Document:

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                                                                   EXHIBIT 10.13

                                                                  EXECUTION COPY

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

                                    RECITALS

     WHEREAS, pursuant to the Agreement and Plan of Merger dated as of March 10,
2004 as amended, supplemented or restated from time to time, (the "Merger
Agreement"), by and among the Corporation, its wholly owned subsidiary AC Safety
Acquisition Corp., a Delaware corporation ("Acquisition"), and Aearo
Corporation, a Delaware corporation ("Aearo"), Acquisition will merge with and
into Aearo, with Aearo being the surviving corporation and a wholly owned
subsidiary of the Corporation (the "Merger");

     WHEREAS, in connection with the Merger, the Contributor desires to
contribute, assign, convey, transfer and deliver to the Corporation, and the
Corporation desires to purchase, the number of shares of common stock, par value
$0.01 per share, of Aearo set forth on the signature page hereto (the
"Contributed Shares") valued at the dollar amount listed immediately below the
Number of Contributed Shares on the signature page hereto, subject to the terms
and conditions and for the Consideration Shares (as defined below) set forth
herein (the "Contribution");

     WHEREAS, in connection with the Merger, the Corporation desires to issue to
the Contributor, and the Contributor desires to purchase from the Corporation,
the number of shares set forth on the signature page hereto of (i) the
Corporation's common stock, $0.01 par value per share (the "Common Stock"), and
(ii) the Corporation's Series A Preferred Stock, $0.01 par value per share (the
"Preferred Stock"), subject to the terms and conditions and in return for the
Contributed Shares as set forth herein; and

     WHEREAS, the Contributor agreed to enter into this Agreement as an
inducement for Corporation to enter into the Merger Agreement and the other
agreements contemplated thereby and the Contributor hereby agrees to be bound by
the terms and provisions hereof, including, without limitation, the restrictions
contained herein, as an inducement for Corporation to enter into this Agreement
and to consummate the Merger and the other transactions contemplated by the
Merger Agreement.

     NOW THEREFORE, in consideration of the mutual promises herein made, and in
consideration of the representations, warranties, and covenants herein
contained, the Corporation and the Contributor hereby agree as set forth below.

                                   ARTICLE I

               CONTRIBUTION AND ISSUANCE OF CONSIDERATION SHARES;
                       CONTRIBUTION CLOSING; DELIVERABLES

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

     (a) In accordance with, and subject to, the provisions of this Agreement,
at the Contribution Closing, (i) the Contributor shall contribute, assign,
transfer, convey and deliver to the Corporation the Contributed Shares, free and
clear of all Encumbrances and the Corporation shall acquire the Contributed
Shares for the consideration set forth in this Section 1.1 and (ii) the
Corporation shall issue, sell and deliver the number of shares of Common Stock
and Preferred Stock to the Contributor as set forth on the signature page hereto
(collectively, the "Consideration Shares").

     (b) Subject to the terms and conditions contained herein, each party shall
use commercially reasonable efforts to take or cause to be taken all actions and
do or cause to be done all things required under all applicable Laws, in order
to consummate the transactions contemplated by this Agreement.

1.2  CONTRIBUTION CLOSING; DELIVERABLES.

     (a) The closing (the "Contribution Closing") with respect to the
Contribution shall take place at the offices of O'Melveny & Myers LLP, Times
Square Tower, 7 Times Square, New York, NY 10036. The Contribution Closing shall
occur on the Closing Date immediately prior to the consummation of the Merger
and the other transactions contemplated by the Merger Agreement (such date, the
"Contribution Closing Date").

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

          (i) certificates representing the number of Consideration Shares set
     forth on the signature page attached hereto registered in the name of the
     Contributor;

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

          (iii) a counterpart to the Buyer Support Agreement, dated as of the
     Closing Date (the "Buyer Support Agreement"), among the Corporation, Bear
     Stearns Merchant Banking Partners II, L.P., Vestar Equity Partners, L.P.
     and the other stockholders of the Corporation whose names are set forth on
     the signature pages thereto; and

          (iv) a counterpart to the Stockholders' Agreement, dated as of the
     Contribution Closing Date (the "Stockholders' Agreement"), among the
     Corporation and the other parties thereto, duly executed by the
     Corporation.

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

          (i) one or more certificates representing the number of Contributed
     Shares set forth on the signature page attached hereto (or an affidavit of
     lost certificate with respect to such Contributed Shares, in form and
     substance reasonably satisfactory to the Corporation);

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

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          (iii) a counterpart to the Buyer Support Agreement;

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

          (v) if applicable, a Spousal Acknowledgment and Consent as required by
     the Stockholders' Agreement duly executed by the spouse of the Contributor.

1.3  SECTION 351 TRANSACTION.

     The Corporation and the Contributor agree that the transaction effected
hereby is entered into in connection with the transaction contemplated by (i)
the Merger Agreement, (ii) the Securities Purchase Agreement, dated as of the
date hereof, by and among the Corporation and the Purchasers parties thereto,
(iii) the Management Contribution Agreements, dated as of the date hereof, by
and between the Corporation and the Contributors whose names are set forth on
the signature pages thereto and (iv) the Management Subscription and
Contribution Agreements, dated as of the date hereof, by and between the
Corporation and the Purchasers whose names are set forth on the signature pages
thereto (collectively, the "Related Transactions"), and is intended to, together
with the Related Transactions, constitute a single transaction under Section 351
of the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder (collectively, "Section 351"), so that the Contributors,
along with any other party receiving shares of capital stock in the Corporation
pursuant to the Related Transactions, are treated as contributing property to
the Corporation in exchange for its shares of capital stock and controlling the
Corporation under Section 351 immediately after the Related Transactions are
effected. The Corporation and the Contributor shall report the transaction
effected hereby as a contribution under Section 351, and not take any position
inconsistent with such treatment.

                                   ARTICLE II

                REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

     As a material inducement to the Contributor to enter into and to perform
his obligations under this Agreement, the Corporation represents and warrants to
the Contributor as of the date hereof as set forth below.

2.1  ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER.

     The Corporation is duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has all requisite power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently being conducted. The Corporation is qualified or
licensed to do business and is in good standing in every jurisdiction in which
the failure to so qualify, be licensed or be in good standing, individually or
in the aggregate, could have a material adverse effect on the Corporation.

2.2  AUTHORIZATION; ISSUANCE OF CONSIDERATION SHARES.

     (a) The Corporation has all requisite power and authority to execute and
deliver this Agreement and any and all instruments necessary or appropriate in
order to effectuate fully the

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terms and conditions of this Agreement, and the transactions contemplated
hereby. This Agreement has been duly authorized by all necessary action
(corporate or otherwise) on the part of the Corporation and this Agreement has
been duly executed and delivered by the Corporation and constitutes the valid
and legally binding obligation of the Corporation, enforceable in accordance
with its terms and conditions, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.

     (b) The authorization, issuance, sale and delivery of the Consideration
Shares have been duly authorized by all requisite action of the Corporation's
board of directors (the "Board"). The Consideration Shares will be validly
issued and outstanding, fully paid and nonassessable, with no personal liability
attaching to the ownership thereof, free and clear of any Encumbrances
whatsoever and with no restrictions on the voting rights thereof and other
incidents of record and beneficial ownership pertaining thereto, in each case,
created by the Corporation, other than as contemplated by the Stockholders'
Agreement.

     (c) The execution, delivery and performance of this Agreement by the
Corporation and the consummation of the transactions contemplated hereby shall
not (i) violate any Law applicable to the Corporation or any of its assets or
(ii) conflict with, or result in any breach of, any of the terms, conditions or
provisions of, or constitute (with due notice or lapse of time, or both) a
default or give rise to any right of termination, cancellation or acceleration,
or result in the creation of any Encumbrance (A) upon any of the Corporation's
assets or (B) under any provision of (i) the Corporation's certificate of
incorporation or bylaws, (ii) any Permit or (iii) any other Contract to which
the Corporation is a party or by which its Assets is or may be bound. The
Corporation has not been and is not required to give any notice to, or make any
filing with, any Governmental Authority or any other Person, or obtain any
Permit, in each case, for the valid execution, delivery and performance by the
Corporation.

2.3  CAPITALIZATION OF THE CORPORATION.

     (a) Immediately after the Closing, the authorized capital stock of the
Corporation shall consist of 4,000,000 shares, of which (i) 3,849,999 shares
will be Common Stock, of which (A) 2,510,499 shares will be issued and
outstanding, fully paid and nonassessable and (B) 633,923 shares will be
reserved for issuance pursuant to the Corporation's 2004 Stock Incentive Plan,
(ii) one share will be Class A Common Stock, of which one share will be issued
and outstanding, fully paid and nonassessable, and (iii) 150,000 shares of
preferred stock, $0.01 par value per share, of which 76,000 shares will be
designated as Series A Preferred Stock, 75,188 shares of which will be issued
and outstanding, fully paid and nonassessable.

     (b) Except as described in Section 2.3(a) and as contemplated by the
Stockholders' Agreement, there are no (i) outstanding warrants, options,
agreements, convertible securities or other commitments or instruments pursuant
to which the Corporation is or may become obligated to issue or sell any shares
of its capital stock or other securities or (ii) preemptive or similar rights to
purchase or otherwise acquire shares of the capital stock or other securities of
the Corporation.

2.4  OFFERING EXEMPTION.

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     Assuming the accuracy of the representations and warranties of the
Contributor made in Article III, the offering, sale and issuance of the
Consideration Shares has been, is, and will be, exempt from registration under
the Securities Act of 1933, as amended, and the rules and regulations in effect
thereunder (the "Securities Act"), and such offering, sale and issuance is also
exempt from registration under applicable state securities and "blue sky" laws.

                                  ARTICLE III

                REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR

     As a material inducement to the Corporation to enter into and perform its
obligations under this Agreement, the Contributor represents and warrants to the
Corporation as of the date hereof as set forth below.

3.1  VALID TITLE; POWER AND AUTHORITY; NO CONFLICTS.

     (a) The Contributor beneficially owns and has valid title of record to the
Contributed Shares, free and clear of any Encumbrance, subject only to
restrictions as to marketability imposed by securities laws.

     (b) Subject only to restrictions as to marketability imposed by securities
laws, the Contributor has full right, power, authority and capacity and all
approvals required by Law, if any, to sell, transfer, assign and deliver the
Contributed Shares hereunder and to enter into this Agreement, and the
Corporation will acquire valid title to the Contributed Shares, free and clear
of any Encumbrance, upon the consummation of the transactions contemplated by
this Agreement.

     (c) The Contributor has all requisite power and authority to execute and
deliver this Agreement and any and all instruments necessary or appropriate in
order to effectuate fully the terms and conditions of this Agreement and to
perform and consummate such Contributor's obligations hereunder. This Agreement
and the performance of the Contributor's obligations hereunder, have been duly
authorized by all requisite action on the part of the Contributor, and this
Agreement has been duly and validly executed and delivered by the Contributor
and constitutes a valid and legally binding obligation of the Contributor,
enforceable against the Contributor in accordance with its terms and conditions,
except as enforceability thereof may be limited by any applicable bankruptcy,
reorganization, insolvency or other Laws affecting creditors' rights generally
or by general principles of equity.

     (d) The execution, delivery and performance by the Contributor of this
Agreement, and the consummation of the transactions contemplated hereby, shall
not (i) violate any Law applicable to the Contributor or (ii) conflict with or
result in any violation or breach of, any of the terms, conditions or provisions
of, or constitute (with due notice or lapse of time, or both) a default under,
or give rise to any right of termination, cancellation or acceleration or result
in the creation of any Encumbrance upon any of the assets of the Contributor,
any Contracts to which the Contributor is a party or by which the Contributor or
any of the Contributor's assets is or may be bound, in each case, which would
prohibit the Contributor from consummating the transactions contemplated hereby.
The Contributor has not been or is not required to give any

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notice to, or make any filing with, any Governmental Authority or any other
Person, or obtain any Permit, in each case, for the valid execution, delivery
and performance by the Contributor of this Agreement.

3.2  CERTAIN INVESTMENT REPRESENTATIONS.

     (a) The Contributor is an "accredited investor" as that term is defined in
Rule 501(a) of Regulation D under the Securities Act.

     (b) The Contributor is acquiring the Consideration Shares for investment
for the Contributor's own account and not with a view to, or for resale in
connection with, the distribution or other disposition thereof except in
compliance with the Stockholders Agreement and as permitted by law, including
without limitation the Securities Act. The Contributor does not have any present
intent to resell or distribute all or any part of its Consideration Shares. If
the Contributor is a corporation, trust, partnership or other organization, it
was not organized for the specific purpose of acquiring the Consideration
Shares.

     (c) The Contributor has been advised that the Consideration Shares have not
been registered under the Securities Act, that the Consideration Shares may not
be sold or otherwise disposed of unless they are registered thereunder or an
exemption from registration is available and that accordingly the Contributor
may be required to bear the economic risk of the investment in the Consideration
Shares for an indefinite period of time. The Contributor also understands that
the Corporation does not have any intention of registering the Consideration
Shares under the Securities Act or of supplying the information which may be
necessary to enable the Contributor to sell Consideration Shares pursuant to
Rule 144 under the Securities Act.

     (d) The Contributor has been given the opportunity to obtain any
information or documents, and to ask questions and receive answers about such
documents, the Corporation and its subsidiaries and the business and prospects
of the Corporation and its subsidiaries (including, without limitation, the
transactions to be consummated pursuant to the terms of the Merger Agreement) as
it deems necessary to evaluate the merits and risks related to its investment in
the Consideration Shares and no representations concerning such matters or any
other matters related to such investment have been made to the Contributor
except as set forth in this Agreement. The Contributor has had the opportunity
to consult its own attorney, accountant or investment advisor with respect to
the investment contemplated hereby and its suitability for the Contributor,
including the tax and other economic considerations related to the investment.

     (e) The Contributor (i) has knowledge and experience in financial and
business matters such that the Contributor is capable of evaluating the merits
and risks of the purchase of the Consideration Shares as contemplated by this
Agreement, (ii) understands and has taken cognizance of all risk factors related
to the purchase of the Consideration Shares and (iii) is able to bear the
economic risk of the investment in the Consideration Shares for an indefinite
period of time and can afford to suffer a complete loss of the investment in
such Consideration Shares.

     (f) The Contributor has been informed that the offer of the Consideration
Shares is being made pursuant to an exemption from the registration requirements
of the Securities Act relating to transactions by an issuer not involving a
public offering, and that, consequently, the

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materials relating to the offer have not been subject to review and comment by
the staff of the Securities and Exchange Commission or any other Governmental
Authority.

     (g) The Contributor is not subscribing for the Consideration Shares as a
result of or subsequent to any advertisement, article, notice or other
communication published in any newspapers, magazine or similar media or
broadcast over television or radio, or presented at any seminar or meeting, or
any solicitation of a subscription by a person not previously known to the
Contributor in connection with investments in securities generally.

     (h) Each party hereby acknowledges, to the extent applicable, that
simultaneous with the consummation of the transactions contemplated by the
Merger Agreement, including without limitation the transactions contemplated by
this Agreement, the Contributor Loan Balance (as hereinafter defined) shall be
repaid in full by wire transfer of immediately available funds and/or by
directing Aearo to set off and net such Contributor Loan Balance against any
amounts the Contributor would otherwise be entitled to receive in connection
with the Merger to the Corporation, on behalf and in the name of the
Corporation. For purposes of this Section 3.2(h), the "Contributor Loan Balance"
shall mean the outstanding principal amount and interest owed by the Contributor
to the Corporation pursuant to a promissory note executed pursuant to an
Executive Security Purchase Agreement in connection with the purchase of the
Contributed Shares by the Contributor in the amount set forth on the signature
page hereto adjacent to the words "Contributor Loan Balance."

                                   ARTICLE IV

                       SECURITIES LAW COMPLIANCE; LEGENDS

4.1  STOCKHOLDERS' AGREEMENT; RESTRICTIVE LEGENDS.

     (a) The Contributor hereby acknowledges and agrees that the Consideration
Shares shall be subject to the Stockholders' Agreement, which is being executed
and delivered by the Contributor on the Contribution Closing Date.

     (b) The Consideration Shares shall be subject to the Stockholders'
Agreement, including, without limitation, the legending requirements set forth
therein and shall bear the following legends:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
     SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
     WITH A VIEW TO DISTRIBUTION OR RESALE. THESE SECURITIES MAY NOT BE OFFERED
     FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED
     IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH
     SECURITIES UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
     LAWS, OR THE AVAILABILITY, IN THE OPINION

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     OF COUNSEL, OF AN EXEMPTION FROM REGISTRATION THEREUNDER."

4.2  REMOVAL OF LEGENDS, ETC.

     Except as otherwise set forth in the Stockholders' Agreement, the legends
and restrictions imposed by Section 4.1 shall cease and terminate when (a) any
such Consideration Shares are sold or otherwise disposed of in accordance with
the intended method of disposition by the seller or sellers thereof set forth in
a registration statement or are sold or otherwise disposed of in a transaction
which does not require that the securities transferred bear the legends set
forth in Section 4.1, or (b) the holder of such Consideration Shares has met the
requirement for transfer of such Consideration Shares pursuant to the Securities
Act. Whenever the restrictions imposed by Section 4.1 shall terminate, as herein
provided, the holder of any Consideration Shares shall be entitled to receive
from the Corporation, without expense, a new certificate not bearing the
restrictive legend set forth in Section 4.1 and not containing any other
reference to the restrictions imposed by Section 4.1.

                                   ARTICLE V

                        NON-COMPETITION; NON-SOLICITATION

5.1  NON-COMPETITION.

     (a) As an inducement for the Corporation entering into the Merger
Agreement, as consideration for the right to make the investment contemplated by
this Agreement and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the undersigned Contributor hereby covenants and
agrees that during the period commencing on the Contribution Closing Date and
ending on the third anniversary thereof (the "Non-Compete Termination Date," and
such period (as may be extended pursuant to Section 5.1(b)) below, the
"Non-Compete Period"), such Contributor will not, directly or indirectly, either
as principal, manager, agent, consultant, officer, stockholder, partner,
investor, lender or employee or in any other capacity, carry on, be engaged in
or have any financial interest in, any business which is in competition with the
business of the Corporation or any of its subsidiaries or any group, division or
Affiliate of the Corporation who is engaged in the same business or businesses
as the Corporation or any of its Affiliates (the "Restricted Group") at any time
during the Non-Compete Period. For purposes of this Section 5.1, a business will
be deemed to be in competition with the Restricted Group if, at any time during
the Non-Compete Period, it is involved in the sale, or other dealing in any
property or the rendering of any service sold, dealt in or rendered by the
Restricted Group as a part of the business of the Corporation or any of its
subsidiaries during the Non-Compete Period within the same geographic area in
which the Restricted Group effects such sales or dealings or renders such
services. Nothing in this Section 5.1 will be construed so as to preclude the
Contributor from (a) investing in any publicly-held company, provided his
beneficial ownership of any class of such company's securities does not exceed
5% of the outstanding securities of such class, (b) working in any sector of the
safety industry where neither the Corporation nor any subsidiary thereof is (i)
marketing or manufacturing products or (ii) to the knowledge of the Contributor,
acquiring, establishing or planning to acquire or establish a company that
markets or manufactures such products in that sector of the market or

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(c) working for any employer if (i) such employer's aggregate revenues during
the then immediately preceding twelve (12) months derived from operations which
are in competition with the Restricted Group represent less than 10% of such
employer's gross revenues and the Contributor does not provide any services
directly or indirectly for such competing operations or (ii) the Restricted
Group has de minimis revenues resulting from businesses that are in competition
with such employer.

     (b) The Corporation may extend the Non-Compete Termination Date to the
fifth anniversary of the Contribution Closing Date in the event that the
Corporation repurchases all of the Consideration Shares from the Contributor
prior to the fifth anniversary of the Contribution Closing Date. Notwithstanding
the foregoing, the Corporation may only exercise its right to extend the
Non-Compete Period if it pays the cash purchase price for the Consideration
Shares within 60 days of (i) the repurchase of such shares by the Corporation or
(ii) the determination of the fair market value of such shares (as determined by
the Board in good faith).

5.2  NON-SOLICITATION.

     As an inducement for the Corporation entering into the Merger Agreement, as
consideration for the right to make the investment contemplated by this
Agreement and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the undersigned Contributor hereby covenants and
agrees that during the period commencing on the Contribution Closing Date and
ending five (5) years from such date (the "Non-Solicit Termination Date"), such
Contributor will not, directly or indirectly, on his own behalf or on behalf of
any person, firm or company, hire any person who has been employed by any member
of the Restricted Group at any time during the twenty-four (24) month period
immediately preceding such hiring, or solicit or induce any such employee or any
customer of the Restricted Group to leave the employ of, or cease doing business
with, as applicable, the Restricted Group, or interfere, in any material way,
with the business of the Restricted Group. For purposes of clarification, this
Section 5.2 shall not apply to any action taken solely by any of the
Contributor's employers following the date of written notice of such
Contributor's termination of employment if (i) such Contributor did not provide
any assistance or recommendation for the benefit of such future employer
relating to the solicitation or hiring of any person referred to above and (ii)
such person referred to above does not become employed by the same division,
department or group within such future employer in which the Contributor is
employed and does not report to the Contributor.

5.3  REASONABLENESS.

     The Contributor hereby agrees that the covenants set forth in this Article
V are reasonable under the circumstances and will not interfere with his ability
to earn a living or to otherwise meet his financial obligations. The Contributor
further acknowledges that he has experience and expertise in industries and
businesses other than those that compete, either directly or indirectly, with
the Restricted Group and that the restrictions contained in this Article V will
not interfere with or otherwise impair the Contributor's ability to earn a
living or to otherwise meet his financial obligations in such other industries
or businesses. The Contributor believes that he has received sufficient
consideration and other benefits hereunder and in connection with the Merger to
clearly justify the restrictions contained in this Article V which, in any event
(given the

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Contributor's education, skills and ability and his substantial experience in
industries other than that of the Restricted Group), the Contributor does not
believe would prevent him from otherwise earning a living. The Contributor has
carefully considered the nature and extent of the restrictions placed upon him
by this Agreement, and hereby acknowledges and agrees that the same are
reasonable in time and territory and do not confer a benefit upon the Company
disproportionate to the detriment of the Contributor. The Contributor and the
Corporation agree that if in the opinion of any court of competent jurisdiction
such restraint is not reasonable in any respect, such court will have the right,
power and authority to excise and modify such provision or provisions of this
covenant as so amended. The Contributor agrees that any breach of the covenants
contained in this Article V would irreparably injure the Corporation.
Accordingly, the Contributor agrees that the Corporation may, in addition to
pursuing any remedies it may have in law or in equity, cease making any payments
to the Contributor otherwise required by any contract between the Corporation
and the Contributor and obtain an injunction against the Contributor from any
court having competent jurisdiction over the matter restraining any further
violation of this Article V. The Contributor acknowledges and agrees that, in
the event of a termination of his employment with the Corporation or any of its
subsidiaries, this Article V will remain in force and effect and he will remain
bound by such provisions in accordance with their terms. The parties acknowledge
and agree that the covenants and agreements set forth in this Article V shall in
no way affect, restrict, impair or otherwise limit any other covenants or
agreements between the Contributor and the Corporation or any of its
subsidiaries that relate to the same or similar subject matter as this Article V
and have been entered into on or prior to the Contribution Closing Date.

                                   ARTICLE VI

                                  MISCELLANEOUS

6.1  DEFINITIONS.

     Capitalized terms used but not defined in this Agreement shall have the
respective meanings given to such terms in the Merger Agreement.

6.2  NO THIRD PARTY BENEFICIARIES.

     Except as expressly provided herein, this Agreement shall not confer any
rights or remedies upon any Person (as defined in the Stockholders Agreement)
other than the parties hereto and their respective successors and permitted
assigns, personal representatives and heirs and estates.

6.3  ENTIRE AGREEMENT.

     This Agreement constitutes the entire agreement among the parties hereto
and supersedes any prior understandings, agreements or representations by or
among the parties hereto, written or oral, with respect to the transactions
contemplated hereby.

6.4  SUCCESSORS AND ASSIGNS.

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     This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that the Corporation may not assign any of its rights under this Agreement
without the express prior written consent of the Contributor.

6.5  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. Facsimile execution and delivery of this Agreement is
legal, valid and binding for all purposes.

6.6  NOTICES.

     All notices or other communications which are required or otherwise
delivered hereunder shall be deemed to be sufficient and duly given if contained
in a written instrument and (a) personally delivered or sent by facsimile; (b)
sent by nationally-recognized overnight courier guaranteeing next business day
delivery; or (c) sent by first class registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:

          (i)  if to the Corporation, to:

               AC Safety Holding Corp.
               c/o Bear Stearns Merchant Banking
               383 Madison Avenue, 40th Floor
               New York, NY 10179
               Attention: Mr. Douglas R. Korn
               Telephone: (212) 272-2000
               Facsimile: (212) 272-7425;

               with a copy to:

               O'Melveny & Myers LLP
               Times Square Tower
               7 Times Square
               New York, NY 10036
               Attention: Adam K. Weinstein, Esq.
               Telephone: (212) 408-2400
               Facsimile: (212) 408-2420;

          (ii) if to the Contributor, to the Contributor at the address set
     forth on the signature page hereto;

               with a copy to:

               Katten Muchin Zavis Rosenman
               525 W. Monroe Street
               Suite 1600

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               Chicago, IL  60661
               Attention: David R. Shevitz, Esq.
               Telephone: (312) 902-5257
               Facsimile: (312) 577-8768

or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been received (i) when delivered, if
personally delivered or sent by facsimile, (ii) on the first business day after
dispatch, if sent by nationally recognized, overnight courier guaranteeing next
business day delivery and (iii) on the fifth business day following the date on
which the piece of mail containing such communication is posted, if sent by
mail.

6.7  GOVERNING LAW.

     This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Delaware 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.

6.8  AMENDMENTS.

     This Agreement may be modified, supplemented or amended only by a written
instrument executed by all parties hereto.

6.9  HEADINGS.

     The headings contained in this Agreement are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.

6.10 FURTHER ASSURANCES.

     At all times on and after the date hereof, each party hereto, at the
reasonable request of another party hereto, shall execute and deliver such other
documents or instruments and do and perform such other acts and things as may be
necessary or desirable for effecting completely the consummation of this
Agreement and the transactions contemplated hereby.

6.11 SEVERABILITY.

     If any particular provision of this Agreement shall be determined to be
illegal and unenforceable by any court of law, the remaining provisions shall be
severable and enforceable in accordance with their terms.

                                    * * * * *

                                      -12-

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Management Contribution
Agreement as of the date first above written.

                                 CORPORATION:

                                 AC SAFETY HOLDING CORP.

                                 By: /s/ Douglas R. Korn
                                     -------------------------------------------
                                 Name: Douglas R. Korn
                                 Title: President

                                 THE CONTRIBUTOR:

                                 -----------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Address:
                                          --------------------------------------

                                          --------------------------------------

                                 Number of Contributed Shares:
                                                               -----------------
                                 Dollar value of Contributed Shares:
                                                                     -----------
                                 Number of shares of Common Stock:
                                                                   -------------
                                 Number of shares of Preferred Stock:
                                                                      ----------
                                 Contributor Loan Balance:
                                                           ---------------------

<PAGE>

                               TABLE OF CONTENTS
                                   (continued)

                                                                            PAGE

     IN WITNESS WHEREOF, the parties have executed this Management Contribution
Agreement as of the date first above written.

                                 CORPORATION:

                                 AC SAFETY HOLDING CORP.

                                 By:
                                     -------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

                                 THE CONTRIBUTOR:

                                 /s/ Michael A. McLain
                                 -----------------------------------------------
                                 Name: Michael A. McLain

                                 Number of Contributed Shares:            2,728
                                 Dollar value of Contributed Shares: $3,409,895
                                 Number of shares of Common Stock:       85,247
                                 Number of shares of Preferred Stock:     2,557
                                 Contributor Loan Balance:           $  669,660

                                       -2-

<PAGE>

                               TABLE OF CONTENTS
                                   (continued)

                                                                            PAGE

     IN WITNESS WHEREOF, the parties have executed this Management Contribution
Agreement as of the date first above written.

                                 CORPORATION:

                                 AC SAFETY HOLDING CORP.

                                 By:
                                     -------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

                                 THE CONTRIBUTOR:

                                 /s/ James H. Floyd
                                 -----------------------------------------------
                                 Name: James H. Floyd

                                 Number of Contributed Shares:              910
                                 Dollar value of Contributed Shares: $1,137,465
                                 Number of shares of Common Stock:       28,436
                                 Number of shares of Preferred Stock:       853
                                 Contributor Loan Balance:           $   73,155

                                       -3-

<PAGE>

                               TABLE OF CONTENTS
                                   (continued)

                                                                            PAGE

     IN WITNESS WHEREOF, the parties have executed this Management Contribution
Agreement as of the date first above written.

                                 CORPORATION:

                                 AC SAFETY HOLDING CORP.

                                 By:
                                     -------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

                                 THE CONTRIBUTOR:

                                 /s/ Rahul Kapur
                                 -----------------------------------------------
                                 Name: Rahul Kapur

                                 Address: 778 Edison Way
                                          Carmel, IN 46032

                                 Number of Contributed Shares:              910
                                 Dollar value of Contributed Shares: $1,137,465
                                 Number of shares of Common Stock:       28,436
                                 Number of shares of Preferred Stock:       853
                                 Contributor Loan Balance:            $  73,155

                                       -4-

<PAGE>

                               TABLE OF CONTENTS
                                   (continued)

                                                                            PAGE

     IN WITNESS WHEREOF, the parties have executed this Management Contribution
Agreement as of the date first above written.

                                 CORPORATION:

                                 AC SAFETY HOLDING CORP.

                                 By:
                                     -------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

                                 THE CONTRIBUTOR:

                                 /s/ M. Rand Maillitz
                                 -----------------------------------------------
                                 Name: M. Rand Mallitz

                                 Address: 7519 Brackenwood Circle North
                                          Indianapolis, IN 46260

                                 Number of Contributed Shares:               682
                                 Dollar value of Contributed Shares:    $852,474
                                 Number of shares of Common Stock:        21,311
                                 Number of shares of Preferred Stock:        639
                                 Contributor Loan Balance:              $ 82,228

                                       -5-<PAGE>

                                                                   EXHIBIT 10.14

================================================================================

                             STOCKHOLDERS' AGREEMENT
                            DATED AS OF APRIL 7, 2004
                                      AMONG
                             AC SAFETY HOLDING CORP.
                                       AND
                       THE HOLDERS THAT ARE PARTIES HERETO

================================================================================
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
SECTION 1.   DEFINITIONS.................................................     1
SECTION 2.   CERTAIN DISPOSITIONS AND ISSUANCES BY THE COMPANY...........    10
SECTION 3.   TRANSFERS; ADDITIONAL PARTIES...............................    15
   3.1   Restrictions; Permitted Dispositions............................    15
   3.2   Additional Parties..............................................    16
   3.3   Securities Restrictions; Legends................................    17
SECTION 4.   REGISTRATION RIGHTS.........................................    18
SECTION 5.   REPURCHASE RIGHTS...........................................    30
SECTION 6.   BOARD OF DIRECTORS..........................................    32
SECTION 7.   FINANCIAL STATEMENTS; ACCESS; CONFIDENTIALITY...............    34
SECTION 8.   TRANSACTIONS WITH AFFILIATES................................    35
SECTION 9.   PREFERRED STOCK CERTIFICATE OF DESIGNATIONS.................    36
SECTION 10.  VOTING AGREEMENT............................................    36
SECTION 11.  NOTICES.....................................................    37
SECTION 12.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............    37
SECTION 13.  REPRESENTATIONS AND WARRANTIES OF THE HOLDERS...............    38
SECTION 14.  MISCELLANEOUS PROVISIONS....................................    40
</TABLE>

                                       -i-
<PAGE>

                                                                  EXECUTION COPY

STOCKHOLDERS' AGREEMENT dated as of April 7, 2004 (this "Agreement") among AC
SAFETY HOLDING CORP., a Delaware corporation (the "Company"), and the HOLDERS
that are parties hereto.

          WHEREAS, each Holder deems it to be in the best interest of the
Company and the Holders that provision be made for the continuity and stability
of the business and policies of the Company and, to that end, the Company and
the Holders hereby set forth herein their agreement with respect to the Common
Stock, Preferred Stock, Restricted Stock and Options owned by them.

          NOW, THEREFORE, in consideration of the premises and of the mutual
consents and obligations hereinafter set forth, the parties hereto hereby agree
as follows:

     Section 1. Definitions.

          As used in this Agreement:

          "Aearo" means Aearo Corporation, a Delaware corporation.

          "Aearo Company" means Aearo Company I, a Delaware corporation and
wholly owned subsidiary of Aearo.

          "Affiliate of the Company or the Bear Group" means any Person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company or the Bear Group,
as applicable. As used in this definition, the term "control," including the
correlative terms "controlling," "controlled by" and "under common control with"
means possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
any partnership or other ownership interest, by contract or otherwise) of a
Person.

          "Affiliate of a Holder" means for any Holder who is not a member of
the Bear Group: (i) an individual Holder's siblings and children (including
those by adoption), the lineal descendants of such siblings and children, and in
any such case, any trust whose primary beneficiary is such individual Holder or
such Holder's siblings, children and/or lineal descendants; (ii) the legal
representative or guardian of such individual Holder or of any such immediate
family members in the event such individual Holder or any such immediate family
members becomes mentally incompetent; and (iii) for any Holder that is not a
natural person, any Person that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such Holder. As used in this definition, the term "control," including the
correlative terms "controlling," "controlled by" and "under common control with"
means possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
any partnership or other ownership interest, by contract or otherwise) of a
Person.

<PAGE>

          "Bear Group" means, collectively, Bear Stearns Merchant Banking
Partners II, L.P., Bear Stearns Merchant Banking Investors II, L.P., Bear
Stearns MB-PSERS II, L.P., The BSC Employee Fund V, L.P. and The BSC Employee
Fund VI, L.P. and each of their respective Affiliates, including, without
limitation, any investment funds managed or controlled by Bear Stearns Merchant
Capital II, L.P.

          "Bear Group Directors" shall have the meaning ascribed to such term in
Section 6(a).

          "Board" means the board of directors of the Company and any duly
authorized committee thereof. All determinations by the Board required pursuant
to the terms of this Agreement to be made by the Board shall be made in good
faith and should be binding and conclusive.

          "Bylaws" means the bylaws of the Company, as may be amended,
supplemented or restated from time to time in accordance with the terms thereof
and hereof.

          "Capital Stock" means any and all shares, interests, participation or
other equivalents (however designated) of corporate stock of a Person and, in
the case of the Company, shall include all Common Stock and Preferred Stock.

          "Cause" means, with respect to the termination of employment of any
Management Holder by the Company or any Subsidiary thereof (each, an
"Employer"): (i) if such Management Holder is at the time of termination a party
to an employment or retention agreement with an Employer thereof which defines
such term, the meaning given therein, and (ii) in all other cases, that in the
Board's determination such termination is based on such Management Holder's: (A)
continuing failure, for more than 10 days after the Employer's notice to such
Management Holder thereof, by such Management Holder to perform such duties as
are reasonably requested by the Employer as documented in writing to such
Management Holder; (B) failure to observe material policies generally applicable
to directors, employees and/or consultants of an Employer unless such failure is
capable of being cured and is cured within 10 days of such Management Holder
receiving notice of such failure; (C) commission of any act of fraud, theft or
financial dishonesty with respect to an Employer or any criminal act involving
moral turpitude or any felony; (D) violation of the provisions of any
employment, consulting, non-competition or confidentiality agreement with an
Employer or any of its Affiliates unless such violation is capable of being
cured and is cured within 10 days of such Management Holder receiving notice of
such violation; (E) chronic absenteeism; or (F) abuse of alcohol or another
controlled substance.

          "CEO Director" shall have the meaning ascribed to such term in Section
6(a)(i).

          "Class A Common Stock" means the Company's Class A Common Stock, par
value $.01 per share.

          "Class A Common Stock Director" shall have the meaning ascribed to
such term in Section 6(d).

                                        2

<PAGE>

          "Co-Investment Rights Agreement" means the Co-Investment Rights
Agreement dated as of the date hereof between Vestar Capital Partners IV, L.P.
and Bear Stearns Merchant Manager II, LLC.

          "Come Along Option" shall have the meaning ascribed to such term in
Section 2(b).

          "Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

          "Common Stock" means the common stock of the Company, par value $.01
per share. For the avoidance of doubt, for purposes of this Agreement, "Common
Stock" shall not include Class A Common Stock.

          "Confidential Information" shall have the meaning ascribed to such
term in Section 7(c).

          "Deemed Held Shares" shall have the meaning ascribed to such term in
Section 2(a)(ii).

          "Demand Notice" shall have the meaning ascribed to such term in
Section 4(a)(i).

          "Demand Registration" means the Bear Group's rights to demand
registration of all or part of their shares of Common Stock or Preferred Stock
pursuant to Section 4(a).

          "DGCL" means the Delaware General Corporation Law.

          "Disposition" means any direct or indirect assignment, sale, transfer,
gift, pledge, hypothecation or other encumbrance, or any other disposition, of
Common Stock or Preferred Stock (or any interest therein or right thereto) or of
all or part of the voting power (other than the granting of a revocable proxy)
associated with the Common Stock or Preferred Stock (or any interest therein)
whatsoever, or any other transfer of beneficial ownership of Common Stock or
Preferred Stock whether voluntary or involuntary, including, without limitation
(i) as a part of any liquidation of a Holder's assets or (ii) as a part of any
reorganization of a Holder pursuant to the United States or other bankruptcy law
or other similar debtor relief laws.

          "Employer" shall have the meaning ascribed to such term in the
definition of "Cause".

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.

          "Excluded Securities" means: (A) securities issued in a Qualified
Public Offering; (B) securities issuable upon the exercise, exchange or
conversion of Common Stock, Preferred Stock or convertible securities and shares
of Common Stock issuable upon the conversion of the Preferred Stock; (C)
securities issued in connection with any Board-approved merger, acquisition or
other business combination; (D) securities issued by the Company to give effect
to any stock dividend or distribution, stock split, reverse stock split,
subdivision or combination or other similar pro rata recapitalization event
affecting any class or series of the

                                        3

<PAGE>

Company's Capital Stock; and (E) securities issued in connection with the
transactions contemplated by the Co-Investment Rights Agreement.

          "Executive Management Holder" means (i) each Management Holder who
entered into an employment agreement with the Company or a Subsidiary thereof on
or prior to the date hereof or (ii) any other Management Holder who enters into
an employment agreement with the Company or a Subsidiary thereof following the
date hereof and who is designated by the Board (or the compensation committee
thereof) as an "Executive Management Holder."

          "Exercising Offerees" shall have the meaning ascribed to such term in
Section 2(a)(i).

          "Fair Market Value" means:

          (a) the per share fair market value of a share of Common Stock or a
     share of Preferred Stock, as the case may be, as such fair market value was
     last determined in good faith by the Board (or the compensation committee
     thereof) in consultation with the Chief Executive Officer of the Company
     prior to the date of determination or, if the Board (or the compensation
     committee thereof) determines in good faith that such fair market value has
     materially changed from the amounts as last determined by the Board (or the
     compensation committee thereof) prior to the date of determination, the
     fair market value as determined in good faith by the Board (or the
     compensation committee) in consultation with the Chief Executive Officer of
     the Company as of the most recent practicable date prior to the date of
     determination; and

          (b) notwithstanding the preceding paragraph (a), in the case of an
     Executive Management Holder whose employment with the applicable Employer
     is terminated other than for Cause or who has resigned for Good Reason:

               (i) the per share fair market value of a share of Common Stock or
          a share of Preferred Stock, as the case may be, as such fair market
          value is agreed to in writing by the selling Executive Management
          Holder and the Board (or the compensation committee thereof);

               (ii) if the selling Executive Management Holder and the Board (or
          the compensation committee thereof) cannot so agree, the per share
          fair market value as agreed to in writing by the Board and the holders
          of a majority of all outstanding shares of Common Stock held by the
          Executive Management Holders (excluding the Capital Stock held by the
          selling Management Holder); or

               (iii) if the Board and the holders of a majority of all
          outstanding shares of Common Stock held by the Executive Management
          Holders cannot so agree, the per share fair market value as determined
          by an independent appraisal firm selected and agreed to in writing by
          the Board and the holders of a majority of the outstanding shares of
          Common Stock held by the Executive Management Holders (excluding
          shares of Common Stock held by the selling Executive Management
          Holder); provided that if the Board and such holders cannot so

                                        4

<PAGE>

          agree, such independent appraisal firm shall be selected by the
          American Arbitration Association;

     provided, however, that in each case of clauses (i), (ii) and (iii), the
     per share fair market value shall be based on the going concern value for a
     private company (unless the Company's shares of Common Stock are publicly
     traded or quoted at the time of determination (in which case, such fair
     market value shall be determined pursuant to (d) below)) and shall in no
     way be affected, or discounted, by the selling Executive Management
     Holder's ownership of less than a majority of shares of Common Stock. In
     the event that per share fair market value is determined pursuant to clause
     (iii) above, all reasonable fees and expenses of the independent appraisal
     firm shall be borne by the selling Executive Management Holder unless the
     price determined by the independent appraisal firm exceeds 10% of the
     amount originally determined by the Board (or the compensation committee
     thereof), in good faith, in which case the reasonable fees and expenses
     shall be paid by the Company.

          (c) Notwithstanding anything to the contrary contained in (a) or (b)
     above, (i) in the case of an Executive Management Holder who is terminated
     other than for Cause or who resigns for Good Reason, the per share fair
     market value of a share of Preferred Stock shall be deemed to be no less
     than the Original Cost thereof plus the value of accrued but unpaid
     dividends thereon and (ii) for purposes of determining the per share fair
     market value of a share of Common Stock, the fair market value of a share
     of Preferred Stock shall be deemed to be (x) if such fair market value is
     being determined pursuant to the exercise of rights under the third
     sentence of Section 5(a), the greater of fair market value and Original
     Cost and (y) in all other cases, the Original Cost thereof plus the value
     of accrued but unpaid dividends thereon.

          (d) Notwithstanding anything to the contrary contained in (a), (b) or
     (c) above, if any securities of the Company are publicly traded or quoted
     at the time of determination, then the per share fair market value of such
     securities shall be the average closing trading price of such securities
     during the thirty day period preceding the date of determination as quoted
     on the largest exchange on which such securities are traded or quoted.

          (e) At any time in which the Board is permitted to determine the fair
     market value of any security in accordance with this Agreement, neither the
     Company nor any officer, director, employee or agent of the Company shall
     have any liability with respect to the valuation of such securities that
     are bought or sold at such fair market value even though the fair market
     value, as so determined, may be more or less than actual fair market value.
     Each of the Company and its officers, directors, employees and agents shall
     be fully protected in relying in good faith upon the records of the Company
     and upon information, opinions, reports or statements presented to the
     Company by any Person as to matters which the Company or such director,
     officer, employee or agent reasonably believes are within such other
     Person's professional or expert competence and who has been selected with
     reasonable care by or on behalf of the Company in determining such fair
     market value. The per share fair market value of Common Stock or Preferred
     Stock, as the case may be, as of the date hereof and until the first
     determination

                                        5

<PAGE>

     of fair market value thereof by the Board shall be deemed to be Original
     Cost, subject to appropriate adjustment by the Board for stock splits,
     stock dividends, combinations and similar transactions.

          "Good Reason" means, with respect to the termination of employment by
any Management Holder: (i) if such Management Holder is at the time of
termination a party to an employment or retention agreement with an Employer
thereof which defines such term, the meaning given therein, and (ii) in all
other cases, the taking of any action by the applicable Employer which (A)
materially decreases such Management Holder's total annual salary and target
bonus or (B) materially adversely affects such Management Holder's participation
in, or reduces such Management Holder's benefits originally provided to such
Management Holder under the applicable Employer's benefit plans, except, in each
of (A) and (B), to the extent that such action applies to (x) the employees of
such Employer that hold titles or responsibilities similar to such Management
Holder or (y) such Employer's employees generally.

          "Group" shall have the meaning ascribed thereto in Section 13(d)(3) of
the Exchange Act.

          "Holders" means the holders of securities of the Company who are
parties hereto.

          "Initial Notice" shall have the meaning ascribed thereto in Section
4b(i).

          "IRA" shall have the meaning ascribed to such term in Section 3.2(c).

          "Management Holder" means Holders who are currently employed or serve
as consultants or directors to the Company or any of its Subsidiaries (and
includes the Executive Management Holders).

          "Merger Agreement" means the Agreement and Plan of Merger, dated as of
March 10, 2004, by and among the Company, AC Safety Acquisition Corp. and Aearo
as it may be amended, supplemented or restated from time to time.

          "NASD" means the National Association of Securities Dealers, Inc.

          "Non-Bear Group Holders" means, collectively, the Holders other than
the Bear Group including their permitted transferees.

          "Notice of Acceptance" shall have the meaning ascribed thereto in
Section 2(e)(iv).

          "Offer to Resell" shall have the meaning ascribed thereto in Section
2(e)(ii).

          "Offered Securities" shall have the meaning ascribed thereto in
Section 2(e)(i).

          "Offerees" shall have the meaning ascribed thereto in Section 2(a)(i).

          "Offeror" shall have the meaning ascribed thereto in Section 2(a)(i).

                                        6

<PAGE>

          "Option" means the options to purchase Common Stock issued to Holders
pursuant to the 2004 Stock Incentive Plan or any other similar plan approved by
the Company.

          "Original Cost" means:

          (a) With respect to a share of Common Stock, the price per share paid
     by the holder of such share, subject to appropriate adjustment by the Board
     for stock splits, stock dividends, combinations and similar transactions;
     and

          (b) With respect to a share of Preferred Stock, $1,000 per share,
     subject to appropriate adjustment by the Board for stock splits, stock
     dividends, combinations and similar transactions.

          "Permitted Disposition" shall have the meaning given to such term in
Section 3.1.

          "Person" shall be construed broadly and shall include, without
limitation, an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

          "Piggyback Notice" shall have the meaning ascribed to such term in
Section 4(b).

          "Piggyback Registration Rights" means the registration rights pursuant
to a Piggy Back Notice in Section 4(b).

          "Preemptive Offer" shall have the meaning ascribed to such term in
Section 2(e)(i).

          "Preemptive Offeree" shall have the meaning ascribed to such term in
Section 2(e)(i).

          "Preferred Stock" means shares of the Company's Series A Preferred
Stock, par value, $.01 per share.

          "Proportionate Percentage" means, with respect to any Holder, (i) in
respect of shares of Common Stock, a fraction (expressed as a percentage) the
numerator of which is the total number of shares of Common Stock held by such
Holder (including any Deemed Held Shares held by such Holder) and the
denominator of which is the total number of shares of Common Stock outstanding
at the time of determination (including any Deemed Held Shares held by all
Holders), and (ii) in respect of the Preferred Stock, a fraction (expressed as a
percentage) the numerator of which is the total number of shares of Preferred
Stock held by such Holder and the denominator of which is the total number of
shares of Preferred Stock outstanding at the time of determination.

          "Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the securities covered by such
Registration Statement and, in each case, by all other amendments and
supplements to such prospectus, including post-effective amendments and, in each
case, all material incorporated by reference in such prospectus.

                                        7

<PAGE>

          "Proxy" shall have the meaning ascribed to such term in Section 10(b).

          "Public Sale" means any sale, occurring simultaneously with or after
an initial public offering, of Common Stock or Preferred Stock to the public
pursuant to an offering registered under the Securities Act or to the public in
the manner described by the provisions of Rule 144(f).

          "Qualified Public Offering" means an underwritten public offering of
Common Stock by the Company pursuant to an effective registration statement
filed by the Company with the Securities and Exchange Commission (other than on
Forms S-4 or S-8 or successors to such forms) under the Securities Act, pursuant
to which (a) the per share price of the Common Stock sold in such offering is
equal to at least 150% of the Original Cost paid by the Bear Group for its
shares of Common Stock on the date of consummation of the transactions
contemplated by the Merger Agreement and (b) the aggregate offering price of the
Common Stock sold in such offering is at least $50,000,000.

          "Realization Event" means (i) the consummation of a Sale of the
Company or (ii) the consummation of any transaction or series of related
transactions in which the Bear Group sells at least 50% of the shares of Common
Stock purchased by them on the date hereof and 50% of the shares of Preferred
Stock purchased by them on the date hereof (excluding any shares sold or
transferred in connection with the transactions contemplated by the
Co-Investment Rights Agreement).

          "Registrable Securities" means shares of Common Stock and Preferred
Stock; provided that any Registrable Securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale of such
Registrable Securities has been declared effective under the Securities Act and
such Registrable Securities have been disposed of in accordance with the plan of
distribution set forth in such registration statement, (ii) such Registrable
Securities are distributed pursuant to Rule 144 (or any similar provision then
in force) under the Securities Act or (iii) such Registrable Securities shall
have been otherwise transferred and new certificates for them not bearing a
legend restricting further Disposition under the Securities Act shall have been
delivered by the Company in accordance with applicable law; and provided further
that any securities that have ceased to be Registrable Securities shall not
thereafter become Registrable Securities. Notwithstanding any other provision of
this Agreement, with respect to any Registration Statement that only registers
shares of Common Stock, "Registrable Securities" shall only include shares of
Common Stock and with respect to any Registration Statement that only registers
shares of Preferred Stock, "Registrable Securities" shall only include shares of
Preferred Stock.

          "Registration Expenses" shall have the meaning ascribed to such term
in Section 4(e).

          "Registration Statement" means any Registration Statement of the
Company which covers Registrable Securities, including the Prospectus,
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits thereto and all material incorporated by
reference in such Registration Statement.

                                        8

<PAGE>

          "Repurchase Event" means, with respect to a Management Holder, such
Management Holder shall cease to be employed by, to be a director of or to be a
consultant to the Company or any of its Subsidiaries for any reason.

          "Resale Notice" shall have the meaning ascribed to such term in
Section 2(e)(ii).

          "Resale Notice Period" shall have the meaning ascribed to such term in
Section 2(e)(ii).

          "Resale Period" shall have the meaning ascribed to such term in
Section 2(e)(ii).

          "Restated Certificate" means the Company's Restated Certificate of
Incorporation, as it may be amended, supplemented or restated from time to time,
including, without limitation, pursuant to the Certificate of Designations,
Preferences and Rights for the Preferred Stock.

          "Restricted Group" shall have the meaning ascribed to such term in
Section 7(c).

          "Restricted Stock" means the restricted Common Stock issued to Holders
pursuant to the 2004 Stock Incentive Plan or other similar plan approved by the
Company.

          "Sale of the Company" means, with respect to the Company, (i) any
merger, consolidation or other business combination of the Company, Aearo or
Aearo Company with or into any other entity, recapitalization, spin-off,
distribution or any other similar transaction, whether in a single transaction
or series of related transactions, where the Bear Group and its permitted
transferees, collectively, cease to beneficially own at least 50% of the voting
power of the Voting Securities of the entity surviving or resulting from such
transaction (or the ultimate sole parent thereof) (such ownership being based
solely on the Voting Securities beneficially owned by such Persons immediately
prior to such event), (ii) any transaction or series of related transactions as
a result of which the Bear Group and its respective permitted transferees,
collectively, cease to beneficially own at least 50% of the voting power of the
Voting Securities of the Company (or the ultimate sole parent thereof) or (iii)
any sale of all or substantially all of the assets, property or business of the
Company and its Subsidiaries.

          "Sale Notice" shall have the meaning ascribed to such term in Section
2(a).

          "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.

          "Selling Holders' Counsel" shall have the meaning ascribed to such
term in Section 4(d)(ii).

          "Subject Employee" shall have the meaning ascribed to such term in
Section 3.2(c).

          "Subsidiary" means any corporation, company or entity with respect to
which a specified Person (or a Subsidiary thereof) has the power to vote or
direct the voting of sufficient securities to elect a majority of the board of
directors or comparable governing body.

                                        9

<PAGE>

          "Tag Along Notice" shall have the meaning ascribed to such term in
Section 2(a).

          "Tag Along Transaction" shall have the meaning ascribed to such term
in Section 2(a).

          "Term" shall have the meaning ascribed to such term in Section 10(a).

          "2004 Deferred Compensation Plan" means the Company's 2004 Deferred
Compensation Plan, as it may be amended, supplemented or restated from time to
time.

          "2004 Stock Incentive Plan" means the Company's 2004 Stock Incentive
Plan, as it may be amended, supplemented or restated from time to time.

          "Underwritten Offering" means a sale of shares of Common Stock or
Preferred Stock to an underwriter for reoffering to the public.

          "Vestar" means, collectively, Vestar Equity Partners, L.P. and its
Affiliates.

          "Voting Securities" shall mean, at any time, shares of any class of
Capital Stock of the Company which are then entitled to vote generally in the
election of Directors or on any other matter.

     Section 2. Certain Dispositions and Issuances by the Company.

          (a) Tag Along Transaction.

               (i) Subject to the provisions of Section 2(b), prior to the
          consummation of a Qualified Public Offering, if any Bear Group Holder
          (the "Offeror") desires to effect any Disposition of shares of Common
          Stock or Preferred Stock to any third party following which such
          Offeror shall have Disposed of at least 5% of the number of shares of
          Common Stock or Preferred Stock, as applicable (when aggregated with
          all prior such sales or Dispositions), that such Offeror originally
          owned to a transferee or Group (each a "Tag Along Transaction"), such
          Holder shall give written notice to the remaining Holders (the
          "Offerees") at least fifteen (15) days prior to the anticipated sale
          date offering such Holders the option to participate in such Tag Along
          Transaction. The notice shall set forth the material terms of the
          proposed Tag Along Transaction and identify the contemplated
          transferee or Group (a "Sale Notice").

               (ii) Each of the Offerees may, by written notice to the Offeror
          (a "Tag Along Notice"), delivered within ten (10) days after the date
          of the Sale Notice (each such Offeree delivering such timely notice
          being an "Exercising Offeree"), elect to Dispose of a number of shares
          of Common Stock or Preferred Stock, as applicable, in such Tag Along
          Transaction, which will not exceed such Exercising Offerees's
          Proportionate Percentage of the total number of shares of Common Stock
          or Preferred Stock, as applicable, that the Offeror proposes to
          Dispose of in the applicable Tag Along Transaction. This number of
          shares may include shares of Common Stock and Preferred Stock to be
          distributed to such

                                       10

<PAGE>

          Exercising Offeree in connection with such Tag Along Transaction from
          the 2004 Deferred Compensation Plan or any similar plan or which such
          Exercising Offeree may obtain by exercising any Options or shares of
          Restricted Stock held by such Exercising Offeree that are vested as of
          the date of such Tag Along Notice or which would vest in connection
          with such Tag Along Transaction (collectively, the "Deemed Held
          Shares").

               (iii) If none of the Offerees delivers a timely Tag Along Notice,
          then the Offeror may thereafter consummate the Tag Along Transaction,
          on the same terms and conditions as are described in the Sale Notice
          for a period of one hundred twenty (120) days thereafter. In the event
          the Offeror has not consummated the Tag Along Transaction within such
          one hundred twenty (120) day period, the Offeror shall not thereafter
          consummate a Tag Along Transaction without first providing a Sale
          Notice and an opportunity to the Exercising Offerees to sell in the
          manner provided above. If one or more of Exercising Offeree gives the
          Offeror a timely Tag Along Notice, then the Offeror shall use its
          commercially reasonable best efforts to cause the prospective
          transferee or Group to agree to acquire all shares identified in all
          timely Tag Along Notices, upon the same terms and conditions as
          applicable to the shares held by the Offeror. Each Exercising Offeree
          shall take all reasonably necessary actions approved by the Bear Group
          in connection with the consummation of the Tag Along Transaction,
          including executing such agreements and such instruments and other
          actions reasonably necessary to provide the representations,
          warranties, covenants and indemnities, as well as escrow arrangements
          relating to such Tag Along Transaction but only to the extent similar
          agreements and instruments are executed and actions taken by the Bear
          Group in connection with such Tag Along Transaction; provided,
          however, that (i) any representations, warranties, covenants,
          indemnities, escrow agreements and other provisions and agreements
          made by the Exercising Offerees shall be several and not joint and
          (ii) to the extent the Exercising Offerees are required to provide
          indemnities in connection with the Disposition of their shares of
          Common Stock or Preferred Stock, no Exercising Offeree shall be
          required to provide indemnification that would result in an aggregate
          liability to such Exercising Offeree in excess of such Exercising
          Offeree's net proceeds from such Disposition pursuant to this Section
          2(a)(iii), as applicable, and such indemnities shall be made by all
          Exercising Offerees participating in the applicable transaction or
          transactions, severally and not jointly. Each Holder hereby waives any
          claims such Holder may have against the Board or the Bear Group in
          connection with the Tag Along Transaction. If such prospective
          transferee or Group is unable or unwilling to acquire all shares
          proposed to be included in the Tag Along Transaction upon such terms,
          then the Offeror may elect to cancel such Tag Along Transaction or to
          allocate the maximum number of shares that each prospective transferee
          or Group is willing to purchase among the Offeror and the Exercising
          Offerees in the proportion that each such Exercising Offeree's and the
          Offeror's Proportionate Percentage bears to the total Proportionate
          Percentages of the Offeror and the Exercising Offerees (e.g., if the
          Sale Notice contemplated a Tag Along Transaction of 10% Proportionate
          Percentage by the Offeror, and if the Offeror at such time owns a

                                       11

<PAGE>

          30% Proportionate Percentage and one Exercising Offeree who owns a 20%
          Proportionate Percentage elects to participate, then the Offeror would
          be entitled to sell a 6% Proportionate Percentage (30%/50% multiplied
          by the 10% Proportionate Percentage) and the Exercising Offeree would
          be entitled to sell a 4% Proportionate Percentage (20%/50% multiplied
          by the 10% Proportionate Percentage).

               (iv) Notwithstanding the provisions of this Section 2(a), the
          Bear Group may take any of the following actions without complying
          with the provisions of this Section 2(a): (a) during the first twelve
          (12) months of this Agreement, the Bear Group may Dispose of up to 10%
          of the shares of Common Stock and 10% of the shares of Preferred Stock
          then owned by it, (b) the Bear Group may Dispose of shares of Common
          Stock and Preferred Stock to any Affiliate of the Bear Group (provided
          that such Affiliate transferee agrees in writing to be bound by this
          Agreement to the same extent as any other member of the Bear Group)
          and (c) the Bear Group may Dispose of shares of Common Stock and
          Preferred Stock to Vestar or one or more of its Affiliates in
          connection with the transactions contemplated by the Co-Investment
          Rights Agreement.

          (b) Come Along Transaction.

               (i) If, at any time, (A) the Bear Group holds at least fifty
          percent (50%) of the outstanding shares of Common Stock and the Bear
          Group approves the Disposition of at least fifty percent (50%) of the
          shares of Common Stock and/or Preferred Stock held by the Bear Group
          as of the date hereof or (B) the holders of at least fifty percent
          (50%) of the outstanding shares of Common Stock (including the Bear
          Group) approve a Disposition of at least fifty percent (50%) of the
          outstanding shares of Common Stock and/or Preferred Stock (in either
          of (A) or (B), a "Come Along Transaction"), then each Non-Bear Group
          Holder shall raise no objections against, and, if a stockholder vote
          is required by law in connection therewith, consent to, the Come Along
          Transaction, and if the Come Along Transaction is structured as (1) a
          merger or consolidation of the Company or an asset sale, each Non-Bear
          Group Holder hereby waives any dissenters rights, appraisal rights or
          similar rights in connection with such merger, consolidation or asset
          sale or (2) a sale of Capital Stock of the Company, each Non-Bear
          Group Holder shall agree to sell his or its pro rata portion of shares
          of Common Stock and/or Preferred Stock which are the subject of the
          Come Along Transaction (including his or its Deemed Held Shares). Each
          Non-Bear Group Holder shall take all reasonably necessary actions
          approved by the Bear Group in connection with the consummation of the
          Come Along Transaction and executing such agreements and such
          instruments and other actions reasonably necessary to provide the
          representations, warranties, covenants and indemnities, as well as
          escrow arrangements relating to such Come Along Transaction but only
          to the extent similar agreements and instruments are executed and
          actions taken by the Bear Group in connection with such Come Along
          Transaction; provided, however, that (x) any representations,
          warranties, covenants, indemnities, escrow agreements and other
          provisions and agreements made by the Non-Bear Group

                                       12

<PAGE>

          Holders shall be several and not joint and (y) to the extent the
          Non-Bear Group Holders are required to provide indemnities in
          connection with the Disposition of their shares of Common Stock or
          Preferred Stock, no Non-Bear Group Holder shall be required to provide
          indemnification that would result in an aggregate liability to such
          Non-Bear Group Holder in excess of such Non-Bear Group Holder's net
          proceeds from such Disposition pursuant to this Section 2(b)(i), as
          applicable, and such indemnities shall be made by all Non-Bear Group
          Holders participating in the applicable transaction or transactions,
          severally and not jointly. Each Holder hereby waives any claims such
          Holder may have against the Board or the Bear Group in connection with
          the Come Along Transaction.

          (c) The Company and the Non-Bear Group Holder shall cooperate in
     causing any Deemed Held Shares that are ultimately included in a Tag Along
     Transaction or a Come Along Transaction to be delivered to the Non-Bear
     Group Holder immediately prior to the closing of such Tag Along Transaction
     or Come Along Transaction in order that the Non-Bear Group Holder may
     exercise his rights under Section 2(a) or that the Bear Group may exercise
     its rights under Section 2(b), as the case may be.

          (d) Upon the closing of the sale of any shares of Common Stock or
     Preferred Stock (including any Deemed Held Shares) pursuant to this Section
     2, the Holders shall deliver at such closing, against payment of the
     purchase price therefor, certificates representing their shares of Common
     Stock or Preferred Stock to be sold, duly endorsed for Disposition or
     accompanied by duly endorsed stock powers, and evidence of good title to
     the shares to be sold and the absence of liens, encumbrances and adverse
     claims with respect thereto and such other matters as are reasonably deemed
     necessary by the Company for the proper Disposition of such shares on the
     books of the Company.

          (e) Preemptive Rights.

               (i) Except for Excluded Securities, prior to the consummation of
          a Qualified Public Offering, the Company shall not issue or sell to,
          or exchange with, the Bear Group (i) any Common Stock, (ii) any
          Preferred Stock, (iii) any other equity security of the Company or
          (iv) any option, call, warrant or other right to subscribe for,
          purchase or otherwise acquire any security of the Company specified in
          the foregoing clauses (i) through (iii), unless, in each case, the
          Company shall have first offered to sell to each Non-Bear Group Holder
          (each, a "Preemptive Offeree") the percentage of such securities equal
          to the percentage of outstanding shares of Common Stock held by such
          Preemptive Offeree as of such date (the "Offered Securities") at a
          price and on such other terms and conditions as shall have been
          specified by the Company in a writing delivered to such Preemptive
          Offeree (the "Preemptive Offer"). A Preemptive Offer by its terms
          shall remain open and irrevocable for a period of thirty (30) days
          from the date of delivery to each Preemptive Offeree.

               (ii) If the Company is unable to make the Preemptive Offer or
          hold the Preemptive Offer open for the entire 30-day period referred
          to in Section 2(e)(i), the Bear Group may purchase or cause to be
          purchased from the Company all of the Offered Securities that are to
          be offered to the Preemptive Offerees

                                       13

<PAGE>

          pursuant to Section 2(e)(i), in which case the Company's obligations
          under Section 2(e)(i) shall be deemed fully satisfied. Promptly after
          such purchase, the Bear Group shall or shall cause the applicable
          purchaser to offer (an "Offer to Resell") to each Preemptive Offeree
          the number of such Offered Securities that such Preemptive Offerees
          would otherwise be entitled to purchase pursuant to Section 2(e)(i),
          at the same price paid by such purchaser and on the same terms and
          conditions. Such Offer to Resell by its terms shall remain open for a
          period of thirty (30) days from the date it is delivered (the "Resale
          Period"). Notice of any Preemptive Offeree's intention to accept the
          Offer to Resell shall be evidenced by a writing signed by such
          Preemptive Offeree and delivered to the Bear Group and the Company
          prior to the end of the Resale Period (the "Resale Notice"). Within
          five (5) days after receipt of the Resale Notice, the Bear Group or
          the applicable purchaser shall sell and each Preemptive Offeree
          delivering a Resale Notice shall purchase the applicable Offered
          Securities which were the subject of the Offer to Resell, upon the
          terms and conditions of the Offer to Resell.

               (iii) The Company may specify in the Preemptive Offer that all or
          a minimum amount of the Offered Securities must be sold to the
          Preemptive Offerees and the Bear Group pursuant to Section 2(e)(v)
          below, in which case any Notice of Acceptance (as defined below) shall
          be deemed conditioned upon the sale of all or such minimum amount, as
          applicable, of the Offered Securities pursuant to Section 2(e)(v).

               (iv) Notice of a Preemptive Offeree's intent to accept, in whole
          or in part, a Preemptive Offer shall be irrevocable and evidenced by a
          writing (the "Notice of Acceptance") signed by such Preemptive Offeree
          and delivered to the Company prior to the end of the 30-day period of
          such Preemptive Offer, setting forth the number of Offered Securities
          to be purchased by such Preemptive Offeree (up to the number of
          Offered Securities set forth in the Preemptive Offer received by such
          Preemptive Offeree pursuant to Section 2(e)), on the above-described
          terms and conditions.

               (v) The Company shall have sixty (60) days from the expiration of
          the foregoing 30-day period to sell all or any part of such Offered
          Securities as to which Notices of Acceptance have not been given by
          the Preemptive Offerees to the Bear Group, but only upon terms and
          conditions (including, without limitation, purchase price,
          representations, covenants, indemnification and interest rates),
          which, when taken as a whole, are no more favorable to the Bear Group
          and no less favorable to the Company than those set forth in the
          Preemptive Offer. Upon the closing of such sale to the Bear Group
          (which shall include full payment to the Company), each Preemptive
          Offeree shall purchase from the Company, and the Company shall sell to
          each Preemptive Offeree, the Offered Securities in respect of which a
          timely Notice of Acceptance was delivered to the Company by such
          Preemptive Offeree, on the terms specified in the Preemptive Offer.

                                       14

<PAGE>

               (vi) Any Offered Securities not purchased by the Preemptive
          Offerees or the Bear Group in accordance with Section 2(e)(v) may not
          be sold or otherwise disposed of to the Bear Group until they are
          again offered to the Preemptive Offerees under the procedures
          specified in this Section 2(e).

     Section 3. Transfers; Additional Parties.

          3.1 Restrictions; Permitted Dispositions.

          Without the written consent of the Board, except as otherwise provided
in this Agreement, no Non-Bear Group Holder shall make any Disposition, directly
or indirectly, through an Affiliate or otherwise. The preceding sentence shall
apply with respect to all shares of Common Stock and Preferred Stock held at any
time by a Non-Bear Group Holder (including, without limitation, all shares of
Common Stock acquired upon the exercise of any Option, any shares of Restricted
Stock and any shares of Common Stock and Preferred Stock distributed pursuant to
the 2004 Deferred Compensation Plan or any similar plan), regardless of the
manner in which such Non-Bear Group Holder initially acquired Common Stock or
Preferred Stock, as applicable. Notwithstanding the foregoing, the following
Dispositions shall be permitted (each, a "Permitted Disposition"):

          (a) By any Non-Bear Group Holder (i) in the case of shares of Common
     Stock or Preferred Stock, with respect to a Public Sale in connection with
     the exercise of registration rights pursuant to Section 4, (ii) subject to
     Section 4(f), a Public Sale of Common Stock, (iii) any sale of Common Stock
     or Preferred Stock to any other Holder with the consent of the Board or
     (iv) pursuant to Section 5 of this Agreement;

          (b) By Vestar to any of its Affiliates or to its limited partners in a
     pro rata distribution, in each case, in accordance with the other
     provisions of this Agreement;

          (c) By any individual Non-Bear Group Holder during such Non-Bear Group
     Holder's lifetime to: (i) a guardian of the estate of such Non-Bear Group
     Holder; (ii) an inter-vivos trust primarily for the benefit of such
     Non-Bear Group Holder; or (iii) an inter-vivos trust whose primary
     beneficiary is one or more of such Non-Bear Group Holder's lineal
     descendants (including lineal descendants by adoption);

          (d) With the consent of the Company (which consent shall not be
     unreasonably withheld), by any Non-Bear Group Holder to a qualified
     retirement plan sponsored by the Non-Bear Group Holder;

          (e) By any qualified retirement plan of the Company to participants,
     alternate payees and beneficiaries to the extent required by law and the
     provisions of such plan;

          (f) By any Non-Bear Group Holder which is a trust, to any successor
     trust or successor trustee;

          (g) By any Non-Bear Group Holder pursuant to Section 2; and

                                       15

<PAGE>

          (h) With the consent of the Company (which consent shall not be
     unreasonably withheld), by any Non-Bear Group Holder to other entities for
     tax planning purposes.

No Holder shall permit a transaction involving a change of ownership interest or
voting power of such Holder which avoids the restrictions on Dispositions
provided in this Section 3.1 to be consummated; provided, however, that the
transfer of interests in a Holder that holds substantial assets in addition to
equity interests in the Company and is not a Management Holder will be deemed
not to be a Disposition which avoids the restrictions on Dispositions provided
in this Section 3.1.

          3.2 Additional Parties.

          (a) As a condition to the Company's obligation to effect a Disposition
     of Common Stock or Preferred Stock permitted by this Agreement on the books
     and records of the Company, any transferee (other than a Disposition to the
     Company or in accordance with Section 3.1(a) above) shall be required to
     become a party to this Agreement by executing (together with such Person's
     spouse, if applicable) an Adoption Agreement in substantially the form of
     Exhibit A or in such other form that is reasonably satisfactory to the
     Company and upon execution of such Adoption Agreement such transferee shall
     have all the rights and obligations of the Disposing Holder.

          (b) In the event that any Person acquires shares of Common Stock or
     Preferred Stock from (i) a Holder or any Affiliate or member of such
     Holder's Group or (ii) any direct or indirect transferee of a Holder, such
     Person shall be subject to any and all obligations and restrictions of the
     Holder (for whom the shares of Common Stock or Preferred Stock were
     purchased) hereunder, as if such Person was such Holder named herein.
     Additionally, whenever a Management Holder makes a Disposition of shares of
     Common Stock or Preferred Stock, such shares of Common Stock and/or
     Preferred Stock shall contain a legend so as to inform any transferee that
     such shares of Common Stock and/or Preferred Stock were held originally by
     a Management Holder and are subject to repurchase based on the employment
     of, or events relating to, such Management Holder. Such legend shall not be
     placed on any shares of Common Stock or Preferred Stock acquired from a
     Non-Bear Group Holder by the Company, the Bear Group or any of their
     Affiliates. Notwithstanding the foregoing, the requirements of this Section
     3.2(b) shall not apply in connection with any Disposition in accordance
     with Section 3.1(a) above.

          (c) The Company shall not, without the prior written consent of the
     Bear Group, issue or sell any Capital Stock to any Person (other than
     pursuant to a Public Sale) unless such Person is already a party to this
     Agreement or first executes and delivers to the Company a counterpart to
     this Agreement (and such Person's spouse, if applicable, executes a Spousal
     Acknowledgement and Consent in substantially the form of Exhibit B or in
     such other form as is reasonably satisfactory to the Company), pursuant to
     which such Person will thereupon become a party to, and be bound by and
     obligated to comply with the terms and provisions of, this Agreement.

          (d) Any shares of Common Stock or Preferred Stock acquired by an
     individual retirement account ("IRA") on behalf of an employee of the
     Company or any

                                       16

<PAGE>

     of its Subsidiaries (the "Subject Employee") shall be deemed to be a
     Non-Bear Group Holder. Additionally, such Subject Employee shall be deemed
     to be a Non-Bear Group Holder and his or her IRA shall be deemed to have
     acquired all shares of Common Stock and/or Preferred Stock it holds from
     such Subject Employee pursuant to a Disposition that is subject to Section
     3.2(b) above.

          3.3 Securities Restrictions; Legends.

          (a) No shares of Common Stock or Preferred Stock shall be transferable
     except upon the conditions specified in this Section 3.3, which conditions
     are intended to insure compliance with the provisions of the Securities
     Act.

          (b) Each certificate representing shares of Common Stock and Preferred
     Stock shall (unless otherwise permitted by the provisions of paragraph (d)
     below) be stamped or otherwise imprinted with a legend in substantially the
     following form:

          "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
          INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE
          SECURITIES MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, DISPOSED
          OF OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
          THEREFROM UNDER SAID ACT OR LAWS. THE SECURITIES REPRESENTED BY THIS
          CERTIFICATE ARE ALSO SUBJECT TO A STOCKHOLDERS' AGREEMENT DATED AS OF
          APRIL __, 2004 AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY"),
          AND THE OTHER PARTIES NAMED THEREIN. THE TERMS OF SUCH STOCKHOLDERS'
          AGREEMENT INCLUDE, AMONG OTHER THINGS, RESTRICTIONS ON TRANSFER. A
          COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY
          TO THE HOLDER HEREOF UPON WRITTEN REQUEST."

          (c) The Holder of any shares of Common Stock and/or Preferred Stock by
     acceptance thereof agrees, prior to any Disposition of any such shares, to
     give written notice to the Company of such Holder's intention to effect
     such Disposition and to comply in all other respects with the provisions of
     this Section. Each such notice shall describe the manner and circumstances
     of the proposed Disposition. Upon request by the Company, the Holder
     delivering such notice shall deliver a written opinion, addressed to the
     Company, of counsel for the Holder of such shares, stating that in the
     opinion of such counsel (which opinion and counsel shall be reasonably
     satisfactory to the Company) such proposed Disposition does not involve a
     transaction requiring registration or qualification of such shares under
     the Securities Act. Such Holder of such shares shall be

                                       17

<PAGE>

     entitled to Dispose of such shares in accordance with the terms of the
     notice delivered to the Company, if the Company does not reasonably object
     to such Disposition and request such opinion within fifteen (15) days after
     delivery of such notice, or, if it requests such opinion, does not
     reasonably object to such Disposition within fifteen (15) days after
     delivery of such opinion. Each certificate or other instrument evidencing
     the securities issued upon the Disposition of any shares of Common Stock or
     Preferred Stock shall bear the legend set forth in paragraph (b) above
     unless (i) in such opinion of counsel to the Holder of such shares (each of
     which opinion and counsel shall be reasonably acceptable to the Company)
     registration of any future Disposition is not required by the applicable
     provisions of the Securities Act or (ii) the Company shall have waived the
     requirement of such legends.

          (d) Notwithstanding the foregoing provisions of this Section 3, the
     restrictions imposed by this Section upon the transferability of any shares
     of Common Stock or Preferred Stock shall cease and terminate (i) when any
     such shares are sold or otherwise disposed of (A) pursuant to an effective
     registration statement under the Securities Act or (B) in a transaction
     contemplated by paragraph (c) above which does not require that the shares
     so transferred bear the legend set forth in paragraph (b) hereof, (ii) when
     the Holder of such shares has met the requirements for Disposition of such
     shares under Rule 144(k) under the Securities Act (subject to the delivery
     of opinions as set forth above) or (iii) upon the expiration of the period
     of time in which the Bear Group has agreed not to sell publicly, make any
     short sale of, grant any option for the purchase of, or otherwise dispose
     publicly of, any Capital Stock of the Company following the consummation of
     a Qualified Public Offering; provided, however, that the period of time in
     the preceding clause (iii) shall not exceed 180 days unless a longer period
     of time has become market practice at the time of the registration of
     securities related thereto. Whenever the restrictions imposed by this
     Section shall terminate, the Holder of any shares as to which such
     restrictions have terminated shall be entitled to receive from the Company,
     without expense, a new certificate not bearing the restrictive legend set
     forth in paragraph (b) above and not containing any other reference to the
     restrictions imposed by this Section.

     Section 4. Registration Rights.

          (a) Demand Registration.

               (i) Right to Demand; Demand Notices. Subject to the provisions of
          this Section 4(a) at any time and from time to time after the date
          hereof, the Bear Group may make up to six written requests to the
          Company for registration under and in accordance with the provisions
          of the Securities Act of all or part of their shares of Common Stock
          or Preferred Stock. All requests made pursuant to this Section will
          specify the aggregate amount of Registrable Securities to be
          registered and will also specify the intended methods of disposition
          thereof (a "Demand Notice"). Subject to Section 4(a)(ii), promptly
          upon receipt of any such Demand Notice, the Company will notify each
          Non-Bear Group Holder of its intent to register the Registrable
          Securities and the Company shall use its commercially reasonable best
          efforts to effect within 180 days such registration under the
          Securities Act of the Registrable Securities which the Company has
          been so requested to register. Subject to the provisions of this

                                       18

<PAGE>

          Section 4(a), each Non-Bear Group Holder shall be permitted to
          participate in any Demand Registration initiated by the Bear Group by
          delivery of written notice to the Company within 30 days of receiving
          notice from the Company of the Demand Notice specifying the aggregate
          number of Registrable Securities such Non-Bear Group Holder desires to
          have registered. Each Non-Bear Group Holder seeking registration of
          any Registrable Securities shall be treated on a pari passu basis with
          the Bear Group.

               (ii) Company's Right to Defer Registration. If the Company is
          requested to effect a Demand Registration and the Company furnishes to
          the Bear Group a copy of a resolution of the Board certified by the
          secretary of the Company stating that in the good faith judgment of
          the Board it would be materially adverse to the Company for such
          Registration Statement to be filed on or before the date such filing
          would otherwise be required hereunder, the Company shall have the
          right to defer such filing for a period of not more than ninety (90)
          days after receipt of the request for such registration from the Bear
          Group. If the Company shall so postpone the filing of a Registration
          Statement and if the Bear Group within thirty (30) days after receipt
          of the notice of postponement advises the Company in writing that it
          has determined to withdraw such request for registration, then such
          Demand Registration shall be deemed to be withdrawn, with respect to
          any Registrable Securities of the Bear Group and any participating
          Non-Bear Group Holders.

               (iii) Registration Statement Form. Registrations under this
          Section 4 shall be on such appropriate registration form of the
          Commission (i) as shall be selected by the Company and as shall be
          reasonably acceptable to the Bear Group and (ii) as shall permit the
          disposition of such Registrable Securities in accordance with the
          intended method or methods of disposition specified in the Bear
          Group's Demand Notice. If, in connection with any registration under
          this Section 4 which is proposed by the Company to be on Form S-3 or
          any successor form, the managing underwriter, if any, shall advise the
          Company in writing that in its opinion the use of another permitted
          form is of material importance to the success of the offering, then
          such registration shall be on such other permitted form.

               (iv) Effective Registration Statement. The Company shall be
          deemed to have effected a Demand Registration if (a) the Registration
          Statement relating to such Demand Registration is declared effective
          by the Commission; provided, however, that no Demand Registration
          shall be deemed to have been effected if (i) such registration, after
          it has become effective, is interfered with by any stop order,
          injunction or other order or requirement of the Commission or other
          governmental agency or court by reason of an act or omission by the
          Company and such interference is not cured within twenty (20) business
          days, or (ii) the conditions to closing specified in the purchase
          agreement or underwriting agreement entered into in connection with
          such registration are not satisfied because of an act or omission by
          the Company (other than a failure of the Company or any of its
          representatives to execute or deliver any closing certificate

                                       19

<PAGE>

          by reason of facts or circumstances not within the control of the
          Company or such representatives), or (b) at any time after the Bear
          Group delivers a Demand Notice to the Company and prior to the
          effectiveness of the Registration Statement, the preparation of such
          Registration Statement is discontinued or such Registration Statement
          is withdrawn or abandoned at the request of the Bear Group (other than
          as contemplated by Section 4(a)(ii)) unless the Bear Group has elected
          to pay and has paid to the Company in full the Registration Expenses
          in connection with such Registration Statement.

               (v) Underwriter's Cutback. If the managing underwriter informs
          the Company in writing that the inclusion of all such Registrable
          Securities proposed to be included in such Demand Registration would
          adversely affect the successful marketing (including pricing, timing
          and distribution) of the Registrable Securities to be offered thereby,
          then the number of Registrable Securities proposed to be included in
          such registration shall be allocated among the Company, the Bear Group
          and all selling Non-Bear Group Holders of the Company proportionately,
          such that the number of Registrable Securities that each such Person
          shall be entitled to sell in the Public Offering shall be included in
          the following order:

                    (A) first, the Registrable Securities held by the Persons
          requesting their Registrable Securities be included in such
          registration pursuant to the terms of this Section 4(a), pro rata
          based upon the number of Registrable Securities owned by each such
          Person at the time of such registration; and

                    (B) second, the Registrable Securities to be issued and sold
          by the Company in such registration.

Notwithstanding anything to the contrary set forth in this Section 4(a)(v), if
the managing underwriter for an Underwritten Offering informs the Company in
writing that the inclusion of all Registrable Securities proposed to be included
in any registration by any particular Management Holder would adversely affect
the successful marketing (including pricing, timing and distribution) of the
Registrable Securities to be offered thereby, then the number of Registrable
Securities proposed to be included in such registration by such Management
Holder shall be reduced to the lower of the number of Registrable Securities
that the managing underwriter advises that such Management Holder may sell in
the Underwritten Offering and the number of Registrable Securities calculated
pursuant to the foregoing.

               (vi) Selection of Underwriters. Notwithstanding any other
          provision herein, the Bear Group shall have sole discretion to select
          any and all underwriters that may participate in any Underwritten
          Offering pursuant to this Section 4(a)(vi).

          (b) Piggyback Registration.

               (i) If the Company at any time proposes for any reason to
          register shares of Common Stock or Preferred Stock under the
          Securities Act (other than on Form S-4 or Form S-8 promulgated under
          the Securities Act or any

                                       20

<PAGE>

          successor forms thereto) on behalf of itself or any other Person
          (other than on behalf of a Holder pursuant to Section 4(a) above), it
          shall give written notice to each Holder of its intention to so
          register such Registrable Securities (an "Initial Notice") as soon as
          practicable and in any event at least 30 days before the filing of
          such Registration Statement. Upon the written request of any Holder (a
          "Piggyback Notice"), delivered within 30 days after receipt of any
          such notice (or 15 days if the Company gives telephonic notice with
          written confirmation to follow promptly thereafter, stating that (i)
          such registration will be on Form S-3 and (ii) such shorter period of
          time is required), to include in such registration Registrable
          Securities designated by such Holder (which request shall specify the
          number of Registrable Securities proposed to be included in such
          registration), the Company shall use its commercially reasonable best
          efforts to cause all such Registrable Securities to be included in
          such registration on the same terms and conditions as the securities
          otherwise being sold in such registration; subject to the limitations
          set forth in Section 4(b)(ii).

               (ii) Underwriter's Cutback. If the managing underwriter informs
          the Company in writing that the inclusion of all such Registrable
          Securities proposed to be included in such Piggyback Registration
          would adversely affect the successful marketing (including pricing,
          timing and distribution) of the Registrable Securities to be offered
          thereby, then the number of Registrable Securities proposed to be
          included in such registration shall be allocated among the Company and
          all selling Holders of the Company proportionately, such that the
          number of Registrable Securities that each such Person shall be
          entitled to sell in the Public Offering shall be included in the
          following order:

                    (A) first, the Registrable Securities to be issued and sold
          by the Company for its own account in such registration; and

                    (B) second, the Registrable Securities requested to be
          included in such registration pursuant to the terms of this Section
          4(b), pro rata based upon the number of Registrable Securities owned
          by each holder of such Registrable Securities at the time of such
          registration; and

                    (C) third, all other Registrable Securities not covered by
          the preceding clause (B) requested to be included in such
          registration, pro rata based upon the number of Registrable Securities
          owned by the holders thereof at the time of registration.

Notwithstanding anything to the contrary set forth in this Section 4(b)(ii), if
the managing underwriter for an Underwritten Offering informs the Company in
writing that the inclusion of all Registrable Securities proposed to be included
in any registration by any particular Management Holder would adversely affect
the successful marketing (including pricing, timing and distribution) of the
Common Stock or Preferred Stock to be offered thereby, then the number of
Registrable Securities proposed to be included in such registration by such
Management Holder shall be reduced to the lower of the number of Registrable
Securities that the managing

                                       21

<PAGE>

underwriter advises that such Management Holder may sell in the Underwritten
Offering and the number of Registrable Securities calculated pursuant to the
foregoing.

               (iii) Company Control. The Company may decline to file a
          Registration Statement after an Initial Notice has been given or after
          receipt by the Company of a Piggyback Notice, and the Company may
          withdraw a Registration Statement after filing and after such Initial
          Notice or Piggyback Notice, but prior to the effectiveness of the
          Registration Statement, provided that the Company shall promptly
          notify the Holders in writing of any such action.

               (iv) Selection of Underwriters. Notwithstanding any other
          provision herein, the Company shall have sole discretion to select any
          and all underwriters that may participate in any Underwritten Offering
          pursuant to this Section 4(b)(iv).

          (c) Registrations on Form S-3. Notwithstanding anything contained in
     this Agreement to the contrary, at such time as the Company shall have
     qualified for the use of Form S-3 promulgated under the Securities Act or
     any successor form thereto, the Bear Group and the Holders shall have the
     right to request in writing an unlimited number of registrations on Form
     S-3, or such successor form, of Registrable Securities, which request or
     requests shall (i) specify the number of Registrable Securities intended to
     be sold or disposed of and (ii) state the intended method of disposition of
     such Registrable Securities, and upon receipt of such request, the Company
     shall use its best efforts promptly to effect the registration under the
     Securities Act of the Registrable Securities so requested to be registered.
     A requested registration on Form S-3, or any such successor form, in
     compliance with this Section 4 shall not count as a registration statement
     initiated pursuant to Section 4(a) but shall otherwise be treated as a
     registration initiated pursuant to, and shall, except as otherwise
     expressly provided herein, be subject to the other provisions of, this
     Section 4.

          (d) Preparation and Filing. If and whenever the Company is under an
     obligation pursuant to the provisions of this Agreement to effect the
     registration of any Registrable Securities, the Company shall, as
     expeditiously as practicable:

               (i) use its commercially reasonable best efforts to cause a
          Registration Statement that registers such Registrable Securities to
          become and remain effective for a period of 90 days or until all of
          such Registrable Securities have been disposed of (if earlier);

               (ii) furnish, at least five business days before filing a
          Registration Statement that registers such Registrable Securities, a
          Prospectus relating thereto or any amendments or supplements relating
          to such Registration Statement or Prospectus, to one counsel selected
          by the Holders of a majority of such Registrable Securities (the
          "Selling Holders' Counsel"), copies of all such documents proposed to
          be filed (it being understood that such five-business-day period need
          not apply to successive drafts of the same document proposed to be
          filed so long as such successive drafts are supplied to the Selling
          Holders'

                                       22

<PAGE>

          Counsel in advance of the proposed filing by a period of time that is
          customary and reasonable under the circumstances);

               (iii) prepare and file with the Commission such amendments and
          supplements to such Registration Statement and the Prospectus used in
          connection therewith as may be necessary to keep such Registration
          Statement effective for at least a period of 90 days or until all of
          such Registrable Securities have been disposed of (if earlier) and to
          comply with the provisions of the Securities Act with respect to the
          sale or other disposition of such Registrable Securities;

               (iv) notify in writing the Selling Holders' Counsel promptly of
          the receipt by the Company of any notification with respect to (a) any
          comments by the Commission with respect to such Registration Statement
          or Prospectus or any amendment or supplement thereto or any request by
          the Commission for the amending or supplementing thereof or for
          additional information with respect thereto, (b) the issuance by the
          Commission of any stop order suspending the effectiveness of such
          Registration Statement or Prospectus or any amendment or supplement
          thereto or the initiation or threatening of any proceeding for that
          purpose and (c) the suspension of the qualification of such
          Registrable Securities for sale in any jurisdiction or the initiation
          or threatening of any proceeding for such purposes;

               (v) use its commercially reasonable best efforts to (i) register
          or qualify such Registrable Securities under such other securities or
          blue sky laws of such jurisdictions as the holders of Registrable
          Securities reasonably request, (ii) keep such registration or
          qualifications in effect for so long as such registration statement
          remains in effect or until all Registrable Securities covered thereby
          have been Disposed of pursuant thereto, and (iii) do any and all other
          acts and things which may be reasonably necessary or advisable to
          enable such Holders of Registrable Securities to consummate their
          disposition in such jurisdictions; provided, however, that the Company
          will not be required to qualify generally to do business, subject
          itself to general taxation or consent to general service of process in
          any jurisdiction where it would not otherwise be required to do so but
          for this paragraph (v);

               (vi) furnish to each Holder of Registrable Securities such number
          of copies of a summary Prospectus or other Prospectus, including a
          preliminary Prospectus, in conformity with the requirements of the
          Securities Act, and such other documents as such Holders may
          reasonably request in order to facilitate the public sale or other
          disposition of such Registrable Securities;

               (vii) without limiting subsection (v) above, use its commercially
          reasonable best efforts to cause such Registrable Securities to be
          registered with or approved by such other governmental agencies or
          authorities as may be necessary by virtue of the business and
          operations of the Company to enable the Holders of such Registrable
          Securities to consummate the disposition of such Registrable
          Securities;

                                       23

<PAGE>

               (viii) notify the Holders of such Registrable Securities promptly
          and confirm such advice in writing (i) when a Prospectus or any
          Prospectus supplement or post-effective amendment has been filed, and,
          with respect to a registration statement or any post-effective
          amendment, when the same has become effective, (ii) of any request by
          the Commission for amendments or supplements to a Registration
          Statement or related Prospectus or for additional information, (iii)
          of the issuance by the Commission of any stop order suspending the
          effectiveness of a registration statement or the initiation of any
          proceedings for that purpose, (iv) of the receipt by the Company of
          any notification with respect to the suspension of the qualification
          of any of the registered securities for sale in any jurisdiction or
          the initiation or threatening of any proceeding for such purpose, (v)
          of the occurrence of any event or information becoming known which
          requires the making of any changes in a Registration Statement or
          related Prospectus so that such documents will not contain any untrue
          statement of a material fact or omit to state any material fact
          required to be stated therein or necessary to make the statements
          therein not misleading and (vi) of the Company's reasonable
          determination that a post-effective amendment to a registration
          statement would be appropriate;

               (ix) give the Selling Holders' Counsel the opportunity (but not
          the obligation) to participate in the preparation of each Registration
          Statement under the Securities Act pursuant to this Agreement, each
          Prospectus included therein or filed with the Commission and, to the
          extent practicable, each amendment thereof or supplement thereto, and
          make available for inspection by the Holders of such Registrable
          Securities, the Selling Holders' Counsel or any underwriter
          participating in any disposition pursuant to such Registration
          Statement and any attorney, accountant or other agent retained by any
          such holder or underwriter (collectively, the "Inspectors"), all
          pertinent financial and other records, pertinent corporate documents
          and properties of the Company (collectively, the "Records"), as shall
          be reasonably necessary to enable them to exercise their due diligence
          responsibility, and cause the Company's officers, directors and
          employees to supply all information (together with the Records, the
          "Information") reasonably requested by any such Inspector in
          connection with such Registration Statement. Any of the Information
          which the Company determines in good faith to be confidential, and of
          which determination the Inspectors are so notified, shall not be
          disclosed by the Inspectors unless (a) the disclosure of such
          Information is necessary to avoid or correct a misstatement or
          omission in the Registration Statement, (b) the release of such
          Information is ordered pursuant to a subpoena or other order from a
          court of competent jurisdiction or (c) such Information has been made
          generally available to the public. The Persons holding such
          Registrable Securities agree that they will, upon learning that
          disclosure of such Information is sought in a court of competent
          jurisdiction, give notice to the Company and allow the Company, at the
          Company's expense, to undertake appropriate action to prevent
          disclosure of the Information deemed confidential;

                                       24

<PAGE>

               (x) in the case of an underwritten offering, use its reasonable
          best efforts to obtain from its independent certified public
          accountants "comfort" letters in customary form and at customary times
          and covering matters of the type customarily covered by comfort
          letters;

               (xi) in the case of an underwritten offering, use its reasonable
          best efforts to obtain from its counsel an opinion or opinions in
          customary form;

               (xii) provide a transfer agent and registrar (which may be the
          same entity and which may be the Company) for such Registrable
          Securities;

               (xiii) issue to any underwriter to which any seller of
          Registrable Securities may sell shares in such offering certificates
          evidencing such Registrable Securities;

               (xiv) upon the request of Holders of a majority of such
          Registrable Securities, list such Registrable Securities on any
          national securities exchange on which any shares of the Common Stock
          or Preferred Stock are listed or, if the Common Stock or Preferred
          Stock is not listed on a national securities exchange, use its best
          efforts to qualify such Registrable Securities for inclusion on the
          automated quotation system of the NASD or such national securities
          exchange as the requesting Holders shall designate;

               (xv) otherwise use its best efforts to comply with all applicable
          rules and regulations of the Commission and make available to its
          securityholders, as soon as reasonably practicable, earnings
          statements (which need not be audited) covering a period of 12 months
          beginning within three months after the effective date of the
          Registration Statement, which earnings statements shall satisfy the
          provisions of Section 11(a) of the Securities Act; and

               (xvi) cooperate and assist in any filings required to be made
          with the NASD and in the performance of any due diligence
          investigation by any underwriter (including any "qualified independent
          underwriter" that is required to be retained in accordance with the
          rules and regulations of the NASD);

               (xvii) subject to all the other provisions of this Agreement, use
          its commercially reasonable best efforts to take all other steps
          necessary to effect the registration of such Registrable Securities
          contemplated hereby.

          (e) Registration Expenses. All expenses incident to the Company's
     performance of or compliance with this Section 4, including without
     limitation (i) all registration and filing fees, and any other fees and
     expenses associated with filings required to be made with any stock
     exchange, the Commission and the NASD (including, if applicable, the fees
     and expenses of any "qualified independent underwriter" and its counsel as
     may be required by the rules and regulations of the NASD), (ii) all fees
     and expenses of compliance with state securities or blue sky laws
     (including fees and disbursements of counsel for the underwriters or
     selling Holders in connection with blue sky qualifications of the
     Registrable Securities and determination of their eligibility for

                                       25

<PAGE>

     investment under the laws of such jurisdictions as the managing
     underwriters or the selling Holders may designate), (iii) all printing and
     related messenger and delivery expenses (including expenses of printing
     certificates for the Registrable Securities in a form eligible for deposit
     with The Depository Trust Company and of printing prospectuses, all fees
     and disbursements of counsel for the Company and of all independent
     certified public accountants of the issuer (including the expenses of any
     special audit and "cold comfort" letters required by or incident to such
     performance), (iv) Securities Act liability insurance if the Company so
     desires or the underwriters so require, (v) all fees and expenses incurred
     in connection with the listing of the Registrable Securities on any
     securities exchange and all rating agency fees, (vi) all reasonable fees
     and disbursements of Selling Holders' Counsel representing such Persons in
     connection with such registration, (vii) all fees and disbursements of
     underwriters customarily paid by the issuer or sellers of securities,
     excluding underwriting discounts and commissions and transfer taxes, if
     any, and fees and disbursements of counsel to underwriters (other than such
     fees and disbursements incurred in connection with any registration or
     qualification of Registrable Securities under the securities or blue sky
     laws of any state), and (viii) fees and expenses of other Persons retained
     by the Company in connection with the registrations or qualifications of
     Registrable Securities (all such expenses being herein called "Registration
     Expenses"), will be borne by the Company, regardless of whether the
     Registration Statement becomes effective. In addition, the Company will, in
     any event, pay its internal expenses (including, without limitation, all
     salaries and expenses of its officers and employees performing legal or
     accounting duties), the expense of any audit and the fees and expenses of
     any Person, including special experts, retained by the Company.

          (f) Lock-Up. If the Company at any time shall register shares of
     Common Stock or Preferred Stock under the Securities Act for sale to the
     public, no Non-Bear Group Holder shall sell publicly, make any short sale
     of, grant any option for the purchase of, or otherwise dispose publicly of,
     any capital stock of the Company without the prior written consent of the
     Company, for the period of time in which the Bear Group has similarly
     agreed not to sell publicly, make any short sale of, grant any option for
     the purchase of, or otherwise dispose publicly of, any capital stock of the
     Company; provided, however, that such period of time shall not exceed 180
     days unless a longer period of time has become market practice at the time
     of such registration.

          (g) Participation in Underwritten Offerings. No Person may participate
     in any Underwritten Offering hereunder unless such Person (i) agrees to
     sell such Person's securities on the basis provided in any underwriting
     arrangements approved by the Persons entitled to approve such arrangements
     and (ii) completes and executes all questionnaires, powers of attorney,
     indemnities, underwriting agreements, lock-ups and other documents required
     under applicable federal and state securities laws and regulations for such
     underwriting arrangements. Nothing in this Section 4(g) shall be construed
     to create any additional rights regarding the registration of Registrable
     Securities in any Person otherwise than as set forth herein.

                                       26

<PAGE>

          (h) Indemnification.

               (i) Indemnification by the Company. The Company agrees to
          indemnify and hold harmless, to the full extent permitted by law, each
          selling Holder and its Affiliates and their respective members,
          partners, managers, agents, officers, directors and employees and each
          Person who controls (within the meaning of the Securities Act) such
          selling Holder against any losses, claims, damages, liabilities and
          expenses caused by any untrue or alleged untrue statement of a
          material fact contained in any Registration Statement, Prospectus or
          preliminary Prospectus or any omission or alleged omission to state
          therein a material fact required to be stated therein or necessary to
          make the statements therein not misleading, except insofar as the same
          may be caused by or contained in any information furnished in writing
          to the Company by such selling Holder for use therein; provided,
          however, that the Company shall not be liable in any such case to the
          extent that any such loss, claim, damage, liability or expense arises
          out of or is based upon an untrue statement or alleged untrue
          statement or omission or alleged omission made in any such preliminary
          Prospectus if (a) such selling Holder failed to deliver or cause to be
          delivered a copy of the Prospectus to the Person asserting such loss,
          claim, damage, liability or expense after the Company has furnished
          such selling Holder with a sufficient number of copies of the same and
          (b) the Prospectus completely corrected in a timely manner such untrue
          statement or omission; and provided, further, that the Company shall
          not be liable in any such case to the extent that any such loss,
          claim, damage, liability or expense arises out of or is based upon an
          untrue statement or alleged untrue statement or omission or alleged
          omission in the Prospectus, if such untrue statement or alleged untrue
          statement, omission or alleged omission is completely corrected in an
          amendment or supplement to the Prospectus and the selling Holder
          thereafter fails to deliver such Prospectus as so amended or
          supplemented prior to or concurrently with the sale of the securities
          to the Person asserting such loss, claim, damage, liability or expense
          after the Company had furnished such selling Holder with a sufficient
          number of copies of the same. The Company will also indemnify
          underwriters, selling brokers, dealer managers and similar securities
          industry professionals participating in the distribution, their
          officers and directors and each Person who controls such Persons
          (within the meaning of the Securities Act) to the same extent as
          provided above with respect to the indemnification of the selling
          Holder, if requested.

               (ii) Indemnification by Selling Holders. Each selling Holder
          agrees to, severally but not jointly, indemnify and hold harmless, to
          the full extent permitted by law, the Company, each other selling
          Holder and their Affiliates and their respective members, partners,
          managers, agents, directors and officers and each Person who controls
          the Company (within the meaning of the Securities Act) against any
          losses, claims, damages or liabilities and expenses caused by any
          untrue or alleged untrue statement of a material fact contained in any
          Registration Statement or any omission or alleged omission to state
          therein a material fact required to be stated therein or necessary to
          make the statements therein not misleading, to the extent, but only to
          the extent, that such untrue statement or

                                       27

<PAGE>

          omission is contained in any information or affidavit so furnished by
          such selling Holder to the Company in writing expressly for inclusion
          in such Registration Statement, Prospectus or preliminary Prospectus
          and has not been corrected in a subsequent writing prior to or
          concurrently with the sale of the securities to the Person asserting
          such loss, claim, damage, liability or expense. In no event shall the
          liability of any selling Holder hereunder be greater in amount than
          the dollar amount of the proceeds received by such selling Holder upon
          the sale of the securities giving rise to such indemnification
          obligation. The Company shall be entitled to receive indemnities from
          underwriters, selling brokers, dealer managers and similar securities
          industry professionals participating in the distribution, to the same
          extent as provided above with respect to information so furnished in
          writing by such Persons specifically for inclusion in any Prospectus
          or Registration Statement.

               (iii) Conduct of Indemnification Proceedings. Any Person entitled
          to indemnification hereunder will (a) give prompt (but in any event
          within 30 days after such Person has actual knowledge of the facts
          constituting the basis for indemnification) written notice to the
          indemnifying party of any claim with respect to which it seeks
          indemnification and (b) permit such indemnifying party to assume the
          defense of such claim with counsel reasonably satisfactory to the
          indemnified party; provided, however, that any delay or failure to so
          notify the indemnifying party shall relieve the indemnifying party of
          its obligations hereunder only to the extent, if at all, that it is
          prejudiced by reason of such delay or failure; provided further,
          however, that any Person entitled to indemnification hereunder shall
          have the right to select and employ separate counsel and to
          participate in the defense of such claim, but the fees and expenses of
          such counsel shall be at the expense of such Person unless (x) the
          indemnifying party has agreed in writing to pay such fees or expenses,
          or (y) the indemnifying party shall have failed to assume the defense
          of such claim within a reasonable time after receipt of notice of such
          claim from the Person entitled to indemnification hereunder and employ
          counsel reasonably satisfactory to such Person or (z) in the
          reasonable judgment of any such Person, based upon advice of counsel,
          a conflict of interest may exist between such Person and the
          indemnifying party with respect to such claims (in which case, if the
          Person notifies the indemnifying party in writing that such Person
          elects to employ separate counsel at the expense of the indemnifying
          party, the indemnifying party shall not have the right to assume the
          defense of such claim on behalf of such Person). If such defense is
          not assumed by the indemnifying party, the indemnifying party will not
          be subject to any liability for any settlement made without its
          consent (but such consent will not be unreasonably withheld), provided
          that an indemnified party shall not be required to consent to any
          settlement involving the imposition of equitable remedies or involving
          the imposition of any material obligations on such indemnified party
          other than financial obligations for which such indemnified party will
          be indemnified hereunder. No indemnifying party will be required to
          consent to entry of any judgment or enter into any settlement which
          does not include as an unconditional term thereof the giving by the
          claimant or plaintiff to such indemnified party of a release from all
          liability in respect to such claim or

                                       28

<PAGE>

          litigation. Whenever the indemnified party or the indemnifying party
          receives a firm offer to settle a claim for which indemnification is
          sought hereunder, it shall promptly notify the other of such offer. If
          the indemnifying party refuses to accept such offer within 20 business
          days after receipt of such offer (or of notice thereof), such claim
          shall continue to be contested and, if such claim is within the scope
          of the indemnifying party's indemnity contained herein, the
          indemnified party shall be indemnified pursuant to the terms hereof.
          If the indemnifying party notifies the indemnified party in writing
          that the indemnifying party desires to accept such offer, but the
          indemnified party refuses to accept such offer within 20 business days
          after receipt of such notice, the indemnified party may continue to
          contest such claim and, in such event, the total maximum liability of
          the indemnifying party to indemnify or otherwise reimburse the
          indemnified party hereunder with respect to such claim shall be
          limited to and shall not exceed the amount of such offer, plus
          reasonable out-of-pocket costs and expenses (including reasonable
          attorneys' fees and disbursements) to the date of notice that the
          indemnifying party desires to accept such offer, provided that this
          sentence shall not apply to any settlement of any claim involving the
          imposition of equitable remedies or to any settlement imposing any
          material obligations on such indemnified party other than financial
          obligations for which such indemnified party will be indemnified
          hereunder. An indemnifying party who is not entitled to, or elects not
          to, assume the defense of a claim will not be obligated to pay the
          fees and expenses of more than one counsel for all parties indemnified
          by such indemnifying party with respect to such claim in any one
          jurisdiction, unless in the written opinion of counsel to the
          indemnified party, reasonably satisfactory to the indemnifying party,
          use of one counsel would be expected to give rise to a conflict of
          interest between such indemnified party and any other of such
          indemnified parties with respect to such claim, in which the
          indemnifying party shall be obligated to pay the fees and expenses of
          one additional counsel.

               (iv) Other Indemnification. Indemnification similar to that
          specified in this Section 4(h) (with appropriate modifications) shall
          be given by the Company and each selling Holder with respect to any
          required registration or other qualification of securities under
          Federal or state law or regulation of governmental authority other
          than the Securities Act.

               (v) Contribution. If for any reason the indemnification provided
          for in the preceding clauses (i) and (ii) is unavailable to an
          indemnified party or insufficient to hold it harmless as contemplated
          by the preceding clauses (i) and (ii), then the indemnifying party
          shall contribute to the amount paid or payable by the indemnified
          party as a result of such loss, claim, damage or liability in such
          proportion as is appropriate to reflect not only the relative benefits
          received by the indemnified party and the indemnifying party, but also
          the relative fault of the indemnified party and the indemnifying
          party, as well as any other relevant equitable considerations,
          provided that no selling Holder shall be required to contribute in an
          amount greater than the dollar amount of the proceeds received by such
          selling Holder with respect to the sale of any securities. No Person
          guilty of fraudulent misrepresentation (within the meaning of Section

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<PAGE>

          11(f) of the Securities Act) shall be entitled to contribution from
          any Person who was not guilty of such fraudulent misrepresentation.

               (vi) Rule 144. The Company hereby covenants that after it has
          filed (and such registration statement has become effective) a
          registration statement pursuant to the requirements of Section 12 of
          the Exchange Act or a registration statement pursuant to the
          requirements of the Securities Act in respect of Common Stock, the
          Company will file in a timely manner all reports required to be filed
          by it under the Securities Act and the Exchange Act and the rules and
          regulations adopted by the Commission thereunder (or, if the Company
          is not required to file such reports, it will, upon the request of any
          Holder, make publicly available other information so long as necessary
          to permit sales by such Holder under Rule 144 under the Securities
          Act) and will take such further action as any Holder may reasonably
          request to the extent required from time to time to enable such Holder
          to sell shares of Common Stock under Rule 144 under the Securities
          Act.

     Section 5. Repurchase Rights.

          (a) Company Repurchase Right. The Company (or a designee of the
     Company) shall have the right to repurchase shares of Common Stock and
     Preferred Stock held by any Management Holder upon the termination of
     employment of such Management Holder as set forth herein. In the case of
     (i) a termination of employment by any Management Holder without Good
     Reason during the period commencing on the date hereof and ending on the
     fifth anniversary of the date hereof or (ii) a termination of employment of
     any Management Holder by the Company for Cause at any time, the Company (or
     its designee) shall be permitted, in its sole discretion, to purchase all,
     but not less than all, of the Management Holder's shares of Common Stock
     and Preferred Stock at a per share purchase price equal to the lower of the
     Original Cost and the Fair Market Value. In the case of a termination of
     employment of a Management Holder other than as set forth on the preceding
     sentence, the Company (or its designee) shall be permitted, in its sole
     discretion, to purchase all, but not less than all, of the Management
     Holder's shares of Common Stock and Preferred Stock at a per share purchase
     price equal to the greater of the Original Cost and the Fair Market Value.
     Notwithstanding the foregoing, in the event a Realization Event or a
     dissolution, winding up or liquidation of the Company occurs within six (6)
     months of the termination of employment of any Management Holder without
     Cause or the resignation of any Management Holder for Good Reason, the
     Company will pay or cause to be paid to such Management Holder the excess,
     if any, of the net proceeds that would have been received by such
     Management Holder in such sale transaction if the Company did not
     repurchase such Management Holder's shares over the purchase price actually
     paid to such Management Holder by the Company pursuant to the exercise of
     the repurchase rights hereunder.

          (b) Form of Payment.

               (i) Subject to Section 5(e) below, in the case of a termination
          of any Management Holder for Cause or a resignation by any Management
          Holder without Good Reason, the Company (or its designee) shall be
          permitted, in

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<PAGE>

          its sole discretion, to pay for the shares of Common Stock and
          Preferred Stock purchased pursuant to this Section 5 by issuance of a
          note (a "Repurchase Note") in exchange for the delivery by the
          Management Holder of the certificates representing such shares of
          Common Stock and shares of Preferred Stock, duly endorsed for transfer
          to the Company. The Company shall have the right to record such
          transfer on its books and records without the consent of the
          Management Holder. Any Repurchase Note issued hereunder shall accrue
          interest at a fixed rate equal to the interest rate then in effect
          with respect to Company's senior revolving credit facility and shall
          be subordinated to all indebtedness of the Company and its
          Subsidiaries. The term of the Repurchase Note shall be established by
          the Board, but in no event shall the term exceed a period of five
          years from the date of repurchase.

               (ii) Subject to Section 5(c) and (d) below, in all cases other
          than Section 5(b)(i), the Company (or its designee) shall pay for the
          shares of Common Stock and shares of Preferred Stock purchased
          pursuant to this Section 5 by delivery of a check or wire transfer of
          funds, in exchange for the delivery by the Management Holder of the
          certificates representing such shares of Common Stock and shares of
          Preferred Stock, duly endorsed for transfer to the Company. The
          Company shall have the right to record such transfer on its books and
          records without the consent of the Management Holder.

          (c) Time of Exercise.

               (i) Subject to Section 5(e) below, in the case of a termination
          of any Management Holder for Cause or a resignation by any Management
          Holder without Good Reason, the Company shall be permitted to exercise
          its right to purchase such shares of Common Stock and Preferred Stock
          pursuant to this Section 5 at any time during the six month period
          following the Repurchase Event. The determination date for purposes of
          determining the Fair Market Value shall be the date of termination of
          employment of such Management Holder.

               (ii) Subject to Section 5(e) below, in all cases other than
          Section 5(c)(i), the Company shall be permitted to exercise its right
          to purchase such shares of Common Stock and Preferred Stock pursuant
          to this Section 5 at any time during the 60 day period following the
          Repurchase Event. The determination date for purposes of determining
          the Fair Market Value shall be the date of termination of employment
          of such Management Holder.

               (iii) Notwithstanding the foregoing, the Company may defer paying
          the purchase price for any shares repurchased hereunder in the event
          that the Company is unable to pay such purchase price pursuant to this
          Section 5 as a result of restrictions contained in the documents
          governing the Company's indebtedness. The deferred purchase price for
          any shares so repurchased will accrue interest at a rate equal to 10%
          per annum on the amount to be paid in respect of such Management
          Holder's shares of Preferred Stock and 7% per annum on the amount to
          be paid in respect of such Management Holder's shares of Common Stock.

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<PAGE>

          (d) Closing. The closing of the purchase or sale of the shares of
     Common Stock and shares of Preferred Stock pursuant to this Section 5 shall
     take place on a date designated by the Company.

          (e) Restrictions on Repurchase. Notwithstanding anything to the
     contrary contained in this Agreement, all purchases of shares of Common
     Stock and shares of Preferred Stock by the Company (or its designee) shall
     be subject to applicable restrictions contained in federal law and the DGCL
     and in the Company's and its respective Subsidiaries' debt financing
     agreements. Notwithstanding anything to the contrary contained in this
     Agreement, if any such restrictions prohibit or otherwise delay the
     purchase of the shares of Common Stock and shares of Preferred Stock
     hereunder which the Company is otherwise entitled or required to make, then
     the Company shall make such purchases within thirty (30) days of the date
     that it is permitted to do so under such restrictions. Notwithstanding
     anything to the contrary contained in this Agreement, the Company and its
     Subsidiaries may not effectuate any transaction contemplated by this
     Section 5 if such transaction would violate the terms of any restrictions
     imposed by agreements evidencing the Company's indebtedness. If any
     restrictions imposed by agreements evidencing the Company's indebtedness
     prevent or restrict the purchase of the shares, the Company shall use its
     commercially reasonable best efforts to obtain a waiver of such
     restrictions (it being understood that the Company is not to required to
     seek such waiver if it incurs, or is reasonably likely to incur, any
     expenses other than de minimis expenses in attempting to obtain such
     waiver). In the event that shares of Common Stock and shares of Preferred
     Stock are purchased or sold pursuant to this Section 5, the Management
     Holder, and such Management Holder's successors, assigns or
     representatives, will take all steps necessary and desirable to obtain all
     required third-party, governmental and regulatory consents and approvals
     and take all other actions necessary and desirable to facilitate
     consummation of such repurchase in a timely manner.

     Section 6. Board of Directors.

          (a) Number; Voting. The number of directors constituting the Board, as
     fixed from time to time by the Board in accordance with this Agreement and
     the Bylaws, shall initially be seven (7). Notwithstanding any provision in
     the By-laws, the number of directors constituting the Board shall not be
     changed without the consent of the Bear Group. At each annual meeting of
     the Holders, and at each special meeting of the Holders called for the
     purpose of electing directors of the Company, and at any time at which the
     Holders shall have the right to, or shall, vote for, or consent in writing
     to, the election of directors of the Company, then, and in each such event,
     the Holders shall vote all of the shares of Common Stock owned by them or
     their Affiliates for, or consent in writing with respect to such shares in
     favor of, the election of the following Persons to the Board:

               (i) one director who shall be the chief executive officer of the
          Company (the "CEO Director"), who shall initially be Michael McLain;
          and

               (ii) all remaining directors that are to be elected by the
          holders of Common Stock pursuant to the Bylaws and the Restated
          Certificate shall be

                                       32

<PAGE>

          designated and approved by the Bear Group (the "Bear Group Directors"
          and individually, each a "Bear Group Director"), provided, however,
          that (a) the seats to be occupied by the Bear Group Directors shall
          initially be vacant until the Bear Group determines to fill such
          vacancies pursuant to this Agreement and the Bylaws and (b) the Bear
          Group shall consult with the chief executive officer of the Company
          prior to designating any non-Affiliate of the Bear Group pursuant to
          this Section 6(a)(ii).

Pursuant to this Agreement and the Bylaws, on the date hereof each undersigned
Holder hereby approves and votes all of his or its shares of Common Stock in
favor of the election to the Board of the initial designee named pursuant to
Section 6(a)(i). Each Holder acknowledges that up to four of the five
directorships to be filled by the holders of the Common Stock may remain vacant
following the date hereof until such time as such vacancies are filled pursuant
to the Bylaws and this Section 6.

          (b) Removal and Vacancies. Subject to the next sentence, the Holders
     shall vote their shares of Common Stock (i) to remove any director whose
     removal is required by the party or parties with the power to designate
     such director and (ii) to fill any vacancy created by the removal,
     resignation or death of a director, in each case for the election of a new
     director designated and approved, in accordance with the provisions of this
     Section 6. Each of the Bear Group Directors may only be removed by the Bear
     Group. The CEO Director may only be removed with the consent of the Bear
     Group and a majority of the votes cast by the directors, excluding the CEO
     Director. Vacancies on the Board shall be filled only by the party or
     parties with the power to designate the applicable director pursuant to
     this Section 6. In the event such party or parties fail to designate a
     director to fill any such vacancy pursuant to this Section 6, such Board
     seat shall remain vacant until the party or parties entitled to designate
     such director fills such vacancy pursuant to this Section 6.

          (c) Voting Rights. The special and exclusive voting rights contained
     in Section 6(a) may be exercised either at a special meeting, at any annual
     or special meeting of the Holders of the Company or by written consent in
     lieu of a meeting. The directors to be elected pursuant to Section 6(a)
     shall serve for terms extending from the date of their election and
     qualification until their successors shall have been elected and qualified
     in accordance with Section 6(a).

          (d) Committees. From the date hereof until the earlier to occur of (i)
     the termination of this Agreement and (ii) the termination of the
     employment of Michael McLain, the Company shall appoint the chief executive
     officer of the Company to serve on all Committees serving in the nature of
     an executive committee or for the benefit of the whole Board. Each
     committee established by the Board shall contain at least one Class A
     Common Stock Director and one Bear Group Director, unless otherwise
     approved by the Bear Group.

          (e) Class A Common Stock Directors.

               (i) Each of the Holders acknowledges and agrees that, pursuant to
          the Restated Certificate and in addition to the directors elected by
          the

                                       33

<PAGE>

          holders of Common Stock and designated pursuant to Section 6(a), the
          holders of the Class A Common Stock have the exclusive right to elect
          two (2) directors to the Board (the "Class A Common Stock Directors").
          Bear Stearns Merchant Banking Partners II, L.P., as the sole holder of
          Class A Common Stock, hereby approves and votes all of its shares of
          Class A Common Stock in favor of the election to the Board of John D.
          Howard and Douglas R. Korn as the Class A Common Stock Directors.

               (ii) The holders of the Class A Common Stock shall have the
          exclusive right (i) to remove any Class A Common Stock Director and
          (ii) to fill any vacancy created by the removal, resignation or death
          of any Class A Common Stock Director immediately by delivering written
          notice to the Company. The exclusive voting rights contained in this
          Section 6(e) and the Restated Certificate may be exercised either at a
          special meeting, at any annual or special meeting of the stockholders
          of the Company or by written consent in lieu of a meeting. The Class A
          Common Stock Directors shall serve for terms extending from the date
          of their election and qualification until they have been removed or
          until their successors shall have been elected and qualified, in each
          case, in accordance with this Section 6(e).

     Section 7. Financial Statements; Access; Confidentiality.

          (a) If at any time the Company and its Subsidiaries cease to file
     periodic reports under the Exchange Act, the Company shall deliver
     quarterly and annual financial statements to each Holder promptly following
     the preparation and finalization thereof.

          (b) Until the consummation of a Qualified Public Offering, the Company
     shall afford any Holder of at least five percent (5%) of the outstanding
     shares of Common Stock and its counsel and other authorized representatives
     (collectively, "Authorized Representatives") during normal business hours
     the opportunity to (i) visit and inspect the assets and properties, (ii)
     examine upon reasonable advance notice, the books of accounts and records
     of the Company and (iii) make copies of such records and permit such
     Persons to discuss all aspects of the Company with any officers, employees
     or accountants of the Company; provided, however, that such investigation
     shall not unreasonably interfere with the operations of the Company. The
     Company will instruct its accountants to discuss such aspects of the
     financial condition of the Company with any such Holder and its
     representatives as such holder may reasonably request, and to permit such
     holder and its representatives to inspect, copy and make extracts from such
     financial statements, analyses, work papers and other documents and
     information (including electronically stored documents and information)
     prepared by the accountants with respect to the Company as such Holder may
     reasonably request. All costs and expenses incurred by such Holder and its
     representatives in connection with exercising such rights of access shall
     be borne by such Persons, and all out-of-pocket costs and expenses incurred
     by the Company in complying with any extraordinary requests by such Holder
     and its representatives in connection with exercising such access rights
     shall be borne by such Holder.

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<PAGE>

          (c) Each Non-Bear Group Holder hereby covenants and agrees that such
     Non-Bear Group Holder will not, without the prior written consent of the
     Board, divulge, disclose or make accessible to any other Person, firm,
     partnership, corporation or other entity for any reason whatsoever, any
     Confidential Information pertaining to the business of the Company or the
     Bear Group (or any of the Affiliates of the Bear Group that are engaged in
     the same business or businesses as the Company or any of the Affiliates of
     the Company) or any group, division, Subsidiary or Affiliate of the Company
     (collectively, the "Company Group") except when required to do so by a
     court of competent jurisdiction, by any governmental agency having
     supervisory authority over the business of the Company Group, or by any
     administrative body or legislative body with jurisdiction to order such
     Holder to divulge, disclose or make accessible such information.
     "Confidential Information" means non-public information concerning
     financial data, strategic business plans, product development (or other
     proprietary product data), customer lists, marketing plans, personnel
     information pertaining to present and former employees of the Company Group
     and any other non-public, proprietary and protected information of the
     Company Group or their customers. Nothing herein will prevent a Non-Bear
     Group Holder from using information generally known to him or it or
     generally by Persons employed in the industry of the Company and its
     Subsidiaries so long as it does not involve Confidential Information.

     Section 8. Transactions with Affiliates.

          (a) Except for transactions contemplated by this Agreement, the
     Company will not, nor will it permit any of its Subsidiaries to, directly
     or indirectly, enter into any material transaction or agreement, including
     without limitation the purchase, sale or exchange of property or the
     rendering of any services, with the Bear Group or any Affiliate thereof
     (other than the Company and its Subsidiaries and Persons that are
     Affiliates of the Bear Group solely as a result of being employees of the
     Company or its Subsidiaries), except (i) pursuant to the Professional
     Services Agreement, dated as of the date hereof, between Bear Stearns
     Merchant Manager II, LLC, Aearo and the Company (the "Professional Services
     Agreement"), (ii) any agreement evidencing investments to be made by the
     Bear Group or an Affiliate thereof in respect of which the Management
     Holders are given preemptive or other participation rights, (iii) the
     issuance of pro-rata dividends, distributions and redemptions, (iv) certain
     financial advisory, investment banking, underwriting, lending or other
     services provided by Affiliates of the Bear Group that are in the ordinary
     course of business and the financial terms of which have been approved by a
     majority of disinterested directors of the Board, (v) transactions that are
     on terms that would be obtainable in an arms-length transaction with a
     third party, (vi) transactions with portfolio companies of the Bear Group
     that are in the ordinary course of business and, if material, have been
     approved by a majority of disinterested directors of the Board or (vii) any
     definitive documentation relating to the Co-Investment Rights Agreement.

          (b) The Bear Group and the Company hereby acknowledge and agree that
     the Professional Services Agreement shall not be amended in a manner
     materially adverse to the Non-Bear Group Holders without the consent of the
     holders of a majority of the shares of Common Stock held by the Executive
     Management Holders who are then

                                       35

<PAGE>

     employed by the Company or a Subsidiary thereof and the holders of a
     majority of the outstanding shares of Common Stock held by Holders other
     than Management Holders and the Bear Group.

     Section 9. Preferred Stock Certificate of Designations.

          In the event the Company seeks to amend, eliminate, supplement or
restate any of the terms of the Preferred Stock (collectively, the "Amended
Terms") in connection with a sale of shares of Preferred Stock by the Bear Group
in which the Non-Bear Group Holders are offered full pro rata tag-along rights
(a "Series A Sale"), the Company shall not amend, eliminate, supplement or
restate such terms without (i) obtaining the consent of the holders of a
majority of the outstanding shares of Preferred Stock acting in good faith prior
to effectuating the Amended Terms and (ii) complying with the other requirements
of this Section 9. The Amended Terms may include, without limitation, (a)
modifications to the dividend rate or the ranking of the Preferred Stock
(provided, however, that the dividend rate of any Retained Shares (as defined
below) shall not be increased), (b) the implementation of optional and/or
mandatory redemption provisions on the Preferred Stock and (c) the elimination
or modification of the conversion rights of the Preferred Stock. The Amended
Terms, in the aggregate, may be favorable or adverse to the Company or to the
third party-buyer pursuant to a Series A Sale and may be implemented through an
amendment to the Restated Certificate, a reclassification or exchange of the
Capital Stock or in any other manner permitted by the DGCL; provided, however,
that the terms of any shares of Preferred Stock not sold in a Series A Sale (the
"Retained Shares") shall not be amended or supplemented except as necessary to
effectuate the Amended Terms in connection with a Series A Sale. Notwithstanding
anything to the contrary contained in this Section 9, the Amended Terms shall
not adversely affect the shares of Preferred Stock held by any Non-Bear Group
Holder without similarly affecting the shares of Preferred Stock held by all
other Holders, unless such Non-Bear Group Holder consents to the Amended Terms.

     Section 10. Voting Agreement.

          (a) Voting of the Shares. From the date hereof until the termination
     of the this Agreement in accordance with Section 14 hereof (the "Term"), at
     any meeting of the stockholders of the Company, however called, and in any
     action by consent of the stockholders of the Company, each Management
     Holder (other than the Executive Management Holders) hereby agrees to vote
     his or her shares of Common Stock at the direction of the Company, and in
     connection therewith, to execute any documents which are necessary in order
     to effectuate the foregoing, including the ability for the Company or its
     nominees to vote such shares of Common Stock directly.

          (b) Proxy. Each Management Holder (other than the Executive Management
     Holders) hereby revokes any and all prior proxies or powers of attorney in
     respect of any of such Management Holder's shares of Common Stock and
     constitutes and appoints the Company, or any nominee of the Company, with
     full power of substitution and resubstitution, at any time during the Term,
     as its true and lawful attorney and proxy (its "Proxy"), for and in its
     name, place and stead, and to vote each of such shares of Common Stock as
     its Proxy, at every annual, special, adjourned or postponed meeting of the
     stockholders of the Company, including the right to sign its name (as
     stockholder) to any consent, certificate or other document relating to the
     Company that the laws of the

                                       36

<PAGE>

     state of Delaware may permit or require with respect to any matter referred
     to be voted on by the stockholders of the Company. THE FOREGOING PROXY AND
     POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN INTEREST THROUGHOUT
     THE TERM.

          (c) No Proxies for or Encumbrances on Management Holder Shares. Except
     pursuant to the terms of this Agreement, during the Term, no Management
     Holder shall, without the prior written consent of the Company, directly or
     indirectly, (i) grant any proxies or enter into any voting trust or other
     agreement or arrangement with respect to the voting of any such Management
     Holder's shares of Common Stock other than this Agreement or (ii) sell,
     assign, transfer, encumber or otherwise dispose of, or enter into any
     contract, option or other arrangement or understanding with respect to the
     direct or indirect sale, assignment, transfer, encumbrance or other
     disposition of any such Management Holder's shares of Common Stock.

     Section 11. Notices.

          In the event a notice or other document is required to be sent
hereunder to the Company or to any Holder or the spouse or legal representative
of a Holder, such notice or other document, if sent by mail, shall be sent by
registered mail, return receipt requested (and by air mail in the event the
addressee is not in the continental United States), to the party entitled to
receive such notice or other document at the address set forth on Annex I
hereto. Any such notice shall be effective and deemed received three (3) days
after proper deposit in the mails, but actual notice shall be effective however
and whenever received. The Company or any Holder or spouse or their respective
legal representatives may effect a change of address for purposes of this
Agreement by giving notice of such change to the Company, and the Company shall,
upon the request of any party hereto, notify such party of such change in the
manner provided herein. Until such notice of change of address is properly
given, the addresses set forth herein shall be effective for all purposes.

     Section 12. Representations and Warranties of the Company.

          As a material inducement to each Holder to enter into and to perform
     his obligations under this Agreement, the Company represents and warrants
     to each Holder as of the date hereof as set forth below.

          (a) The Company has all requisite power and authority to execute and
     deliver this Agreement and any and all instruments necessary or appropriate
     in order to effectuate fully the terms and conditions of this Agreement,
     and the transactions contemplated hereby. This Agreement has been duly
     authorized by all necessary action (corporate or otherwise) on the part of
     the Company and this Agreement has been duly executed and delivered by the
     Company and constitutes the valid and legally binding obligation of the
     Company, enforceable in accordance with its terms and conditions, subject,
     as to enforcement, to bankruptcy, insolvency, reorganization, moratorium
     and similar laws of general applicability relating to or affecting
     creditors' rights and to general equity principles.

                                       37

<PAGE>

          (b) The execution, delivery and performance of this Agreement by the
     Company and the consummation of the transactions contemplated hereby shall
     not (a) violate any law applicable to the Company or any of its assets or
     (b) conflict with, or result in any breach of, any of the terms, conditions
     or provisions of, or constitute (with due notice or lapse of time, or both)
     a default or give rise to any right of termination, cancellation or
     acceleration, or result in the creation of any encumbrance (x) upon any of
     the Company's assets or (y) under any provision of (i) the Company's
     certificate of incorporation or bylaws, (ii) any permit or (iii) any other
     material contract to which the Company is a party or by which its assets is
     or may be bound. The Company has not been and is not required to give any
     notice to, or make any filing with, any governmental authority or any other
     Person, or obtain any permit, in each case, for the valid execution,
     delivery and performance by the Company.

          (c) The Company and the Holders agree to treat the receipt of shares
     of the Company by (i) members of the Bear Group in exchange for cash and
     (ii) Vestar and other Non-Bear Group Holders who receive shares in the
     Company as provided under the Merger Agreement or in connection with the
     Management Roll (as defined in the Merger Agreement), as a transaction to
     which Section 351 of the Code and comparable provisions of applicable state
     and local income tax law apply.

          (d) As of the date of this Agreement, the Company intends to report
     dividends on the Preferred Stock as income to the holders of such stock as
     and when paid and intends not to treat the stock as giving rise to imputed
     dividend income under Section 305 of the Code. The Company and the Holders
     shall file all tax returns consistent with the Company's treatment.

     Section 13. Representations and Warranties of the Holders.

          As a material inducement to the Company to enter into and perform its
obligations under this Agreement, each Holder represents and warrants to the
Company as of the date hereof as set forth below.

     (a) The Holder has all requisite power and authority to execute and deliver
this Agreement and any and all instruments necessary or appropriate in order to
effectuate fully the terms and conditions of this Agreement and to perform and
consummate such Holder's obligations hereunder. This Agreement and the
performance of the Holder's obligations hereunder, have been duly authorized by
all requisite action on the part of the Holder, and this Agreement has been duly
and validly executed and delivered by the Holder and constitutes a valid and
legally binding obligation of the Holder, enforceable against the Holder in
accordance with its terms and conditions, except as enforceability thereof may
be limited by any applicable bankruptcy, reorganization, insolvency or other
Laws affecting creditors' rights generally or by general principles of equity.

     (b) The execution, delivery and performance by the Holder of this
Agreement, and the consummation of the transactions contemplated hereby, shall
not (i) violate any law applicable to the Holder or (ii) conflict with or result
in any violation or breach of, any of the terms, conditions or provisions of, or
constitute (with due notice or lapse of time, or both) a default under, or give
rise to any right of termination, cancellation or acceleration or result in the

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<PAGE>

creation of any encumbrance upon any of the assets of the Holder, any material
contracts to which the Holder is a party or by which the Holder or any of the
Holder's assets is or may be bound, in each case, which would prohibit the
Holder from consummating the transactions contemplated hereby. The Holder has
not been or is not required to give any notice to, or make any filing with, any
governmental authority or any other Person, or obtain any permit, in each case,
for the valid execution, delivery and performance by the Holder of this
Agreement.

     (c) Upon the acquisition of any shares of Common Stock and Preferred Stock
(including on the date hereof), in addition to any other representations and
warranties set forth in any other document required by the Board with respect to
such acquisition, each Holder severally, as to itself (and not as to any other
Person) makes the representations and warranties set forth below to the Company
with respect to such shares of Common Stock and Preferred Stock, effective upon
the issuance thereof and upon such Holder's execution and delivery of a
counterpart hereof or an Adoption Agreement.

                    (i) The Holder is acquiring the shares of Common Stock and
          Preferred Stock for investment for the Holder's own account and not
          with a view to, or for resale in connection with, the distribution or
          other disposition thereof except in compliance with this Agreement and
          as permitted by law, including without limitation the Securities Act.
          The Holder does not have any present intent to resell or distribute
          any of its shares of Common Stock and Preferred Stock. If the Holder
          is a corporation, trust, partnership or other organization, it was not
          organized for the specific purpose of acquiring shares of Common Stock
          and Preferred Stock.

                    (ii) The Holder has been advised that its shares of Common
          Stock and Preferred Stock have not been registered under the
          Securities Act, that such shares may not be sold or otherwise disposed
          of unless they are registered thereunder or an exemption from
          registration is available and that accordingly the Holder may be
          required to bear the economic risk of the investment in such shares
          for an indefinite period of time. The Holder also understands that the
          Company does not have any intention of registering the shares of
          Common Stock and Preferred Stock under the Securities Act or of
          supplying the information which may be necessary to enable the Holder
          to sell such shares pursuant to Rule 144 under the Securities Act.

                    (iii) The Holder has been given the opportunity to obtain
          any information or documents, and to ask questions and receive answers
          about such documents, the Company and its subsidiaries and the
          business and prospects of the Company and its subsidiaries (including,
          without limitation, the transactions to be consummated pursuant to the
          terms of the Merger Agreement) as it deems necessary to evaluate the
          merits and risks related to its investment in shares of Common Stock
          and Preferred Stock and no representations concerning such matters or
          any other matters related to such investment have been made to the
          Holder except as set forth in this Agreement. The Holder has had an
          opportunity to consult his or its own attorney, accountant or
          investment advisor with respect to the investment contemplated hereby
          and its suitability for the Holder, including the tax and other
          economic considerations related to the investment.

                                       39

<PAGE>

                    (iv) The Holder (i) has knowledge and experience in
          financial and business matters such that the Holder is capable of
          evaluating the merits and risks of the purchase of the shares of
          Common Stock and Preferred Stock as contemplated by this Agreement,
          (ii) understands and has taken cognizance of all risk factors related
          to the purchase of the shares of Common Stock and Preferred Stock and
          (iii) is able to bear the economic risk of the investment in the
          shares of Common Stock and Preferred Stock for an indefinite period of
          time and can afford to suffer a complete loss of the investment in
          such shares.

                    (v) The Holder has been informed that the offer of the
          shares of Common Stock and Preferred Stock that the Holder is
          acquiring is being made pursuant to an exemption from the registration
          requirements of the Securities Act relating to transactions by an
          issuer not involving a public offering, and that, consequently, the
          materials relating to the offer have not been subject to review and
          comment by the staff of the Securities and Exchange Commission or any
          other governmental authority.

The Holder is not acquiring shares of Common Stock and Preferred Stock as a
result of or subsequent to any advertisement, article, notice or other
communication published in any newspapers, magazine or similar media or
broadcast over television or radio, or presented at any seminar or meeting, or
any solicitation of a subscription by a person not previously known to the
Holder in connection with investments in securities generally.

     Section 14. Miscellaneous Provisions.

          (a) On and as of the date hereof, each Holder hereby approves and
     votes all of his or its shares of Common Stock in favor of, the form, terms
     and provisions (including all exhibits, schedules and annexes, if any) of
     the 2004 Stock Incentive Plan, in substantially the form previously
     presented to the Holders.

          (b) All questions concerning the construction, interpretation and
     validity of this Agreement shall be governed by and construed in accordance
     with the domestic laws of the State of Delaware without giving effect to
     any choice or conflict of law provision or rule (whether in 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.

          (c) Whenever the context requires, the gender of all words used herein
     shall include the masculine, feminine and neuter, and the number of all
     words shall include the singular and plural.

          (d) This Agreement shall be binding upon the parties hereto, any
     spouses of Management Holders, and their respective heirs, executors,
     administrators and permitted successors and assigns.

          (e) This Agreement may be amended, waived or terminated from time to
     time by an instrument in writing signed by the Company and the Holders
     party hereto holding a majority of the outstanding shares of Common Stock;
     provided, however, that (i) this Agreement may be amended by the Company
     without the consent of any Holder in

                                       40

<PAGE>

     connection with the exercise (in whole or in part) by Vestar of its rights
     pursuant to the Co-Investment Rights Agreement in order to give effect to
     the arrangements between Bear and Vestar set forth therein, (ii) any
     amendment or waiver that would adversely and affect the rights hereunder of
     any Holder or any class of Holders without similarly affecting the rights
     hereunder of all Holders or all Holders of such class shall not be
     effective as to such Holder or class of Holders without the prior written
     consent of such Holder or class of Holders and (iii) the parties to this
     Agreement, as set forth on the signature pages hereto, shall be amended
     from time to time by the Company without requiring the consent of any party
     hereto to reflect issuances by the Company of Capital Stock or Dispositions
     of Capital Stock made in compliance with the terms of this Agreement.

          (f) This Agreement shall terminate automatically in its entirety upon
     a Sale of the Company or a liquidation, dissolution or winding up of the
     Company.

          (g) Any Holder who disposes of all of his or its Common Stock and
     Preferred Stock in conformity with the terms of this Agreement shall cease
     to be a party to this Agreement and shall have no further rights hereunder.

          (h) As a condition to the issuance of shares of Common Stock and
     Preferred Stock to each Management Holder, such Management Holder's spouse,
     to the extent applicable, shall execute the Spousal Acknowledgement and
     Consent attached hereto as Exhibit B pursuant to which such spouse shall
     agree to be bound by the terms and provisions of this Agreement. The
     spouses of the Management Holders are fully aware of, understand and fully
     consent and agree to the provisions of this Agreement and its binding
     effect upon any community property interests or similar marital property
     interests in the Common Stock and Preferred Stock they may now or hereafter
     own, and agree that the termination of their marital relationship with any
     Management Holder for any reason shall not have the effect of removing any
     Common Stock and Preferred Stock of the Company otherwise subject to this
     Agreement from the coverage of this Agreement and that their awareness,
     understanding, consent and agreement are evidenced by their signing this
     Agreement. Furthermore, each Management Holder agrees to cause his or her
     spouse (and any subsequent spouse) to execute and deliver, upon the request
     of the Company, a counterpart of this Agreement, or an Adoption Agreement
     substantially in the form of Exhibit A or in a form satisfactory to the
     Company.

          (i) Any Disposition or attempted Disposition in breach of this
     Agreement shall be void ab initio and of no effect. In connection with any
     attempted Disposition in breach of this Agreement, the Company may hold and
     refuse to Dispose of any Common Stock or Preferred Stock or any certificate
     therefor tendered to it for Disposition, in addition to and without
     prejudice to any and all other rights or remedies which may be available to
     it or the Holders. Each party to this Agreement acknowledges that a remedy
     at law for any breach or attempted breach of this Agreement will be
     inadequate, agrees that each other party to this Agreement shall be
     entitled to specific performance and injunctive and other equitable relief
     in case of any such breach or attempted breach and further agrees to waive
     (to the extent legally permissible) any legal conditions required to be met
     for the obtaining of any such injunctive or other equitable relief
     (including posting any bond in order to obtain equitable relief).

                                       41

<PAGE>

          (j) This Agreement may be executed simultaneously in two or more
     counterparts, any one of which need not contain the signatures of more than
     one party, but all such counterparts taken together will constitute one and
     the same agreement. It shall not be necessary in making proof of this
     Agreement to produce or account for more than one such counterpart. The
     failure of any Holder to execute this Agreement does not make it invalid as
     against any other Holder.

          (k) Whenever possible, each provision of this Agreement will be
     interpreted in such manner as to be effective and valid under applicable
     law, but if any provision of this Agreement is held to be invalid, illegal
     or unenforceable in any respect under any applicable law or rule in any
     jurisdiction, such invalidity, illegality or unenforceability will not
     affect any other provision or any other jurisdiction, and such invalid,
     void or otherwise unenforceable provisions shall be null and void. It is
     the intent of the parties, however, that any invalid, void or otherwise
     unenforceable provisions be automatically replaced by other provisions
     which are as similar as possible in terms to such invalid, void or
     otherwise unenforceable provisions but are valid and enforceable to the
     fullest extent permitted by law.

          (l) Each party hereto shall do and perform or cause to be done and
     performed all such further acts and things and shall execute and deliver
     all such other agreements, certificates, instruments, and documents as any
     other party hereto reasonably may request in order to carry out the
     provisions of this Agreement and the consummation of the transactions
     contemplated hereby.

          (m) The parties to this Agreement agree that jurisdiction and venue in
     any action brought by any party hereto pursuant to this Agreement shall
     properly (but not exclusively) lie in any federal or state court located in
     the State of Delaware. By execution and delivery of this Agreement, the
     parties hereto irrevocably submit to the jurisdiction of such courts for
     himself and in respect of his property with respect to such action. The
     parties hereto irrevocably agree that venue would be proper in such court,
     and hereby waive any objection that such court is an improper or
     inconvenient forum for the resolution of such action. The parties further
     agree that the mailing by certified or registered mail, return receipt
     requested, of any process required by any such court shall constitute valid
     and lawful service of process against them, without necessity for service
     by any other means provided by statute or rule of court.

          (n) No course of dealing between the Company, or its Subsidiaries, and
     the Holders (or any of them) or any delay in exercising any rights
     hereunder will operate as a waiver of any rights of any party to this
     Agreement. The failure of any party to enforce any of the provisions of
     this Agreement will in no way be construed as a waiver of such provisions
     and will not affect the right of such party thereafter to enforce each and
     every provision of this Agreement in accordance with its terms.

          (o) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
     TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED
     AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO
     APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
     DISPUTES BE

                                       42

<PAGE>

     RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE
     THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND/OR
     ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
     ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR
     REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.

          (p) This Agreement sets forth the entire agreement of the parties
     hereto as to the subject matter hereof and supersedes all previous
     agreements among all or some of the parties hereto, whether written, oral
     or otherwise. Unless otherwise provided herein, any consent required by the
     Company may be withheld by the Company in its sole discretion.

          (q) No Person not a party to this Agreement, as a third party
     beneficiary or otherwise, shall be entitled to enforce any rights or
     remedies under this Agreement.

          (r) If, and as often as, there are any changes in the Common Stock or
     Preferred Stock by way of stock split, stock dividend, combination or
     reclassification, or through merger, consolidation, reorganization or
     recapitalization, or by any other means, appropriate adjustment shall be
     made in the provisions of this Agreement, as may be required, so that the
     rights, privileges, duties and obligations hereunder shall continue with
     respect to the Common Stock or Preferred Stock as so changed. Without
     limiting the foregoing and notwithstanding anything to the contrary
     contained in this Agreement, the provisions of this Agreement will apply to
     any shares of Capital Stock or securities received in consideration for
     shares of Common Stock and/or Preferred Stock and to the issuer of such
     shares of Capital Stock or securities.

          (s) No director of the Company shall be personally liable to the
     Company or any Holder as a result of any acts or omissions taken under this
     Agreement in good faith.

          (t) In the event additional shares of Common Stock or Preferred Stock
     are issued by the Company to a Holder at any time during the term of this
     Agreement, either directly or upon the exercise or exchange of securities
     of the Company exercisable for or exchangeable into shares of Common Stock
     or Preferred Stock, such additional shares of Common Stock or Preferred
     Stock, as a condition to such issuance, become subject to the terms and
     provisions of this Agreement, except if such issuance is made pursuant to a
     Public Sale.

          (u) Notwithstanding anything to the contrary contained herein, the
     Bear Group may assign its rights or obligations, in whole or in part, under
     this Agreement to one or more of its Affiliates.

                                    * * * * *

                                       43

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        COMPANY

                                        AC SAFETY HOLDING CORP.

                                        By: /s/ Douglas R. Korn
                                            ------------------------------------
                                        Name: Douglas R. Korn
                                        Title: President

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        BEAR GROUP

                                        BEAR STEARNS MERCHANT BANKING
                                        PARTNERS II, L.P.

                                        By: Bear Stearns Merchant Capital II,
                                            L.P., its General Partner

                                        By: JDH Management LLC,
                                            its Special Limited Partner

                                        By: /s/ Douglas R. Korn
                                            ------------------------------------
                                        Name: Douglas R. Korn
                                        Title: Senior Managing Director

                                        BEAR STEARNS MERCHANT BANKING
                                        INVESTORS II, L.P.

                                        By: Bear Stearns Merchant Capital II,
                                            L.P., its General Partner

                                        By: JDH Management LLC,
                                            its Special Limited Partner

                                        By: /s/ Douglas R. Korn
                                            ------------------------------------
                                        Name: Douglas R. Korn
                                        Title: Senior Managing Director

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        BEAR STEARNS MB-PSERS II, L.P.

                                        By: Bear Stearns Merchant Capital II,
                                            L.P., its General Partner

                                        By: JDH Management LLC,
                                            its Special Limited Partner

                                        By: /s/ Douglas R. Korn
                                            ------------------------------------
                                        Name: Douglas R. Korn
                                        Title: Senior Managing Director

                                        THE BSC EMPLOYEE FUND V, L.P.

                                        By: Bear Stearns Merchant Capital II,
                                            L.P., its General Partner

                                        By: JDH Management LLC,
                                            its Special Limited Partner

                                        By: /s/ Douglas R. Korn
                                            ------------------------------------
                                        Name: Douglas R. Korn
                                        Title: Senior Managing Director

                                        THE BSC EMPLOYEE FUND VI, L.P.

                                        By: Bear Stearns Merchant Capital II,
                                            L.P., its General Partner

                                        By: JDH Management LLC,
                                            its Special Limited Partner

                                        By: /s/ Douglas R. Korn
                                            ------------------------------------
                                        Name: Douglas R. Korn
                                        Title: Senior Managing Director

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        VESTAR EQUITY PARTNERS, L.P.

                                        By: Vestar Associates, L.P.,
                                            its general partner

                                        By: Vestar Associates Corporation,
                                            its general partner

                                        By: /s/ Norman W. Alpert
                                            ------------------------------------
                                        Name: Norman W. Alpert
                                        Title:
                                               ---------------------------------

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ James H. Floyd
                                        ----------------------------------------
                                        Name: James H. Floyd

                                        Address: 5850 Carrollton Avenue
                                                 Indianapolis, IN 46220

                                        /s/ D. Garrad Warren III
                                        ----------------------------------------
                                        Name: D. Garrad Warren III

                                        Address: 8888 Pickwick Drive
                                                 Indianapolis, IN 46260

                                        JAMES M. PHILLIPS TRUST

                                        By: /s/ James M. Phillips, Trustee
                                            ------------------------------------

                                            /s/ Carole E. Phillips, Trustee
                                            ------------------------------------
                                        Name: James M. Phillips and Carole E.
                                        Phillips

                                        Address: 12121 Woods Bay Place
                                                 Carmel, IN 46033

                                       A-1

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Michael A. McLain
                                        ----------------------------------------
                                        Name: Michael A. McLain

                                        Address: 325 Willow Springs Road
                                                 Indianapolis, IN 46240

                                        /s/ M. Rand Mallitz
                                        ----------------------------------------
                                        Name: M. Rand Mallitz

                                        Address: 7519 Brackenwood Circle North
                                                 Indianapolis, IN 46260

                                        /s/ Jeffrey S. Kulka
                                        ----------------------------------------
                                        Name: Jeffrey S. Kulka

                                        Address: 5291 Woodfield Drive South
                                                 Carmel, IN 46033

                                       A-2

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Rahul Kapur
                                        ----------------------------------------
                                        Name: Rahul Kapur

                                        Address: 778 Edison Way
                                                 Carmel, IN 46032

                                        /s/ Paul A. Berthiaume
                                        ----------------------------------------
                                        Name: Paul A. Berthiaume

                                        Address: P.O. Box 313
                                                 Sturbridge, MA 01566-0313

                                        BRYAN J. CAREY TRUST

                                        By: /s/ Bryan J. Carey
                                            ------------------------------------
                                        Name: Bryan J. Carey, Trustee

                                        Address: 215 East 68th Street, 6A
                                                 New York, NY 10021

                                       A-3

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ John D. Curtin, Jr.
                                        ----------------------------------------
                                        Name: John D. Curtin, Jr.

                                        Address: 60 Chestnut Street
                                                 Boston, MA 02108

                                        /s/ Daryl Charton
                                        ----------------------------------------
                                        Name: Daryl Charton

                                        Address: 137 Hawkins Circle
                                                 Wheaton, IL 60187

                                        /s/ Neil Cook
                                        ----------------------------------------
                                        Name: Neil Cook

                                        Address: 12 The Downs
                                                 Cheadle, 5K8 UK

                                       A-4

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Maryan M. Dellomo
                                        ----------------------------------------
                                        Name: Maryan M. Dellomo

                                        Address: 218 West Main Street
                                                 Dudley, MA 01571

                                        /s/ Vincent Donargo
                                        ----------------------------------------
                                        Name: Vincent Donargo

                                        Address: 8317 Courtney Drive
                                                 Fishers, IN 46038

                                        /s/ Michael Douar
                                        ----------------------------------------
                                        Name: Michael Douar

                                        Address: 3468 Mesquite Court
                                                 Indianapolis, IN 46214

                                       A-5

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Marc F. Farris
                                        ----------------------------------------
                                        Name: Marc F. Farris

                                        Address: 12348 Medalist Parkway
                                                 Carmel, IN 46033

                                        /s/ Keith Fecteau
                                        ----------------------------------------
                                        Name: Keith Fecteau

                                        Address: 223 Three Rivers Road
                                                 Wilbraham, MA 01095

                                        /s/ John E. Flanagan
                                        ----------------------------------------
                                        Name: John E. Flanagan

                                        Address: 259 Washington Street
                                                 Winchester, MA 01890

                                       A-6

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ George E. Gabuzda Jr.
                                        ----------------------------------------
                                        Name: George E. Gabuzda, Jr.

                                        Address: 10278 Hickory Ridge Drive
                                                 Zionsville, IN 46077

                                        /s/ James F. Gray
                                        ----------------------------------------
                                        Name: James F. Gray

                                        Address: 5 Darby Lane
                                                 Brownsburg, IN 46112

                                        /s/ Per Gustafsson
                                        ----------------------------------------
                                        Name: Per Gustafsson

                                        Address: Ugglegerton 12
                                                 33141 Vernamo, Sweden

                                       A-7

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Greg R. Handy
                                        ----------------------------------------
                                        Name: Greg R. Handy

                                        Address: 3662 Crickwood Circle
                                                 Indianapolis, IN 46268

                                        /s/ Richard W. Holub
                                        ----------------------------------------
                                        Name: Richard W. Holub

                                        Address: 1516 Brook Mill Court
                                                 Carmel, IN 46032

                                        /s/ Gilbert R. Igo
                                        ----------------------------------------
                                        Name: Gilbert R. Igo

                                        Address: 100 Oak Hill Drive
                                                 Brownsburg, IN 46112

                                       A-8

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Jay Kastan
                                        ----------------------------------------
                                        Name: Jay Kastan

                                        Address: 3421 Windsong Way
                                                 Maineville, OH 45039

                                        /s/ Robert T. Klun
                                        ----------------------------------------
                                        Name: Robert T. Klun

                                        Address: 4423 Summer Drive
                                                 Zionsville, IN 46077

                                        RICHARD E. KRAUER LIVING TRUST

                                        By: /s/ Michael E. Krauer and
                                                Patricia L Krauer, Trustees
                                            ------------------------------------
                                        Name: Michael E. Krauer and
                                              Patricia L Krauer

                                        Address: 1362 Midway Court
                                                 Carmel, IN 46032

                                       A-9

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        ROSEMARY J. LABANOSKI LIVING TRUST

                                        By: /s/ Rosemary Labanoski and
                                                Ronald Labanoski, Trustees
                                            ------------------------------------
                                        Name: Rosemary Labanoski and
                                              Ronald Labanoski

                                        Address: 10888 State Road 32E
                                                 Zionsville, IN 46077

                                        /s/ Leonard Lieberman
                                        ----------------------------------------
                                        Name: Leonard Lieberman

                                        Address: One Gateway Center Newark,
                                                 NJ 07102

                                        /s/ Michael A. Lombardi
                                        ----------------------------------------
                                        Name: Michael A. Lombardi

                                        Address: 1232 Mountain Brook Drive
                                                 Norman, OK 73072

                                      A-10

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Timothy A. Millar
                                        ----------------------------------------
                                        Name: Timothy A. Millar

                                        Address: 1428 Gwynmere Run
                                                 Carmel, IN 46032

                                        /s/ Peter Murphy
                                        ----------------------------------------
                                        Name: Pete Murphy

                                        Address: 1025 Pine Hill Way
                                                 Carmel, IN 46032

                                        /s/ Ian C. Mullally
                                        ----------------------------------------
                                        Name: Ian C. Mullaly

                                        Address: 435 Dosebury Road, Heaton
                                                 Mersey, Stockport, England

                                      A-11

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Brian C. Myers
                                        ----------------------------------------
                                        Name: Brian C. Myers

                                        Address: 6246 Winford Drive
                                                 Indianapolis, IN 46236

                                        /s/ Sigvard Nilsson
                                        ----------------------------------------
                                        Name: Sigvard Nilsson

                                        Address: Citronwagen 82
                                                 3315Y Varnamo, Sweden

                                        /s/ Larry D. Power
                                        ----------------------------------------
                                        Name: Larry D. Power

                                        Address: 1468 Queensborough Dr. Carmel,
                                                 IN 46033

                                      A-12

<PAGE>

          This Stockholders' Agreement is executed by the Company and by each
Holder to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Roman Rozman
                                        ----------------------------------------
                                        Name: Roman Rozman

                                        Address: 88 Metropolitan Avenue
                                                 Ashland, MA 01721

                                        /s/ John E. Salce
                                        ----------------------------------------
                                        Name: John E. Salce

                                        Address: 166 Central Street
                                                 Auburn, MA 01501

                                        /s/ David Savage
                                        ----------------------------------------
                                        Name: David Savage

                                        Address: 39 Kilbride Drive
                                                 Whitby, Ontario Canada L1R 2B3

                                      A-13

<PAGE>

     This Stockholders' Agreement is executed by the Company and by each Holder
to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Martin C. Salon
                                        ----------------------------------------
                                        Name: Martin C. Salon

                                        Address: 308 Broadbrook Road
                                                 Enfield, CT 06082

                                        /s/ Jody Sneed
                                        ----------------------------------------
                                        Name: Jody Sneed

                                        Address: 445 Spring Mill Lane
                                                 Indianapolis, IN 46260

                                        /s/ Garry Sutton
                                        ----------------------------------------
                                        Name: Gary Sutton

                                        Address: 4271 Field Master Drive
                                                 Zionsville, IN 46077

                                      A-14

<PAGE>

     This Stockholders' Agreement is executed by the Company and by each Holder
to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Ron Throndsen
                                        ----------------------------------------
                                        Name: Ron Throndsen

                                        Address: 7618 Gardenshire Court
                                                 Indianapolis, IN 46278

                                        /s/ Julie Tremblay
                                        ----------------------------------------
                                        Name: Julie Tremblay

                                        Address: 330 Sunderland Road #70
                                                 Worcester, MA 01604

                                        /s/ Earle Vancelette
                                        ----------------------------------------
                                        Name: Earle Vancelette

                                        Address: 315 Rawsed Street
                                                 Leicester, MA 01524

                                      A-15

<PAGE>

     This Stockholders' Agreement is executed by the Company and by each Holder
to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ R. W. Vernazza
                                        ----------------------------------------
                                        Name: R. W. Vernazza

                                        Address: 11, Willow Field Grove
                                                 Ashton-in-Makerfield England
                                                 WN49NN

                                        /s/ Hans Wickstrom
                                        ----------------------------------------
                                        Name: Hans Wickstrom

                                        Address: Duvgatau 17 33033 Hilleston
                                                 Sweden

                                        /s/ John J. Wojnarowicz
                                        ----------------------------------------
                                        Name: John J. Wojnarowicz

                                        Address: 6 Fort Sumter Drive Holden,
                                                 MA 01520

                                      A-16

<PAGE>

     This Stockholders' Agreement is executed by the Company and by each Holder
to be effective as of the date first above written.

                                        NON-BEAR GROUP HOLDER

                                        /s/ Guylaine Zmetra
                                        ----------------------------------------
                                        Name: Guylaine Zmetra

                                        Address: 380 Bungay Hill Road
                                                 Woodstock, CT 06281

                                        ----------------------------------------
                                        Name:
                                              ----------------------------------
                                        Address:
                                                 -------------------------------

                                                 -------------------------------

                                        ----------------------------------------
                                        Name:
                                              ----------------------------------

                                        Address:
                                                 -------------------------------

                                                 -------------------------------

                                      A-17

<PAGE>

                                    EXHIBIT A

                               ADOPTION AGREEMENT

          This Adoption Agreement (the "Adoption") is executed pursuant to the
terms of the Stockholders' Agreement of AC Safety Holding Corp., a Delaware
corporation (the "Company"), dated as of April 7, 2004, a copy of which is
attached hereto (as it may be amended, supplemented or restated from time to
time, the "Stockholders Agreement"), by the transferee ("Transferee") executing
this Adoption. By the execution of this Adoption, the Transferee agrees as
follows:

          1.   Acknowledgement. Transferee acknowledges that Transferee is
               acquiring certain shares of Common Stock and/or Preferred Stock
               of the Company, subject to the terms and conditions of the
               Stockholders Agreement. Capitalized terms used herein without
               definition are defined in the Stockholders Agreement and are used
               herein with the same meanings set forth therein.

          2.   Agreement. Transferee (i) agrees that the shares of Common Stock
               and/or Preferred Stock acquired by Transferee, and certain other
               shares of Common Stock, Preferred Stock, and other securities
               that may be acquired by Transferee in the future, shall be bound
               by and subject to the terms of the Stockholders Agreement,
               pursuant to the terms thereof, and (ii) hereby adopts the
               Stockholders Agreement with the same force and effect as if he
               were originally a party thereto.

          3.   Notice. Any notice required as permitted by the Stockholders
               Agreement shall be given to Transferee at the address listed
               beside Transferee's signature below.

          4.   Joinder. The spouse of the undersigned Transferee, if applicable,
               executes this Adoption to acknowledge its fairness and that it is
               in such spouse's best interest, and to bind such spouse's
               community interest, if any, in the shares of Common Stock,
               Preferred Stock, and other securities referred to above and in
               the Stockholders Agreement, to the terms of the Stockholders
               Agreement.

                                                  ------------------------------

                                                  ------------------------------

                                      A-18

<PAGE>

                                    EXHIBIT B

                       SPOUSAL ACKNOWLEDGMENT AND CONSENT

          The undersigned spouse of the Management Holder has read and hereby
approves the foregoing Stockholders' Agreement of AC Safety Holding Corp., a
Delaware corporation (the "Company"), dated as of April ___, 2004 (the
"Stockholders Agreement"). In consideration of the Company's granting the
Management Holder the right to acquire the Common Stock and Preferred Stock in
accordance with the terms of such Management Holder's Contribution Agreement or
Management Subscription and Contribution Agreement with the Company, as the case
may be, the undersigned hereby agrees to be irrevocably bound by all the terms
of the Stockholders Agreement, including, without limitation, the right of the
Company (or its designees) to purchase the Common Stock and Preferred Stock
otherwise owned or possessed by such Management Holder at the time of the
Management Holder's termination of employment. The undersigned spouse of the
Management Holder hereby acknowledges the fairness of the Stockholders Agreement
and that it shall bind such spouse's community interest, if any, in the shares
of Common Stock, Preferred Stock, and other securities referred to therein, to
the terms of the Stockholders Agreement. Capitalized terms used herein without
definition are defined in the Stockholders' Agreement and are used herein with
the same meanings set forth therein.

                                        ------------------------------------
                                        NON-BEAR GROUP HOLDER'S SPOUSE

                                        Address:
                                                 -------------------------------

                                                 -------------------------------

                                       B-1

<PAGE>

                                     ANNEX I

          (i)  If to the Company:

                    AC Safety Holding Corp.
                    c/o Bear Stearns Merchant Banking
                    383 Madison Avenue, 40th Floor
                    New York, NY 10179
                    Facsimile: (212) 272-4154
                    Attention: Mr. Douglas R. Korn

               with a copy to:

                    O'Melveny & Myers, LLP
                    7 Times Square Tower
                    New York, NY 10036
                    Facsimile: (212) 408-2420
                    Attention: Adam K. Weinstein, Esq.

          (ii) If to the Bear Group:

                    Bear Stearns Merchant Banking
                    383 Madison Avenue, 40th Floor
                    New York, NY 10179
                    Facsimile: (212) 272-4154
                    Attention: Mr. Douglas R. Korn

               with a copy to:

                    O'Melveny & Myers, LLP
                    7 Times Square Tower
                    New York, NY 10036
                    Facsimile: (212) 408-2420
                    Attention: Adam K. Weinstein, Esq.

          (iii) If to any Non-Bear Group Holder, to the address set forth with
respect to such Non-Bear Group Holder in the Company's records.

                                    * * * * *

                                       I-1

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