Recent Financial Statements” has the meaning set forth in §3(g) below.


 


“Most
Recent Fiscal Month End” has the meaning set forth in §3(g) below.


 


“Most
Recent Fiscal Year End” has the meaning set forth in §3(g) below.


 


“Ordinary
Course of Business” means the ordinary course of business consistent with
past custom and practice.


 


“Owned Real
Property” has the meaning set forth in §3(l)(i) below.


 


“Party”
and “Parties” have the meanings set forth in the preface above.


 


“Permitted
Liens” means (i) mechanic’s, materialmen’s and similar liens arising in the
Ordinary Course of Business for sums not yet due and payable, (ii) liens for
Taxes not yet due and payable or for Taxes that the taxpayer is contesting in
good faith through appropriate proceedings to the extent reserves or other
appropriate provisions that are required by GAAP have been made therefore,
(iii) purchase money liens and liens securing rental payments under capital
lease arrangements, (iv) other liens arising in the Ordinary Course of Business
and not incurred in connection with the borrowing of money which would not be
reasonably expected to have a Material Adverse Effect, (v) zoning, building and
other land use laws imposed by any governmental authority; (vi) easements,
covenants, conditions, restrictions and other similar matters of record
affecting title and such other title defects which would not be reasonably
expected to have a Material Adverse Effect, (vii) any matters of record that
would be disclosed in a current title commitment which would not be reasonably
expected to have a Material


 


5

















 


Adverse
Effect, (viii) matters that would be disclosed by an accurate survey which
would not be reasonably expected to have a Material Adverse Effect; and (ix)
with respect to real property located outside of the United States, any other
liens, encumbrances, restrictions or other defects customarily accepted by
buyers in such jurisdiction which would not be reasonably expected to have a
Material Adverse Effect.


 


“Person”
means an individual, a partnership, a limited liability company, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity (or any department, agency
or political subdivision thereof).


 


“Plans”
has the meaning set forth in §3(r)(i) below.


 


“Preferred
Shares” has the meaning set forth in the preface above.


 


“Preferred
Stock” has the meaning set forth in the preface above.


 


“Real
Property Leases” has the meaning set forth in §3(l)(ii) below.


 


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


 


“Securities
Exchange Act” means the Securities Exchange Act of 1934, as amended.


 


“Stockholders
Agreement” means that certain Stockholders Agreement, dated
November 18, 1994, among the Company and the Stockholders of the Company
listed therein, as amended.


 


“Security
Interest” means any mortgage, pledge, lien, encumbrance, charge or other
security interest.


 


“Seller”
and “Sellers” have the meanings set forth in the preface above.


 


“Selling
Expenses” means the fees, expenses, charges and other payments incurred or
otherwise payable by the Company or any of its Subsidiaries specifically
related to the transactions contemplated by this Agreement, which shall include,
without limitation, (a) the fees, expenses, charges and other payments to
counsel, accountants, financial advisors or investment bankers of the Company
and its Subsidiaries arising out of the transactions contemplated by this
Agreement, (b) all amounts due to any employee or consultant of the Company or
its Subsidiaries in respect of any stay bonuses, severance payments, change of
control payments or other similar payments arising (i) solely from the
consummation of the transactions contemplated by this Agreement (provided that
amounts due in respect of any stay bonuses and other similar payments shall be
deemed to arise solely from the consummation of the transactions contemplated
by this Agreement) and (ii) that do not require any subsequent action by the
Buyer, the Company or any Subsidiary following the Closing to make such amounts
due, including termination of the employment of such person , (c) any premium,
make whole payment or similar penalties due to any lender of the Company or its
Subsidiaries arising from the transactions contemplated hereby, including
repayment of the Funded Indebtedness, and (d) the net amount of any prepayments
of Funded Indebtedness made after January 3, 2004, including any premium,
make whole payment or similar penalties relating thereto.


 


6

















 


“Shareholder”
and “Shareholders” have the meanings set forth in the preface above.


 


“Shares”
has the meaning set forth in the preface above.


 


“Subsidiary”
means any corporation, limited liability company, partnership or other entity
with respect to which a specified Person (or a Subsidiary thereof) owns,
directly or indirectly, a majority of the common stock or equity interests or
has the power to vote or direct the voting of sufficient securities to elect a
majority of the directors or managers, as the case may be.


 


“Tax”
or “Taxes” mean all federal, state, local and foreign net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, windfall profits, customs,
duties or other taxes, together with interest and any penalties.


 


“Termination
Date Extension Event” means the occurrence and continuation of any of the
following to Frank Nasisi (a) his death, (b) his resignation as chief operating
officer of the Company or (c) if, as a result of health reasons, he experiences
a meaningful deterioration in the performance of his duties as chief operating
officer compared to his past performance and activity level.


 


“Tax Return”
means any return, declaration, report, claim for refund or information return
or statement relating to Income Taxes, including any schedule or
attachment thereto, and including any amendment thereof.


 


“Transaction”
has the meaning set forth in §5(1) below.


 


2.             Basic Transaction.


 


(a) Purchase and Sale of the Shares.
At the Closing, upon the terms and subject to the conditions set forth in this
Agreement, each of the Sellers shall sell, assign, transfer and convey to the
Buyer, and the Buyer shall purchase and acquire from each of the Sellers, all
of the Shares owned by such Seller free and clear of any Security Interests,
against payment at the Closing of an aggregate amount equal to the portion of
the Closing Cash Consideration set forth below.


 


The term “Closing
Cash Consideration” means (i) $1,150,000,000, minus (ii) all
principal and accrued interest in respect of the Funded Indebtedness of the
Company and its Subsidiaries outstanding immediately prior to the Closing Date
that will be repaid pursuant to §2(b)(ii)(B) on the Closing Date, plus
the amount of Cash of the Company and its Subsidiaries determined on a
consolidated basis on January 3, 2004 as reflected on the 2003 Audited
Financial Statements, minus the aggregate amount of the Selling Expenses
(determined without any duplication related to Funded Indebtedness). Closing
Cash Consideration shall be subject to a one-time reduction in the amount of
the sum of (A) any accrued current Taxes incurred in and payable for the
fiscal year ended January 3, 2004 as reflected on the 2003 Audited
Financial Statements plus (B) in the event the Company receives written
notice from the IRS prior to the Closing Date that the IRS has disallowed the
Company’s §338(g) election with respect to the purchase of stock described in
§(3)(k) of the Disclosure Schedule, an amount equal to the Taxes the Company
would be obligated to pay as a result of failing to make a timely §338(g) election


 


7

















 


with
respect to such purchase, without taking into account the transactions
contemplated by this Agreement; provided that
the amount of the one-time reduction for amounts under clauses (A) and (B)
shall in no event exceed $12.5 million in the aggregate. Closing Cash
Consideration shall also be subject to a one-time reduction if the EBITDA as
derived from the 2003 Audited Financial Statements (“2003 EBITDA”) is less than
$124.3 million, but greater than $119.3 million, by an amount equal to the
product of (x) 8.65 times (y) the difference of $124.3 million minus
the greater of (A) 2003 EBITDA and (B) $119.3 million; provided, that the
amount of clause (y) shall not, in any event, exceed more than $5.0 million,
and the reduction in Closing Cash Consideration shall not, in any event, exceed
$43.25 million.


 


The Closing
Cash Consideration shall be allocated among the Sellers holding Class A
Preferred, in amounts equal to the product of (i) the number of shares of Class
A Preferred held by each such Seller multiplied by (ii) the Liquidation
Value thereof, plus (iii) all accrued and unpaid dividends thereon, with
the remaining Closing Cash Consideration to be allocated among the Shareholders
in proportion to their respective holdings of Class A Shares (or rights to
acquire Class A Shares).


 


(b) The Closing.


 


(i)            The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Willkie Farr & Gallagher LLP, 787
Seventh Avenue, New York, New York at 10:00 a.m. on the second business day
following full satisfaction or due waiver of all of the closing conditions set
forth in §7 hereof (other than those to be satisfied at the Closing) or at such
other location or on such other date as is mutually agreeable to the Buyer and
the Sellers. The date and time of the Closing are herein referred to as the “Closing
Date.”


 


(ii)           Subject
to the terms and conditions set forth in this Agreement, the Parties hereto
shall consummate the following transactions (the “Closing Transactions”)
on the Closing Date:


 


(A)          the Buyer shall deliver to each of the holders of Shares such
Shareholder’s portion of the Closing Cash Consideration (as determined in
accordance with §2(a) herein), by wire transfer of immediately available funds
to one or more accounts designated by the Sellers to the Buyer prior to the
Closing;


 


(B)           the Buyer shall repay, or cause to be repaid, on behalf of the Company
and its Subsidiaries all amounts necessary to discharge fully the then
outstanding balance of all indebtedness for borrowed money, including the
indebtedness listed on the attached Indebtedness Schedule (such
amount, in the aggregate, the “Funded Indebtedness;” provided that
Funded Indebtedness shall not include any indebtedness of Buyer or any
indebtedness of the Company or any of its Subsidiaries incurred to finance the
Closing Cash Consideration) by wire transfer of immediately available funds as
directed by the holders of the Funded Indebtedness at or prior to the Closing,
and the Company shall deliver to the Buyer all appropriate payoff letters and
shall make arrangements reasonably


 


8

















 


satisfactory to the Buyer for such holders to deliver releases and canceled
notes at the Closing;


 


(C)           the Sellers shall deliver to the Buyer certificates, duly endorsed in
blank or accompanied by duly executed stock powers, representing all Shares of
the Company issued and outstanding as of the Closing;


 


(D)          the Buyer, the Company and the Sellers shall make such other deliveries
as are required by and in accordance with §7 hereof.


 


3.             Representations
and Warranties of the
Company and the Sellers. The
Company, with respect to the Company and its Subsidiaries, as applicable, and
each Seller, severally with respect to itself and not jointly with respect to
any of the other Sellers, hereby represent and warrant to the Buyer that the
statements contained in this §3 are correct and complete as of the date of this
Agreement and shall be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this §3), except as set forth in the disclosure
schedule accompanying this Agreement (the “Disclosure Schedule”).
The Disclosure Schedule shall be arranged in paragraphs corresponding to
the lettered paragraphs contained in this §3; provided,
however, that any event, fact or circumstance disclosed in any
lettered paragraph of the Disclosure Schedule shall be deemed to be a
disclosure for purposes of all other lettered paragraphs of the Disclosure
Schedule, to the extent the applicability of such disclosure is reasonably
ascertainable.


 


(a)  Authorization of Transaction.  The Company has full corporate power and
authority and each Seller has full power and authority to execute and deliver
this Agreement and to perform its obligations hereunder.  This Agreement constitutes the valid and
legally binding obligation of the Company and each Seller, enforceable in
accordance with its terms and conditions.


 


(b)  Noncontravention.  Other than as set forth on §3(b) of the
Disclosure Schedule, neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, shall (i) violate
any statute, regulation, rule, injunction, judgment, order, decree or ruling of
any government, governmental agency or court to which any of the Sellers, the
Company or its Subsidiaries is subject or any provision of the Constitutive
Documents of any of the Sellers, the Company or its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice or consent under any agreement, contract,
lease, license or instrument to which any of the Sellers, the Company or any of
its Subsidiaries is a party or by which any of them are bound or to which any
of their assets are subject, except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation or failure to
give notice would not have a Material Adverse Effect or a material adverse
effect on the ability of the Sellers, the Company or any of its Subsidiaries to
consummate the transactions contemplated by this Agreement.  Except for applicable requirements of
Competition Laws, including the Hart-Scott-Rodino Act and the EC Merger


 


9

















 


Regulation,
none of the Sellers, the Company or its Subsidiaries is required to give any
notice to, make any filing with, or obtain any authorization, consent or
approval of any government or governmental agency in order for the Sellers and
the Company to consummate the transactions contemplated by this Agreement,
except where the failure to give notice, to file or to obtain any
authorization, consent or approval would not have a Material Adverse Effect or
a material adverse effect on the ability of the Sellers or the Company to
consummate the transactions contemplated by this Agreement.


 


(c)  Brokers’
Fees.  Neither the Sellers, the
Company nor any of its Subsidiaries has any liability or obligation to pay any
fees or commissions to any broker, finder or investment banker with respect to
the transactions contemplated by this Agreement for which the Buyer could
become liable or obligated, except for the fee of J.P. Morgan Securities Inc.


 


(d)  Title.  Other than as set forth on §3(d) of the
Disclosure Schedule, the Company or one of its Subsidiaries has good and valid
title to, or a valid leasehold interest in, the material tangible personal
property that is reflected on the Most Recent Balance Sheet, free and clear of
any Security Interest other than Permitted Liens.


 


(e)  Capitalization.  §3(e) of the Disclosure Schedule sets
forth for the Company (A) the number of shares of authorized capital stock of
each class of its capital stock, (B) the number of issued and outstanding
shares of each class of its capital stock, and (C) the number of shares of its
capital stock held in treasury. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where such qualification is required,
except where the lack of such qualification would not have a Material Adverse
Effect. The Company has full corporate power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned and
used by it. All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
nonassessable.  Each Shareholder holds
of record and owns beneficially all of his or its Shares of the Company, free
and clear of any restrictions on transfer and Security Interests (other than
restrictions under the Securities Act and state securities laws and the
Stockholders Agreement). Except as set forth on §3(e) of the Disclosure
Schedule, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights or other
contracts or commitments that could require any Shareholder to sell, transfer
or otherwise dispose of any capital stock of the Company or that could require
the Company to issue, sell or otherwise cause to become outstanding any of its
capital stock (in each case, other than this Agreement and the Stockholders
Agreement).  There are no outstanding stock
appreciation, phantom stock or similar rights with respect to the Company.  Except for the Stockholders Agreement, there
are no voting trusts, proxies or other agreements or understandings with
respect to the voting of any capital stock of the Company.


 


(f)  Subsidiaries.
The Company does not have any ownership interest in any corporation,
partnership, limited liability company, joint venture or other Person other
than those entities set forth on §3(f) of the Disclosure Schedule.  Other than as set forth on §3(f) of the
Disclosure Schedule and other than director qualifying shares, all of the
equity interests of such entities are owned directly or indirectly by the
Company.  All of the issued and
outstanding shares of


 


10

















 


common
stock or equity interests of each of the Company’s Subsidiaries have been duly
authorized, validly issued and are fully paid and nonassessable and are owned
beneficially and of record by the Company or another Subsidiary free and clear
of all liens, claims or other encumbrances or rights of third parties other
than liens and encumbrances relating to the Credit Agreement. There are no
outstanding options, warrants or rights to purchase or acquire any capital
stock or other equity interests of any of its Subsidiaries, and there are no
contracts, commitments, understandings, arrangements or restrictions by which
the Company or any of its Subsidiaries is bound to sell or issue any additional
shares of capital stock or equity interests of such Subsidiary.


 


(g)  Financial
Statements.  Attached hereto as Exhibit
A are the following financial statements (collectively the “Financial
Statements”): (i) the Company’s audited balance sheet and statements of
income, stockholders’ equity and cash flows as of and for the year ended
December 29, 2001 and December 28, 2002 (the “Most Recent Fiscal
Year End”) and (ii) the Company’s unaudited balance sheet and statements of
income and cash flows (the “Most Recent Financial Statements”) as of and
for the period beginning December 29, 2002 and ended November 30,
2003 (the “Most Recent Fiscal Month End”). The Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby and present fairly in all material respects the
financial condition of the Company as of such dates and the results of
operations of the Company for such periods, provided
that the Most Recent Financial Statements are subject to normal year
end adjustments and lack footnotes and other presentation items.


 


(h)  Absence of Certain Developments.  Except as set forth on §3(h) of the
Disclosure Schedule or otherwise contemplated by this Agreement, since the
Most Recent Fiscal Month End, there has not been any Material Adverse Effect.
In addition to the foregoing, since that date and except as set forth on §3(h)
of the Disclosure Schedule, the Company and its Subsidiaries have operated in
the Ordinary Course of Business and neither the Company nor any of its
Subsidiaries has:


 


(i)            borrowed
any amount or incurred any material liabilities, except amounts borrowed or
liabilities incurred in the Ordinary Course of Business or under contracts
entered into in the Ordinary Course of Business;


 


(ii)           mortgaged,
pledged or subjected to any material lien, charge or other encumbrance, any
material portion of its assets, except for Permitted Liens arising in the
Ordinary Course of Business;


 


(iii)          sold,
assigned, licensed or transferred any Owned Real Property, Leased Real Property
or any material portion of its other tangible assets, except in the Ordinary
Course of Business;


 


(iv)          sold,
assigned or transferred any material patents, trademarks, trade names,
copyrights, trade secrets or other intangible assets;


 


11

















 


(v)           made
any material capital expenditures or commitments therefor outside the Ordinary
Course of Business or failed to make any material capital expenditures that
otherwise would have been made in the Ordinary Course of Business;


 


(vi)          entered
into, materially amended or modified, or waived any material rights with
respect to, any material agreement, contract, lease or license outside the
Ordinary Course of Business;


 


(vii)         issued,
sold or transferred any of its equity securities, securities convertible into
its equity securities or warrants, options or other rights to acquire its
equity securities, or any notes, bonds or debt securities;


 


(viii)        declared
or paid any dividend, made any distribution on its capital stock or equity
interests, redeemed or purchased any shares of its capital stock or equity
interests, or paid any management or other fees to any Shareholder or any
Affiliates of any Shareholder; provided, that
the Company may pay a cash dividend to the Shareholders as long as the amount
of such cash dividend is obtained solely from either (A) Cash of the Company
existing on January 3, 2004 and deducted from the definition of Closing
Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at
or prior to the Closing (including any interest, expenses or fees incurred in
connection with the borrowing), and the payment of such cash dividend does not
subject the Company to any adverse Tax consequences, including any withholding
Tax obligation;


 


(ix)           increased
the compensation of any officer or other key management employee, or entered
into any material employment, severance, bonus or consulting agreement or other
material compensation agreement or caused or suffered any cancellation or
material amendment thereof, other than cost of living or merit increases
granted in the Ordinary Course of Business;


 


(x)            waived,
released, cancelled or forgiven any debts, claims or rights (or series of
debts, claims or rights) involving, individually or in the aggregate,
consideration in excess of $500,000;


 


(xi)           (A)
acquired (by merger, consolidation, acquisition of stock, other securities or
assets or otherwise), (B) made a capital investment in, (C) made a loan advance
or agreement to loan or advance to, (D) entered into any joint venture,
partnership or other similar arrangement for the conduct of business with, or
(E) guaranteed any indebtedness for borrowed money of, any Person or any
portion of the assets of any Person that constitutes a division or operating
unit of such Person;


 


(xii)          suffered
any theft, damage, destruction or casualty loss affecting its business or any
of their respective assets in excess of $250,000 in any single instance or
$500,000 in the aggregate, whether or not covered by insurance;


 


12

















 


(xiii)         paid,
discharged, cancelled, compromised or satisfied any material liability other
than any such payment, discharge, cancellation, compromise or satisfaction made
in the Ordinary Course of Business;


 


(xiv)        commenced
or settled any material legal, administrative or arbitral proceeding;


 


(xv)         made
or changed any material Tax election, filed any amended material Tax Return,
entered into any material closing agreement or settled any material Tax claim
or assessment, surrendered any right to claim a refund of Taxes or consented to
any extension or waiver of the limitation period applicable to any material Tax
claim or assessment;


 


(xvi)        between
November 30, 2003 and January 3, 2004, either failed to manage its
working capital in the Ordinary Course of Business or suffered any material
reduction in working capital not in the Ordinary Course of Business; or


 


(xvii)       committed
to do any of the foregoing.


 


(i)  Undisclosed Liabilities. Neither the
Company nor any of its Subsidiaries has any liability (whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), except
for (i) liabilities set forth on the Most Recent Balance Sheet (including any
notes thereto), (ii) liabilities under agreements, contracts, leases, licenses
and other arrangements (x) listed in §3(m)(i) or §3(n) of the Disclosure
Schedule or (y) that were entered into in the Ordinary Course of Business
since November 30, 2003 that are not required to be listed on the
Disclosure Schedules, (iii) liabilities reflected on the Disclosure Schedule,
(iv) liabilities that have arisen in the Ordinary Course of Business, since
November 30, 2003, and (v) liabilities that, individually or in the
aggregate, would not have a Material Adverse Effect. Except as otherwise
disclosed in the Financial Statements, none of the Company or any of its
Subsidiaries is directly or indirectly liable upon or with respect to (by
discount, repurchase agreements or otherwise), or obliged in any other way to
provide funds in respect of, or to guarantee or assume, any debt, obligation or
dividend of any Person other than the Company or any of its wholly-owned
Subsidiaries, except endorsements in the ordinary course of business in
connection with the deposit, in banks or other financial institutions, of items
for collection.  Except as otherwise
disclosed in the Financial Statements, neither the Company nor any of its
Subsidiaries has any obligation for borrowed money, any obligation that is
evidenced by any note or other similar instrument or any capitalized lease
obligation.


 


(j)  Legal
Compliance.


 


(i)            Except
as set forth on §3(j) of the Disclosure Schedule, the Company and its
Subsidiaries are in compliance with all applicable statutes, laws, ordinances,
rules, orders and regulations of federal, state, local and foreign governments
(and all agencies thereof), except where the failure to comply would not have a
Material Adverse Effect. Except as set forth on §3(j) of the Disclosure
Schedule, neither of the Company nor any


 


13

















 


of its Subsidiaries has received any communication (written or, to the
Knowledge of the Company, oral) from any governmental authority or any other
Person that alleges that either of the Company or any of its Subsidiaries is
not in compliance with all applicable foreign, federal, state or local laws,
rules or regulations, except where such communication alleges a failure to
comply that would not reasonably be expected to have a Material Adverse Effect.


 


(ii)           The
Company and its Subsidiaries have obtained each material permit, approval,
consent, authorization, license, variance, or permission required under any
applicable statutes, laws, ordinances, rules, orders and regulations of
federal, state, local and foreign governments (and all agencies thereof) that
is necessary or appropriate for the operations of the Company and its
Subsidiaries, except in the case where the failure to have such permit,
approval, consent, license, variance or permission would not reasonably be
expected to have a Material Adverse Effect. Each such material permit,
approval, consent, authorization, license, variance, and permission, is in full
force and effect and no proceeding is pending or, to the Knowledge of Sellers,
threatened, to revoke or limit any such permit, approval, consent,
authorization, license, variance, or permission, except for failures to be in
full force and effect, revocations or limitations that would not reasonably be
expected to have a Material Adverse Effect. Except as set forth in §3(j) of the
Disclosure Schedule:


 


(A)          the Company or its Subsidiaries (as applicable) is, and at all times
since November 30, 2003 have been, in compliance with all of the terms and
requirements of each such material permit, approval, consent, authorization,
license, variance, and permission, except where failure to comply would not
reasonably be expected to have a Material Adverse Effect; and


 


(B)           since November 30, 2003, neither the Sellers nor the Company or
its Subsidiaries has received any communication (written or oral) from any
governmental authority or any other Person regarding (y) any actual, alleged,
possible, or potential violation of or failure to comply with any term or
requirement of any such material permit, approval, consent, authorization,
license, variance, or permission, or (z) any actual, proposed, possible, or
potential revocation, withdrawal, suspension, cancellation, termination of, or
modification to any such permit, approval, consent, authorization, license,
variance, or permission, except where such communication relates to matters
that would not reasonably be expected to have a Material Adverse Effect.


 


(k)  Tax Matters.
Except as set forth on §3(k) of the Disclosure Schedule:


 


(i)            Each
of the Company and its Subsidiaries has timely filed all material Tax Returns
required to be filed by it, and each of the Company and its Subsidiaries has
paid all material Taxes due and payable by it.


 


14

















 


(ii)           No
material deficiency or proposed adjustment relating to Taxes that has not been
resolved or settled has been proposed, asserted or assessed by any taxing
authority against the Company or any of its Subsidiaries.


 


(iii)          The
Company and its Subsidiaries have withheld and paid all material Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, shareholder or other third party.


 


(iv)          §3(k)
of the Disclosure Schedule lists those Tax Returns that currently are the
subject of audit or for which written notice of intent to audit has been
received. The Company has made available to the Buyer copies of all Tax Returns
filed and all examination reports and written statements of deficiencies
assessed against or agreed to by the Company or any of its Subsidiaries since
January 1, 2001.


 


(v)           Neither
the Company nor any of its Subsidiaries has waived any statute of limitations
in respect of material Taxes or agreed to any extension of time with respect to
a material Tax assessment or deficiency.


 


(vi)          Neither
the Company nor any of its Subsidiaries is a party to any Tax allocation or
sharing agreement with any Person.


 


(vii)         No
claim has been made by any Tax authority in a jurisdiction where the Company
(or any of its Subsidiaries, as applicable) does not currently file a Tax
Return that it is or may be subject to Tax by such jurisdiction.


 


(viii)        None of
the Company or any of its Subsidiaries has any outstanding request for an
extension of time within which to pay any material Taxes or file any material
Tax Returns.


 


(ix)           None
of the Company or any of its Subsidiaries is a party to any agreement,
contract, arrangement or plan that has resulted or would result, separately or
in the aggregate, in (A) the payment of any “excess parachute payment” within
the meaning of § 280G of the Code or (B) the loss of any deduction under
§ 162(m) of the Code.


 


(x)            The
Company is not, and has not been at any time during the applicable period
specified in § 897(c)(l)(A)(ii) of the Code, a “United States real
property holding corporation” within the meaning of § 897(c)(2) of the
Code.


 


(1)  Real Property and Assets.


 


(i)            §3(l)(i)
of the Disclosure Schedule lists and describes briefly all real property
owned by the Company or any of its Subsidiaries (the “Owned Real Property”).
With respect to each such parcel of Owned Real Property and except for matters
that would not be reasonably expected to have a Material Adverse Effect or as
otherwise disclosed on §3(l)(i) of the Disclosure Schedule: (a) the Company or
its Subsidiaries has good and marketable fee simple title to the parcel and the
improvements located thereon,


 


15

















 


free and clear of all Security Interests, except Permitted Liens; (b)
there are no leases, subleases, options or other agreements, written or oral,
granting to any party or parties the right of use or occupancy or the right to
otherwise obtain title of such parcel or any portion thereto (except for which
public notice has been provided or has been disclosed in a survey); and (c)
there are no parties (other than the Company and/or any of its Subsidiaries)
who are in possession of or who are using any such parcel.


 


(ii)           §3(l)(ii)
of the Disclosure Schedule lists all real property leased or subleased by
the Company and/or any of its Subsidiaries (the “Leased Real Property”).
The Company has made available to the Buyer a correct and complete copy of the
leases and subleases and all material amendments for the Leased Real Property
(the “Real Property Leases”). To the Knowledge of the Company, each
lease and sublease for the Leased Real Property is valid, binding, enforceable
and in full force and effect in all material respects, and neither the Company
nor any of its Subsidiaries has received a current notice of default under any
such lease or sublease and the Company has not received any notice indicating
that any other party to such leases is in material default, except where the
invalidity, nonbinding nature, unenforceability, ineffectiveness or default
would not be reasonably expected to have a Material Adverse Effect.


 


(iii)          The
Leased Real Property and Owned Real Property comprise all of the material real
property currently used in connection with the conduct of the business of the
Company and any of its Subsidiaries.


 


(m)  Intellectual Property.


 


(i)            §3(m)(i)
of the Disclosure Schedule identifies each patent or registered
Intellectual Property, or application therefor, owned by the Company or any of
its Subsidiaries, and each material written license or other agreement or
material oral agreement that would be reasonably considered to exist (excluding
off-the-shelf software license agreements) pursuant to which the Company or any
of its Subsidiaries has granted to any third party, or has been granted by any
third party, any rights in the Intellectual Property.


 


(ii)           With
respect to each material item of Intellectual Property other than the license
agreements identified in §3(m)(i) of the Disclosure Schedule, and except as
otherwise indicated on §3(m)(i) of the Disclosure Schedule:


 


(A)          the Company and/or its Subsidiaries owns all right, title and interest
in and to such item of Intellectual Property, free and clear of any Security
Interest, license or other restriction;


 


(B)           to the Knowledge of the Company, such item of Intellectual Property is
not subject to any outstanding injunction, judgment, order, decree, ruling or
charge; and


 


16

















 


(C)           no action, suit, proceeding, hearing, investigation, written claim or
written demand is pending or, to the Knowledge of the Company, is threatened
which challenges the legality, validity, enforceability, use or ownership of
such item of Intellectual Property;


 


(iii)           With respect to each agreement identified in §3(m)(i) of the Disclosure
Schedule:


 


(A)          neither the Company nor any of its Subsidiaries, nor to the Knowledge
of the Company, any other party to any such agreement is in material breach or
default thereof; and


 


(B)           neither the Company nor any of its Subsidiaries has repudiated any
provision thereof, nor has the Company received any notice that any other party
to any such agreement has repudiated any provision thereof; and


 


(C)           each such agreement is in full force and effect as to the Company or
any of its Subsidiaries, and the Company has not received any notice that would
indicate that any such agreement is not in full force and effect as to each
other party thereto.


 


(iv)          Neither the Company nor any of its Subsidiaries has received notice of
any claim that it is infringing the Intellectual Property of any third party
that would have a material effect on the Company or its Subsidiaries, and the
Company has no Knowledge of any infringement by any third party of any material
Intellectual Property owned or used by the Company or any of its Subsidiaries.


 


(n)  Contracts.  §3(n) of the Disclosure Schedule lists
the following written agreements, or material oral agreements that would be
reasonably considered to exist that were entered into and known by the Company,
to which the Company or its Subsidiaries is a party:


 


(i)            any agreement for the lease of personal or
real property to or from any Person providing for lease payments in excess of
$1,000,000 per annum;


 


(ii)           any agreement for the purchase of products or services (in each case,
other than agreements evidenced by purchase orders), under which the
undelivered balance of such products and services has a selling price in excess
of $2,500,000;


 


(iii)          any agreement for the sale of products or services (in each case, other
than agreements evidenced by purchase orders), under which the undelivered
balance of such products or services has a sales price in excess of $2,500,000;


 


(iv)          any agreement concerning a partnership or joint venture;


 


(v)           any agreement under which it has created, incurred, assumed or
guaranteed any indebtedness for borrowed money in excess of $1,000,000 or any


 


17

















 


capitalized lease obligation, in excess of $250,000
or under which it has imposed a Security Interest on any of its assets,
tangible or intangible;


 


(vi)          any non-competition agreement which materially restricts the ability of
the Company or any of its Subsidiaries to freely conduct its business;


 


(vii)         any agreement with any of the Sellers and their Affiliates which will
survive the Closing, the default of which would result in a Material Adverse
Effect;


 


(viii)        any collective bargaining agreement;


 


(ix)           any agreement for employment on a full-time, part-time, consulting or
other basis with respect to any individual who received total compensation in
2002 in excess of $250,000 or who has an annual base compensation for 2003 in
excess of $250,000, or any agreement providing severance benefits to any such
person in excess of $250,000;


 


(x)            any agreement under which it has advanced or
loaned any amount to any of its directors, officers, managers and Employees
outside the Ordinary Course of Business;


 


(xi)           any other agreement, the default of which would result in a Material
Adverse Effect; or


 


(xii)          any agreement regulating or controlling or otherwise affecting the
voting or disposition of any capital stock or other proprietary interest of the
Company or any of its Subsidiaries and any shareholder agreement or agreement
relating to the issuance of any securities of the Company or any of its
Subsidiaries or the granting of any registration rights with respect thereto
and which agreement does not terminate at or prior to Closing.


 


The Company has made available to the Buyer a correct and complete copy
of each written agreement or a summary of each material oral agreement listed
in §3(n) of the Disclosure Schedule. Each such agreement is a valid and binding
agreement of the Company or one of its Subsidiaries, as the case may be, and is
in full force and effect and the Company has not received any notice that any
such agreement is not a valid and binding agreement of each other party
thereto. Neither the Company nor any of its Subsidiaries, and the Company has
not received any notice that any other Person party thereto, is in default
under any such agreements, and no event has occurred, or, to the Knowledge of
the Company, is alleged to have occurred, which constitutes or with lapse of
time or giving of notice or both, would constitute a default under any such
agreement, except, in each case, for such defaults which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.


 


(o)  Insurance.
§3(o) of the Disclosure Schedule describes each material insurance policy
maintained by or on behalf of the Company or any of its Subsidiaries. All of
such insurance policies are in full force and effect, and to the Knowledge of
the Company, the Company and its Subsidiaries are not in material default with
respect to their obligations under any of such


 


18

















 


insurance
policies. To the Company’s Knowledge, there are no material claims by the
Company or any of its Subsidiaries under any of such policies relating to the
business, assets or properties of the Company or its Subsidiaries as to which
any insurance company is denying liability or defending under a reservation of
rights or similar clause.


 


(p)  Litigation.
§3(p) of the Disclosure Schedule sets forth each instance in which the
Company or any of its Subsidiaries or any of their respective property and
assets (i) is subject to any outstanding injunction, judgment, order, decree or
ruling or (ii) is a party or, to the Knowledge of the Company, is threatened to
be made a party, to any action, suit, proceeding, hearing or investigation of,
in or before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator, except
where such injunction, judgment, order, decree, ruling, action, suit,
proceeding, hearing or investigation is not reasonably expected to have a
Material Adverse Effect.


 


(q)  Employees.
§3(q) of the Disclosure Schedule sets forth each material collective
bargaining agreement or similar written understanding to which the Company or
any of its Subsidiaries is a party. Except as set forth in §3(q) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is
currently experiencing, or has experienced within the past three years, (i) any
strike, picketing, or work stoppage, or (ii) any material grievance, claim of
unfair labor practices or other collective bargaining dispute, and, to the
Knowledge of the Company, nothing contained in clauses (i) and (ii) have been
threatened with respect to any employees employed by the Company or any of its
Subsidiaries. The Company believes that its employee relations are
satisfactory.


 


(r)  Employee Benefits.


 


(i)            §3(r)
of the Disclosure Schedule sets forth all of the current material Employee
Pension Benefit Plans, Employee Welfare Benefit Plans and all other material
employee benefits, compensation and fringe benefit plans, policies and programs
maintained or contributed to by the Company or any of its Subsidiaries with
respect to current or former employees of the Company or any of its
Subsidiaries (the “Plans”). The Company has provided or made available
to the Buyer (a) a copy of each of the Plans, including all amendments thereto,
(b) any trust agreements thereunder, (c) each summary plan description, (d) the
most recent favorable determination letter issued by the Internal Revenue
Service, if applicable, and (3) the most recent actuarial valuation with respect
to any Plan covered by Title IV of ERISA.


 


(ii)           Each
Plan is in compliance in all material respects with the applicable requirements
of law, including, if applicable, ERISA and the Code.


 


(iii)          Each
Plan which is intended to qualify under §401 (a) of the Code has received a
favorable determination letter that it is so qualified, and, to the Knowledge
of the Company, there exist no facts or circumstances which would cause any of
such favorable determination letters to be revoked.


 


19

















 


(iv)          All
material contributions required to have been made by the Company or any of its
Subsidiaries to any Plan under the terms of any such Plan or pursuant to any
applicable collective bargaining agreement or applicable law (including,
without limitation, ERISA and the Code) have been timely made in all material
respects.


 


(v)           Except
as set forth on §3(r)(v) of the Disclosure Schedule, none of the Plans is a
“multiemployer plan” as defined in Section 3(37) of ERISA, and neither the
Company nor any of its Subsidiaries has withdrawn at any time within the
preceding six years from any multiemployer plan, and incurred any material
withdrawal liability which remains unsatisfied.


 


(vi)          No
Plan that is subject to Section 302 of ERISA or Section 412 of the
Code has incurred any material “accumulated funding deficiency” within the
meaning of Section 302 of ERISA or Section 412 of the Code, whether
or not waived, and no material liability (other than for annual premiums) to
the Pension Benefit Guaranty Corporation has been incurred by the Company or
any of its Subsidiaries with respect to any such Plan. There has been no
“reportable event” within the meaning of Section 4043 of ERISA with
respect to any Plan subject to Title IV of ERISA which would require the giving
of notice or any other event requiring disclosure under
Section 4041(c)(3)(C) or 4063(a) of ERISA.


 


(vii)         Neither
the Company nor any of its Subsidiaries has incurred any material liability
pursuant to Title IV of ERISA as a result of any of them being treated as a
single employer, within the meaning of Section 414(b) or 414(c) of the
Code, with any other trade or business other than the Company or any of its
Subsidiaries, and to the Knowledge of the Company, no facts exist which could
reasonably form the basis for any such material liability.


 


(viii)        Except
as set forth on §3(r)(viii) of the Disclosure Schedule, neither the Company nor
any of its Subsidiaries or any Plan has any present or future obligation to
make any material payment to, or with respect to any present or former employee
of the Company or any of its Subsidiaries pursuant to, any retiree medical
benefit plan.


 


(ix)           The
most recent actuarial report prepared for each Plan covered by Title IV of
ERISA accurately sets forth the fair value of the assets and liabilities, based
on the actuarial assumptions contained in such report, of each such Plan, and,
since the date of such report, no event has occurred that has had, or would
reasonably be expected to have, a material adverse effect on the funded status
of any such Plan.


 


(s)  Environmental Matters.


 


(i)            Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, each of the Company and its Subsidiaries is in material
compliance with all applicable Environmental Laws. The Company and its
Subsidiaries have


 


20

















 


obtained, and are in material compliance with, all material permits and
authorizations required under applicable Environmental Laws.


 


(ii)           Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, and except for such releases as occur pursuant to
environmental permits or as otherwise authorized by Environmental Laws, to the
Knowledge of the Company: (A) there are and have been no material releases or
threatened releases of Hazardous Substances at, on, or into any real property
currently owned or leased by the Company or its Subsidiaries, and (B) there are
and have been no material releases or threatened releases of Hazardous
Substances at, on, or into any real property formerly owned or leased, by the
Company or its Subsidiaries that could, in either (A) or (B), be reasonably
expected to result in liability, expense or obligation of the Company or its
Subsidiaries of $5.0 million or more, individually or in the aggregate, under
any Environmental Law.


 


(iii)          Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, none of the Company and any of its Subsidiaries is a
party, whether as a direct signatory or as successor, assign or, to the
Knowledge of the Company, otherwise bound, to any agreement under which the
Company or its Subsidiaries is obligated by any representation, warranty,
indemnification, covenant, restriction or other undertaking concerning
compliance with Environmental Laws that could be reasonably expected to result
in material liability, expense or obligation of the Company or its
Subsidiaries.


 


(iv)          Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries has
received from any governmental authority or other party any written notice of
violation or alleged violation of, non-compliance with, liability or potential
liability under Environmental Laws, other than notices in respect of
violations, non-compliance or liability that would not be reasonably expected
to have a Material Adverse Effect.


 


(v)           The
Company and its Subsidiaries have not owned or operated at any property or
facility except those set forth or referenced on §3(s) of the Disclosure
Schedule; provided, that the
Company makes no representation or warranty under this clause (v) with regard
to any property or facility prior to its acquisition by the Company or its
Subsidiaries or with respect to any property or facility owned by a Subsidiary
prior to the acquisition of such Subsidiary by the Company or its Subsidiaries.


 


(vi)          Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, no judicial proceeding or governmental or administrative
action is pending or, to the Knowledge of the Company, threatened, under any
Environmental Law pursuant to which the Company or any of its Subsidiaries is
or is reasonably expected to


 


21

















 


be named as a party and which, if adversely determined, would
reasonably be expected to result in a Material Adverse Effect.


 


(vii)         Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries has
entered into any agreement with any party or is subject to any order or decree
from any governmental authority pursuant to which the Company or any of its
Subsidiaries has assumed responsibility for the remediation of any condition
resulting from the release, treatment, storage or disposal of Hazardous
Substances, except for any such agreements, orders or decree that has been
fully satisfied, discharged, or otherwise terminated and no longer poses a
material threat of liability, expense or obligation to the Company and its
Subsidiaries or the performance of which would not be reasonably expected to
result in a Material Adverse Effect.


 


(viii)        The
Company has provided or made available to Buyer or its representatives copies
of all (i) material notices, demands, claims or actions against the Company or
the Subsidiaries pursuant to any Environmental Law and (ii) material reports
and documentation, in each case issued in the past three years and within the
Company’s or any of its Subsidiaries possession, related to all material
investigations, audits or assessments of environmental conditions at any
property or facility that the Company or any of its Subsidiaries owns or
operates or the Company’s or any of its Subsidiaries’ compliance with
Environmental Law.


 


(ix)           Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, to the Knowledge of the Company, there are no
Asbestos-Containing Materials contained in the Company’s products. There is no
pending or, to the Company’s Knowledge, threatened claim against the Company or
any of its Subsidiaries involving, relating to, or arising out of Asbestos or
any Asbestos-Containing Material or the exposure to or release thereof.


 


(x)            This
§3(s) contains the sole and exclusive representations and warranties of the
Company and the Sellers with respect to any environmental matters (with respect
to the Company and its Subsidiaries), including, without limitation, any
arising under any Environmental Requirements or relating to Hazardous
Substances.


 


(t)  Certain Business Relationships
with the Company. Except as disclosed in the notes to the Financial
Statements or §3(t) of the Disclosure Schedule, none of the Sellers or any of
their respective Affiliates or any officer or director of the Company or any of
its Subsidiaries have been involved in any material business arrangement or
relationship with the Company or any of its Subsidiaries within the past 24
months, other than in his, her or its capacity as a director, officer, employee
or securityholder of the Company or any of its Subsidiaries.


 


(u)  Products Liability. Except as set forth on
§3(u) of the Disclosure Schedule, there are not presently pending or, to the
Knowledge of the Company, threatened, civil, criminal or


 


22

















 


administrative
actions, suits, demands, claims, hearings, notices of violation,
investigations, proceedings or demand letters relating to any alleged hazard or
alleged defect in design, manufacture, materials or workmanship including,
without limitation, any failure to warn or alleged breach of express or implied
warranty or representation, relating to any product manufactured, distributed
or sold by or on behalf of the Company or any of its Subsidiaries that would
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. §3(u) of the Disclosure Schedule sets forth a true and
complete list of all material product recalls or material written post-sales
warnings involving a product line of the Company or its Subsidiaries, as
opposed to warranty claims in the Ordinary Course of Business (“Recalls”)
and any pending investigations being conducted by the Company, any of its
Subsidiaries or, to the Company’s Knowledge, by any other Person or
governmental or regulatory agency concerning a material Recall relating to any
product manufactured, distributed or sold by or on behalf of the Company or any
of its Subsidiaries.


 


(v)  Customers and Suppliers. §3(v) of the
Disclosure Schedule sets forth a true and correct list of (a) the 10
largest customers of the Company and its Subsidiaries on a consolidated basis
in terms of gross sales during the nine month period ended September 27,
2003 and (b) the 10 largest suppliers of the Company and its Subsidiaries on a
consolidated basis in terms of gross purchases during the nine month period
ended September 27, 2003. Except as otherwise set forth on § 3(v) of
the Disclosure Schedule, there are no ongoing discussions or negotiations with
any of the customers or suppliers involving or in respect of any material price
increases in any of the Company’s or any Subsidiary’s inputs or material price
or volume decreases in any of the Company’s or any Subsidiary’s outputs, in
either case, the net effect of which could reasonably be expected to have a
Material Adverse Effect. Except as otherwise set forth on § 3(v) of the
Disclosure Schedule, since November 30, 2003, there has not been any
termination of, or material and adverse modification, amendment or change to,
any business relationship maintained by the Company or any of its Subsidiaries
with any customer or supplier named in §3(v) of the Disclosure Schedule, and no
such customer or supplier has provided the Company or any of its Subsidiaries
with notice of an intent to terminate or make a material and adverse
modification, amendment or change to its business relationship with the Company
or such Subsidiary, as the case may be. As of the date of this Agreement, and
other than as disclosed on §3(v) of the Disclosure Schedule, no customer or
supplier named in §3(v) of the Disclosure Schedule has given the Company
or any of its Subsidiaries written notice that it is subject to any bankruptcy,
insolvency or similar proceeding.


 


(w)  Prohibited Payments. The Company and its
Subsidiaries have not, directly or indirectly, (i) made or agreed to make any
contribution, payment or gift to any government official, employee or agent
where either the contribution, payment or gift or the purpose thereof was
illegal under the laws of any federal, state, local or foreign jurisdiction,
(ii) made or agreed to make any contribution, or reimbursed any political gift
or contribution made by any other Persons, to any candidate for federal, state,
local or foreign public office or (iii) paid or delivered any fee, commission
or any other sum of money or item of property, however characterized, to any
finder, agent, government official or other party, in the United States or any
other country, which in any manner relates to the assets, business or
operations of the Company or its Subsidiaries, which, in the case of each of
(i) (ii) or (iii), to the Company’s Knowledge, was


 


23

















 


illegal
under any federal, state or local laws (or any rules or regulations thereunder)
of the United States or any other country having jurisdiction.


 


4.             Representations
and Warranties of the
Buyer.  The Buyer represents and warrants to the
Sellers that the statements contained in this §4 are correct and complete as of
the date of this Agreement and shall be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this §4).


 


(a)  Organization of the Buyer.  The Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation.


 


(b)  Authorization of Transaction.  The Buyer has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of the Buyer, enforceable in
accordance with its terms and conditions.


 


(c)  Noncontravention.  Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, shall (i) violate any statute,
regulation, rule, injunction, judgment, order, decree or ruling of any
government, governmental agency or court to which the Buyer is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify or cancel, or require any
notice under any agreement, contract, lease, license or instrument to which the
Buyer is a party or by which it is bound or to which any of its assets is
subject, except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation or failure to give notice would not
have a material adverse effect on the ability of the Buyer to consummate the
transactions contemplated by this Agreement. 
Except for applicable requirements of Competition Laws, including the
Hart-Scott-Rodino Act and the EC Merger Regulation, the Buyer is not required
to give any notice to, make any filing with, or obtain any authorization,
consent or approval of any government or governmental agency in order for the
Buyer to consummate the transactions contemplated by this Agreement, except
where the failure to give notice, to file, or to obtain any authorization,
consent or approval would not have a material adverse effect on the ability of
the Buyer to consummate the transactions contemplated by this Agreement.


 


(d)  Brokers’
Fees.  The Buyer has no
liability or obligation to pay any fees or commissions to any broker, finder, investment
banker or agent with respect to the transactions contemplated by this Agreement
for which any Seller could become liable or obligated.


 


(e)  Availability of Funds. The Buyer has
delivered to the Company complete and correct executed copies of the documents
listed in §4(e) of the Disclosure Schedule and all other letters,
agreements and other documents, excluding any agreements or understandings with
respect to fees (the “Commitments”), issued to the Buyer or to which the
Buyer is a party in connection with (a) the debt financing of the transactions
contemplated hereby (the “Debt Financing”) and (b) the equity investment
by Warburg Pincus Private Equity, VIII, L.P. and/or one or more of its
Affiliates in the transactions contemplated hereby (the “Equity Financing”).  Assuming


 


24

















 


satisfaction
of all applicable conditions set forth in the Commitments and full funding
thereunder of all amounts available under the terms of the Commitments, at the
Closing Date, the Buyer will have sufficient funds to consummate the
transactions contemplated hereby. The Buyer has no reason to believe that cash
shall not be available for the Equity Financing or that the Debt Financing
shall not be funded, and the Buyer has not made any material misrepresentation
in connection with obtaining the Commitments. Buyer shall not modify, amend,
terminate or revoke the Commitments if the effect of such action would
reasonably be likely to prevent the Buyer from receiving the Debt Financing or
the Equity Financing in accordance with the Commitments.


 


(f)  Acquisition of the Shares for
Investment.  The Shares
purchased by the Buyer pursuant to this Agreement are being acquired for
investment only and not with a view to any public distribution thereof, and the
Buyer shall not offer to sell or otherwise dispose of such Shares in violation
of any of the registration requirements of the Securities Act or any comparable
state or foreign securities laws.


 


(g)  Other
Matters.  To the knowledge of
Buyer, no supplier or customer of the Company or its Subsidiaries is reasonably
likely to seek to materially and adversely amend, modify or terminate its
existing relationship following the entering into this Agreement by Buyer and
the Company or the announcement or consummation of the transactions
contemplated hereby, specifically as a result of the participation by Buyer and
its affiliates in the transactions contemplated by this Agreement.


 


5.             Pre-Closing
Covenants.  The
Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.


 


(a)  General.  Each of the Parties shall use commercially
reasonable best efforts to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in §7 below).


 


(b)  Notices and Consents.  The Sellers and the Company shall use
commercially reasonable best efforts to obtain any third party consents that
are required to be obtained in connection with the consummation of the
transaction. Each of the Parties shall give any notices to, make any filings
with, and use commercially reasonable best efforts to obtain any
authorizations, consents and approvals of governments and governmental agencies
which are required to be given, made or obtained in connection with
consummation of the transaction. 
Without limiting the generality of the foregoing, each of the Parties shall
file any notices or other material required under Competition Laws, including
any Notification and Report Forms and related material that it may be required
to file with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the Hart-Scott-Rodino Act and filings
with the European Commission under the EC Merger Regulation, and each of the
Parties shall use commercially reasonable efforts to obtain a waiver from any
applicable waiting periods related thereto, and shall make any further filings
pursuant thereto that may be necessary, proper or advisable in connection
therewith.  Each of the Parties shall
bear its own costs and


 


25

















 


expenses
in preparing such filings; provided that
the Buyer shall pay all filing fees required under the Hart-Scott-Rodino Act,
the EC Merger Regulation or other Competition Laws.


 


(c)  Operation of Business.  Neither the Company nor any of its
Subsidiaries shall engage in any practice, take any action, or enter into any
transaction of the sort described in §3(h) above, except as expressly
contemplated by this Agreement.


 


(d)  Equity Issuances; Dividends and
Distributions.  The
Company shall not (i) issue, sell or deliver any shares of its capital stock or
issue or sell any securities convertible into, or options with respect to, or
warrants to purchase or rights to subscribe for, any shares of its capital
stock, (ii) effect any recapitalization, reclassification, stock dividend, stock
split or like change in its capitalization, (iii) amend its articles of
incorporation or bylaws, (iv) make any redemption or purchase of any shares of
its capital stock, (v) declare or pay any dividend or make any distribution on
its capital stock or equity interests, or (vi) pay any management or other fees
to the Shareholders or any of their Affiliates; provided, that the Company may pay a cash dividend to the
Shareholders as long as the amount of such cash dividend is obtained solely
from either (A) Cash of the Company existing on January 3, 2004 and
deducted from the definition of Closing Cash Consideration or (B) Funded
Indebtedness of the Company that is repaid at or prior to the Closing
(including any interest, expenses or fees incurred in connection with the
borrowing), and the payment of such cash dividend does not subject the Company
to any adverse Tax consequences, including any withholding Tax obligation;


 


(e)  Restrictions on Transfer.  Prior to Closing, the Sellers shall not
sell, transfer, contribute, distribute or otherwise dispose of any Shares, or
agree to do any of the foregoing.


 


(f)  Preservation of Business.  The Company and its Subsidiaries shall use
commercially reasonable efforts to keep their respective businesses and
properties substantially intact, including their present operations, physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers, customers and employees.


 


(g)  Access to Books and Records and
Customers and Suppliers. 
The Company and its Subsidiaries shall permit representatives of the
Buyer to have reasonable access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Company or its
Subsidiaries, to the premises, properties, personnel, books, records (including
tax records), contracts and documents of or pertaining to the Company and its
Subsidiaries, including, without limitation, reasonable access to any
properties of the Company or any Subsidiary for the purpose of conducting environmental
audit or assessment, including the taking of reasonable samples from soils,
groundwaters, surface waters, soils, and air; provided,
however, that all such requests for access shall be directed to, and
shall be approved by, the Company or such other person as the Sellers may
designate from time to time. Notwithstanding the foregoing sentence, including
the proviso therein, if, on or after March 1, 2004, the Buyer and the
Sellers reasonably determine in good faith that Frank Nasisi is unlikely to be
able to participate in the financing efforts of the Buyer beginning on or about
the date the roadshow for the contemplated high yield financing is
then-scheduled to begin (as confirmed by the placement agent for such
offering), a representative of the Buyer shall be entitled to be present at the
Company’s offices at all reasonable times and shall be provided with reasonable
office space and support (including telephone and facsimile),


 


26

















 


and
such representative shall be entitled to attend as an observer (with no power
or ability to make any decisions on behalf of the Company) such internal
management meetings of the Company as he may reasonably request for the purpose
of becoming familiar with the Company’s business and operations. Prior to the
Closing, the Buyer shall not contact or otherwise communicate with the
customers, employees or suppliers of the Company or any of its Subsidiaries in
connection with the transactions contemplated by this Agreement or in
connection with its observer rights, if any, provided in the immediately
preceding sentence, directly or indirectly, without the prior written consent
of the Sellers. The Buyer reaffirms its obligations under the confidentiality
agreement between the Buyer and the Company, as supplemented (the “Confidentiality
Agreement”), previously executed and delivered in connection with this
transaction.


 


(h)  Notice of Developments.


 


(i)            The
Sellers may elect (x) at any time to notify the Buyer of any development reasonably
likely to cause a breach of any of the representations and warranties in
§3(f)-(w) above and (y) on one occasion, to provide to the Buyer (A) the
updates to the environmental reports listed on §5(h)(i) of the Disclosure
Schedule and (B) a Phase 1 environmental report on the facility located in
Prachinburi, Thailand. Buyer shall have 10 days following the receipt of such
environmental reports to notify the Sellers that it needs up to an additional
20 days to conduct further investigations with respect to the matters set forth
on such environmental reports. Unless the Buyer has the right to terminate this
Agreement pursuant to §9(a)(ii) below by reason of such development, notice or
delivery and exercises that right within the period of 30 days referred to in
§9(a)(ii) below, the written notice or delivery of such environmental reports
pursuant to this §5(h)(i) shall be deemed to have amended the Disclosure
Schedule, to have qualified the representations and warranties contained in §3
above, and to have cured any misrepresentation or breach of warranty that
otherwise might have existed hereunder by reason of such development or notice
or lack of delivery.


 


(ii)           Each
Party shall give prompt written notice to the other Party of any material
adverse development causing or reasonably expected to result in (i) such
Party’s failure to satisfy the conditions to the other Party’s obligation to
consummate the transactions contemplated in this Agreement in §7(a) or §7(b),
as applicable, or (ii) a breach of any of such Party’s own representations and
warranties in §3(a)-(e) and §4 above, as applicable. No disclosure by any Party
pursuant to this §5(h)(ii), however, shall be deemed to amend or supplement the
Disclosure Schedule or to prevent or cure any misrepresentation or breach
of warranty.


 


(iii)          Prior
to the Closing, the Buyer shall act in good faith to notify the Sellers if the
Buyer reasonably determines that any condition to closing under §7(a) that has
not been satisfied is not reasonably likely to be satisfied at or prior to the
Closing.


 


(i)  No Additional Representations or
Warranties. The Buyer acknowledges that the Sellers, the Company
and its Subsidiaries have not made any representation or warranty, express or
implied, as to the accuracy or completeness of any information regarding the
Sellers, the


 


27

















 


Company
or its Subsidiaries, except as expressly set forth in this Agreement or the
Disclosure Schedule, and the Buyer further agrees that the Sellers, the Company
and its Subsidiaries shall not have or be subject to any liability to the Buyer
or any other Person resulting from the distribution to the Buyer, or the
Buyer’s use of, any such information, including, without limitation, the
Descriptive Memorandum prepared by J.P. Morgan Securities Inc. and any
information, document or material provided to or made available to the Buyer in
any “data room,” management presentations or any other form in expectation of
the transactions contemplated by this Agreement. Except for the representations
and warranties expressly set forth in §3, as qualified or supplemented by the
Disclosure Schedule, the Sellers, the Company and its Subsidiaries make no
representation or warranty, express or implied, at law or in equity, in respect
of the Sellers, the Company, its Subsidiaries or any of their respective
assets, liabilities or operations, including, without limitation, any implied
representation or warranty as to the condition, merchantability, suitability or
fitness for a particular purpose, and expressly disclaim any such
representation or warranty. Except for the express representations and
warranties set forth in §3, as qualified or supplemented by the Disclosure
Schedule, the Buyer agrees that it is purchasing the Shares and acquiring the
Company and its Subsidiaries on an “as is” and “where is” basis.


 


(j)  Disclaimer Regarding Estimates
and Projections.  In
connection with the Buyer’s investigation of the Company and its Subsidiaries,
the Buyer has received from the Sellers and/or the Company certain estimates,
forecasts, plans and financial projections of the Company and its Subsidiaries.
The Buyer acknowledges that there are uncertainties inherent in attempting to
make such estimates, forecasts, plans and projections, that the Buyer is
familiar with such uncertainties, that the Buyer is taking full responsibility
for making its own evaluation of the adequacy and accuracy of all estimates,
forecasts, plans and projections so furnished to it (including the
reasonableness of the assumptions underlying such estimates, forecasts, plans
and projections), and that the Buyer shall have no claim against the Sellers
and/or the Company or its Subsidiaries with respect thereto. Accordingly, the
Sellers, the Company and its Subsidiaries make no representation or warranty
with respect to such estimates, forecasts, plans and projections (including any
such underlying assumptions).


 


(k)  Financing.  The Buyer agrees to use commercially
reasonable best efforts to obtain the financing contemplated by the Commitments
as soon as possible on the terms set forth in the Commitments. The Company
agrees to provide, and will cause its Subsidiaries and their respective
officers, directors, employees and accountants (collectively the foregoing Persons
are hereinafter referred to as the “Company Representatives”) to
provide, reasonable and customary cooperation reasonably requested in
connection with the arrangement of such financing, including without
limitation, participation in meetings, due diligence sessions, road shows, the
preparation of offering memoranda, private placement memoranda, prospectuses
and similar documents, the execution and delivery of any commitment letters,
underwriting or placement agreements, pledge and security documents, other
definitive financing documents, or other reasonably requested certificates or
documents, including a certificate of the chief financial officer of the
Company with respect to solvency matters and comfort letters of accountants and
such other certificates or documents as the Buyer may reasonably request from
time to time.


 


28

















 


(1)  No Solicitation.  From and after the date hereof until the earlier of the Closing
and the termination of this Agreement pursuant to §9 hereof, the Company shall
not, and shall not permit or cause any of its Subsidiaries or any Company
Representative, to, directly or indirectly, solicit, initiate or engage in
discussions or negotiations with or provide any information or data to any
Person, encourage submission of any inquiries, proposals or offers by, or take
any other actions intended or designed to facilitate the efforts of any Person,
other than Buyer, relating to (i) the possible acquisition of, or business
combination with, the Company or any of its Subsidiaries (whether by way of
merger, consolidation or otherwise) or the purchase, exchange or other transfer
of any portion of the Company’s or any of its Subsidiaries’ capital stock or
assets (other than in the case of assets, sales of inventory or obsolete or
non-productive assets in the Ordinary Course of Business) or (ii) any other
similar transaction that could reasonably be expected to materially impede,
interfere with or otherwise delay the consummation of the transactions contemplated
hereby (each, a “Transaction”). Upon execution of this Agreement, the
Company shall immediately terminate, and shall cause its Subsidiaries and all
Company Representatives to immediately terminate, all discussions with any
Person (other than Buyer and its Affiliates) concerning any such Transaction.


 


(m)  2003 Audited
Financial Statements.  The
Company shall use commercially reasonable efforts to promptly prepare the 2003
Audited Financial Statements. The Company shall promptly deliver the 2003 Audited
Financial Statements to the Buyer as soon as they have been finally completed
and are no longer subject to any further adjustments or discussions with the
Company’s accountants. Following the delivery to the Buyer of the 2003 Audited
Financial Statements, the Buyer shall have ten business days to review the 2003
Audited Financial Statements for the purpose of determining whether the
condition to closing set forth in §7(a)(xi) has been satisfied. Unless the
Buyer notifies the Sellers within ten business days that the condition to
closing set forth in §7(a)(xi) has not been satisfied, such condition to
closing shall be deemed to have been met and the 2003 Audited Financial
Statements shall become the Most Recent Financial Statements, January 3, 2004
shall be the Most Recent Fiscal Month End, the fiscal year ended
January 3, 2004 shall be the Most Recent Fiscal Year End, be deemed to
have replaced the representations and warranties related to the Most Recent
Financial Statements, amended the Disclosure Schedule to the extent
applicable, changed all the references to November 30, 2003 contained
herein to January 3, 2004 (other than in § 3(h)(xvi) which shall
remain November 30, 2003), and to have cured any misrepresentation or breach
of warranty that otherwise might have existed hereunder solely by reason of the
prior Most Recent Financial Statements.


 


(n)  Selling
Expense Schedule.  Not later
than 3 days prior to the Closing Date, the Company shall provide the Buyer with
a reasonably detailed schedule setting forth the Selling Expenses for the
purpose of calculating the Closing Cash Consideration.


 


6.             Post-Closing
Covenants.  The
Parties agree as follows with respect to the period following the Closing.


 


(a)  General.  In the event that at any time after the
Closing any further action is necessary to carry out the purposes of this
Agreement, each of the Parties shall take such further action (including the
execution and delivery of such further instruments and documents) as the other


 


29

















 


Party may reasonably request, all at the sole cost and expense of the
requesting Party. The Buyer agrees to retain records material to the operations
of the Company and its Subsidiaries for the period prior to the Closing and make
them available to the Sellers for a period of three (3) years after the
Closing, or, in the alternative, to notify the Sellers in writing at least 30
days prior to their disposal at any time prior to the expiration of such period
and permit the Sellers to have access to such records.


 


(b)  Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with (i)
any transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing
Date involving either of the Company or any of its Subsidiaries, each of the
other Parties shall cooperate with such Party or its counsel in the defense or
contest, make available their personnel, and provide such testimony and access
to their books and records as shall be reasonably requested in connection with
the defense or contest, all at the sole cost and expense of the contesting or
defending Party; provided that
this §6(b) shall not apply with respect to any actual or threatened litigation
or dispute between the Parties.


 


(c)  Tax
Matters.


 


(i)            Transfer
Taxes.  The Buyer shall, at its expense, prepare or
cause to be prepared and file or cause to be filed, and the Parties shall
cooperate in the preparation, execution and filing of, all returns,
questionnaires, applications, or other documents regarding any sales, use,
transfer, recording, registration and other fees, and any similar Taxes, which
become payable in connection with the transactions contemplated hereby. All
such taxes and fees shall be paid by the Buyer.


 


(ii)           Cooperation.  The
Parties shall cooperate with each other to provide each other with such
assistance as may be reasonably requested by them in connection with the
preparation of any Tax Returns, and any Tax audit or other examination in
connection with an administrative or judicial proceeding involving a taxing
authority relating to Taxes.


 


(d)  Performance of Obligations by the
Buyer.  Except as otherwise
expressly provided by this Agreement, on or after the Closing Date, the Buyer
shall or shall cause the Company to duly, promptly and faithfully pay, perform
and discharge when due, (i) all obligations and liabilities of whatever kind
and nature, primary or secondary, direct or indirect, absolute or contingent,
known or unknown, whether accrued or unaccrued, whether arising before, on or
after the Closing Date, of the Company, and (ii) any liability or obligation of
the Company or its Affiliates with respect to any of the liabilities described
in clause (i), including, without limitation, any guarantee or obligation to
assure performance given or made by the Company or its Affiliates with respect
to any such obligation of the Company set forth in clause (i) above.


 


30

















 


(e)  Directors’ and Officers’
Indemnification.


 


(i)            All
rights to indemnification existing in favor of directors, officers, members,
managers, or employees of the Company and its Subsidiaries as provided in the
Constitutive Documents of the Company and its Subsidiaries, as in effect on the
date hereof, with respect to matters occurring through the Closing Date, will
survive the transactions contemplated hereby and will continue in full force
and effect thereafter for a period of six years.


 


(ii)           From
and after the Closing, the Buyer shall indemnify, defend and hold harmless the
present and former officers, directors and managers of the Company and its
Subsidiaries (collectively, the “Indemnified Parties”) against all
losses, expenses, claims, damages, liabilities or amounts that are paid in
settlement of, or otherwise in connection with, any claim, action, suit,
proceeding or investigation, based in whole or in part on the fact that such
person is or was a director, officer or manager of the Company or any of its
Subsidiaries and arising out of actions or omissions occurring at or prior to
the Closing (including, without limitation, the transactions contemplated by
this Agreement), in each case to the fullest extent permitted under applicable
law (and shall pay expenses in advance of the final disposition of any such
action or proceeding to each Indemnified Party to the fullest extent permitted
under applicable law).


 


(iii)          This
§6(e) is intended to be for the benefit of, and shall be enforceable by, the
Indemnified Parties, their heirs and personal representatives and shall be
binding on the Buyer and its successors and assigns.


 


7.             Conditions
to Obligation to Close.


 


(a)  Conditions to Obligation of the
Buyer.  The obligation of the
Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:


 


(i)            the
representations and warranties set forth in §3 above shall be true and correct
in all material respects at and as of the Closing Date, except for
representations and warranties set forth in §3 which are qualified as to
materiality or Material Adverse Effect, which shall be true and correct in all
respects at and as of the Closing Date, taking into account such
qualifications;


 


(ii)           the
Company and the Sellers shall have performed and complied with all of their
respective covenants hereunder in all material respects through the Closing;


 


(iii)          there
shall not be any injunction, judgment, order, decree, ruling or charge in
effect preventing consummation of any of the transactions contemplated by this
Agreement;


 


(iv)          the
Sellers shall have delivered to the Buyer a certificate to the effect that each
of the conditions specified above in §7(a)(i)-(iii) is satisfied in all
respects;


 


(v)           all
applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Act and other applicable Competition Laws shall have expired
or


 


31

















 


otherwise been terminated, and the approval of the European Commission
of the transactions contemplated hereby shall have been obtained pursuant to
the EC Merger Regulation;


 


(vi)          the
Buyer shall have obtained the Debt Financing contemplated in the Commitments or
otherwise obtained financing on terms reasonably satisfactory to Purchaser, in
either case, in an amount sufficient to enable Purchaser to consummate the
transactions contemplated by this Agreement;


 


(vii)         the
Buyer and certain of the Sellers shall have executed and delivered a Transition
Services Agreement substantially containing the terms set forth on Exhibit B;


 


(viii)        during
the period from the date hereof to the Closing, no change, event or effect
shall have occurred that has had, or that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect;


 


(ix)           all
directors of the Company and its Subsidiaries shall have tendered their
resignations and copies thereof shall have been delivered to the Buyer;


 


(x)            the
Company, on behalf of the Sellers, shall deliver to the Buyer, pursuant to
§ 1445(b)(3) of the Code and the Treasury regulations promulgated
thereunder, an affidavit dated no more than 30 days prior to the Closing Date
and signed by a responsible corporate officer of the Company stating that (A)
the Company is not, and has not been at any time during the applicable period
specified in § 897(c)(l)(A)(ii) of the Code, a “United States real
property holding corporation” (as defined in § 897(c)(2) of the Code) and
(B) no interest in the Company constitutes a “United States real property
interest” (as defined in § 897(c) of the Code); and


 


(xi)           the
EBITDA of the Company for the fiscal year ended January 3, 2004 shall be
not less than $119.3 million as derived from the 2003 Audited Financial
Statements.


 


The
Buyer may waive any condition specified in this §7(a) in writing at or prior to
the Closing.


 


(b)  Conditions to Obligation of the
Sellers. The obligation of the Sellers to consummate the transactions
to be performed by them in connection with the Closing is subject to
satisfaction of the following conditions:


 


(i)            the
representations and warranties set forth in §4 above shall be true and correct
in all material respects at and as of the Closing Date, except for
representations and warranties set forth in §4 which are qualified as to
materiality or material adverse effect, which shall be true and correct in all
respects at and as of the Closing Date, taking into account such
qualifications;


 


(ii)           the
Buyer shall have performed and complied with all of its covenants hereunder in
all material respects through the Closing;


 


32

















 


(iii)          there
shall not be any injunction, judgment, order, decree, ruling or charge in
effect preventing consummation of any of the transactions contemplated by this
Agreement;


 


(iv)          the
Buyer shall have delivered to the Sellers a certificate to the effect that each
of the conditions specified above in §7(b)(i)-(iii) is satisfied in all
respects; and


 


(v)           all
applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Act and other applicable Competition Laws shall have expired
or otherwise been terminated, and the approval of the European Commission of
the transactions contemplated hereby shall have been obtained pursuant to the
EC Merger Regulation.


 


The
Sellers may waive any condition specified in this §7(b) in writing at or prior
to the Closing.


 


8.             Remedies for Breaches of this Agreement.  All
of the representations, warranties and agreements contained herein shall
terminate as of the Closing and be of no further force or effect, except that
the agreements set forth in §6 and §10 shall survive the Closing and continue
in full force and effect.


 


9.             Termination.


 


(a)  Termination
of Agreement.  Certain of the
Parties may terminate this Agreement as provided below:


 


(i)            the
Buyer and the Sellers may terminate this Agreement by mutual written consent at
any time prior to the Closing;


 


(ii)           the
Buyer may terminate this Agreement by giving written notice to the Sellers at
any time prior to the Closing in the event the Sellers has within the then
previous 30 days given the Buyer any notice pursuant to §5(h)(i) above and the
development that is the subject of the notice is reasonably likely to result in
the closing condition set forth in §7(a)(i) or §7(a)(viii) not being satisfied
by the Closing Date;


 


(iii)          the
Buyer may terminate this Agreement by giving written notice to the Sellers at
any time prior to the Closing (A) in the event that any Seller has breached any
material representation, warranty or covenant contained in this Agreement
(other than the representations and warranties in §3(f)-(w) above in cases
where the Sellers have provided notice pursuant to §5(h)(i)) in any material
respect, the Buyer has notified the Sellers of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach or
(B) if the Closing shall not have occurred on or before the earlier of (x) the
date that is 120 days after the delivery to the Buyer of the 2003 Audited
Financial Statements and (y) June 30, 2004, by reason of the failure of
any condition precedent under §7(a) hereof (unless the failure results
primarily from the Buyer’s inaction or the Buyer itself breaching any
representation, warranty or covenant contained in the Agreement); provided that the date in this clause (y)
may be extended to July 31, 2004, if (1) a Termination Date Extension
Event shall have occurred and is continuing


 


33

















 


and the Buyer has so notified the Sellers and (2) the Buyer shall have
delivered to the Sellers amendments to each of their Commitments that are
substantially in the form of the Commitments but that contain an expiration
date on or after July 31, 2004, and otherwise do not contain any
amendments or modifications reasonably likely to prevent the Buyer from
receiving the Debt Financing in accordance with the Commitments; and


 


(iv)          the
Sellers may terminate this Agreement by giving written notice to the Buyer at
any time prior to the Closing (A) in the event the Buyer has breached any
material representation, warranty or covenant contained in this Agreement in
any material respect, the Sellers has notified the Buyer of the breach, and the
breach has continued without cure for a period of 30 days after the notice of
breach or (B) if the Closing shall not have occurred on or before the earlier
of (x) the date that is 120 days after the delivery to the Buyer of the 2003
Audited Financial Statements and (y) June 30, 2004, by reason of the
failure of any condition precedent under §7(b) hereof (unless the failure
results primarily from a Seller’s inaction or a Seller breaching any
representation, warranty or covenant contained in this Agreement); provided that the date in this clause (y)
may be extended to July 31, 2004, if (1) a Termination Date Extension
Event shall have occurred and is continuing and the Buyer has so notified the
Sellers and (2) the Buyer shall have delivered to the Sellers amendments to
each of their Commitments that are substantially in the form of the Commitments
but that contain an expiration date on or after July 31, 2004, and
otherwise do not contain any amendments or modifications reasonably likely to
prevent the Buyer from receiving the Debt Financing in accordance with the
Commitments.


 


(b)  Effect of Termination.
If any Party terminates this Agreement pursuant to §9(a) above, all rights and
obligations of the Parties hereunder shall terminate without any liability of
any Party to the other Party (except for any liability of any Party then in
breach); provided, however, that
the confidentiality provisions contained in the Confidentiality Agreement shall
survive in accordance with the terms thereof.


 


10.           Miscellaneous.


 


(a)  Press Releases and Public
Announcements.  No Party shall
issue any press release or public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior written approval of
the other Party; provided, however, that
any Party may make any public disclosure it believes in good faith based upon
the advice of counsel, is required by applicable law (in which case the
disclosing Party shall use its reasonable best efforts to advise the other
Party of such disclosure and the form and content thereof prior to making the
disclosure).  The Parties agree to prepare
and issue mutually acceptable press releases on or promptly after the Closing
announcing the transactions contemplated hereby.


 


(b)  Third-Party Beneficiaries.  Except as contemplated by §6(e) above, this
Agreement shall not confer any rights or remedies upon any Person other than
the Parties and their respective successors and permitted assigns.


 


34

















 


(c)  Entire Agreement.  This Agreement (including the documents referred to herein)
constitutes the entire agreement between the Parties and supersedes any prior
understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof, other than the Confidentiality Agreement, which shall remain in full
force and effect.


 


(d)  Succession and Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns.  No
Party may assign either this Agreement or any of its rights, interests or
obligations hereunder without the prior written approval of the Buyer and the
Sellers; provided, however, that the Buyer shall be permitted
without the prior written consent of the other Parties to assign its rights but
not its obligations under this Agreement to the lenders under the Debt
Financing.


 


(e)  Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.


 


(f)  Headings. 
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.


 


(g)  Notices. All notices, requests, demands, claims and
other communications hereunder shall be in writing. Any notice, request,
demand, claim or other communication hereunder shall be deemed duly given if
personally delivered or sent by registered or certified mail, return receipt
requested, postage prepaid, or by reputable overnight courier and addressed to
the intended recipient as set forth below, or in the case of the Sellers, as
set forth on the Notice Schedule hereto:


 


If to the Company:


 


	
   

  	
  Polypore
  Inc.

  
	
   

  	
  13800
  South Lakes Drive

  
	
   

  	
  Charlotte,
  NC 28273

  
	
   

  	
  Attention:

  	
  Frank
  Nasisi

  
	
   

  	
   

  	
  Lynn
  Amos

  
	
   

  	
  Facsimile:
  (704) 587-8796

  



 


With a copy to (which shall not constitute notice to
the Company):


 


	
   

  	
  Kirkland
  & Ellis LLP

  
	
   

  	
  200
  East Randolph Drive

  
	
   

  	
  Chicago,
  Illinois 60601

  
	
   

  	
  Attention:

  	
  H.
  Kurt von Moltke

  
	
   

  	
   

  	
  Carol
  Anne Huff

  
	
   

  	
  Facsimile:
  (312) 861-2200

  



 


35

















 


If to the Buyer:


 


	
   

  	
  PP
  Acquisition Corporation

  
	
   

  	
  c/o
  Warburg Pincus LLC

  
	
   

  	
  466
  Lexington Avenue

  
	
   

  	
  New
  York, NY 10017

  
	
   

  	
  Attention:

  	
  Kewsong
  Lee

  
	
   

  	
   

  	
  David
  Barr

  
	
   

  	
  Facsimile:

  	
  (212)
  878-9100

  



 


With a copy to (which shall not constitute notice to
the Buyer):


 


	
   

  	
  Willkie
  Farr & Gallagher LLP

  
	
   

  	
  787
  Seventh Avenue

  
	
   

  	
  New
  York, NY 10019-6099

  
	
   

  	
  Attention:

  	
  Steven
  J. Gartner

  
	
   

  	
  Facsimile:

  	
  (212)
  728-9222

  



 


Any
Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including messenger service, telecopy, telex, ordinary mail or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.


 


(h)  Governing Law; Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware (i.e., without giving effect to any choice
or conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.) Each of the Parties hereby (a)
irrevocably submits to the exclusive jurisdiction of any state or federal court
sitting in the State of Delaware in any action, suit or proceeding arising out
of or relating to this Agreement and agrees that all claims in respect of the
action or proceeding may be heard and determined in any such court, (b) waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
(i) it is not personally subject to the jurisdiction of such court or of any
other court to which proceedings in such court may be appealed, (ii) such suit,
action or proceeding is brought in an inconvenient forum or (iii) the venue of
such suit, action or proceeding is improper, (c) expressly waives any
requirement for the posting of a bond by the party bringing such suit, action
or proceeding and (d) consents to process being served in any such suit, action
or proceeding by mailing, certified mail, return receipt requested, a copy
thereof to such party at the address in effect for notices hereunder, and
agrees that such services shall constitute good and sufficient service of
process and notice thereof. Nothing in this §10(h) shall affect or limit any
right to serve process in any other manner permitted by law.


 


36

















 


(i)  Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
of the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.


 


(j)  Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.


 


(k)  Expenses.  Each of the Buyer and the Sellers will bear
its own costs and expenses (including without limitation accounting, investment
banking and legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby; provided that, if and only to
the extent that the Closing occurs, all Selling Expenses shall be paid by the
Company with funds provided by the Buyer, it being understood and agreed that
any amounts provided by the Buyer to pay the Selling Expenses shall be deducted
from the Closing Cash Consideration calculation as contemplated by § 2(a)
hereof. No costs or expenses specifically related to the transactions contemplated
by this Agreement other than the Selling Expenses shall be paid or borne by the
Company or any of its Subsidiaries. Without limiting the generality of the
foregoing, all transfer, documentary, sales, use, stamp, registration and other
such Taxes, and all conveyance fees, recording charges and other fees and
charges (including any penalties and interest) incurred in connection with the
consummation of the transactions contemplated by this Agreement, shall be paid
by the Buyer when due, and the Buyer will, at its own expense, file all
necessary tax returns and other documentation with respect to all such Taxes,
fees and charges, and, if required by applicable law, the Parties will, and
will cause their affiliates to, join in the execution of any such tax returns
and other documentation.


 


(l)  Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.


 


(m)  Incorporation of Exhibits and
Schedules.  The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.


 


(n)  Disclosure Schedule.  The inclusion of information in the
Disclosure Schedule shall not be construed as an admission that such
information is material to the Company, its Subsidiaries or the Sellers. In
addition, matters reflected in the Disclosure Schedule are not necessarily
limited to matters required by this Agreement to be reflected in the Disclosure
Schedule. Such additional matters are set forth for informational purposes only
and do not necessarily include other matters of a similar nature.


 


*  * 
*  *  *


 


37

















 


IN WITNESS WHEREOF, the Parties hereto have executed this Stock
Purchase Agreement as of the date first above written.


 


	
   

  	
  Company:

  	
  POLYPORE
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jerry Zucker

  
	
   

  	
   

  	
  Name:

  	
  Jerry Zucker

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Buyer:

  	
  PP
  ACQUISITION CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kewsong Lee

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sellers:

  	
  /s/ Jerry Zucker

  
	
   

  	
   

  	
  Jerry
  Zucker

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ James Boyd

  
	
   

  	
   

  	
  James
  G. Boyd

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CIGNA
  MEZZANINE PARTNERS III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  CIGNA Investments, Inc. (as authorized

  agent)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  /s/
  Robert Eccles

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CONNECTICUT
  GENERAL LIFE INSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  CIGNA Investments, Inc. (as authorized

  agent)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  /s/
  Robert Eccles

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GOLDER,
  THOMA, CRESSEY FUND III

  LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  Golder, Thoma, Cressey, Rauner, L.P.

  
	
   

  	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ B. Rauner

  
	
   

  	
   

  	
   

  	
  Its:
  

  	
  Principal

  
													



 


38

















 


	
   

  	
  J.P.
  MORGAN PARTNERS (BHCA), L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  JPMP Master Fund Manager, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  JPMP
  Capital Corp.

  
	
   

  	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ C. Behrens

  
	
   

  	
   

  	
  Its:
  

  	
  General
  Partner

  
	
   

  	
   

  
	
   

  	
  THE
  INTERTECH GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jerry Zucker

  
	
   

  	
  Name:

  	
  Jerry Zucker

  
	
   

  	
  Its:

  	
  Chairman, President
  & CEO

  
	
   

  	
   

  
	
   

  	
  THE
  LINCOLN NATIONAL LIFE INSURANCE

  COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  Delaware Investment Advisers, a series of

  Delaware Management Business Trust, Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  /s/ R. Gordon
  Marsh

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ZB
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jerry Zucker

  
	
   

  	
  Name:

  	
  Jerry Zucker

  
	
   

  	
  Its:

  	
  President & CEO

  
											



 


39