**Exhibit10.1**

 

 

 

PURCHASE AND SALEAGREEMENT

 

by and among

 

NSP HOLDINGSL.L.C.,

 

NORCROSS SAFETYPRODUCTS L.L.C.,

 

and

 

SAFETY PRODUCTSHOLDINGS, INC.

 

 

MAY 20, 2005

 

 

 

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| ARTICLE 1 | PURCHASE AND SALE                                                                       |   |
|-----------|-----------------------------------------------------------------------------------------|--------|
| 1A.       | Purchase and Sale of the  Company Equity Interests and NSP Capital Shares               |   |
| 1B.       | Payment of the Purchase Price                                                           |   |
| 1C.       | The Closing                                                                             |   |
| ARTICLE 2 | CONDITIONS TO CLOSING                                                                   |   |
| 2A.       | Conditions to All Parties’  Obligations                                            |   |
| 2B.       | Conditions to the Buyer’s  Obligations                                             |   |
| 2C.       | Conditions to the Company’s,  NSP Capital’s and the Seller’s Obligations |   |
| 2D.       | Waiver of Condition                                                                     |   |
| ARTICLE 3 | COVENANTS PRIOR TO THE  CLOSING                                                         |   |
| 3A.       | Access                                                                                  |   |
| 3B.       | Ordinary Conduct of Company                                                             |   |
| 3C.       | Cancellation of Accounts from  Seller                                                   |   |
| 3D.       | Ordinary  Conduct of NSP Capital                                                        |   |
| 3E.       | Financial  Statements                                                                   |   |
| 3F.       | Financing  Sources                                                                      |   |
| 3G.       | 280G  Cooperation                                                                       |   |
| 3H.       | Exclusive  Transaction                                                                  |   |
| ARTICLE 4 | REPRESENTATIONS AND  WARRANTIES OF THE COMPANY AND THE SELLER                           |   |
| 4A.       | Organization and Corporate  Power                                                       |   |
| 4B.       | Company Equity Interests                                                                |   |
| 4C.       | Subsidiaries                                                                            |   |
| 4D.       | Authorization; No Breach                                                                |   |
| 4E.       | Financial Statements; Company  SEC Reports                                              |   |
| 4F.       | Permits                                                                                 |   |
| 4G.       | Absence of Certain  Developments                                                        |   |
| 4H.       | Title to Properties, etc.                                                               |   |
| 4I.       | Tax Matters                                                                             |   |
| 4J.       | Company Material Contracts                                                              |   |
| 4K.       | Intellectual Property                                                                   |   |

 

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| 4L.        | Litigation                                                                                  |   |
|------------|---------------------------------------------------------------------------------------------|--------|
| 4M.        | Brokerage                                                                                   |   |
| 4N.        | Company Employee Benefit  Plans.                                                            |   |
| 4O.        | Insurance                                                                                   |   |
| 4P.        | Compliance  with Applicable Laws                                                            |   |
| 4Q.        | Environmental                                                                               |   |
| 4R.        | Employees                                                                                   |   |
| 4S.        | Transaction  Agreements                                                                     |   |
| 4T.        | Board and  Stockholder Approval                                                             |   |
| 4U.        | Product Warranties                                                                          |   |
| 4V.        | Affiliate  Transactions                                                                     |   |
| 4W.        | Customers  and Suppliers                                                                    |   |
| 4X.        | Undisclosed  Liabilities                                                                    |   |
| 4Y.        | Compliance  with the Foreign Corrupt Practices Act and Export Control and Antiboycott  Laws |   |
| ARTICLE  5 | REPRESENTATIONS  AND WARRANTIES OF NSP CAPITAL AND THE SELLER                               |   |
| 5A.        | Organization  and Corporate Power                                                           |   |
| 5B.        | NSP Capital  Shares                                                                         |   |
| 5C.        | Litigation                                                                                  |   |
| 5D.        | Operations                                                                                  |   |
| ARTICLE  6 | REPRESENTATIONS,  WARRANTIES AND COVENANTS OF SELLER                                        |   |
| 6A.        | Organization  and Corporate Power                                                           |   |
| 6B.        | Authorization;  No Breach                                                                   |   |
| 6C.        | Litigation                                                                                  |   |
| 6D.        | Brokerage                                                                                   |   |

 

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| 6E.         | Ownership of  Company Equity Interests and NSP Capital Shares |   |
|-------------|---------------------------------------------------------------|--------|
| 6F.         | Holdco Notes  Indenture                                       |   |
| ARTICLE  7  | REPRESENTATIONS,  WARRANTIES AND COVENANTS OF BUYER           |   |
| 7A.         | Organization  and Corporate Power                             |   |
| 7B.         | Authorization;  No Breach                                     |   |
| 7C.         | Litigation                                                    |   |
| 7D.         | Brokerage                                                     |   |
| 7E.         | Financing                                                     |   |
| 7F.         | Acquisition  for Investment                                   |   |
| ARTICLE  8  | TERMINATION                                                   |   |
| 8A.         | Termination                                                   |   |
| 8B.         | Effect of  Termination                                        |   |
| ARTICLE  9  | DEFINITIONS                                                   |   |
| ARTICLE  10 | ADDITIONAL  AGREEMENTS                                        |   |
| 10A.        | Survival                                                      |   |
| 10B.        | Press  Release and Announcements                              |   |
| 10C.        | Confidentiality                                               |   |
| 10D.        | Notification                                                  |   |
| 10E.        | Consents                                                      |   |
| 10F.        | Reasonable  Best Efforts                                      |   |
| 10G.        | Regulatory  Act Compliance                                    |   |
| 10H.        | Director and  Officer Liability and Indemnification           |   |
| 10I.        | Employee  Benefits Matters                                    |   |
| 10J.        | Facility  Closings; Employee Layoffs                          |   |
| 10K.        | Provision  Respecting Representation of Company and Seller    |   |
| 10L.        | Notes and  Indenture; Holdco Notes and Holdco Notes Indenture |   |
| 10M.        | Certain Tax  Matters                                          |   |
| 10N.        | Expenses;  Transfer Taxes                                     |   |
| 10O.        | Further  Assurances                                           |   |

 

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| ARTICLE  11 | MISCELLANEOUS                              |   |
|-------------|--------------------------------------------|--------|
| 11A.        | Amendment and  Waiver                      |   |
| 11B.        | Notices                                    |   |
| 11C.        | Assignment                                 |   |
| 11D.        | Severability                               |   |
| 11E.        | No Strict  Construction                    |   |
| 11F.        | Captions                                   |   |
| 11G.        | Complete  Agreement                        |   |
| 11H.        | Company  Disclosure Letter                 |   |
| 11I.        | No Additional  Representations; Disclaimer |   |
| 11J.        | Counterparts                               |   |
| 11K.        | Governing  Law                             |   |
| 11L.        | Interpretation                             |   |
| 11M.        | Third-Party  Beneficiaries and Obligations |   |
| 11N.        | Waiver of  Bulk Sales Laws                 |   |
| 11O.        | Liquidation  of Seller                     |   |

 

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| **Exhibits**    |                                      |
|-----------------|-------------------------------------------|
|            |                                      |
| Exhibit 2B(xi)  | Form of Kirkland &  Ellis LLP Opinion |
| Exhibit 2B(xii) | Form of Seller Member  Letter             |
| Exhibit 7C(i)   | Debt Commitment Letter                    |
| Exhibit 7C(ii)  | Equity Commitment  Letter                 |
| Exhibit 9A      | March Net Indebtedness                    |

 

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**PURCHASE AND SALE AGREEMENT**

 

THIS PURCHASE AND SALEAGREEMENT is made as of May 20, 2005, by and among NSP Holdings L.L.C., aDelaware limited liability company (the “Seller”), Norcross SafetyProducts L.L.C., a Delaware limited liability company (the “Company”),and Safety Products Holdings, Inc., a Delaware corporation (the “Buyer”).

 

WHEREAS, the Seller owns (i) 100Class A Membership Units of the Company (the “Company Equity Interests”),being all of the issued and outstanding equity interests of the Company and (ii) 1,000shares of common stock, par value $0.01 per share, of NSP Capital (the “NSPCapital Shares”), being all of the issued and outstanding capital stock ofNSP Capital, and Buyer and Seller desire to enter into this Agreement providingfor the purchase and sale of the Company Equity Interests of the Company andthe NSP Capital Shares of NSP Capital from Seller to Buyer and the assignmentto, and assumption by, Buyer and its Subsidiaries of obligations in respect ofthe Holdco Notes.

 

NOW, THEREFORE, inconsideration of the premises and the mutual representations, warranties andcovenants herein contained, and intending to be legally bound, the partieshereto hereby agree as follows:

 

# ARTICLE 1PURCHASE AND SALE

#  

## 1A.                             Purchaseand Sale of the Company Equity Interests and NSP Capital Shares.  On the terms and conditions set forth in thisAgreement, and in reliance upon the representations, warranties, covenants andagreements contained herein, at the Closing (as defined below) and upon paymentof the Purchase Price by the Buyer in accordance with Section 1Bhereof and assumption of the Holdco Notes in accordance with Section 1Chereof, Buyer shall purchase and accept from the Seller, and the Seller shallsell and transfer to Buyer, all of the Company Equity Interests and NSP CapitalShares.

##  

## 1B.                               Paymentof the Purchase Price.  At theClosing, the Buyer agrees to pay to the Seller, by wire transfer of immediatelyavailable funds from the Buyer to an account designated by the Seller at leastone business day prior to the Closing Date, an amount in cash equal to thePurchase Price.

##  

## 1C.                               TheClosing.  The closing of the purchaseand sale of the Company Equity Interests in exchange for the Purchase Price (the“Closing”) shall occur at the offices of Dechert LLP, 30 RockefellerPlaza, New York, New York 10112, at 9:00 a.m. on the second business dayfollowing satisfaction or waiver of each of the conditions to Closing specifiedin Article 2 hereof, other than conditions to Closing which bytheir terms require performance at the Closing. The date and time of the Closing are herein referred to as the “ClosingDate.”  At the Closing, (i) Buyershall deliver (A) to Seller the Purchase Price in accordance with Section 1B,and (B) to Seller and the trustee under the Holdco Notes Indenture suchSupplemental Indenture and other documents or instruments required by theHoldco Notes Indenture (including certificates addressed to the Seller and itsAffiliates and its or their counsel so that the Seller may deliver any Officers’Certificate and Opinion of Counsel, each as defined in the Holdco NotesIndenture,

 

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## required toeffectuate such assignment and assumption), duly executed by Buyer, in order toassume all obligations of Seller in respect of the Holdco Notes and the HoldcoNotes Indenture (including purchase agreements and registration rightsagreements with respect thereto), and (ii) Seller shall deliver to Buyerany certificate representing (x) the Company Equity Interests and (y) the NSPCapital Shares, each duly endorsed in blank or otherwise together with atransfer power executed in favor of Buyer. Buyer acknowledges and agrees that, on the Closing Date, Buyer shall, orshall cause the Company to, pay to the intended beneficiaries thereof (asidentified by Seller to Buyer prior to Closing) (a) amounts due and owingpursuant to the Senior Credit Facility on the Closing Date as reflected in apayoff letter in customary form delivered to Buyer at Closing, (b) amountsdue and owing pursuant to the Seller Notes, (c) the Company Expenses (butonly to the extent that (1) the amount therefor is included in thecomputation of Adjustment Amount or the proviso to the definition ofTransaction Expenses and (2) Buyer has been delivered an invoice withrespect thereto), and (d) the Senior Executive Obligations (but only tothe extent that the amount therefor is included in the computation ofAdjustment Amount).

##  

# ARTICLE 2CONDITIONS TO CLOSING

#  

## 2A.                             Conditionsto All Parties’ Obligations.  Theobligation of each of the Seller, NSP Capital, the Company, and the Buyer toconsummate the Closing is subject to the satisfaction of the followingconditions as of immediately prior to the Closing:

##  

#### (i)                                     Noinjunction or order of any court or administrative agency of competentjurisdiction shall be in effect as of the Closing which restrains or prohibitsthe consummation of the purchase and sale of the Company Equity Interests orNSP Capital Shares to Buyer;

####  

#### (ii)                                  Allwaiting period requirements shall have expired or been terminated under the HSRAct (the “HSR Approval”);

####  

#### (iii)                               Anyrequired clearances, approvals or confirmations of the transactionscontemplated hereunder shall have been obtained pursuant to any foreignacquisition control statutes; and

####  

#### (iv)                              ThisAgreement shall not have been terminated in accordance with Section 8A.

####  

Any condition specifiedin this Section 2A may be waived prior to Closing only by a writteninstrument signed by the Seller, the Company and the Buyer.

 

## 2B.                               Conditionsto the Buyer’s Obligations.  Theobligation of the Buyer to consummate the Closing is subject to thesatisfaction of each of the following additional conditions as of immediatelyprior to the Closing:

##  

#### (i)                                     Eachof the representations and warranties of the Company and the Seller made inthis Agreement, in any other Transaction Document or in any written certificatedelivered pursuant to this Agreement shall (disregarding any Company MaterialAdverse

 

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#### Effect or materiality qualification) be true and correct on the date ofthis Agreement, such Transaction Document or such certificate, as the case maybe, and shall (disregarding any Company Material Adverse Effect or materialityqualification, but not disregarding any specific dollar thresholds set forththerein) be true and correct on and as of the Closing Date, as though made onand as of the Closing Date (except, in each case, for representations andwarranties that speak as of a specific date or time (which need only be trueand correct as of such date or time)), except where the failure of suchrepresentations and warranties to be true and correct on the date hereof, thedate of such Transaction Document or the date of such written certificate, onthe Closing Date or as of a specific date or time, would not (individually ortogether with other failures of such representations and warranties to be trueand correct as of such date) have a Company Material Adverse Effect (other thanthe representation and warranty in the penultimate sentence of Section 4D,which shall be true and correct in all respects) and the Company shall havedelivered to the Buyer a certificate to the foregoing effect dated the ClosingDate and signed by a senior executive officer of the Seller and the Company onbehalf of the Seller and the Company confirming the foregoing;

####  

#### (ii)                                  [intentionallyomitted]

####  

#### (iii)                               TheCompany and the Seller shall have performed or complied in all materialrespects with all obligations and covenants required by this Agreement to beperformed or complied with by the Company and the Seller, respectively (exceptfor the covenants contained in Section 3B(xvi) of this Agreementwhich shall be complied with in all respects), by the time of the Closing andthe Company shall have delivered to the Buyer a certificate to the foregoingeffect dated the Closing Date and signed by a senior executive officer of theSeller and the Company on behalf of the Seller and the Company confirming theforegoing;

####  

#### (iv)                              Onthe Closing Date, the Seller or the Company shall have delivered to the Buyerthe following:

####  

##### (1)                                  theoriginal certificates evidencing the Company Equity Interests and NSP CapitalShares issued to the Seller, accompanied by unit powers or stock powers, asapplicable, duly executed in blank;

#####  

##### (2)                                  acertificate, dated the Closing Date, of the Secretary or Assistant Secretary ofthe Company certifying that attached or appended to such certificate:  (A) is a true and correct copy of theCompany’s certificate of formation and limited liability company agreement, andall amendments thereto; (B) is a true copy of all limited liabilitycompany actions taken by it, including resolutions of its board of managers,authorizing the consummation of the transactions contemplated hereby and theexecution, delivery and performance of this Agreement and each of theTransaction Documents to be delivered by it pursuant hereto; and (C) arethe names and signatures of its duly elected or appointed officers who areauthorized to execute and deliver this Agreement and the other TransactionDocuments to which it is a party; and

 

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##### (3)                                  certificatesof good standing from the appropriate state agencies, dated as of a recent date(e.g., not more than 14 days prior to the Closing Date), certifying that theCompany, each Subsidiary organized under the laws of the United States and NSPCapital is in good standing in the state of its incorporation;

#####  

#### (v)                                 TheBuyer shall have received debt financing and have a revolving credit facilityavailable for periods after the Closing on terms set forth in the DebtCommitment Letter (as such terms may be modified by the exercise of “marketflex” provisions to which the Debt Commitment Letter is subject (which “marketflex” provisions were provided by Buyer to Seller’s counsel prior to the dateof this Agreement) and after taking into account any draw down of the NewcoBridge Facility, the Parent Bridge Facility and/or the Opco Backstop TermAmount portion of the Senior Credit Facilities (each as defined in the DebtCommitment Letter)) or other terms that may be reasonably satisfactory toBuyer; provided that to the extent that all or any portion of the Notesor the Holdco Notes are not being refinanced, redeemed, purchased or repaid onthe Closing Date, the condition set forth in this Section 2B(v) shallnot be construed to include Buyer’s receipt of any financing contemplated bythe Debt Commitment Letter that would be used to refinance, redeem, purchase orrepay the Notes or the Holdco Notes; provided further that it shall be acondition to Buyer’s obligations hereunder that, to the extent not received onthe Closing Date, the obligation to issue the Newco Notes and the Newco BridgeFacility under the Debt Commitment Letter shall not have been repudiated inwriting by the lender(s) party thereto;

####  

#### (vi)                              Sincethe date of the Latest Balance Sheet, the Company shall not have suffered aCompany Material Adverse Effect;

####  

#### (vii)                           Eachof the agreements listed on Section 2B(vii) of the CompanyDisclosure Letter shall have beenterminated effective on or prior to the Closing Date;

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#### (viii)                        Onor prior to the Closing Date, the Company shall have delivered to Buyer (A) apayoff letter in customary form with respect to the Senior Credit Facility and (B) releasesof all Liens (other than Permitted Encumbrances) with respect to the capitalstock, property and assets of NSP Capital, the Company or any Subsidiary of theCompany with respect to indebtedness for borrowed money that is being repaid onthe Closing Date (including the Senior Credit Facility), which Lien releasesshall be in customary form and may be effective upon repayment of the loansgiving rise to such Liens;

####  

#### (ix)                                TheSeller shall have delivered to the Buyer an affidavit of the type described inTreas. Reg. Section 1.1445-2(b), dated the Closing Date;

####  

#### (x)                                   TheCompany shall have obtained the third party consents, approvals, and waiverslisted on Section 2B(x) of the Company Disclosure Letter;

####  

#### (xi)                                Assumingdelivery from the Buyer or other assignee of the Holdco Notes of any supportcertificate reasonably requested by Kirkland & Ellis LLP regarding thematters set forth in Section 5.01 of the Holdco Notes Indenture, the Buyershall have

 

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#### received an opinion from Kirkland & Ellis LLP substantially inthe form of Exhibit 2B(xi) attached hereto;

####  

#### (xii)                             TheBuyer shall have received from the Seller and holders of common or preferredunits of the Seller a fully executed copy of the Seller Member RepresentationLetter and Release in the form attached hereto as Exhibit 2B(xii)(the “Seller Member Letter”) providing for indemnification in anaggregate amount equal to the Purchase Price for the matters specified therein;and

####  

#### (xiii)                          TheManagement Rollover Amount shall have been invested in equity securities of theUltimate Parent Company either (A) in cash, (B) on termssubstantially consistent with those set forth in Section 3J hereof,or (C) on other terms reasonably satisfactory to the Buyer.

####  

Any condition specifiedin this Section 2B may be waived prior to Closing only by a writteninstrument signed by the Buyer.

 

## 2C.                               Conditionsto the Company’s and the Seller’s Obligations.  The obligation of the Company and the Sellerto consummate the Closing is subject to the satisfaction of each of thefollowing additional conditions as of immediately prior to the Closing:

##  

#### (i)                                     Eachof the representations and warranties of the Buyer contained in this Agreement,in any other Transaction Document or in any written certificate deliveredpursuant to this Agreement shall be true and correct on the date of thisAgreement, such Transaction Document or such certificate, as the case may be,and shall be true and correct on and as of the Closing Date, as though made onand as of the Closing Date (except for representations and warranties thatspeak as of a specific date or time (which need only be true and correct as ofsuch date or time)), and except otherwise where the failure to be true andcorrect (disregarding material adverse effect and other materialityqualifications contained therein other than specific dollar thresholdscontained therein) would (individually or together with other failures ofrepresentations and warranties to be true and correct) not have a materialadverse effect on the Buyer’s ability to consummate the transactionscontemplated hereby, and the Buyer shall have performed or complied in allmaterial respects with all obligations and covenants required by this Agreementto be performed or complied with by the Buyer by the time of the Closing; andthe Buyer shall have delivered to the Company a certificate to the foregoingeffect dated the Closing Date and signed by a senior executive officer of theBuyer on behalf of the Buyer confirming the foregoing;

####  

#### (ii)                                  Onthe Closing Date, the Buyer shall have delivered to the Seller the following:

####  

##### (1)                                  acertificate, dated the Closing Date, of the Secretary or Assistant Secretary ofthe Buyer certifying that attached or appended to such certificate:  (A) is a true and correct copy of theBuyer’s certificate of incorporation and bylaws, and all amendments thereto; (B) isa true copy of all corporate actions taken by it, including resolutions of itsboard of directors, authorizing the consummation of the transactions

 

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##### contemplated hereby andthe execution, delivery and performance of this Agreement and each of theTransaction Documents to be delivered by it pursuant hereto; and (C) arethe names and signatures of its duly elected or appointed officers who areauthorized to execute and deliver this Agreement and the other TransactionDocuments to which it is a party; and

#####  

##### (2)                                  certificatesof good standing from the appropriate state agencies, dated as of a recent date(e.g., not more than 14 days prior to the Closing Date), certifying that theBuyer is in good standing in the state of its incorporation; and

#####  

#### (iii)                               Buyerand its Affiliates shall have taken all actions required by the Holdco NotesIndenture such that, upon effectiveness of the assignment and assumption of theHoldco Notes and Holdco Notes Indenture contemplated by Section 1Cattached hereto Seller shall have been released from all liability in respectof the Holdco Notes and/or the Holdco Notes Indenture, and Seller shall havebeen so released from all such liability.

####  

Any condition specifiedin this Section 2C may be waived prior to Closing only by a writteninstrument signed by the Company and the Seller.

 

## 2D.                              Waiverof Condition.  All conditions to theClosing shall be deemed to have been satisfied or waived from and after theClosing.

##  

# ARTICLE 3COVENANTS PRIOR TO THE CLOSING

#  

## 3A.                             Access.  During the period from the date of thisAgreement to the earlier of the Closing and the date that this Agreement isterminated in accordance with its terms, the Company shall grant to the Buyeror cause to be granted to the Buyer and its authorized representativesreasonable access, during normal business hours and upon reasonable notice, tothe personnel, accountants, properties, books and records, contracts,commitments and other documents and information of NSP Capital, the Company andits Subsidiaries (including with respect to pending and recently settledlitigation against the Company and its Subsidiaries) as the Buyer mayreasonably request that are in the possession of NSP Capital, the Company andits Subsidiaries or under the control of NSP Capital, the Company and itsSubsidiaries; providedthat such access does not unreasonablyinterfere with the normal operations of the Company or its Subsidiaries; providedfurther that all requests for access shall be directed to Robert A.Peterson, David F. Myers, Jr. or such other person as the Company maydesignate in writing from time to time; and providedfurther thatthe Buyer is not authorized to and shall not (and shall not permit any of itsemployees, agents, representatives or Affiliates to) contact any officer,director, employee, franchisee, supplier, distributor or other materialbusiness relation of the Company or any of its Subsidiaries prior to theClosing without the prior written consent of the Company.  For the avoidance of doubt, in no event shallthe access provided for in this Section 3A or any other obligationof the Company or its Subsidiaries hereunder include any right of Buyer or anyof its Affiliates to conduct, without the Company’s consent, any “Phase IEnvironmental Investigation”, any sampling and analysis of environmental mediaof the nature commonly referred to as a “Phase II Environmental Investigation”or any invasive soil testing.

 

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## 3B.                               OrdinaryConduct of Company.  During theperiod from the date of this Agreement to the earlier of the Closing and thedate that this Agreement is terminated in accordance with its terms, except asset forth on Section 3B of the Company Disclosure Letter, or asotherwise consented to by the Buyer in writing (which consent shall be withheldonly in the exercise of Buyer’s reasonable business judgment) or as otherwisespecifically contemplated by this Agreement, the Company shall, and shall causeeach of its Subsidiaries to, conduct its business in the ordinary course andconsistent with past practices, and the Company shall not, and shall cause eachof its Subsidiaries not to:

##  

#### (i)                                     makeany material change in the conduct of its business;

####  

#### (ii)                                  enterinto a new agreement that would be included in the definition of CompanyMaterial Contracts or Leases if it had been entered into as of the date of thisAgreement or amend in a material manner, cancel, terminate or waive anymaterial term of any of the Company Material Contracts or Leases, other than inthe ordinary course of business consistent with past practice; providedthat nothing herein shall prevent the Company or any of its Subsidiaries from (A) extendingthe term of any Lease that is expiring, or (B) amending the Senior CreditFacility to provide that any cash contributed by the Seller may be paid to theSeller in the event that the transactions contemplated hereby are notconsummated, to permit the transactions contemplated by Section 3Jhereof and/or to permit the re-borrowing of certain amounts repaid in theperiod between the date of this Agreement and the Closing Date;

####  

#### (iii)                               amendits Certificate of Formation, Certificate of Incorporation, Limited LiabilityCompany Agreement, by-laws or other constitutive documents;

####  

#### (iv)                              acquireby merging or consolidating with, or agreeing to merge or consolidate with, orpurchase substantially all the assets of, or otherwise acquire any business orany corporation, partnership, association or other business organization ordivision thereof;

####  

#### (v)                                 exceptfor Permitted Encumbrances, sales of inventory or obsolete or worn assets inthe ordinary course of business consistent with past practice, sell, lease,sublease, mortgage, license, pledge, abandon, fail to maintain or otherwiseencumber or dispose of any of the assets or properties owned by the Company orits Subsidiaries;

####  

#### (vi)                              makeany capital expenditure of more than $250,000 except in accordance with thebudget set forth in Section 3B(vi) of the Company DisclosureLetter (the “Budget”);

####  

#### (vii)                           issueor sell any membership interests or capital stock in the Company or any of itsSubsidiaries or any options, warrants or other rights to purchase any suchmembership interests or capital stock in the Company or any of its Subsidiariesor any securities convertible into or exchangeable for such membershipinterests or capital stock;

####  

#### (viii)                        (a) enterinto any employment, deferred compensation, severance, retirement or similaragreement or arrangement with any director, officer or employee of

 

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#### the Company or any Subsidiary (or amend any such existing agreement), (b) grantany severance or termination pay to any director, officer or employee of theCompany or any Subsidiary or (c) materially change any compensation,benefit plans or other benefits payable to any director, officer or employee ofthe Company or any Subsidiary, in each case other than with respect tonon-executive employees in the ordinary course of business consistent with pastpractice or except as required by applicable law or contractual obligations orother agreements or employee benefit plans existing on the date hereof anddisclosed in the Company Disclosure Letter;

####  

#### (ix)                                makeany payments of any material liability of the Company or any of itsSubsidiaries or settle or compromise any material claim, dispute, action orlitigation (including with respect to Taxes), or forgive or cancel any materialliability of any third party to the Company or any of its Subsidiaries, otherthan in the ordinary course of business consistent with past practices, pensionplan fundings in accordance with applicable law (as determined pursuant toactuarial reports) and settlements of respiratory product liability claims forwhich the Company and its Subsidiaries are indemnified;

####  

#### (x)                                   alterthrough merger, liquidation, reorganization, restructuring, election or in anyother manner the corporate structure, ownership or classification for Taxpurposes of the Company or any Subsidiary;

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#### (xi)                                incur,assume or guarantee any Indebtedness, other than (A) amounts to beincluded in the definition of Adjustment Amount, (B) interest accruing onIndebtedness, and (C) issuances of letters of credit in replacement ofexpiring letters of credit as long as the obligation of the Company and itsSubsidiaries under the new letter of credit does not exceed the obligation ofthe Company and its Subsidiaries under the expiring letter of credit; providedthat increases in the amount of Indebtedness arising from fluctuations inforeign exchange rates shall not be deemed an incurrence or assumption ofIndebtedness;

####  

#### (xii)                             makeany loan, advance or capital contribution to or investment in any Person otherthan (A) Subsidiaries and (B) travel advances to employees in theordinary course of business;

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#### (xiii)                          changeany method of accounting or accounting practice by the Company or anySubsidiary, except for any such changes required by reason of a concurrentchange in GAAP;

####  

#### (xiv)                         makeany new, or change any existing, Tax elections, or settle any material Taxclaim or assessment;

####  

#### (xv)                            enterinto any contract, agreement or other arrangement with any Affiliate of theCompany or any of its Subsidiaries, other than such contracts, agreements orother arrangements solely among the Company and its Subsidiaries entered intoin the ordinary course of business consistent with past practice or agreementsentered into at the direction of the Buyer in connection with the consummationof the transactions contemplated hereby;

 

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#### (xvi)                         exceptfor any cash contributed by the Seller to the Company after the date hereof,make any dividend or other payment or distribution, directly or indirectly(including by means of a repurchase of equity), to any shareholders or otherequity holders of the Company (in their capacity as a shareholder or equityholder), except for payment of fees or reimbursement of expenses incurred inconnection with service as a member of the Company’s or Seller’s board ofmanagers in amounts not to exceed $25,000 in the aggregate;

####  

#### (xvii)                      repayany Indebtedness, other than (A) payments in respect of Indebtedness underthe Senior Credit Facility and (B) regularly scheduled payments inaccordance with the terms governing such Indebtedness;

####  

#### (xviii)                   otherthan purchases of inventory and forms in the ordinary course of business andother asset acquisitions made in accordance with the Budget, purchase oracquire any asset for an aggregate purchase price of more than $200,000;

####  

#### (xix)                           firstincur Rebate Obligations to any customer of more than $100,000 or to allcustomers of more than $500,000 for any twelve-month period; or

####  

#### (xx)                              enterinto any agreement to do any of the foregoing.

####  

## 3C.                               Cancellationof Accounts from Seller.  The Buyeracknowledges and agrees that, notwithstanding anything herein to the contrary,at or prior to the Closing, the Company and its Subsidiaries may cancel orforgive any receivable, note or other liability or obligation owing from theSeller or any holder or equity interests of the Seller to the Company or any ofits Subsidiaries that is included in the “Accumulated Deficit” or “Due from NSPHoldings L.L.C.” line items of the Company’s balance sheet (as updated throughthe Closing Date), that such cancellation or forgiveness shall be withoutliability to the Seller or any holder of equity interests of the Seller andthat all representations and warranties made hereunder shall be made as thoughsuch receivable, note, or other liability or obligation was neveroutstanding.  Furthermore, for theavoidance of doubt, nothing in this Agreement shall prevent, or be construed toprevent, Seller from distributing its cash to its equityholders or any otherPerson using the basket provided in Section 4.11(B)(8) of the HoldcoNotes Indenture (with it being understood that in the event that any cash isleft in the Seller, such cash shall be for the exclusive benefit of the Sellerand its equityholders).

##  

## 3D.                              OrdinaryConduct of NSP Capital.  During theperiod from the date of this Agreement to the Closing, the Seller shall causeNSP Capital to not engage in any business or activities other than as necessaryto (i) maintain its corporate existence and (ii) perform itsobligations under the Holdco Notes, the Holdco Notes Indenture and any otheragreement related thereto or contemplated therein.

##  

## 3E.                                FinancialStatements.  Promptly after becomingavailable and in any event within 30 days after the end of each month after thedate hereof, the Company shall deliver to the Buyer a consolidated balancesheet of the Company and its Subsidiaries as of the end of such month, andconsolidated statements of income and cash flows of the Company and its

 

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## Subsidiaries forsuch monthly period, prepared in a manner consistent with the Company’scustomary practice for monthly financial statements.

##  

## 3F.                                FinancingSources.

##  

#### (i)                                     Fromthe date hereof until the Closing Date, unless otherwise agreed in writing byBuyer, the Company shall, and shall cause its Subsidiaries and their respectivepersonnel and advisors to, take, at the Buyer’s expense, commerciallyreasonable efforts to cooperate in connection with the proposed debt financingby Buyer of the transaction contemplated hereby as may be reasonably requestedby Buyer, including without limitation, the participation of Company personnelin meetings, due diligence sessions, the preparation of offering memoranda,private placement memoranda, and similar documents; provided that,notwithstanding anything herein or elsewhere in this Agreement to the contrary,the Company shall not be required to deliver or cause the delivery of any legalopinions in connection with Buyer’s debt financing.  The Buyer agrees that the execution of anydocuments referred to in the preceding sentence shall be subject to theconsummation of the Closing.

####  

#### (ii)                                  Inthe event that Buyer elects to make a tender offer for all or any portion ofthe Notes or the Holdco Notes (collectively, the “Debt Tender”) and/orelects to seek consents to amendment or waiver of one or more covenants in theNotes, the Holdco Notes, the Indenture or the Holdco Notes Indenture (collectively,the “Consent Solicitation”), the Buyer shall commence the Debt Tenderand Consent Solicitation in sufficient time to permit a closing thereof on orprior to the Termination Date.  The Buyershall cause the Debt Tender to be accomplished in accordance with applicablelaw, including Rule 14e promulgated pursuant to the Exchange Act, and theConsent Solicitation to be accomplished in accordance with applicable law.  The Buyer shall use reasonable best effortsto cause the Debt Tender and the Consent Solicitation to seek consent for thewaiver of covenants set forth in the Holdco Notes Indenture reasonablynecessary for the transactions contemplated hereby (and shall seek consent forwaivers of the covenants under Section 4.11 and Section 5.01(c) thereof)such that such provisions shall not be applicable to the transactionscontemplated hereby.  The Buyer shallprovide the Company and the Seller a reasonable opportunity to review andcomment upon all filings, mailings and other submissions and documents preparedin connection with the Debt Tender and the Consent Solicitation, as applicable,and shall reflect any comments that are reasonable or necessary to comply withapplicable law.  The Seller and theCompany shall use commercially reasonable efforts to assist Buyer in connectionwith the preparation of all filings, mailings or other submissions to be madein connection with the Debt Tender and the Consent Solicitation, as applicable;provided that neither the Company nor the Seller shall be required to deliver(x) any opinion of counsel in connection with the Debt Tender or the ConsentSolicitation or (y) any representation or warranty in connection with the DebtTender or the Consent Solicitation that may, directly or indirectly, providefor liability to the Seller at any time or the Company or any of itsSubsidiaries at any time at or prior to the Closing (with it being understoodand agreed that no representation, warranty or covenant hereunder shall bedeemed breached as a result of delivery of documents requested by the Buyer inconnection with the Debt Tender or the Consent Solicitation).  The Buyer shall ensure that the Debt Tendershall

 

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#### not be consummated, nor shall any amounts be payable to the holders ofthe Notes or Holdco Notes in connection with the Debt Tender or the ConsentSolicitation, at any time prior to Closing or in the event this Agreement isterminated.  Notwithstanding anythingherein to the contrary, except to the extent included in the computation of March NetIndebtedness, all amounts (including premiums, consent fees and interestaccruals related to the Debt Tender and the Consent Solicitation), and allcosts, fees and expenses incurred in connection with the Debt Tender and theConsent Solicitation or payments made in connection therewith, includingpayments made to the investment banking firm managing such Debt Tender and/orConsent Solicitation, and legal and accounting fees and expenses incurred inconnection therewith, shall be paid by the Buyer.

####  

#### (iii)                               If,at any time prior to the Closing, any information relating to the Company orany Subsidiary, or any of its Affiliates, officers, directors or employeesshould be discovered by Buyer, Merger Sub, the Company or any Subsidiary of atype which should be set forth in an amendment or supplement to the documentsfiled or mailed in respect of the Debt Tender or the Consent Solicitation sothat such documents would not include any misstatement of a material fact oromit to state any material fact necessary to make the statements therein notmisleading, the party which discovers such information shall promptly notifythe other parties hereto and, to the extent required by law, rules orregulations, an appropriate amendment or supplement describing such informationshall promptly be prepared by Buyer, and, if required, filed with theSecurities Exchange Commission and/or disseminated to the holders of the Notesand/or Holdco Notes, as applicable.

####  

## 3G.                               280GCooperation.  The Seller will, andwill cause the Company to, prior to the Closing Date, seek to ensure that theshareholder approval requirements of Section 280G(b)(5)(B) of theCode and the regulations promulgated pursuant thereto are satisfied to theextent necessary such that payments by the Seller or the Company to anyemployees of the Company or any of its Subsidiaries arising in whole or in partas a result of the transactions contemplated hereby based on arrangements inplace at the Closing (other than arrangements entered into at the direction ofBuyer on the Closing Date) will not be characterized as parachute paymentsunder Section 280G of the Code.

##  

## 3H.                              ExclusiveTransaction.  In consideration of thesubstantial expenditures of time, effort and expense to be undertaken by Buyerin connection with its due diligence review and the preparation and negotiationof this Agreement with Seller, Seller agrees that from the date of thisAgreement and until the earlier of the Closing Date and the date that thisAgreement is terminated in accordance with its terms, neither the Seller northe Company or any of their Subsidiaries shall, directly or indirectly, throughany officer, director, employee or agent (including through any investmentbanker, attorney or accountant retained by any of the foregoing), solicit thesubmission of any proposal, offer, inquiry or contact from any Person relatingto (i) any sale of all or any portion of the Company Equity Interests orNSP Capital Shares or assets of the Seller, the Company or any of their Subsidiarieswith any Person other than the Buyer, its Affiliates and their representatives(other than sales of inventory or obsolete or worn assets in the ordinarycourse of business consistent with past practice) or (ii) any merger,consolidation, recapitalization, liquidation, dissolution or similartransaction involving the Seller, NSP Capital, the Company or any of theirSubsidiaries, or participate in any discussions or

 

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## negotiationsregarding any of the foregoing (each such transaction being referred to hereinas a “Proposed Acquisition Transaction”).  The Seller, the Company and theirSubsidiaries shall promptly cease and cause to be terminated any and allnegotiations with such third parties regarding any of the foregoing.  The Seller shall not waive any provision ofany confidentiality agreement that it entered into in connection with thetransactions contemplated hereby.  In theevent that the Company, the Seller or UBS receives any bona fide proposal toenter into negotiations in respect of, or a written or bona fide verbalproposal regarding, a Proposed Acquisition Transaction, the Company shallprovide prompt notice of such proposal to the Buyer and the Company’s responsethereto.

##  

## 3I.                                   ClosingNet Indebtedness.  Not less than two (2) daysprior to Closing, the Company shall provide to Buyer a good faith estimate ofNet Indebtedness as of the Closing based on currency exchange rates as of twodays prior to the date of delivery (the “Closing Net Indebtedness”)(with it being understood that because of the number of the Company’s bankaccounts, it will be difficult to provide a precise amount of the cash portionof Closing Net Indebtedness).  The schedule settingforth Buyer’s estimate of Closing Net Indebtedness shall be in substantiallythe form of the calculation of March Net Indebtedness attached hereto.

##  

## 3J.                                  EquityTransactions.

##  

#### (i)                                     Notwithstandinganything in this Agreement to the contrary, to the extent that any suchdistribution does not violate the Indenture or the Holdco Notes Indenture(determined after giving effect to any amendment or waiver of any provisionthereof in connection with the transactions contemplated hereby) the Companymay either (x) distribute to the Seller a number of shares of North (“NorthManagement Shares”) having a value, as reasonably determined by the Buyer,equal to the Management Equity Rollover Amount and, to the extent necessary tomake such transaction a “Restricted Payment” for purposes of the Indenture, theSeller may redeem certain membership interests of the Company (whereupon suchmembership interests shall be canceled) and thereafter the Seller shalldistribute such North Management Shares to certain of its unitholders that aremembers of Seller that are intending to acquire equity in the Buyer or itsparent company (the “Rollover Management Unitholders”) in redemption ofunits of the Seller having a value, as reasonably determined by the Seller,equal to the Management Equity Rollover Amount or (y) distribute to theRollover Management Unitholders a number of North Shares having a value, asreasonably determined by the Buyer, equal to the Management Equity RolloverAmount in exchange for units of Seller having a value, as reasonably determinedby the Seller, equal to the Management Equity Rollover Amount.  Prior to making any such distribution, theCompany shall (A) have received reasonable assurance that the RolloverManagement Unitholders have entered into an agreement with Buyer agreeing thatat the Closing, such Rollover Management Unitholders will contribute the NorthManagement Shares to Buyer or Buyer’s ultimate parent company (the “UltimateParent Company”) in exchange for equity securities of the Ultimate ParentCompany having a value equal to the Management Equity Rollover Amount in atransaction intended to qualify as an exchange under Section 351(a) orSection 721 of the Code, and otherwise containing customaryrepresentations, warranties and covenants from the Ultimate Parent Company andsuch Rollover Management Unitholder regarding such exchange and (B) haveensured that the Rollover Management

 

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#### Unitholders have agreed in writing for the benefit of the Seller andits unitholders that, from and after the Closing, he or she agrees that theaggregate amount of cash to be distributed by Seller in respect of itsoutstanding units to such Rollover Management Unitholder shall be reduced toreflect the redemption of units described in the immediately precedingsentence.  In the event that thetransactions contemplated by this Section 3J(i) are completed,the parties agree that the Purchase Price paid to the Seller at Closing shallbe reduced by the Management Equity Rollover Amount.  Each of the Company and the Buyer shall usereasonable best efforts to cause the management rollover described in this Section 3J(i) tooccur.

####  

#### (ii)                                  The Seller has advised Buyer that certainunitholders of the Seller are “blocker corporations”.   Prior to Closing, the Seller may presentBuyer with a structure that would provide for Buyer to purchase, directly orindirectly, the blocker corporations.  AtSeller’s request, the Seller and the Buyer shall, and shall cause theirrespective Affiliates to, use commercially reasonable efforts to negotiate ingood faith the terms of an agreement for the purchase and sale of the blockercorporations in connection with either the sale of the Company pursuant to thisAgreement or, pursuant to Section 3K below, the sale of Seller, itbeing understood that Buyer shall not be required to acquire the blockercorporations in a structure that the Buyer reasonably believes would haveadverse consequences (whether economic, tax or otherwise) to Buyer.

####  

#### (iii)                               Norepresentation, warranty or covenant of the Seller or the Company madehereunder shall be deemed breached or untrue as a result of the transactionscontemplated by Section 3J(i); provided that nothing hereinshall relieve the Seller or the Company for breach of the covenants set forthin Section 3J(i).

####  

## 3K.                              Saleof Seller.  At the request of theBuyer, the Seller and the Buyer shall, and shall cause their respectiveAffiliates to, use commercially reasonable efforts to negotiate in good faiththe terms of an agreement for the purchase and sale of the outstanding units ofthe Seller (the “Replacement Agreement”) in which the provisions of Section 5.01(c) ofthe Holdco Notes Indenture would be inapplicable.  The Replacement Agreement shall (i) providefor no change in the amount or form of the Purchase Price, (ii) includerepresentations, warranties, covenants and agreements for the respectiveparties that are substantially the same as those made in this Agreement(subject to changes as referenced in disclosure schedules attached thereto(which revised disclosure schedules shall require the consent of the Buyerprior to signing if such schedules set forth a Company Material Adverse Effectrelative to the disclosures in the Company Disclosure Letter) and other changesreasonably necessary to reflect the difference between the Seller as targetversus the Company as target), (iii) provide for post-Closing remediesagainst the Seller’s unitholders only to the extent and on the terms set forthin the Seller Member Letter and otherwise shall not provide for post-Closingremedies in respect of representations, warranties or pre-Closing covenants, (iv) imposeno additional conditions to the parties’ respective obligations hereunder, (v) containa reaffirmation of obligations of the counterparties to the Debt CommitmentLetter and the Equity Commitment Letter, and (vi) include only suchmodifications as may be necessary to reflect the sale of the Seller as opposedto the sale of the Company and as may be necessary to deliver Buyer a cleanequity capital structure (i.e., termination of UAR rights and option grantsupon the Closing).  In the event that theSeller enters into the Replacement Agreement, it shall (A) promptly adviseits unitholders of

 

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## the Replacement Agreementand the terms thereof, (B) advise its unitholders that the transactionscontemplated by the Replacement Agreement constitute an “Approved Company Sale”as such term is set forth in the Second Amended and Restated Limited LiabilityCompany Agreement of the Seller (as amended, the “Seller LLC Agreement”),and/or (C) inform its unitholders that, subject to compliance with theterms of Section 9.3 of the Seller LLC Agreement, failure to execute anddeliver the Replacement Agreement and perform its obligations thereunder shallconstitute a breach of Section 9.3 of the Seller LLC Agreement.  The Seller shall cause its counsel to respondpromptly after receipt of any draft of the Replacement Agreement prepared byBuyer’s counsel, regardless of when prepared by Buyer’s counsel.  The Replacement Agreement shall be executedby the relevant parties promptly after the later of (1) the date that bothof (x) and (y) have occurred: (x) the Buyer advises the Seller that the Buyerhas concluded that, after consultation with its debt financing sources, it willnot be able to obtain a consent to waive the applicability of the CompanyCoverage Ratio Exception (as defined in the Holdco Notes Indenture) under Section 4.11and Section 5.01(c) of the Holdco Notes Indenture with respect to thetransactions contemplated hereby (a “Replacement Notice”) and (y) theCompany’s Chief Financial Officer could not reasonably conclude that theCompany will be able to incur at least $1 of additional Indebtedness (asdefined in the Holdco Notes Indenture) under the Company Coverage RatioException as of immediately after the assignment and assumption of the HoldcoNotes on or prior to the later of (I) July 8, 2005 and (II) the third (3rd)business day after receipt of a Replacement Notice, and (2) the date thatthe Replacement Agreement is agreed to between the parties.  In reaching such conclusion, each of theBuyer and the Company agree to use reasonable best efforts to deliver to theother such additional information as may reasonably be requested to confirm theChief Financial Officer’s conclusions regarding the Company Coverage RatioException after the Closing.  No partyshall willfully take any action that would cause the Seller to not be able makethe certification in respect of Section 5.01(c) of the Holdco NotesIndenture to the Trustee under the Holdco Notes Indenture in connection withthe assignment and assumption of the Holdco Notes and Holdco Notes Indenture.

##  

# ARTICLE 4REPRESENTATIONS AND WARRANTIES OF THE COMPANY

#  

As an inducement to theBuyer to enter into this Agreement, the Company hereby represents and warrantsthat:

 

## 4A.                             Organizationand Corporate Power.  The Company isa limited liability company duly organized, validly existing and in goodstanding under the laws of the State of Delaware and is qualified to dobusiness as a foreign limited liability company and is in good standing in eachjurisdiction in which the failure to so qualify would reasonably be expected tohave a Company Material Adverse Effect. The Company and its Subsidiaries have all requisite corporate or limitedliability company power and authority necessary to own and operate theirproperties and to carry on their businesses as now conducted and to enter intothis Agreement and consummate the transactions contemplated hereby.  The copies of the Company’s Certificate ofFormation and Agreement of Limited Liability Company which have been madeavailable to the Buyer reflect all amendments made thereto at any time prior tothe date of this Agreement.

 

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## 4B.                               CompanyEquity Interests.  All of the CompanyEquity Interests have been duly authorized and are validly issued.  There are no rights, subscriptions, warrants,or options to purchase or otherwise acquire any equity interests of the Companyor securities or obligations of any kind convertible into or exchangeable forany equity interests of the Company.  TheCompany Equity Interests represent all of the issued and outstanding equityinterests in the Company.

##  

## 4C.                               Subsidiaries.  Section 4C of the CompanyDisclosure Letter sets forth the name of each Subsidiary of the Company, thejurisdiction of its incorporation or organization, the direct owner of theoutstanding capital stock or other equity securities of such Subsidiaries andthe percentage of the outstanding capital stock or other equity interests ofsuch Subsidiary owned by the Company or any of its Subsidiaries.  Each such Subsidiary listed on Section 4Cof the Company Disclosure Letter is an entity validly existing and in goodstanding (or an equivalent foreign concept to the extent applicable) under thelaws of the jurisdiction of its incorporation or organization and is qualifiedto do business in each jurisdiction in which the failure to so qualify wouldreasonably be expected to have a Company Material Adverse Effect.  Except as set forth on Section 4Cof the Company Disclosure Letter, all of the outstanding capital stock or otherequity securities of each such Subsidiary are owned by the Company or anotherSubsidiary free and clear of any Liens, except for Liens arising pursuant tothe Senior Credit Facility and restrictions on transfer under applicablesecurities law.  There are no rights,subscriptions, warrants, or options to purchase or otherwise acquire any sharesof capital stock or equity securities of any of the Subsidiaries or obligationsof any kind convertible into or exchangeable for any shares of capital stock orequity securities of such Subsidiaries. Except for the Subsidiaries or except as set forth on Section 4Cof the Company Disclosure Letter, neither the Company nor any of itsSubsidiaries owns or holds the right to acquire any shares of stock or anyother security or interest in any other Person or has entered into any jointventure arrangement.  Other than as setforth on Section 4C of the Company Disclosure Letter, there are noshareholders agreements, voting trusts or other agreements or understandings towhich the Company or any of its Subsidiaries is a party relating to the purchase,sale, voting or disposition of any shares of capital stock or other equitysecurities of such Subsidiaries.

##  

## 4D.                              Authorization;No Breach.  This Agreement has beenduly executed and delivered by the Company, and constitutes a valid and bindingobligation of the Company, enforceable in accordance with its terms, except aslimited by the application of bankruptcy, moratorium and other laws affectingcreditors’ rights generally and as limited by the availability of specificperformance and the application of equitable principles.  Except as set forth on Section 4Dof the Company Disclosure Letter, assuming receipt of HSR Approval, theexecution and delivery of this Agreement by the Company do not (i) resultin any material breach of any of the provisions of, (ii) constitute amaterial default under, (iii) give any third party the right to terminateor accelerate any material right under, (iv) result in the creation of anyLien upon any of the equity interests or any assets of the Company or itsSubsidiaries under, or (v) require any authorization, consent, approval,exemption or other action by or notice to any court or other governmental bodyunder (a) the provisions of the Certificate of Formation or LimitedLiability Company Agreement of the Company, (b) any Company MaterialContract or Lease, (c) any judgment, order or decree to which the Companyor any of its Subsidiaries is subject, or (d) any law, statute, rule orregulation, to which the Company or its Subsidiaries is subject, except in thecases of clause (b) foregoing, as would not result in a Company MaterialAdverse Effect.

 

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## Immediately priorto the Closing, without giving effect to the transactions contemplated hereby,(x) no Default or Event of Default (as defined in the Indenture and the HoldcoNotes Indenture, respectively) shall have occurred and be continuing (includingas a result of the transactions contemplated by Section 3J(i)), and (y)each of the Company and the Seller shall be entitled to incur $1 of additionalIndebtedness (as defined in the Indenture and the Holdco Notes Indenture,respectively) (other than Permitted Indebtedness (as defined in the Indentureand the Holdco Notes Indenture, respectively)) for purposes of the CoverageRatio Exception (as defined in the Indenture) and the Company Coverage RatioException (as defined in the Holdco Notes Indenture) under the Indenture andthe Holdco Notes Indenture, as applicable; provided that norepresentation or warranty shall be deemed made pursuant to this clause (y)with respect to the Holdco Notes Indenture to the extent compliance with Section 4.11and Section 5.01(c) of the Holdco Notes Indenture is waived inaccordance with the Holdco Notes Indenture prior to Closing, whether as part ofthe Debt Tender, the Consent Solicitation or otherwise.  Notwithstanding anything to the contrarycontained herein, the parties agree that no representation or warranty is beingmade by the Company pursuant to this Section 4D or elsewhere inthis Agreement with regard to any default under the Indenture or the HoldcoNotes Indenture as a result of the amount of debt financing (includingpreferred equity that is treated as debt for accounting purposes) arranged byBuyer or any of its Affiliates for the Buyer, the Company and their respectiveSubsidiaries with respect to periods from and after the Closing or the mergerof any Subsidiary of Buyer with and into the Company after the Closing.

##  

## 4E.                                FinancialStatements; Company SEC Reports.  Section 4Eof the Company Disclosure Letter sets forth the following financialstatements:  (i) the auditedconsolidated balance sheet of the Company and its Subsidiaries as of each of December 31, 2003 and December 31, 2004 (the “Latest Audited Balance Sheet”)and the related audited consolidated statements of income and cash flows forthe fiscal years then ended and (ii) the unaudited consolidated balancesheet of the Company and its Subsidiaries as of April 2, 2005 (the “LatestBalance Sheet”) and the related unaudited consolidated statements of incomeand cash flows for the three-month period then ended.  Each of the foregoing financial statements(including the notes thereto, if any, collectively, the “FinancialStatements”) has been prepared in accordance with GAAP applied on aconsistent basis and presents fairly in all material respects the financialposition of the Company and its Subsidiaries at December 31, 2003, December 31,2004 and April 2, 2005, respectively, and results of their operations forthe periods referred to therein (subject in the case of the unaudited financialstatements to the lack of footnote disclosure and changes resulting from normalyear-end adjustments).  None of theCompany SEC Reports, as of their respective dates (and, if amended or supersededby a filing prior to the Closing Date, then on the date of such filing),contained or, in the case of an amended or superseding filing, will contain anyuntrue statement of a material fact or omitted or will omit to state a materialfact required to be stated therein or necessary to make the statements therein,in light of the circumstances under which they were made, not misleading (withit being understood that (x) no representation is being made regarding anyfinancial statements included in the Company SEC Reports except as set forth inthe immediately foregoing sentence and (y) the Company SEC Reports (other thanthe consolidated financial statements (without regard to footnotes) containedtherein) did not include information regarding Subsidiaries that are notguarantors of the Notes or the Holdco Notes).

 

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## 4F.                                Permits.  Each of the Company and its Subsidiariesholds all permits, licenses or other authorizations of governmental agenciesthat are required for the conduct of its business as presently conducted,except where the failure to obtain or hold any such permits, licenses orauthorizations would not be reasonably likely to result in a Company MaterialAdverse Effect, and each of the Company and its Subsidiaries is in compliancewith such required permits, licenses and authorizations, except where thefailure to comply would not be reasonably likely to result in a CompanyMaterial Adverse Effect.

##  

## 4G.                               Absenceof Certain Developments.  Except asset forth in Section 4G of the Company Disclosure Letter or asotherwise contemplated by this Agreement (including Section 3B),since the date of the Latest Balance Sheet, neither the Company nor any of itsSubsidiaries has:

##  

#### (i)                                     suffereda Company Material Adverse Effect;

####  

#### (ii)                                  issuedor sold any of its membership interests or equity securities, securitiesconvertible into its membership interests or equity securities or warrants,options or other rights to acquire its membership interests or equity securities;

####  

#### (iii)                               exceptfor Permitted Encumbrances and except for sales of inventory or obsolete orworn assets in the ordinary course of business consistent with past practice,sold, leased, subleased, mortgaged, licensed, pledged or otherwise encumbered ordisposed of any of the assets or properties owned by the Company or itsSubsidiaries that are material, individually or in the aggregate;

####  

#### (iv)                              sold,assigned or transferred, or granted a license to, any material patents,trademarks, trade names, copyrights, trade secrets or other intangible assetsowned by the Company or any of its Subsidiaries, except in the ordinary courseof business;

####  

#### (v)                                 (a) enteredinto any employment, deferred compensation, severance, retirement or similaragreement or arrangement with any director, officer or employee of the Companyor any Subsidiary (or amended any such existing agreement), (b) grantedany severance or termination pay to any director, officer or employee of theCompany or any Subsidiary or (c) materially changed any compensation,benefit plans or other benefits payable to any director, officer or employee ofthe Company or any Subsidiary, in each case other than with respect tonon-executive employees in the ordinary course of business consistent with pastpractice or except as required by applicable law or contractual obligations orother agreements or employee benefit plans existing on the date hereof anddisclosed in the Company Disclosure Letter;

####  

#### (vi)                              amendedin any material manner, cancelled, terminated or waived any material term ofany of the Company Material Contracts or Leases, other than in the ordinarycourse of business consistent with past practices;

####  

#### (vii)                           enteredinto or agreed to enter into any new or amended contract with any unionsrepresenting employees of the Company or any Subsidiary;

 

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#### (viii)                        madeany capital expenditure of more than $250,000, except in accordance with theBudget;

####  

#### (ix)                                changedan annual accounting period or adopted or changed any material accountingmethod unless required by GAAP;

####  

#### (x)                                   changedany of the material accounting methods used by it or adopted any materialaccounting method unless required by GAAP or the Code, or made any materialelection relating to Taxes or changed any material election relating to Taxesalready made unless required by GAAP or the Code;

####  

#### (xi)                                alteredthrough merger, liquidation, reorganization, restructuring, election or in anyother manner the corporate structure, ownership or classification for Taxpurposes of the Company or any Subsidiary;

####  

#### (xii)                             cancelled,compromised, waived or released any right or claim (or series of related rightsand claims) that are material, individually or in the aggregate, outside of theordinary course of business consistent with past practice;

####  

#### (xiii)                          settledor compromised any material claim, dispute, action or litigation (includingwith respect to Taxes), or forgiven or cancelled any material liability of anythird party to the Company or any of its Subsidiaries,

####  

#### (xiv)                         madeany dividend or other payment or distribution, directly or indirectly(including by means of a repurchase of equity), to any shareholders or otherequity holders of the Company (in their capacity as shareholder or equityholder), except for payment of fees or reimbursement of expenses incurred inconnection with service as a member of the Company’s or Seller’s board ofmanagers in amounts not to exceed $25,000 in the aggregate;

####  

#### (xv)                            incurred,assumed, or guaranteed any Indebtedness, other than (A) amounts to beincluded in the definition of Adjustment Amount, (B) interest accruing onIndebtedness, (C) issuances of letters of credit in replacement ofexpiring letters of credit as long as the obligation of the Company and itsSubsidiaries under the new letter of credit does not exceed the obligation ofthe Company and its Subsidiaries under the expiring letter of credit and (D) thecompletion of the exchange offer in connection with the Holdco Notes; providedthat increases in the amount of Indebtedness arising from fluctuations inforeign exchange rates shall not be deemed an incurrence or assumption ofIndebtedness

####  

#### (xvi)                         madeany loans or advances to, or guarantees for the benefit of, any Persons otherthan the Company or any of its Subsidiaries and travel advances to employees inthe ordinary course of business; or

####  

#### (xvii)                      sufferedany material damage, destruction or other casualty loss with respect toproperty owned by the Company or any of its Subsidiaries that is not covered byinsurance.

 

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## 4H.                              Titleto Properties, etc.

##  

#### (i)                                     Section 4Hof the Company Disclosure Letter sets forth the address of each parcel of OwnedReal Property.  With respect to eachparcel of Owned Real Property and, in the cases of clauses (b) and (c), asdoes not materially impair the business operations of the Company and itsSubsidiaries:  (a) the Company orone of its Subsidiaries has good fee simple title, free and clear of all Liens,except Permitted Encumbrances; (b) except as set forth on Section 4Hof the Company Disclosure Letter, neither the Company nor any of itsSubsidiaries has leased or otherwise granted to any Person the right to use oroccupy such Owned Real Property or any portion thereof; and (c) there areno outstanding options, rights of first offer or rights of first refusal topurchase such Owned Real Property or any portion thereof or interest therein.

####  

#### (ii)                                  Section 4Hof the Company Disclosure Letter sets forth the address of each parcel ofLeased Real Property, and a true and complete list of all Leases for each suchparcel of Leased Real Property.  TheCompany has not received written notice of any material default under any ofthe Leases which has not been cured or waived. To the Company’s knowledge, except as set forth on Section 4Dor Section 4H of the Company Disclosure Letter, no event hasoccurred which would allow the other party thereto to terminate or accelerateperformance under or otherwise modify (including upon the giving of notice orthe passage of time) any of such Leases. No Person has terminated, accelerated performance or modified any ofsuch Leases.  The Leases listed on Section 4Hof the Company Disclosure Letter are valid and binding agreements of theCompany or a Subsidiary and are in full force and effect.

####  

#### (iii)                               Except(a) as set forth on Section 4H of the Company DisclosureLetter attached hereto, (b) as set forth on the Latest Audited BalanceSheet, and (c) for Permitted Encumbrances, the Company or one of itsSubsidiaries owns, free and clear of all Liens, or has a contract, license orlease to use, all of the personal property and assets shown on the LatestAudited Balance Sheet, acquired thereafter or located on its premises which ismaterial to its business or operations. The assets of the Company and its Subsidiaries will as of the Closinginclude all of the tangible assets, whether real or personal, that arenecessary for the Company and its Subsidiaries immediately after Closing toconduct in all material respects the business of the Company and itsSubsidiaries as conducted immediately prior to the Closing.

####  

#### (iv)                              Tothe Company’s knowledge there is no, and neither the Company nor any of theSubsidiaries has received written notice of an existing or threatened, changein the zoning classification of any Owned Real Property or Leased Real Property(or any portion thereof) from that in effect on the date of this Agreement, ineach instance, which would be reasonably expected to have a Company MaterialAdverse Effect.

####  

#### (v)                                 Exceptas listed on Section 4H of the Company Disclosure Letter, neitherthe Company nor any of its Subsidiaries has received, since January 1,2000, written notice of an outstanding violation of any applicable law, rule orregulation relating to any material part of the Owned Real Property or LeasedReal Property or the operation thereof or written notice of condemnation,special assessment or the like, with respect

 

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#### thereto which, in any such case, would be reasonably expected to have aCompany Material Adverse Effect.

####  

## 4I.                                   TaxMatters.  Except as set forth on Section 4Iof the Company Disclosure Letter, (i) the Company and each of itsSubsidiaries has timely filed all Tax Returns that it is required to file and all such Tax Returns are true, correctand accurate in all material respects; (ii) all Taxes due and owingby the Company or any of its Subsidiaries have been timely paid, all Taxes required to have been withheldand paid over to a Taxing authority by the Company or any Subsidiary have beenso withheld and paid over, and there are no Liens (other than PermittedEncumbrances) with respect to Taxes on any of the assets or properties or theCompany or any of its Subsidiaries; (iii) no deficiency or proposedadjustment which has not been paid or resolved for any material amount of Taxhas been asserted or assessed by any Taxing authority against the Company orany of its Subsidiaries; (iv) neither the Company nor any of itsSubsidiaries has consented to extend the time in which any Tax may be assessedor collected by any Taxing authority; (v) as of the date hereof, there areno ongoing or pending Tax audits by any Taxing authority against the Company orany of its Subsidiaries; (vi) neitherthe Company nor any of its Subsidiaries is a party to or bound by any Taxallocation, indemnification or sharing agreement; (vii) during the lastthree fiscal years, none of the Company nor any of its Subsidiaries hasdistributed stock of another Person, or has had its stock distributed byanother Person, in a transaction that was purported or intended to be governedin whole or in part by Section 355 of the Code; (viii) since the dateof the Latest Balance Sheet, neither the Company nor any of its Subsidiarieshas incurred any material liability for Taxes arising from extraordinary gainsor losses, as that term is used in GAAP, outside the ordinary course ofbusiness consistent with past practice; (ix) none of the Company nor anyof its Subsidiaries (A) has been a member of an affiliated group ofcorporations, within the meaning of Section 1504 of the Code, or (B) hasany liability for the Taxes of any Person under Treas. Reg. §1.1502-6 (or anysimilar provision of state, local or foreign income Tax law), as a transfereeor successor, by contract, or otherwise; (x) no claim has been made by a Taxingauthority in a jurisdiction where the Company and its Subsidiaries do not fileTax Returns that the Company or any of its Subsidiaries is or may be subject toTaxes assessed by such jurisdiction, (xi) the unpaid income Taxes of theCompany and its Subsidiaries did not, as of the date of the Latest BalanceSheet, exceed the reserve for income Tax liability set forth on the LatestBalance Sheet, (xii) none of the Company nor any of its Subsidiaries hasentered into any transaction which is a “reportable transaction” (as defined inTreasury Regulation Section 1.6011-4) or a “potentially abusive taxshelter” (as defined in Treasury Regulation Section 1.6112-1), (xiii)neither the Company nor any of its Subsidiaries is a party to any contract,plan or arrangement (written or otherwise) covering any Person that,individually or collectively, would, in whole or in part resulting from theconsummation of the transactions contemplated hereby, result in the payment ofany amount that will not be deductible pursuant to the terms of Section 280Gof the Code, (xiv) no corporate subsidiary of the Company is, nor hasany corporate subsidiary of the Company been, a United States real propertyholding corporation within the meaning of Code Section 897(c)(2) duringthe applicable period described in Code Section 897(c)(1)(A)(ii), (xv) Section 4I of the CompanyDisclosure Letter sets forth, with respect to the Company and each of itsSubsidiaries, the name of such entity and the characterization of such entityfor U.S. federal Tax purposes, and (xvi) neither the Company nor any ofits Subsidiaries (during such period that such Subsidiaries have been owned bythe Company) has made any election to change the characterization of suchentity for U.S. federal income tax purposes.

 

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## 4J.                                  CompanyMaterial Contracts.  Section 4Jof the Company Disclosure Letter sets forth a list as of the date of thisAgreement of each of the following types of written contracts to which any ofthe Company or its Subsidiaries is a party:

##  

#### (i)                                     anyemployment, consulting or similar agreement or contract with any officer,employee, consultant or independent contractor of the Company or any of itsSubsidiaries that has future liability (including severance, change in controlor other similar payments) in excess of $200,000 in any 12-month period;

####  

#### (ii)                                  anyemployee collective bargaining agreement, workers’ council or similar statutoryorganization agreement or other labor union contract;

####  

#### (iii)                               anynon-competition or non-solicitation contract, including any contract that afterthe Closing will restrict the conduct of any line of business by the Company orany Subsidiary or upon consummation of the transactions contemplated herebywill restrict the ability of the Company or any Subsidiary to engage in anyline of business in which they may lawfully engage;

####  

#### (iv)                              anylease or similar agreement under which (A) the Company or one of itsSubsidiaries is lessee of, or holds or uses, any machinery, equipment, vehicleor other tangible personal property owned by a third party or (B) theCompany or one of its Subsidiaries is a lessor or sublessor of, or makesavailable for use by any third party, any tangible personal property owned orleased by the Company or one of its Subsidiaries, in any case which has futureliability in excess of $250,000 in any 12-month period and which cannot beterminated for a liability of $250,000 or less;

####  

#### (v)                                 anyagreement or contract under which the Company or one of its Subsidiaries hasborrowed any money or issued any note, indenture or other evidence ofindebtedness or guaranteed indebtedness or liabilities of others (other thanintercompany indebtedness solely among the Company and its Subsidiaries,endorsements for the purpose of collection, loans made to employees forrelocation, travel or other employment-related purposes, or purchases ofequipment or materials made under conditional sales contracts, in each case in theordinary course of business), in each case having an outstanding principalamount in excess of $250,000;

####  

#### (vi)                              anymaterial agreement or contract with a governmental entity providing forpayments to the Company and its Subsidiaries in excess of $250,000 in the nexttwelve-month period;

####  

#### (vii)                           anyagreement or contract pursuant to which a counterparty thereto has made awritten claim for indemnification against the Company or any of itsSubsidiaries which has not been settled or resolved (other than warranty claimsin the ordinary course of business);

####  

#### (viii)                        anyother agreement, contract, lease, license or instrument, in each case notincluded in clauses (i) through (vii) above or set forth on any ofthe other Sections of the Company Disclosure Letter, to which the Company orone of its Subsidiaries is a party or by or to which any of their assets arebound or subject which has future liability

 

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#### or benefit to the Company or one of its Subsidiaries in excess of$500,000 in any 12-month period and is not terminable by it upon notice of 60calendar days or less without the payment of any termination penalty (otherthan warranty obligations in the ordinary course of business, purchase ordersin the ordinary course of business, Leases, License Agreements and AcquisitionAgreements); or

####  

#### (ix)                                anyagreement, contract, memorandum of understanding, side letter or otherarrangement, whether written or oral, pursuant to which the Company or any ofits Subsidiaries has asserted claims for indemnification or contributionagainst a prior owner of the Company or any of its Subsidiaries for asbestosis,silicosis, mixed dust, benzene or similar claims or litigation to which theCompany or any of its Subsidiaries is subject (including as may relate torespiratory product liability litigation or claims) relating to productsmanufactured, distributed or sold by the Company or any of its Subsidiaries.

####  

The Company has deliveredto, or made available for inspection by, the Buyer a copy of each contract,lease, license, instrument or other agreement required to be listed on Section 4Jof the Company Disclosure Letter (collectively, the “Company MaterialContracts”), other than exhibits or schedules to such contract, lease,license, instrument or other agreement that would not reasonably be expected toimpact the unexpired rights or obligations of the Company or its Subsidiariesunder such Company Material Contracts in any material respect.  The Company Material Contracts are valid andbinding agreements of the Company or a Subsidiary and are in full force andeffect.  Each Company Material Contractis enforceable against the Company or its Subsidiaries, as applicable (and, tothe Company’s knowledge, any other parties to such Company Material Contract),in accordance with its terms.  Except asdisclosed on Section 4J of the Company Disclosure Letter or anyother section of the Company Disclosure Letter, the Company or one of itsSubsidiaries, as applicable, has performed all material obligations required tobe performed by them to date under the Company Material Contracts and is not(with or without the lapse of time or the giving of notice, or both) in breachor default thereunder in any material respect.

 

## 4K.                              IntellectualProperty.

##  

#### (i)                                     Setforth on Section 4K of the Company Disclosure Letter is a true andaccurate list of all material (A) issued patents and patent applications, (B) trademarkand service mark registrations and applications for registration thereof andmaterial unregistered trademarks, (C) registrations of and applicationsfor copyrights and mask works, and (D) internet domain name registrationsand applications therefor, in each case that are owned by the Company or any ofits Subsidiaries.  Each such item ofCompany Intellectual Property and each pending patent application has been dulymaintained or prosecuted, as applicable, and has not been cancelled, expired orabandoned.  Section 4K of theCompany Disclosure Letter also sets forth (1) each material license ineffect as of the date of this Agreement of Company Intellectual Property to athird party, (2) each material third party license of IntellectualProperty Rights to the Company or its Subsidiaries, excluding licenses ofcommercially available off the shelf software, and (3) any material jointdevelopment agreement for next generation fire products (each, a “LicenseAgreement”). Except as set forth on Section 4K of the CompanyDisclosure Letter, (x) each License Agreement is in full force and effect andis valid and legally

 

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#### binding on the Company or a Subsidiary that is a party thereto, (y)neither the Company nor any Subsidiary is in material default or breach of suchLicense Agreement, and no event has occurred that with notice or lapse of timewould constitute a material default or breach or permit termination, or anymaterial modification, or acceleration of material rights thereunder; and(z) neither the Company nor any Subsidiary has granted any sublicense withrespect to such License Agreement except in the ordinary course of business andas permitted under the applicable License Agreement.  Except as set forth on Section 4Kof the Company Disclosure Letter, the Company or one of its Subsidiaries ownsand possesses good title to all Company Intellectual Property, free of Liens(other than Permitted Encumbrances).  TheCompany and its Subsidiaries own or have a valid right to use all materialIntellectual Property Rights used in their businesses as presently conducted.  Except as set forth on Section 4Kof the Company Disclosure Letter, no claims are pending or, to the knowledge ofthe Company, threatened against the Company or any of its Subsidiaries withrespect to the ownership, use, enforceability or validity of any CompanyIntellectual Property and neither the Company nor any of its Subsidiaries hasbrought any claim for infringement or misappropriation of Company IntellectualProperty against any third party.  Eachitem of (i) Company Intellectual Property, and (ii) IntellectualProperty Rights owned by third parties which are the subject of a LicenseAgreement will be owned or available for use by the Company and theSubsidiaries on substantially the same terms and conditions immediatelysubsequent to the Closing as immediately prior to the Closing, except in thecase of Intellectual Property Rights which are the subject of a LicenseAgreement, where the failure to be owned or available for use would not resultin a Company Material Adverse Effect. Except as set forth on Section 4K of the Company DisclosureLetter, neither the Company nor any of its Subsidiaries have been sued orcharged as a defendant in, or to the knowledge of the Company, threatened inwriting with any claim, suit, action, or proceeding which involves a claim ofinfringement, misappropriation or dilution of any Intellectual Property Rightsof any third party or conflicting ownership rights of any Company IntellectualProperty and which has not been finally terminated prior to the date hereofwhich if determined adversely to the Company and its Subsidiaries would resultin a Company Material Adverse Effect. Except as would not result in a Company Material Adverse Effect, allCompany Intellectual Property and Intellectual Property Rights owned by thirdparties which are the subject of a License Agreement which derive independenteconomic value, actual or potential, from not being generally known to thepublic have been maintained by the Company and its Subsidiaries in confidencein accordance with protection procedures that the Company believes are adequatefor protection.

####  

#### (ii)                                  Exceptas would not result in a Company Material Adverse Effect, the informationtechnology systems owned, licensed, leased, operated on behalf of, or otherwiseheld for use in the business by Company and/or its Subsidiaries, including allcomputer hardware, software, firmware and telecommunications systems used inthe business of Company and its Subsidiaries, perform reliably and in materialconformance with the appropriate specifications or documentation for suchsystems.  Except as would not result in a

 

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#### Company Material Adverse Effect, the Company and its Subsidiaries havetaken commercially reasonable steps to provide for the archival, back-up,recovery and restoration of the critical business data of their business.  Except as would not result in a CompanyMaterial Adverse Efect, all material computer software, including withoutlimitation any separately sold component elements of computer software used byor on behalf of the Company or any Subsidiary in the conduct of its businessand material thereto (collectively, the “Business Software”) isadequately documented, and the Company or the relevant Subsidiary(ies) has madeadequate provision for the maintenance and support of the Business Software forits continued use in conduct of its business.

####  

## 4L.                                Litigation.  Except as set forth on Section 4Lof the Company Disclosure Letter, there are no actions, suits, proceedings ororders pending or, to the Company’s knowledge, threatened against the Companyor any of its Subsidiaries at law or in equity, or before or by anyGovernmental Authority, that are not covered by insurance or indemnification(subject to deductibles, self-insured retentions or similar limitations) andwhich if determined adversely to the Company or any of its Subsidiaries wouldresult in a Company Material Adverse Effect. There are no outstanding judgments, decrees or orders of anyGovernmental Authority against the Company or any Subsidiary or any of theirrespective assets or businesses.

##  

## 4M.                           Brokerage.  Except to the extent included as CompanyExpenses, there are no claims for brokerage commissions, finders fees, orsimilar compensation in connection with the transactions contemplated by thisAgreement based on any arrangement or agreement made by or on behalf of theSeller, the Seller’s unitholders, the Company or any of its Subsidiaries.  Except to the extent included as CompanyExpenses, there are no fees, commissions or expenses of legal counsel,accountants or other professional advisors of the Company or any of itsSubsidiaries or any other third party based on any arrangement or agreementmade by or on behalf of the Company or any of its Subsidiaries incurred inconnection with the negotiation, execution and preparation of this Agreementand the consummation of the transactions contemplated hereby.

##  

## 4N.                              CompanyEmployee Benefit Plans.

##  

#### (i)                                     Section 4Nof the Company Disclosure Letter sets forth a list of each Employee BenefitPlan.  Except as set forth on Section 4Nof the Company Disclosure Letter, each Employee Benefit Plan has beenmaintained, funded and administered in all material respects in accordance withits terms and complies in form and in operation in all material respects withthe applicable requirements of ERISA, the Code and other applicable laws.  Other than routine claims for benefits, thereis no audit, investigation, claim or lawsuit pending or, to the knowledge ofthe Company, threatened against or arising out of an Employee Benefit Plan.

####  

#### (ii)                                  Exceptas set forth on Section 4N of the Company Disclosure Letter, eachEmployee Benefit Plan that is intended to meet the requirements of a “qualifiedplan” under Section 401(a) of the Code has received a favorable determinationletter from the Internal Revenue Service and no determination letter withrespect to any Employee Benefit Plan has been revoked nor has the Company orany Subsidiary received notice of threatened revocation, nor has any EmployeeBenefit Plan been amended, or (except with respect to amendments for which theremedial amendment period has not yet expired) failed to be amended, since thedate of its most recent determination letter in any respect

 

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#### that would adversely affect its qualification or materially increaseits cost nor has any Employee Benefit Plan been amended in a manner that wouldrequire security to be provided in accordance with Section 401(a)(29) ofthe Code.  To the knowledge of theCompany, there are no facts or circumstances that would adversely affect thequalified status of any such Employee Benefit Plan.

####  

#### (iii)                               Exceptas set forth on Section 4N of the Company Disclosure Letter, noneof the Company or any of its Subsidiaries contributes to, or has any obligationto contribute to, any Title IV Plan or any Multiemployer Plan.  No Title IV Plan has been completely orpartially terminated or been the subject of a Reportable Event, and no Title IVPlan has an accumulated funding deficiency or has applied for or received aminimum funding waiver.  No proceeding bythe PBGC to terminate any Title IV Plan has been instituted or, to theknowledge of the Company, threatened. None of the Company, its Subsidiaries or any ERISA Affiliate hasincurred or is reasonably likely to incur any material liability to the PBGC(other than with respect to PBGC premium payments not yet due) or has incurredor is reasonably likely to incur any material liability, including any contingentliability under Section 4204 of ERISA, on account of a “partial withdrawal”or a “complete withdrawal” (within the meaning of Sections 4205 and 4203 ofERISA) from any Multiemployer Plan.

####  

#### (iv)                              Exceptas set forth on Section 4N of the Company Disclosure Letter, allcontributions to, and payments from, the Employee Benefit Plans which may havebeen required to be made in accordance with the Employee Benefit Plans and,when applicable, Section 302 of ERISA or Section 412 of the Code,have been timely made.

####  

#### (v)                                 TheCompany, each Subsidiary and each ERISA Affiliate have complied in all materialrespects with the notice and continuation coverage requirements of Section 4980Bof the Code and the regulations thereunder, including, without limitation, the “M&Aregulations” set out in Treas. Reg. 54.4980B-9, with respect to each EmployeeBenefit Plan that is, or was during any taxable year of the Company, anySubsidiary or any ERISA Affiliate for which the statute of limitations on theassessment of federal income taxes remains open, by consent or otherwise, agroup health plan within the meaning of Section 5000(b)(1) of theCode.

####  

#### (vi)                              Neitherthe Employee Benefit Plans, the Company or any Subsidiary, nor any employee ofthe foregoing, nor, to the Company’s knowledge, any trusts created thereunder,nor any trustee, administrator or other fiduciary thereof, has engaged in a “prohibitedtransaction” (as such term is defined in Section 4975 of the Code or Section 406of ERISA) which could reasonably be expected to subject any thereof to amaterial tax or penalty on prohibited transactions imposed by such Section 4975or the sanctions imposed under Title I of ERISA in a material amount.

####  

#### (vii)                           Atrue and complete copy of each Employee Benefit Plan, and, as applicable, acopy of the most recent IRS Determination Letter received, the three mostrecent IRS Forms 5500 filed, and the most recent actuarial report with respectto each such Employee Benefit Plan, have been furnished to Buyer.

 

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#### (viii)        Exceptas set forth on Section 4N of the Company Disclosure Letter, noemployee of the Company will be entitled to any additional compensation orbenefits or any acceleration of the time of payment or vesting of anycompensation or benefits under any Employee Benefit Plan, including, withoutlimitation, any payment or acceleration under any equity based plan, solely asa result of the transactions contemplated by this Agreement.

####  

#### (ix)           Section 4Nof the Company Disclosure Letter contains a list of each Foreign BenefitPlan.  The Company, each Subsidiary andeach ERISA Affiliate and each of the Foreign Benefit Plans are in compliance inall material respects with the provisions of the applicable laws of each jurisdictionin which any of the Foreign Benefit Plans are maintained.

####  

#### (x)            Exceptas set forth in Section 4N of the Company Disclosure Letter, allcontributions to, and payments from, the Foreign Benefit Plans (other thanpayments to be made from a trust, insurance contract or other funding medium)which have been required to be made in accordance with the terms of any suchplan, and, when applicable, the law of the jurisdiction in which such plan ismaintained, have been timely made.

####  

#### (xi)           Exceptas set forth in Section 4N of the Company Disclosure Letter, eachof the Foreign Benefit Plans has obtained from the government or governmentshaving jurisdiction with respect to such plan any required determinations thatsuch plans are in compliance with the laws and regulations of any government.

####  

#### (xii)          Eachof the Foreign Benefit Plans for which an applicable statute of limitationsremains open has been administered at all times, in all material respects, inaccordance with its terms.  Except as setforth in Section 4N of the Company Disclosure Letter, there are nopending investigations by any governmental agency involving the Foreign BenefitPlans, no claims pending or threatened in writing (except for claims forbenefits payable in the normal operation of the Foreign Benefit Plans), suitsor proceedings against any Foreign Benefit Plan or asserting any rights orclaims to benefits under any Foreign Benefit Plan which could reasonably beexpected to give rise to any material liability.

####  

## 4O.          Insurance.  Section 4O of the CompanyDisclosure Letter sets forth a list of (i) each material insurance policy(other than title insurance) maintained by the Company and its Subsidiaries asof the date of this Agreement for the current policy year and (ii) certainother insurance policies covering product liability claims (collectively, the “Policies”).  All of the Policies are in full force andeffect, and neither the Company nor any of its Subsidiaries is in default inany material respect regarding its obligations under any of such Policies.   Except set forth on Section 4Oof the Company Disclosure Letter, within the past two years, no notice ofcancellation or non-renewal with respect to, or disallowance of any materialclaim under, any Policy has been received by the Company or any of itsSubsidiaries.

##  

## 4P.           Compliance with Applicable Laws.  Except as set forth on Section 4Pof the Company Disclosure Letter, since December 31, 2000, the Company andits Subsidiaries have complied in all material respects with all applicablestatutes, laws, ordinances, rules, orders,

 

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## judgments andregulations of any governmental authority or instrumentality, domestic orforeign applicable to the Company and its Subsidiaries.  Except as set forth on Section 4Pof the Company Disclosure Letter, to the Company’s knowledge, since December 31,2000, neither the Company nor any of its Subsidiaries has received any writtencommunication from a Governmental Authority that alleges that any of them isnot in compliance with any federal, state, foreign or local laws, rules andregulations in any material respect.

##  

## 4Q.          Environmental.  Except as set forth on Section 4Qof the Company Disclosure Letter, (i) neither the Company nor any of itsSubsidiaries (a)  has received any material written communicationfrom, or been subject to a material claim asserted in writing by, any thirdparty (including, without limitation, a governmental authority), or (b)  tothe knowledge of the Company, has been subject to any material investigation bya governmental authority, that, in the case of (a) or (b) above,alleges that the Company or any of its Subsidiaries is not in materialcompliance with any Environmental Laws and which allegation has not beenresolved, (ii) the Company and its Subsidiaries hold, and are in materialcompliance with, all material permits, licenses and governmental authorizationsrequired to be obtained by the Company or its Subsidiaries under EnvironmentalLaws, and the Company and its Subsidiaries are in material compliance with allEnvironmental Laws; (iii) to the knowledge of the Company, neither theCompany nor any of its Subsidiaries has treated, stored, disposed of, arrangedfor or permitted the disposal of, transported or released any substance,pollutant, contaminant or waste in a manner or location that has given rise to,or that is reasonably likely to give rise to, material claims or materialliabilities under Environmental Laws for environmental site investigation orcleanup, corrective action, other response action, or damages or injuries topersons, property or natural resources; (iv) with respect to properties orfacilities currently or formerly owned, leased or operated by the Company orany of its Subsidiaries during such Company’s or any of its Subsidiaries’ownership, lease or operation, there has been no release or threat of a releaseby the Company or any of its Subsidiaries, or, to the Company’s knowledge, byothers, of any hazardous substance, pollutant, contaminant or waste where suchrelease or threat of a release has given rise to, or that is reasonably likelyto give rise to, any material liability for environmental site investigation orcleanup, corrective action, other response action or damages or injuries topersons, property or natural resources under Environmental Laws; and (v) noLiens arising under Environmental Laws are recorded against any property ownedor leased by the Company or any of its Subsidiaries.  As used in this Agreement, the term “EnvironmentalLaws” means the Clean Air Act, as amended, the Comprehensive EnvironmentalResponse, Compensation and Liability Act, as amended (“CERCLA”), theResource Conservation and Recovery Act, as amended, the Clean Water Act, asamended, and any other foreign, federal, provincial, state or local laws,regulations or ordinances regulating or imposing standards of conduct orliability relating to pollution or protection of the environment or workerhealth and safety as the foregoing are enacted and in effect on or prior to theClosing.

##  

## 4R.          Employees.  Except as set forth in Section 4Rof the Company Disclosure Letter, during the past 36 months there have been nolabor strikes, slowdowns, work stoppages, lockouts, labor organization drivesor similar disputes against the Company or any of its Subsidiaries, and, as ofthe date hereof, there are no such labor strikes, slowdowns, work stoppages,lockouts, labor organization drives or similar disputes pending or, to theCompany’s knowledge, threatened against the Company or any of itsSubsidiaries.  Except as set forth in Section 4Rof the Company Disclosure Letter, during the past 36 months there has been no

 

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## material unfairlabor practice complaint, grievance, or arbitration proceeding filed againstthe Company or any of its Subsidiaries that has not been settled, resolved ordismissed, and there are no such material unfair labor practice complaints,grievances, or arbitration proceedings pending, or to the Company’s knowledge,threatened against the Company or any of its Subsidiaries.  The Company and all of its Subsidiaries arein compliance in all material respects with all applicable laws respectingemployment and employment practices, terms and conditions of employment andwages and hours, and are not engaged in any unfair labor practice.

##  

## 4S.           Transaction Agreements.  Section 4S of the CompanyDisclosure Letter sets forth each purchase agreement or purchase and salecontract (each, an “Acquisition Agreement”) to which the Company or anyof its Subsidiaries is or has been party since January 1, 1998 relating tothe purchase or sale of any Subsidiary or business unit of the Company or anyof its Subsidiaries involving consideration (including the assumption ofliabilities and liabilities remaining with the acquired entity) in excess of$1,000,000 (each, a “Material Transaction”).  Except as set forth on Section 4Sof the Company Disclosure Letter, neither the Company nor any of itsSubsidiaries has any obligations (other than contingent indemnificationobligations for which, as of the date hereof, no claim has been made) to payany other Person any additional amount in connection with such MaterialTransaction.  Except as set forth on Section 4Sof the Company Disclosure Letter or in any other section of the CompanyDisclosure Letter (including Section 4J(vii) of the CompanyDisclosure Letter), no claim for indemnification is pending by or against theCompany or any of its Subsidiaries arising from such Material Transaction.

##  

## 4T.          Board and Stockholder Approval.  The execution and delivery by the Company ofthis Agreement have been duly and validly authorized by (i) the Company’sboard of managers and (ii) Persons representing the Required Approval (assuch term is defined in the Second Amended and Restated Limited Liability CompanyAgreement of the Seller, as amended).

##  

## 4U.          ProductWarranties.

##  

#### (i)            Exceptwhere the obligations of the Company or its Subsidiaries in respect of suchterms and conditions would not reasonably be expected to have a CompanyMaterial Adverse Effect, the Company has made available to Buyer complete andcorrect copies of the standard terms and conditions for each of the products ofthe Company and its Subsidiaries presently being sold by the Company.  Except as required by applicable law or asset forth on Section 4U of the Company Disclosure Letter and exceptas would not otherwise result in a Company Material Adverse Effect, no productmanufactured, sold or delivered by, or services rendered by or on behalf of theCompany or any of its Subsidiaries is subject to any express guaranty, warrantyor other indemnity beyond such standard terms and conditions.

####  

#### (ii)           Neitherthe Company nor any of its Subsidiaries has entered into any agreement,contract, commitment or other arrangement (whether written or oral) pursuant towhich the Company or any of its Subsidiaries is or will be obligated to makeany rebates or similar payments to any customer (“Rebate Obligations”),other than (A) Rebate Obligations that are included on the liabilitiesside of balance sheets included in the Financial Statements, (B) otherRebate Obligations incurred in the ordinary course of

 

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#### business consistent with past practices for which the liability isfirst required to be disclosed on a balance sheet prepared in accordance withGAAP after the date of the Latest Balance Sheet, and (C) other RebateObligations which are not material in amount.

####  

## 4V.          Affiliate Transactions.  Except as included on Section 4Vof the Company Disclosure Letter, neither the Company and any of itsSubsidiaries, on the one hand, and any Affiliate (other than the Company or anyof its Subsidiaries) or executive employee of the Company or its Subsidiaries,on the other hand, is party to any contract or arrangement.  Except as included on Section 4Vof the Company Disclosure Letter, no Affiliate of the Company or any of itsSubsidiaries (other than the Company or one of its Subsidiaries), has anyinterest in any material property (whether real, personal or mixed and whethertangible or intangible) used or held for use by the Company and itsSubsidiaries in the conduct of their respective businesses.

##  

## 4W.         Customers and Suppliers.  Section 4W of the CompanyDisclosure Letter sets forth a complete and accurate list of the 10 largestcustomers and 10 largest suppliers of the Company and its Subsidiaries (on aconsolidated basis) for the twelve-month period ended December 31, 2004and the three-month period ended April 2, 2005.  Except to the extent set forth on Section 4Wof the Company Disclosure Letter, to the knowledge of the Company, since December 31,2004, no such customer has provided the Company with written notice that itintends to materially reduce the dollar amount of business that it intends todo with the Company and its Subsidiaries during the twelve-month period ended December 31,2005 relative to its level of purchases for the twelve-month period ended December 31,2004.

##  

## 4X.          Undisclosed Liabilities.  Except as set forth on Section 4Xof the Company Disclosure Letter, the Company and its Subsidiaries do not haveany outstanding liabilities except (i) liabilities under the CompanyMaterial Contracts or under contracts or agreements that are not required to belisted in Section 4J of the Company Disclosure Letter or undercontracts or agreements otherwise disclosed in the Company Disclosure Letter, (ii) liabilitiesincluded on the liabilities side of the Latest Balance Sheet, (iii) liabilitieswhich have arisen after the date of the Latest Balance Sheet in the ordinarycourse of business, (iv) liabilities arising in connection with thetransactions contemplated hereby, (v) liabilities to be included in clause(ii) or (iii) of the definition of Purchase Price, (vi) liabilitiesdisclosed on another section of the Company Disclosure Schedule, and (vii) liabilitieswhich would not, individually or in the aggregate, have a Company MaterialAdverse Effect.

##  

## 4Y.          Compliancewith the Foreign Corrupt Practices Act and Export Control and Antiboycott Laws.  Except asset forth on Section 4Y of the Company Disclosure Letter,

##  

#### (i)            Neitherthe Company, its Subsidiaries nor any of their directors, officers, agents,employees or any other Persons acting on their behalf has, in connection withthe operation of the business of the Company or its Subsidiaries, (i) usedany corporate or other funds for unlawful contributions, payments, gifts orentertainment, or made any unlawful expenditures relating to political activityto government officials or established or maintained any unlawful or unrecordedfunds in violation of Section 104 of the Foreign Corrupt Practices Act of1977, as amended, or any other applicable foreign, federal or state law; or (ii) acceptedor received any unlawful contributions, payments, expenditures or gifts.

 

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#### (ii)           The Seller and its Subsidiaries have, at all times since December 31,2000, been in compliance in all material respects with U.S. export controllaws, including the Export Administration Regulations, The InternationalTraffic in Arms Regulations and the Foreign Assets Control Regulations.

####  

#### (iii)          Since December 31, 2000, neither of the Company norany of its Subsidiaries has violated in any material respect the U.S.antiboycott regulations contained in 50 U.S.C. § 2401 et seq. or thepenalty provisions contained in Section 999 of the Code.

####  

# ARTICLE 5REPRESENTATIONS AND WARRANTIES OF THE SELLER RE NSP CAPITAL

#  

## As an inducement to Buyerto enter into this Agreement, the Seller represents and warrants to Buyer that:

 

## 5A.          Organization and Corporate Power.  NSP Capital is a corporation duly organized,validly existing and in good standing under the laws of the State of Delawareand is qualified to do business as a foreign corporation and is in goodstanding in each jurisdiction in which the failure to so qualify wouldreasonably be expected to have a material adverse effect upon the financialcondition or operating results of NSP Capital. NSP Capital has all requisite corporate power and authority necessary toown and operate their properties and to carry on their businesses as nowconducted.  The copies of the NSP Capital’sCertificate of Incorporation and Bylaws which have been made available to theBuyer reflect all amendments made thereto at any time prior to the date of thisAgreement.

##  

## 5B.          NSP Capital Shares.  All of the NSP Capital Shares have been dulyauthorized and are validly issued, fully paid and nonassessable.  There are no rights, subscriptions, warrants,or options to purchase or otherwise acquire any equity interests of NSP Capitalor securities or obligations of any kind convertible into or exchangeable forany equity interests of NSP Capital.  TheNSP Capital Shares represent all of the issued and outstanding equity interestsin NSP Capital.

##  

## 5C.          Litigation.  There are no actions, suits, proceedings ororders pending or, to NSP Capital’s knowledge, threatened against NSP Capitalat law or in equity, or before or by any federal, state, municipal or othergovernmental department, commission, board, bureau, agency or instrumentality,domestic or foreign.

##  

## 5D.          Operations.  Except as set forth in Section 5Dof the Company Disclosure Letter, except for liabilities incidental to itsexistence and except in its capacity as co-issuer of the Holdco Notes, NSPCapital has not conducted any business, entered into any contracts or incurredany liabilities.

 

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# ARTICLE 6REPRESENTATIONS AND WARRANTIES OF SELLER

#  

## As an inducement to Buyerto enter into this Agreement, Seller represents and warrants to Buyer that:

 

## 6A.          Organization and Corporate Power.  The Seller is a limited liability companyduly organized, validly existing and in good standing under the laws of theState of Delaware.  The Seller has allrequisite limited liability company power and authority necessary to own andoperate its properties and to carry on its businesses as now conducted and toenter into this Agreement and consummate the transactions contemplatedhereby.  The copies of the Seller’s Certificateof Formation and Second Amended and Restated Limited Liability CompanyAgreement which have been made available to the Buyer reflect all amendmentsmade thereto at any time prior to the date of this Agreement.

##  

## 6B.          Authorization; No Breach.  This Agreement has been duly executed anddelivered by the Seller, and constitutes a valid and binding obligation of theSeller, enforceable in accordance with its terms, except as limited by theapplication of bankruptcy, moratorium and other laws affecting creditors’rights generally and as limited by the availability of specific performance andthe application of equitable principles. Assuming HSR Approval and any other approval set forth on Section 6Bof the Company Disclosure Letter, the execution and delivery of this Agreementby the Seller do not (i) result in any material breach of any of theprovisions of, (ii) constitute a material default under, (iii) giveany third party the right to terminate or accelerate any material right under, (iv) resultin the creation of any Lien upon any of the equity interests or any assets ofthe Seller under, or (v) require any authorization, consent, approval,exemption or other action by or notice to any court or other governmental bodyunder, (a) the provisions of the Certificate of Formation or SecondAmended and Restated Limited Liability Company Agreement, (b) the HoldcoNotes Indenture, (c) any judgment, order or decree to which the Seller issubject, or (d) any law, statute, rule or regulation to which theSeller is subject.

##  

## 6C.          Litigation.  There are no actions, suits, proceedings ororders pending or, to the Seller’s knowledge, threatened against the Seller atlaw or in equity, or before or by any federal, state, municipal or othergovernmental department, commission, board, bureau, agency or instrumentality,domestic or foreign.

##  

## 6D.          Brokerage.  Except to the extent included as CompanyExpenses, there are no claims for brokerage commissions, finders fees, orsimilar compensation in connection with the transactions contemplated by thisAgreement based on any arrangement or agreement made by or on behalf of theSeller, the Seller’s unitholders or Affiliates, or any of its Subsidiaries.

##  

## 6E.           Ownership of Company EquityInterests and NSP Capital Shares. The Seller owns all of the Company Equity Interests and NSP CapitalShares, free and clear of all Liens, other than Liens existing pursuant to theSenior Credit Facility and restrictions on transfer pursuant to applicablesecurities laws.  There are no other equity securities of theCompany or NSP Capital (or securities convertible into equity of the Company orNSP Capital) outstanding.

 

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## 6F.           Holdco Notes Indenture.  The Seller has delivered to, or madeavailable for inspection by, the Buyer a copy of the Holdco NotesIndenture.  The Seller and NSP Capitalhave performed all material obligations required to be performed by them underthe Holdco Notes Indenture and are not (with or without the lapse of time orthe giving of notice, or both) in breach or default thereunder.

##  

# ARTICLE 7REPRESENTATIONS AND WARRANTIES OF BUYER

#  

As an inducement to theCompany to enter into this Agreement, the Buyer hereby represents and warrantsthat:

 

## 7A.          Organization and Corporate Power.  The Buyer is a corporation duly organized,validly existing and in good standing under the laws of the State of Delawareand is qualified to do business as a foreign corporation and is in goodstanding in each jurisdiction in which the failure to so qualify would have amaterial adverse effect upon the ability of the Buyer to consummate thetransactions contemplated hereby.  TheBuyer and its Subsidiaries have all requisite corporate power and authoritynecessary to own and operate their properties and to carry on their businessesas now conducted and to enter into this Agreement and consummate thetransactions contemplated hereby.  Thecopies of the Buyer’s certificate of incorporation and by-laws which have beenmade available to the Company reflect all amendments made thereto at any timeprior to the date of this Agreement.

##  

## 7B.          Authorization; No Breach.  This Agreement has been duly executed anddelivered by the Buyer and constitutes the valid and binding obligation of theBuyer, enforceable in accordance with its terms, except as limited by theapplication of bankruptcy, moratorium and other laws affecting creditors’rights generally and as limited by the availability of specific performance andthe application of equitable principles. Assuming HSR Approval and the receipt of the consents set forth on Schedule 7Battached hereto, the execution and delivery of this Agreement by the Buyer donot (i) result in any material breach of any of the provisions of, (ii) constitutea material default under, (iii) give any third party the right toterminate, (iv) result in the creation of any lien, security interest,charge or encumbrance upon any of the shares of capital stock or any assets ofthe Buyer or its Subsidiaries or (v) require any authorization, consent,approval, exemption or other action by or notice to any court or othergovernmental body, except as has been obtained or as contemplated in thisAgreement or as would not reasonably be expected to materially adversely effectthe Buyer’s ability to consummate the transactions contemplated hereby, underthe provisions of the certificate of incorporation or bylaws of the Buyer, anymaterial contract to which Buyer is party, any judgment, order or decree, orany law, statute, rule or regulation to which the Buyer or itsSubsidiaries is subject.

##  

## 7C.          Litigation.  Except as set forth on Schedule 7Cattached hereto, there are no actions, suits, proceedings or orders pending or,to the Buyer’s knowledge, threatened against the Buyer at law or in equity, orbefore or by any federal, state, municipal or other governmental department,commission, board, bureau, agency or instrumentality, domestic or foreign thatwould reasonably be expected to materially adversely affect the ability of theBuyer to consummate the transactions contemplated by this Agreement.

 

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## 7D.          Brokerage.  There are no claims for brokeragecommissions, finders fees, expenses or similar compensation in connection withthe transactions contemplated by this Agreement based on any arrangement oragreement made by or on behalf of the Buyer or any of its Subsidiaries.

##  

## 7E.           Financing.  The Buyer has received the executedcommitment letter from Credit Suisse First Boston LLC attached hereto as Exhibit 7E(i) (the“Debt Commitment Letter”), and the executed equity commitment letterfrom Odyssey Investment Partners, LLC attached hereto as Exhibit 7E(ii) (the“Equity Commitment Letter” and together with the Debt Commitment Letter,the “Commitment Letters”).  Theaggregate proceeds of the financing as contemplated by the Commitment Letters(if and when received) will be sufficient to pay all obligations of the Buyerhereunder (including fees and expenses). The obligations to fund the commitments under the Commitment Letters arenot subject to any condition, other than the conditions set forth in theCommitment Letters.  The Buyer hasdelivered to Seller’s counsel a true, correct and complete copy of the “marketflex” provisions to which the Debt Commitment Letter is subject.  Each Commitment Letter that has been executedby Buyer has been duly executed by Buyer and, to the knowledge of Buyer, eachother Person party thereto, and each such Commitment Letter is in full forceand effect.

##  

## 7F.           Acquisition for Investment.  The Company Equity Interests acquired by theBuyer pursuant to this Agreement are being acquired for investment only and notwith a view to any public distribution thereof, and the Buyer will not offer tosell or otherwise dispose of the Company Equity Interests so acquired by it inviolation of any of the registration requirements of the Securities Act, or anycomparable state law.  Buyer is an “accreditedinvestor” within the meaning of Regulation D promulgated pursuant to theSecurities Act.

##  

# ARTICLE 8TERMINATION

#  

## 8A.          Termination.  Anything contained herein to the contrarynotwithstanding, this Agreement may be terminated and the transactionscontemplated hereby abandoned at any time:

##  

#### (i)            bythe mutual written consent of the Buyer and the Seller;

####  

#### (ii)           bythe Buyer, if there has been a material violation or breach by the Company orSeller of any covenant, representation or warranty contained in this Agreementwhich has prevented the satisfaction of any condition to the obligations ofBuyer at the Closing and such violation or breach has not been waived by theBuyer or cured by the Company or Seller within twenty (20) days after writtennotice thereof from the Buyer (providedthat the failure todeliver the Company Equity Interests and the NSP Capital Shares at the Closingas required hereunder shall not be subject to cure hereunder unless otherwiseagreed to in writing by the Buyer);

####  

#### (iii)          bythe Seller, if there has been a material violation or breach by the Buyer ofany covenant, representation or warranty contained in this Agreement which hasprevented the satisfaction of any condition to the obligations of Seller at theClosing and

 

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#### such violation or breach has not been waived by the Seller and theCompany or cured by the Buyer within twenty (20) days after written noticethereof by the Seller (providedthat the failure to deliver thePurchase Price at the Closing as required hereunder shall not be subject tocure hereunder unless otherwise agreed to in writing by the Seller);

####  

#### (iv)          bythe Seller or the Buyer if any Governmental Authority shall have issued anorder, decree or ruling, in each case, permanently restraining, enjoining orotherwise prohibiting the transactions contemplated by this Agreement and suchorder, decree or ruling shall have become final and non-appealable; providedthat the party seeking to terminate this Agreement pursuant to this provisionshall have used all reasonable efforts to remove or vacate such order;

####  

#### (v)           bythe Seller on or after the 7th business day after the Buyer deliversa Financing Notice unless on or prior to such 7th business day Buyerhas delivered to Seller an Alternative Financing Proposal; or

####  

#### (vi)          bythe Buyer or the Seller if the transactions contemplated hereby have not beenconsummated prior to August 5, 2005 (the “Termination Date”); providedthat (a) the Buyer shall not be entitled to terminate thisAgreement pursuant to this subparagraph (vi) if the Buyer’s knowing orwillful breach of this Agreement has prevented the consummation of thetransactions contemplated hereby and (b) the Seller shall not be entitledto terminate this Agreement pursuant to this subparagraph (vi) if theCompany’s or the Seller’s knowing or willful breach of this Agreement hasprevented the consummation of the transactions contemplated hereby.

####  

## 8B.          Effect of Termination.  In the event of any termination of thisAgreement by the Buyer or the Seller as provided above, this Agreement shallforthwith become void and of no further force or effect (other than this Section 8B,Section 10C, Section 10N, Article 11 andthe second sentence of Section 10L(i) (with respect to theEquity Commitment Letter)) which shall survive the termination of thisAgreement and shall be enforceable by the parties hereto), and there shall beno liability or obligation on the part of the Buyer, the Seller or the Companyor any of their respective representatives or Affiliates to any other partyhereto, except as set forth in this Section 8B, except for willfulbreaches of this Agreement prior to the time of such termination.

##  

# ARTICLE 9DEFINITIONS

#  

“Acquisition Agreement”shall have the meaning set forth in Section 4S.

 

“Adjustment Amount”means the sum of (i) Transaction Expenses and (ii) any prepaymentpenalties, breakage fees or similar fees accrued after the date of the LatestBalance Sheet requiring payment of any Indebtedness (other than pursuant to theNotes or the Holdco Notes) of the Company and its Subsidiaries is required tobe paid pursuant to this Agreement or otherwise (whether or not paid on orprior to the Closing Date); provided that, notwithstanding theforegoing, in no event shall “Adjustment Amount” include (x) liabilities orobligations incurred or arranged by Buyer or its Affiliates in connection withthe transactions contemplated

 

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hereby, (y) liabilities or obligations in respect ofany accrued but unpaid interest for the period from April 2, 2005 throughand including the Closing Date, or (z) any tender cost, tender premium, consentsolicitation fee, exit consent fee, make-whole premium, redemption premium,change in control premium, termination payment or other payment related to therefinancing, purchase or redemption or potential refinancing, purchase orredemption of the Notes, the Holdco Notes and/or the German Credit Facilities.

 

“Affiliate” meansany Person that directly, or indirectly through one or more intermediaries,controls or is controlled by or is under common control with the party specified.

 

“Allocation” shallhave the meaning set forth in Section 10M(i).

 

“Alternative FinancingProposal” means a written proposal from Buyer to consummate thetransactions contemplated hereby on the terms set forth herein on or prior tothe Termination Date, with no amendment or modification that is adverse toSeller or the Company, and that includes with such proposal, written equity anddebt commitment letters from reputable financial institutions that (i) providefor the full debt and equity financing for Buyer to consummate the transactionscontemplated hereby on the terms set forth herein on or prior to theTermination Date, (ii) do not contain terms or conditions that are,individually or in the aggregate, in addition to or more burdensome (from theperspective of consummating the transactions contemplated hereby) than theconditions set forth in the Equity Commitment Letter and the Debt CommitmentLetter, (iii) do not cause, and upon consummation of the transactionscontemplated hereby would not cause, the Seller or the Company to be in breachof any of their representations, warranties or covenants hereunder or in breachof any other agreement or instrument to which it is party, and (iv) isreasonably satisfactory to the Seller and the Company.

 

“Base Purchase Price”means $472,000,000.

 

“Business Software”shall have the meaning given to such term in Section 4K(ii).

 

“Buyer” shall havethe meaning set forth in the preamble.

 

“CERCLA” shallhave the meaning set forth in Section 4Q.

 

“Claims” shallhave the meaning set forth in Section 10P.

 

“Closing” shallhave the meaning set forth in Section 1C.

 

“Closing Date”shall have the meaning set forth in Section 1C.

 

“Code” means theInternal Revenue Code of 1986, as amended.

 

“Commitment Letters”shall have the meaning set forth in Section 7E.

 

“Company” shallhave the meaning set forth in the preamble.

 

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“Company DisclosureLetter” means the Company Disclosure Letter delivered by the Company to theBuyer on the date hereof, as amended, supplemented or restated in accordancewith Section 11H attached hereto.

 

“Company EquityInterests” shall have the meaning given to such term in the preamblehereto.

 

“Company Expenses”means the aggregate fees and expenses of NSP Capital, the Company and itsSubsidiaries (i) for investment banking services for the Seller, theCompany and their Subsidiaries, (ii) to Kirkland & Ellis LLP andother legal counsel for legal services to the Seller, the Company and theirSubsidiaries, (iii) to ENVIRON for environmental consulting services forthe Seller, the Company and their Subsidiaries, (iv) to Ernst &Young LLP for accounting services to the Seller, the Company and theirSubsidiaries, and (v) any Person in connection with the procurement of anythird-party consent set forth on Section 2B(x) of the CompanyDisclosure Letter or that is otherwise necessary for the consummation of thetransactions contemplated hereby, in each case for clauses (i) - (v) foregoingto the extent unpaid at the Closing Date and to the extent related to thetransactions contemplated hereby.

 

“Company IntellectualProperty” means each of the material Intellectual Property Rights owned bythe Company or one of its Subsidiaries.

 

“Company MaterialAdverse Effect” means a material adverse effect upon the business, assets,financial condition or operating results of the Company and its Subsidiariestaken as a whole, except any adverse effect related to or resulting from (i) eventsaffecting the United States or global economy or capital or financial marketsgenerally (in each case which changes or events do not affect the Company andits Subsidiaries in a materially disproportionate manner), (ii) changes inconditions in the industries in which the Company and its Subsidiaries or theircustomers operate (in each case which changes or events do not affect theCompany and its Subsidiaries in a materially disproportionate manner) or (iii) normal,ordinary course seasonal fluctuations in the business of the Company and itsSubsidiaries.  For purposes ofdetermining whether any representation and warranty contained in Article 4qualified by a Company Material Adverse Effect has been breached, all relatedeffects and changes that may result in a breach of such representation andwarranty but for such qualification shall be aggregated to determine whethersuch effects and changes in the aggregate constitute a Company Material AdverseEffect described in this definition and so qualifying such representation andwarranty.

 

“Company MaterialContracts” shall have the meaning set forth in Section 4J.

 

“Company SEC Reports”means the reports, schedules and forms (but, in each case, excluding theexhibits thereto) filed by the Company and its Subsidiaries with the SEC andpublicly available since December 31, 2003 and prior to the execution ofthis Agreement, in each case as amended.

 

“ConfidentialityAgreement” shall have the meaning set forth in Section 10C.

 

“Consent Solicitation”shall have the meaning set forth in Section 3F(ii).

 

“ConstitutiveDocuments” shall have the meaning set forth in Section 10H(i).

 

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“Continuing Employees”shall have the meaning set forth in Section 10I.

 

“Debt CommitmentLetter” shall have the meaning set forth in Section 7E.

 

“Determination Date”shall have the meaning set forth in Section 10L(i).

 

“Employee Benefit Plan”means each “employee benefit plan” (as such term is defined in Section 3(3) ofERISA) and each other material employee benefit plan, program or arrangementincluding, without limitation, any bonus, LLC unit purchase, LLC unitownership, LLC unit option, LLC unit appreciation, deferred compensation,incentive, severance, or termination plan or arrangement, or other materialemployee fringe benefit plan that is maintained, sponsored or contributed to bythe Company or its Subsidiaries on behalf of employees located in the UnitedStates.

 

“Environmental Laws”shall have the meaning set forth in Section 4Q.

 

“Environmental Reports”means the Environmental Reports set forth on Section 9A of theCompany Disclosure Letter.

 

“Equity CommitmentLetter” shall have the meaning set forth in Section 7E.

 

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

 

“ERISA Affiliate”means each entity that is treated as a single employer with the Company forpurposes of Section 414 of the Code.

 

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

 

“Financial Statements”shall have the meaning set forth in Section 4E.

 

“Financing Notice”shall have the meaning set forth in Section 10L(i).

 

“Foreign Benefit Plan”means each employee benefit plan, program or arrangement maintained by theCompany or its Subsidiaries on behalf of employees of the Company or itsSubsidiaries located outside of the United States.

 

“GAAP” meansUnited States generally accepted accounting principles.

 

“German CreditFacilities” means,collectively, (i) that certain Loan Agreement dated as of December, 15,1998 between Kächele-Cama-Latex GmbH and VR Genossenschaft Fulda for DM1,500,000, (ii)  that certain Loan Agreement dated as of July 20,2001 between Kächele-Cama-Latex GmbH and Sparkasse Fulda for Euro 250,000, (iii) thatcertain Loan Agreement dated as of July 20, 2001 betweenKächele-Cama-Latex GmbH and Sparkasse Fulda for Euro 210,000, (iv) thatcertain Loan Agreement dated as of Sept. 22, 1998 between Kächele-Cama-LatexGmbH and Dresdner Bank AG for DM 1,500,000, (v) that certain LoanAgreement dated as of April 23, 2001 between Kächele-Cama-Latex GmbH andCommerzbank for DM  640,000; (vi) thatcertain Loan Agreement dated as of December 31, 1999 betweenKächele-Cama-Latex

 

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GmbH and VRGenossenschaftsbank for DM 1,250,000 and (vii) that certain LoanAgreement, dated as of December 28, 2001 between Kächele-Cama-Latex GmbHand Sparkasse Fulda for DM 357,904.00.

 

“GovernmentalAuthority” means any foreign or UnitedStates federal, state or local court, administrative agency, commission orgovernmental or regulatory authority.

 

“Holdco Notes”means the 113/4% Senior Pay In Kind Notes of the Sellerand NSP Holdings Capital Corp. due 2012.

 

“Holdco NotesIndenture” means that certain Indenture, dated as of January 7, 2005,by and among the Seller, NSP Capital, the guarantors named therein andWilmington Trust Company, as trustee.

 

“HSR Act” shallhave the meaning given to such term in Section 10G.

 

“HSR Approval”shall have the meaning given to such term in Section 2A.

 

“Indebtedness”means, without duplication, (i) all principal and accrued interest owingby NSP Capital, the Company and its Subsidiaries for debt for borrowed moneyand penalties owed to any third party (i.e., specifically excludingintercompany debt between NSP Capital, the Company and any of its Subsidiariesand any Subsidiary of the Company and another Subsidiary of the Company),including pursuant to the Senior Credit Facility, the Notes and the SellerNotes, (ii) all principal, accrued interest and penalties owing by Sellerand NSP Capital in respect of the Holdco Notes, but only to the extent that theliability therefor is assumed by the Buyer or one of its Subsidiaries from andafter the Closing, (iii) all obligations of the Company and itsSubsidiaries as lessee or lessees under leases that have been recorded ascapital leases in accordance with GAAP, (iv) all unpaid reimbursementobligations of the Company and its Subsidiaries with respect to letters ofcredit, bankers’ acceptances or similar facilities issued for the account ofsuch Person, (v) all fees and other expenses owed with respect to theindebtedness referred to above (and any prepayment penalties or fees or similarbreakage costs or other fees and costs and similar expenses required to be paidin respect of any such Indebtedness to be satisfied and discharged in full atthe Closing (other than the Notes and the Holdco Notes)), and (vi) allindebtedness of any Person (other than the Company or any of its Subsidiaries)of the type referred to in clauses (i), (ii), (iii) (iv) and (v) foregoingabove guaranteed directly or indirectly in any manner by the Company or any ofits Subsidiaries; provided that, notwithstanding the foregoing, in noevent shall “Indebtedness” include (x) liabilities or obligations incurred orarranged by Buyer or its Affiliates in connection with the transactionscontemplated hereby, (y) liabilities or obligations in respect of any accruedbut unpaid interest for the period from April 2, 2005 through andincluding the Closing Date, or (z) any tender cost, tender premium, consentsolicitation fee, exit consent fee, make-whole premium, redemption premium,change in control premium, termination payment or other payment related to therefinancing, purchase or redemption or potential refinancing, purchase orredemption of the Notes, the Holdco Notes and/or the German Credit Facilities.

 

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“Indenture” meansthat certain Indenture, dated as of August 13, 2003, by and among theCompany, Norcross Capital Corp., the guarantors named therein and WilmingtonTrust Company, as trustee.

 

“InformationMemorandum” shall have the meaning set forth in Section 11I.

 

“Intellectual PropertyRights” means all rights, worldwide, in and to the following: (i) patentsand patent applications, (ii) trademarks, service marks, trade dress,trade names, domain names, logos and corporate names and registrations andapplications for registration thereof together with all of the goodwillassociated therewith, (iii) works of authorship and other copyrightableworks, including registered or unregistered copyrights,  and applications for registration thereof, (iv) maskworks and registrations and applications for registration thereof, (v) computersoftware (including source code and executable code) and (vi) tradesecrets, confidential information, inventions (whether patentable orunpatentable and whether or not reduced to practice) and know-how, (vii) allother proprietary rights.

 

“knowledge,” whenused in the phrase “to the knowledge of the Company” or similar phrasesmeans, and shall be limited to, the actual knowledge of the Senior ExecutiveEmployees, after reasonable inquiry of Charles S. Ellis, Mary Grilliot, andKenneth R. Martel.

 

“Latest AuditedBalance Sheet” shall have the meaning set forth in Section 4E.

 

“Latest Balance Sheet”shall have the meaning set forth in Section 4E.

 

“Leased Real Property”means all leasehold or subleasehold estates and other rights to use or occupyany land, buildings, structures, improvements, fixtures, or other interest inreal property that is used in the Company’s or any of its Subsidiaries’business.

 

“Leases” means allleases, subleases, licenses, concessions and other agreements (written ororal), including all amendments, extensions, renewals, guaranties and otheragreements with respect thereto, pursuant to which the Company or any of itsSubsidiaries holds any Leased Real Property and for which the annual rentobligation exceeds $50,000.

 

“Liabilities”shall have the meaning set forth in Section 4F.

 

“License Agreement”shall have the meaning set forth in Section 4K(i).

 

“Lien” means anymortgage, pledge, lien, equitable interest, right-of-way, easement,encroachment, security interest, preemptive right, right of first refusal or similarrestriction, charge or right, option, judgment, title defect or encumbrance ofany kind.

 

“Management EquityRollover Amount” means (i)  in the event that the transactionscontemplated by Section 3J(i) are not consummated, not less than$1,500,000 or (ii) in the event that the transactions contemplated by Section 3J(i) areconsummated, not less than the greater of $1,900,000 and the pre-Tax equivalentof $1,500,000 (applying the effective Tax rates for the Rollover ManagementUnitholders related to the sale of the Company by the Seller); providedthat in no event shall the Management Equity Rollover Amount exceed $3,000,000.

 

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“March NetIndebtedness” means $331,518,000 (which is calculated to equal theaggregate amount of Net Indebtedness as of the close of business on April 2,2005 in accordance with Exhibit 9A).

 

“Material Transaction”shall have the meaning set forth in Section 4S.

 

“Multiemployer Plan”has the meaning set forth in Section 3(37) of ERISA.

 

“Net Indebtedness”means, at the time of determination, the excess of (i) Indebtedness over (ii) cashand cash equivalents (determined in a manner consistent with the preparation ofthe Latest Balance Sheet) of the Company and its Subsidiaries.

 

“North” meansNorth Safety Products Inc., a Delaware corporation.

 

“North ManagementShares” shall have the meaning set forth in Section 3J(i).

 

“Notes” means the97/8% Senior Notes of the Company and Norcross CapitalCorp. due 2011.

 

“NSP Capital”shall mean NSP Holdings Capital Corp., a Delaware corporation.

 

“NSP Capital Shares”shall have the meaning given to such term in the preamble hereto.

 

“Owned Real Property”means all land, together with all buildings, structures, improvements, andfixtures located thereon, and all easements and other interests and rightsappurtenant thereto, owned by the Company or any of its Subsidiaries and usedin the business of the Company or any of its Subsidiaries.

 

“Party”means the Seller or the Company, on one hand, or the Buyer, on the other hand,as the context requires, and the term “Parties” means, collectively, theSeller, the Company and the Buyer.

 

“PBGC” means theUnited States Pension Benefit Guaranty Corporation.

 

“PermittedEncumbrances” means (i) any restriction on transfer arising underapplicable securities law, (ii) Liens for Taxes not yet due and payable orfor Taxes that the taxpayer is diligently contesting in good faith throughappropriate proceedings and for which adequate reserves have been establishedin accordance with GAAP, (iii) purchase money Liens and Liens securingpayments under lease arrangements or license arrangements, (iv) Liensunder the Senior Credit Facility, the German Credit Facilities, the SouthAfrican line of credit or the Seller Notes, (v) Liens of lessors andlicensors under any lease or license agreement to which the Company or any ofits Subsidiaries is party, (vi) mechanics’, material men’s, warehousemen’s,contractors’, workers’, repairmen’s, carriers’ and similar Liens attaching byoperation of law, incurred in the ordinary course of business and securingpayments not delinquent or payments which are being diligently contested ingood faith by appropriate proceedings or bonded and for which adequate reserveshave been established in accordance with GAAP, (vii) zoning, buildingcodes, and other land use laws regulating the use or occupancy of Owned RealProperty or

 

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Leased Real Property or the activities conductedthereon that are imposed by any governmental authority having jurisdiction oversuch Owned Real Property; (viii) rebates, refunds and other discounts tocustomers in the ordinary course of business consistent with past practice inamounts consistent with those reflected on the Latest Balance Sheet, and (ix) easements,covenants, conditions, restrictions, and other similar matters affecting titleto any assets of the Company or any of its Subsidiaries and other Liens that donot or would not materially impair the use or occupancy of such assets in theoperation of the business of the Company and its Subsidiaries taken as a whole.

 

“Person” means anindividual, a partnership, a corporation, a limited liability company, anassociation, a joint stock company, a trust, a joint venture, an unincorporatedorganization and a governmental entity or any department, agency or politicalsubdivision thereof.

 

“Policies” shallhave the meaning set forth in Section 4O.

 

“Proposed AcquisitionTransaction” shall have the meaning set forth in Section 3H.

 

“Purchase Price”means the result equal to (i) the Base Purchase Price, minus (ii) theMarch Net Indebtedness, minus (iii) the Adjustment Amount, asadjusted pursuant to Section 3J.

 

“Rebate Obligations”shall have the meaning set forth in Section 4U.

 

“Released Matter”shall have the meaning set forth in Section 10P.

 

“Releasee” shallhave the meaning set forth in Section 10P.

 

“Replacement Agreement”shall have the meaning set forth in Section 3K.

 

“Reportable Event”means the reportable events listed in Section 4043 of ERISA, other thanthose with respect to which notice is waived by regulation.

 

“Rollover ManagementUnitholders” shall have the meaning set forth in Section 3J(i).

 

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

 

“Seller Group”shall have the meaning given to such term in Section 10G.

 

“Seller LLC Agreement”shall have the meaning given to such term in Section 3K.

 

“Seller Member Letter”shall have the meaning given to such term in Section 2B.

 

“Seller Notes” meansthe each of the promissory notes for which the Company or any of itsSubsidiaries is an obligor as set forth on Section 9B of theCompany Disclosure Letter.

 

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“Senior CreditFacility” means that certain Second Amended and Restated Credit Agreement,dated as of March 20, 2003, by and among the Company, certain of itsSubsidiaries, the lenders party thereto, and Fleet National Bank, asadministrative agent, as amended by that certain First Amendment and Consent,dated as of July 24, 2003, that certain Second Amendment, dated as of September 25,2003, that certain Third Amendment, dated as of October 4, 2004, thatcertain Fourth Amendment, dated as of December 29, 2004, as furtheramended, modified, supplemented or waived from time to time, and each otherdocument or agreement executed in connection therewith.

 

“Senior ExecutiveEmployees” means Robert A. Peterson and David F. Myers, Jr.

 

“Senior ExecutiveObligations” means (i) the aggregate bonus obligations of the Sellerand its Subsidiaries to each of the Senior Executive Employees pursuant tothose certain letter agreements, dated as of January 1, 2002, by andbetween the Seller and each of the Senior Executive Employees and (ii) theother obligations of the Company and its Subsidiaries in place at or prior toClosing (other than at the direction of the Buyer and its Affiliates) toemployees of the Company and its Subsidiaries that come due as a result of thetransactions contemplated hereby, other than obligations that are paid by theSeller prior to or in connection with the Closing.

 

“Subsidiary”means, with respect to any Person, any corporation, partnership, association orother business entity of which (i) if a corporation, a majority of thetotal voting power of shares of stock entitled (without regard to theoccurrence of any contingency) to vote in the election of directors, managersor trustees thereof is at the time owned or controlled, directly or indirectly,by that Person or one or more of the other Subsidiaries of that Person or acombination thereof, or (ii) if a partnership, association or otherbusiness entity, a majority of the partnership or other similar ownershipinterest thereof is at the time owned or controlled, directly or indirectly, byany Person or one or more Subsidiaries of that Person or a combinationthereof.  For purposes hereof, a Personor Persons shall be deemed to have a majority ownership interest in apartnership, association or other business entity if such Person or Personsshall be allocated a majority of partnership, association or other businessentity gains or losses.

 

“Tax” or “Taxes”means any federal, provincial, state, local or foreign income, gross receipts,license, payroll, employment, excise, severance, stamp, occupation, premium,property or windfall profits taxes, environmental taxes, customs duties,franchise, employees’ income withholding, foreign or domestic withholding,social security, unemployment, disability, real property, personal property,sales, use, transfer, value added, goods and services, alternative or add-onminimum or other tax, fee, assessment or charge of any kind whatsoeverincluding any interest, penalties or additions to Tax or additional amounts inrespect of the foregoing.

 

“Tax Return” meansany Tax return, declaration, report, claim for refund, or information return orstatement filed or required to be filed by the Company or any of itsSubsidiaries.

 

“Termination Date”shall have the meaning set forth in Section 8A(vi).

 

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“Title IV Plan”means any employee pension benefit plan (as such term is defined in Section 3(2) ofERISA) that is subject to Title IV of ERISA, other than a Multiemployer Plan.

 

“TransactionDocuments” means, collectively, this Agreement and each of the otheragreements and instruments to be executed and delivered by either or both ofthe Parties in connection with the consummation of the transactionscontemplated hereby; provided that notwithstanding anything herein tothe contrary, except for any Supplemental Indenture executed in connection withthe assignment and assumption of the Holdco Notes and the Holdco NotesIndenture, in no event shall any documents executed in connection with Buyer’sfinancing for the transactions contemplated hereby be “Transaction Documents”of the Seller or the Company.

 

“Transaction Expenses”means, without duplication, the sum of (i) the Company Expenses and (ii) theSenior Executive Obligations; provided that, for the avoidance of doubt,in no event shall “Transaction Expenses” be deemed to include (x) any fees andexpenses to any of the Persons named in clauses (i) and (iv) of thedefinition of “Company Expenses”, but only to the extent relating to Buyer’sfinancing for the transactions contemplated hereby or (y) any tender cost,consent solicitation fee, exit consent fee, makewhole premium, redemptionpremium, change in control premium, termination payment or other paymentrelated to the refinancing or redemption or potential refinancing or redemptionof the Notes, the Holdco Notes and/or the German Credit Facilities.

 

“Treas. Reg.”means the Treasury Regulations promulgated pursuant to the Code.

 

“Ultimate ParentCompany” shall have the meaning set forth in Section 3J(i).

 

“WARN” shall havethe meaning given to such term in Section 10J.

 

# ARTICLE 10ADDITIONAL AGREEMENTS

#  

## 10A.        Survival.  Except for the representations and warrantiescontained in Sections 4A, 4B, 5A, 5B, 6A and6E, which shall survive to the extent provided in the Seller MemberLetter, and the representations and warranties set forth in Section 7Aand Section 7B, each of which shall survive the Closingindefinitely, each of the representations and warranties set forth in thisAgreement or in any certificate delivered in connection with this Agreement(other than the certificate executed by Buyer or one or more of its Affiliatesin favor of Seller and/or one or more of its Affiliates or representatives inconnection with the assignment and assumption of the Holdco Notes) shallterminate effective immediately as of the Closing such that no claim for breachof any such representation or warranty, detrimental reliance or other right orremedy (other than for common law actual fraud) may be brought after theClosing.  Except for the respectivecovenants of the parties pursuant to Section 1C (which covenantsshall survive the Closing indefinitely), the covenants of any party set forthin this Agreement and in any other document delivered in connection herewiththat require performance by such party on or prior to the Closing Date shallterminate effective immediately as of the Closing such that no claim for breachof any such covenant, detrimental reliance or other right or remedy may bebrought after the Closing.  Notwithstandingthe fact that the representations and warranties in Article 4 hereof aremade by the Company, the Seller agrees that it shall be jointly and severally

 

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## responsible forany common law actual fraud committed by the Company in making suchrepresentations or warranties.

##  

## 10B.        Press Release and Announcements.  The Company and the Buyer agree that, fromthe date hereof through the Closing Date, no public release or announcementconcerning the transactions contemplated hereby shall be issued or made by oron behalf of any party without the prior consent of the other parties, exceptthat each of the Parties and their respective Affiliates may make announcementsfrom time to time (i) to their respective equityholders, (ii) totheir respective employees, (iii) the Buyer’s financing sources and (iv) assuch party may, after consultation with counsel, reasonably determine isnecessary to comply with applicable law. Notwithstanding the foregoing, the Buyer and the Company shall cooperateto prepare a joint press release to be issued on the Closing Date.  Each party may disclose the terms of thisAgreement to their respective accountants and other representatives asnecessary in connection with the ordinary conduct of their respectivebusinesses (so long as such Persons agree to keep the terms of this Agreementconfidential).  Furthermore, Buyerunderstands that the Seller and the Company will need to publicly announce andfile this Agreement promptly after the execution hereof; provided thatthe Seller and the Company shall make available to the Buyer a copy of suchpublic announcement prior to filing and, to the extent such comments would notcause the Seller or the Company to violate applicable law, shall incorporateany reasonable comments of Buyer made prior to filing in such public release.

##  

## 10C.        Confidentiality.

##  

#### (i)            TheBuyer acknowledges that all information provided to any of its and itsAffiliates, agents and representatives by the Company and its Affiliates,agents and representatives is subject to the terms of a confidentialityagreement between or on behalf of the Company and Buyer or one or more of theirrespective Affiliates or other beneficial owners (the “ConfidentialityAgreement”), the terms of which are hereby incorporated herein by referenceand (to the extent signed by an Affiliate of Buyer) shall be binding on Buyeras a recipient of information from the Seller, the Company and their respectiveSubsidiaries as though the Buyer was an original signatory thereto.

####  

#### (ii)           Fromand after the Closing the Seller shall keep confidential and not disclose toany other person or entity or use for his or its own benefit or the benefit ofany other person or entity any Evaluation Materials (as such term is defined inthe Confidentiality Agreement) in its possession or control.  The obligations of the Seller under this Section 10C(ii) shallnot apply to Evaluation Material which (i) is or becomes generallyavailable to the public without breach of the commitment provided for in this Section 10D(ii);or (ii) is required to be disclosed by law, order or regulation of a courtor tribunal or governmental authority; provided, however, that,in any such case, the Seller shall notify the Buyer as early as reasonablypracticable prior to disclosure to allow the Company or the Buyer to takeappropriate measures to preserve the confidentiality of such EvaluationMaterial at the cost of the Company.

####  

## 10D.        Notification.  Prior to the Closing, each of Buyer, Seller,NSP Capital and the Company shall promptly notify the other parties hereto ifsuch Person obtains knowledge that any of the representations and warranties inthis Agreement, the Company Disclosure Letter and

 

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## the Scheduleshereto are not true and correct in all material respects, or if such Personobtains knowledge of any material errors in, or omissions from, the CompanyDisclosure Letter or the Schedules to this Agreement provided, however,that the delivery of any notice pursuant to this Section 10D shallnot limit or otherwise affect the remedies available under this Agreement toany Party receiving such notice.

##  

## 10E.         Consents.  Prior to the Closing, the Company shall, andshall cause the Subsidiaries to, use commercially reasonable efforts to obtainall of the consents and approvals that are set forth on Section 2B(x)of the Company Disclosure Letter and each other consent of a third party (otherthan consents (i) in connection with the Debt Tender and Consent Solicitation,which is governed by Section 3F and (ii) from GovernmentalAuthorities, which is governed by Section 10G) necessary for theconsummation of the transactions contemplated hereby; provided thatneither the Company nor its Subsidiaries shall be required to commence anylitigation against any third party or to expend any material sum to obtain suchconsent.  To the extent requested by theCompany, the Buyer shall cooperate with the Company in all reasonable respectsin connection with obtaining any such consents and approvals.

##  

## 10F.         Reasonable Best Efforts.  Each of the Buyer, the Seller, and theCompany shall use its reasonable best efforts to cause the conditions toClosing to be satisfied; provided that, if with respect to anyparticular covenant of any party hereto, another standard (e.g., “best efforts”or “commercially reasonable efforts”) is called for, such other standard shallapply for such particular covenant of such party.  The “reasonable best efforts” of the Companyshall not require the Company or any of its Subsidiaries, Affiliates orrepresentatives to expend any material sum of money to remedy any breach of anyrepresentation or warranty hereunder; provided that if the Company orany of its Subsidiaries elects to remedy such breach, the Company shall not bedeemed to be in breach of such representation or warranty, or in violation ofany covenant pursuant to Section 3B, for purposes of determiningthe Buyer’s obligations to consummate the transactions contemplated herebypursuant to Section 2B.

##  

## 10G.        Regulatory Act Compliance.  The Buyer and the Company shall each file orcause to be filed, as promptly as practicable after the date of this Agreement,any notifications or the like required to be filed under the Hart-Scott-RodinoAntitrust Improvements Act of 1976, as amended (the “HSR Act”) and otheranti-competition laws with respect to the transactions contemplated hereby andthe Buyer shall pay all filing and similar fees payable in connectiontherewith.  With respect to filings underthe HSR Act, each of the parties hereto shall seek early termination of thewaiting period under the HSR Act.  TheBuyer and the Company shall use their respective best efforts to respond to anyrequests for additional information made by any agencies and to cause thewaiting periods or other requirements under the HSR Act to terminate or expireat the earliest possible date and (subject to the Party’s rights under Section 8Aabove) to resist in good faith, at each of their respective cost and expense(including the institution or defense of legal proceedings), any assertion thatthe transactions contemplated hereby constitute a violation of the antitrustlaws, all to the end of expediting consummation of the transactionscontemplated hereby.  Each of the Buyerand the Company shall consult with the other prior to any meetings, bytelephone or in person, with the staff of the Federal Trade Commission, theUnited States Department of Justice or any other regulatory agency, and each ofthe Buyer and the Company shall have the right to have a representative presentat any such meeting.  Notwithstanding theforegoing, no party shall be required to divest, or offer or agree to divest,

 

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## any assets orproperties (including any assets or properties of the Company or any of itsSubsidiaries).

##  

## 10H.        Director and Officer Liability andIndemnification.

##  

#### (i)            Buyershall cause the limited liability company agreement, certificate ofincorporation, By-Laws, and/or other constitutive documents of the Company andeach of its Subsidiaries (collectively, the “Constitutive Documents”) tocontain the provisions with respect to indemnification set forth in theConstitutive Documents on the date of this Agreement, which provisions shall notbe amended, repealed or otherwise modified for a period of not less than six (6) yearsafter the Closing in any manner that would adversely affect the rightsthereunder of individuals who at any time prior to the Closing were members,officers, directors, managers or employees of the Seller, the Company or any oftheir respective Subsidiaries in respect of actions or omissions occurring ator prior to the Closing Date (including without limitation the transactionscontemplated by this Agreement), unless such modification is required by law.

####  

#### (ii)           Buyershall cause the Company and its Subsidiaries to maintain in effect for sixyears from the Closing Date directors’ and officers’ liability insurancecovering those persons who are currently covered by the Company’s directors’and officers’ liability insurance policy (which, for the avoidance of doubt,includes members of the Seller’s board of managers) on terms comparable to suchexisting insurance coverage; provided that in the event that any claimis brought under any such policy prior to the six year anniversary of theClosing Date, such directors’ and officers’ liability insurance policy shall bemaintained until final disposition thereof; provided, however, thatduring such period, the Company shall not be required to maintain any coveragein excess of the amount that can be obtained for the remainder of such periodfor an annual premium of 150% of the current annual premium paid by the Companyfor its existing directors’ and officers’ liability insurance coverage as ofthe date hereof.

####  

## 10I.          EmployeeBenefits Matters.

##  

#### (i)            Immediately following the ClosingDate, the Buyer shall or shall cause the Company and its Subsidiaries toprovide or cause to be provided to employees of the Company and its Subsidiaries(the “Continuing Employees”) compensation and employee benefit plans,programs, arrangements and policies that are substantially similar in theaggregate to the compensation and employee benefit plans, programs,arrangements and policies that were provided to the Continuing Employeesimmediately prior to the execution of this Agreement.  The Buyer shall have the same right,following Closing, to terminate the employment of any Continuing Employee oramend or terminate any compensation or employee benefit plan, program oragreement as the Company, its Subsidiaries and ERISA Affiliates have on thedate hereof.  The Buyer agreesthat it or one of its Affiliates shall be solely responsible for satisfying thecontinuation coverage requirements of Section 4980B of the Code for all “M&Aqualified beneficiaries” as such term is defined in Treas. Reg. § 54.4980B-9.

 

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#### (ii)           Following the Closing Date,the Buyer shall recognize or cause to be recognized the service of eachContinuing Employee with the Company or its Subsidiaries determined as of theClosing Date for purposes of eligibility and vesting under any employee benefitplans, programs, arrangements or policies maintained by the Buyer, the Companyor any of their Affiliates that employs any Continuing Employee; provided,however, that such crediting of service shall not operate to duplicateany benefit.  Each such employee benefitplan, program, arrangement or policy that provides health benefits toContinuing Employees shall waive pre-existing condition limitations withrespect to the Continuing Employees to the same extent waived under theapplicable group health plan of the Company or its Subsidiaries maintainedprior to the Closing Date, and each Continuing Employee shall be given creditfor amounts paid under the corresponding group health plan of the Company orits Subsidiaries during the plan year in which the Closing Date occurs forpurposes of applying deductibles, co-payments and out-of-pocket maximums forsuch plan year.

####  

#### (iii)          Except to the extentotherwise agreed between the Buyer and such director, officer or employee, theBuyer shall cause the Company and its Subsidiaries to honor for the one-yearperiod following the Closing Date all employment, change-of-control andseverance agreements existing as of the date hereof between the Company or itsSubsidiaries and any current or former director, officer or employee of theCompany or its Subsidiaries.

####  

## 10J.         Facility Closings; Employee Layoffs.  For a period of ninety days after theClosing Date, none of the Buyer, the Company or any of its Subsidiaries shallterminate employees of the Company or any of its Subsidiaries in such numbersas would trigger any liability under the Worker Adjustment, Retraining and Notification Act, 29 U.S.C. § 2101,et seq. (“WARN”) or any United States state plant closing or severancelaw.  The Buyer shall cause the Companyand its Subsidiaries following the Closing Date to comply with any notice orfiling requirements under WARN and any state or foreign plant closing orseverance law.

##  

## 10K.        Provision Respecting Representationof Company and Seller.  Each of theparties to this Agreement hereby agrees, on its own behalf and on behalf of itsdirectors, members, partners, officers, employees and Affiliates, that Kirkland &Ellis LLP may serve as counsel to each and any of Seller, its unitholders, andtheir respective Affiliates (individually and collectively, “Seller Group”),on the one hand, and the Company and its Subsidiaries, on the other hand, inconnection with the negotiation, preparation, execution and delivery of thisAgreement and the consummation of the transactions contemplated hereby, andthat, following consummation of the transactions contemplated hereby, Kirkland &Ellis LLP (or any successor) may serve as counsel to the Seller Group or anydirector, member, partner, officer, employee or Affiliate of Seller Group, inconnection with any litigation, claim or obligation arising out of or relatingto this Agreement or the transactions contemplated by this Agreementnotwithstanding such representation or any continued representation of theCompany and/or any of its Subsidiaries. Each of the parties hereto hereby consents to such representation andwaives any conflict of interest arising therefrom, and each of such partiesshall cause any Affiliate thereof to consent to waive any conflict of interestarising from such representation.

 

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## 10L.         Buyer Financing; Notes and Indenture;Holdco Notes and Holdco Notes Indenture.

##  

#### (i)            Withoutlimiting the generality of Buyer’s obligations under Section 10F orelsewhere in this Agreement, the Buyer agrees to take the following actionswith respect to its financing for the transactions contemplated hereby.  Buyer shall not agree to amend or modify(including by amendment or modification to, or waiver of, the existing terms orentering into a new agreement) the terms of the Commitment Letters or any “marketflex” language (as previously presented to Seller’s counsel) in any agreementexecuted in connection with the Commitment Letters to include any additionalconditions to the financing set forth in the Commitment Letters in the formsattached to this Agreement or that could otherwise reasonably be expected toimpair its obligations hereunder.  Buyershall provide updates to the Company as to the progress of its financing andshall make its financing sources available to the Company and its representativesto determine the progress of the Buyer’s financing efforts, in each case uponreasonable notice from the Company or its representatives.  Buyer shall promptly (but in any event within24 hours after so learning) provide the Company with written notice (a “FinancingNotice”) in the event that any party to the Debt Commitment Letters hasinformed Buyer in writing that it has determined that any condition to the DebtCommitment Letters will not be satisfied or waived prior to the TerminationDate (with it being understood that if Buyer gets verbal notice of suchdetermination, it shall immediately request written notification from suchcounterparty and, if not received within 24 hours after such request, shallprovide the Financing Notice based on such verbal information) or Buyer becomesaware that any counterparty repudiates its obligations under the DebtCommitment Letter.   In the event thatBuyer needs any of the proceeds of the financing contemplated by paragraphs(a), (b) and (c) of the prefatory paragraphs to the Debt CommitmentLetter in order to consummate the transactions contemplated hereby, and as ofthe Termination Date, the Newco Notes and/or the Parent Notes (each as definedin the Debt Commitment Letter) will not be issued, the Buyer shall, and shallcause its parent company to, use reasonable best efforts to cause the issuanceof the Senior Facilities (including the Opco Backstop Term Amount, the NewcoBridge Facility and the Parent Bridge Facility (each as defined in the DebtCommitment Letter)), as needed, by the counterparties to the Debt CommitmentLetter and such other Persons to whom such obligations are syndicated inaccordance with the Debt Commitment Letter. If the Closing has not occurred on or prior to the Termination Date, theNewco Notes and/or the Parent Notes will not be issued in whole or in part andthe conditions to Closing set forth in Section 2A and Section 2B havebeen satisfied or will be satisfied, Buyer shall accept borrowings available inrespect of the Senior Facilities (including the Opco Backstop Term Amount), theNewco Bridge Facility and the Parent Bridge Facility on the terms set forth inthe Debt Commitment Letter, as necessary.

####  

#### (ii)           Ator after the Closing, the Buyer shall, and shall cause the Company and each ofits Subsidiaries to, deliver any notice required to be delivered and take otheractions required to be performed pursuant to Section 4.16 of the Indentureand/or the Notes as a result of the transactions contemplated hereby inaccordance with the Indenture and/or the Notes, as the case may be.

 

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#### (iii)          Ator after the Closing, the Buyer shall, and shall cause any of its Subsidiariesto, deliver any notice required to be delivered and take other actions requiredto be performed pursuant to Section 4.16 of the Holdco Notes Indentureand/or Holdco Notes as a result of the transactions contemplated hereby inaccordance with the Holdco Notes Indenture and/or the Holdco Notes, as the casemay be.

####  

## 10M.       Certain Tax Matters.

##  

#### (i)            Within60 days following to the Closing, the Buyer shall allocate the Purchase Pricein accordance with Section 1060 of the Code (the “Allocation”)among the assets of the Company and any of its Subsidiaries that ischaracterized as a disregarded entity for U.S. federal income Tax purposes (“DisregardedSubsidiaries”), and shall deliver the Allocation (along with a copy of theappraisals, if any, on which the Allocation is based) to the Seller.  The Buyer and the Seller agree to consult ingood faith with regard to the Allocation, provided that the Seller shall acceptthe Buyer’s final determination of the Allocation to the extent that theProposed Allocation is reasonable and consistent with applicable law.  The parties acknowledge that the fair marketvalue of the inventory and tangible property, plant and equipment of theCompany and its Disregarded Subsidiaries is approximately equal to the net bookvalue of such items.  Accordingly, Buyerwill not allocate an amount of the Purchase Price in excess of 110% of the netbook value of inventory and tangible property, plant and equipment of theCompany and its Disregarded Subsidiaries without the prior written consent ofthe Seller, which consent shall not be unreasonably withheld (provided, howeverthat the parties acknowledge and agree that the Seller’s failure to consentshall not be deemed unreasonable if such failure is supported by a third-partyappraisal of the inventory and/or the tangible property, plant and equipment ofthe Company and its Disregarded Subsidiaries).  Forpurposes of the Allocation, the Purchase Price shall mean an amount equal tothe Purchase Price plus any liabilities of the Company or the DisregardedSubsidiaries that are treated as assumed liabilities for U.S. federal incomeTax purposes.  The Seller and the Buyeragree to prepare and file an IRS Form 8594 for or such other form orstatement as may be required by applicable law, rule or regulation, andany comparable state or local income tax form, in a manner consistent with theAllocation. The Seller and the Buyer shall adhere to the Allocation for allTax-related purposes including any federal, foreign, state, county or localincome and franchise Tax Return filed by them after the Closing Date, includingthe determination by the Seller of taxable gain or loss on the sale of theCompany and its Subsidiaries and the determination by the Buyer of its taxbasis with respect to the Company and its Subsidiaries.  Neither Buyer nor the Seller shall file anyTax Returns or, in a judicial or administrative proceeding, assert or maintainany Tax reporting position that is inconsistent with this Agreement or theAllocation agreed to in accordance with this Agreement, unless required to doso by applicable law.

####  

#### (ii)           Buyershall, and shall cause the Company and the Disregarded Subsidiaries to, utilizethe alternate procedure set forth in Revenue Procedure 2004-53 with respect towage reporting.  After the Closing, Buyershall provide, and shall cause the Company and its Subsidiaries to provide,during normal business hours and upon reasonable advance notice, the Sellers,the holders of equity interests in the Seller and

 

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#### their representatives with such assistance and access as they mayreasonably request in connection with the preparation of Tax Returns requiredto be filed, any audit or other examination by or communication with anygovernmental authority relating to Taxes or customs duties, any judicial oradministrative proceedings relating to liability for Taxes or customs duties,or any claim for refund in respect of Taxes. Such assistance shall include making employees available, during normalbusiness hours and upon reasonable advance notice, to the Sellers, the holdersof equity interests in the Seller and their respective representatives,providing additional information and explanation of any material to beprovided, furnishing to or permitting the copying by the Seller, the holders ofequity interests in the Seller and their respective representatives of any records,returns, schedules, documents, work papers or other relevant materials whichmight reasonably be expected to be used in connection with such return, audit,examination, proceeding or claim.  TheSellers will reimburse the Company or its Subsidiaries (as applicable) for anyreasonable out of pocket expenses incurred in assisting the Sellers pursuant tothis Section 10M(ii).  TheBuyer will, and will cause the Company and its Subsidiaries to, retain for aperiod of five (5) years after the Closing Date,****andupon the reasonable request of the Seller, the holders of equity interests inthe Seller and their respective representatives provide, any records orinformation which may be relevant to such reporting, return, audit,examination, proceeding or claim.

####  

#### (iii)          Afterthe Closing, the Seller and the Buyer and each of their Affiliates agree tocooperate with each other in connection with any official Tax inquiry, Taxaudit, Tax determination, Tax-related proceeding affecting the Tax liability ofthe Company, any Subsidiary of the Company, the Seller or the Buyer, inconnection with information required to prepare any Tax Return or report, andto make available to each other within a reasonable time, at no cost to suchparty, relevant sections of Tax Returns, documents, correspondence, reports,books and records of the Company and other materials bearing on such Taxmatters, provided that each party shall be reimbursed for any reasonable out ofpocket expenses it incurs in assisting another party hereunder.

####  

## 10N.        Expenses; Transfer Taxes.  If this Agreement is terminated prior toconsummation of the Closing, each party shall pay all fees and expensesincurred by such party in connection with this Agreement and the transactionscontemplated hereby.  If the Closingoccurs, the Buyer shall pay, or cause to be paid, all fees and expensesincurred by the Buyer and its Affiliates in connection with this Agreement andthe transactions contemplated hereby, any and all Transaction Expenses and allproperty or transfer taxes imposed on the Company, NSP Capital or theirSubsidiaries and any real property transfer tax imposed on the Seller or anyholder of equity interests in the Seller resulting from the transactionscontemplated hereby.  Except to theextent included as Transaction Expenses, Seller shall pay all fees and expensesincurred by the Seller, the Company and NSP Capital in connection with thisAgreement and the transactions contemplated hereby.

##  

## 10O.        Further Assurances.  Each of the Parties shall execute and deliverto all appropriate other parties such other instruments as may be reasonablyrequired in connection with the performance of this Agreement and each shalltake all such further actions as may be reasonably required to carry out thetransactions contemplated by this Agreement.

 

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## 10P.         Seller Release.  As of immediately after the Closing, theSeller, to the fullest extent permitted by applicable law, for itself only (andnot any of its Affiliates, unitholders, officers, managers or any otherPerson), hereby releases and forever discharges the Company and the Buyer,their Subsidiaries, and their successors and assigns (individually, a “Releasee”and collectively, “Releasees”) from any and all claims, demands, proceedings,causes of action, orders, judgments, obligations, contracts, agreements, debtsand liabilities whatsoever, whether known or unknown, suspected or unsuspected,both at law and in equity (“Claims”), which the undersigned now has, has everhad or may hereafter have against the respective Releasees arising as a resultof or on account of, or arising out of, any matter, cause or event occurringprior to the Closing Date, and whether or not relating to claims pending at, orasserted after, the Closing Date (collectively, the “Released Matters”).  For the avoidance of doubt, in no event shallthe foregoing release and discharge extend to, and in no event shall the “ReleasedMatters” include, (i) any Claims or rights of the Seller or the Seller’sAffiliates under any contract, agreement or arrangement disclosed on theCompany Disclosure Letter (other than such contracts, agreements orarrangements that are terminated on or prior to Closing pursuant to theAgreement), (ii) any Claims or rights to reimbursement, indemnification orcontribution of the Seller or the Seller’s representatives in his, her or itscapacity as an officer, director, manager, stockholder, unitholder or employeeof the Company or any of its Subsidiaries (whenever arising) under the governingdocuments of the Seller, the Company and/or any of their respectiveSubsidiaries, the D&O Policies or applicable law, or (iii) any Claimsor rights of any Seller or any unitholder thereof that relates to anyobligation of the Buyer or the Company under this Agreement or any TransactionDocument.

##  

# ARTICLE 11MISCELLANEOUS

#  

## 11A.        Amendment and Waiver.  This Agreement may be amended or anyprovision of this Agreement may be waived; providedthat anyamendment or waiver shall be binding only if such amendment or waiver is setforth in a writing executed by the party against whom enforcement issought.  Any amendments or waivers underthis Agreement following the Closing shall require the prior written consent ofthe Buyer and the Seller (or, from and after the liquidation of the Seller,such Person as is revealed by Seller to Buyer to have such rights with respectto amendments).  No course of dealingbetween or among any Persons having any interest in this Agreement shall bedeemed effective to modify, amend or discharge any part of this Agreement orany rights or obligations of any person under or by reason of this Agreement.

##  

## 11B.        Notices.  All notices, demands and other communicationsthat are required or may be given pursuant to the terms of this Agreement orthe other Transaction Documents shall be in writing and shall be deemed to havebeen duly given (i) on the date of delivery, when delivered, if deliveredpersonally or by facsimile before 5:00 p.m. local time on a business day(and otherwise on the next business day), (ii) on the first business dayfollowing the date of dispatch if delivered by a nationally recognized next-daycourier service, or (iii) on the third business day following the date ofmailing if delivered by registered or certified first-class mail, returnreceipt requested, postage prepaid. All notices hereunder shall be delivered asset forth below, or pursuant to such other instructions as may be designated inwriting by the party to receive such notice:

 

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Notices to theCompany (prior to Closing):

 

Norcross SafetyProducts L.L.C.

2211 York Road, Suite 215

Oak Brook, IL60523

Telephone:  630.572.8231

Telecopy:630.572.8518

Attn: Mr. RobertA. Peterson

 

With a copy to:

 

Kirkland &Ellis LLP

200 East RandolphDrive

Chicago, Illinois60601

Attention:  Richard J. Campbell

Telephone:  312.861.2000

Telecopy:  312.861.2200

 

Notices to theSeller or NSP Capital:

 

NSP HoldingsL.L.C. (prior to Closing)

c/o the Company(at the address specified above)

 

NSP HoldingsL.L.C. (after Closing)

c/o John HancockLife Insurance Company

200 ClarendonStreet

Boston, MA 02117

Attn:  Stephen Blewitt

Telephone:617.572.9624

Telecopy:  617.572.6454

 

And a copy (ineach case) to:

 

Kirkland &Ellis LLP

200 East RandolphDrive

Chicago, Illinois60601

Attention:  Richard J. Campbell

Telephone:  312.861.2000

Telecopy:  312.861.2200

 

Notices to theBuyer:

 

c/o OdysseyInvestment Partners, LLC

280 Park Avenue

West Tower, 38thFloor

New York, New York10017

Attention:  Brian Kwait

 

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Telecopy:  212.351.7925

 

 

With a copy to:

 

Dechert LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia,Pennsylvania 19103

Attention:  Geraldine A. Sinatra

Telephone:  215.994.4000

Telecopy:  214.994.2222

 

 

## 11C.        Assignment.  This Agreement and all of the provisionshereof shall be binding upon and inure to the benefit of the parties hereto andtheir respective heirs, successors and permitted assigns; providedthatneither this Agreement nor any of the rights, interests or obligationshereunder shall be assigned (including by operation of law) (i) by theBuyer without the prior written consent of the Seller (except that the Buyermay assign its rights, interest and obligations to any Affiliate without theconsent of the Seller (provided such assignment does shall not relieve theBuyer from its obligations hereunder) and the Buyer may assign its rights,interests and obligations as collateral to secure its obligation under anyfinancing arrangements) or (ii) by the Seller or the Company without theprior written consent of the Buyer; provided that Seller may assign itsrights hereunder to its unitholders upon liquidation of the Seller.  For all purposes hereof, a transfer, sale ordisposition of a majority of the voting capital stock or other voting interestsof a Party (whether by contract or otherwise) shall be deemed an assignmenthereunder.

##  

## 11D.        Severability.  Whenever possible, each provision of thisAgreement shall be interpreted in such manner as to be effective and validunder applicable law, but if any provision of this Agreement is held to beprohibited by or invalid under applicable law, such provision shall beineffective only to the extent of such prohibition or invalidity, withoutinvalidating the remainder of such provisions or the remaining provisions ofthis Agreement.  Notwithstanding anythingherein to the contrary, no representation or warranty regarding or relating to (i) Taxmatters is being made, except as set forth in Section 4I, (ii) employeebenefit matters is being made, except as set forth in Section 4N, (iii) environmentalmatters is being made, except as set forth in Section 4Q, and (iv) anyasbestosis, silicosis, mixed dust or similar litigation or claim (including asmay relate to respiratory product liability litigation or claims) is beingmade, except as set forth in the last sentence of Section 4E; providedthat clause (iv) of this sentence shall not be intended to limit therepresentations and warranties regarding (w) indemnification for asbestosis,silicosis, mixed dust or similar litigation or claims to the extent provided inSection 4J(ix), (x) insurance related to asbestosis, silicosis,mixed dust or similar litigation or claims to the extent provided in Section 4O,(y) acquisition agreements which have provision with respect to asbestosis,silicosis, mixed dust or similar litigation or claims to the extent provided inSection 4S, or (z) product warranties related to respiratoryproducts for which asbestosis, silicosis, mixed dust or similar litigation orclaims to the extent provided in Section 4U(i).

 

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##  

## 11E.         No Strict Construction.  Notwithstanding the fact that this Agreementhas been drafted or prepared by one of the parties, each of the Buyer, theCompany and the Seller confirm that they and their respective counsel havereviewed, negotiated and adopted this Agreement as the joint agreement andunderstanding of the parties hereto and the language used in this Agreementshall be deemed to be the language chosen by the parties hereto to expresstheir mutual intent, and no rule of strict construction shall be appliedagainst any Person.

##  

## 11F.         Captions.  The captions used in this Agreement anddescriptions of the Company Disclosure Letter and Schedules are for convenienceof reference only and do not constitute a part of this Agreement and shall notbe deemed to limit, characterize or in any way affect any provision of thisAgreement, and all provisions of this Agreement shall be enforced and construedas if no caption or description of the Company Disclosure Letter or theSchedules had been used in this Agreement.

##  

## 11G.        Complete Agreement.  Except for the Confidentiality Agreement,this Agreement, the Transaction Documents and the other agreements executed onthe date hereof contain the complete agreement between the parties andsupersede any prior understandings, agreements or representations by or betweenthe parties, written or oral, which may have related to the subject matterhereof in any way.

##  

## 11H.        Company Disclosure Letter.  The disclosures in the Company DisclosureLetter relate to specific representations and warranties and, to the extent itis reasonably apparent from the reading of such disclosure, such otherrepresentations and warranties contained herein.  The inclusion of information in the CompanyDisclosure Letter shall not be construed as an admission that such informationis material to any of the Company or its Subsidiaries.  In addition, matters reflected in the CompanyDisclosure Letter are not necessarily limited to matters required by thisAgreement to be reflected in the Company Disclosure Letter.  Such additional matters are set forth forinformational purposes only and do not necessarily include other matters of asimilar nature.  Prior to the Closing,the Company shall have the right to supplement, modify or update the CompanyDisclosure Letter to ensure the correctness thereof.  The obligations of the Buyer under Section 2B(i) andSection 2B(ii) hereof to consummate the transactionscontemplated hereby shall be determined as though such supplements,modifications and updates had not been made to the Company DisclosureLetter.  From and after the Closing, referencesto the Company Disclosure Letter shall be references to the Company DisclosureLetter as so supplemented, modified and/or updated.

##  

## 11I.          No Additional Representations;Disclaimer.

##  

#### (i)            Therepresentations and warranties of the Parties expressly and specifically setforth in this Agreement constitute the sole and exclusive representations andwarranties of the Parties in connection with the transactions contemplatedhereby, and each Party understands, acknowledges and agrees that all otherrepresentations and warranties of any kind or nature expressed or implied arespecifically disclaimed by the Parties. The Buyer further agrees that neither the Seller nor any of itsAffiliates will have or be subject to any liability to the Buyer or any otherPerson resulting from the distribution to the Buyer, or the Buyer’s use of, anysuch information, including the Confidential Information Memorandum prepared byCredit Suisse First Boston, LLC

 

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#### dated February 2004(the “Information Memorandum”) and any information, document or materialmade available to the Buyer or its Affiliates in certain “data rooms,”management presentations or any other form in expectation of the transactionscontemplated by this Agreement.

####  

#### (ii)           Exceptfor the representations and warranties of the Company and the Seller set forthin this Agreement, the Company Equity Interests and NSP Capital Shares arebeing acquired AS IS WITHOUT ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESSFOR INTENDED USE OR OTHER EXPRESSED OR IMPLIED WARRANTY.

####  

#### (iii)          Inconnection with the Buyer’s investigation of the Company and its Subsidiaries,the Buyer has received from or on behalf of the Company certain projections,including projected statements of operating revenues and income from operationsof the Company and its Subsidiaries and certain business plan information ofthe Company and its Subsidiaries.  TheBuyer acknowledges that there are uncertainties inherent in attempting to makesuch estimates, projections and other forecasts and plans, that the Buyer isfamiliar with such uncertainties, that the Buyer is taking full responsibilityfor making its own evaluation of the adequacy and accuracy of all estimates,projections and other forecasts and plans so furnished to it (including thereasonableness of the assumptions underlying such estimates, projections andforecasts), and that the Buyer shall have no claim against the Seller or anyother Person with respect thereto. Accordingly, the Company makes no representations or warrantieswhatsoever with respect to such estimates, projections and other forecasts andplans (including the reasonableness of the assumptions underlying suchestimates, projections and forecasts).

####  

#### (iv)          Eachparty to this Agreement acknowledges and agrees that, except for (i) theSeller’s unitholders solely to the extent provided in the Seller Member Letterand (ii) the obligations of Buyer’s Affiliates solely to the extentprovided in the Commitment Letters, no Affiliate of any party to this Agreement and no officer, director,employee, agent or representative of any other party to this Agreement or anyof such party’s Affiliates shall have any personal or institutional liabilityor obligation of any kind to any other party to this Agreement or such otherparty’s Affiliates in connection with this Agreement, any delivery madepursuant to this Agreement or the transactions contemplated hereby orthereby.  Notwithstanding anything hereinto the contrary, the immediately foregoing sentence is for the benefit of, andenforceable by, each Affiliate of each party hereto and each officer, director,employee, and agent and representative of each party hereto or such party’sAffiliates and shall serve as an absolute and complete defense to any claim oraction against such Person.

####  

## 11J.         Counterparts.  This Agreement may be executed in multiplecounterparts (including by means of telecopied or electronically transmittedsignature pages), all of which taken together shall constitute one and the sameAgreement.

##  

## 11K.        Governing Law.  The internal law (and not the law ofconflicts) of the State of New York shall govern all questions concerning theconstruction, validity and

 

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## interpretation ofthis Agreement and the performance of the obligations imposed by thisAgreement.

##  

## 11L.         Interpretation.  When used herein, “include” or “including”means “including, without limitation” and the masculine includes the feminineand vice versa.  Any reference to anyagreement or contract referenced herein or in the Company Disclosure Letter orany Schedule shall be a reference to such agreement or contract, asamended, modified, supplemented or waived. Each party agrees that all amounts required to be paid hereunder shallbe paid in United States currency without discount, rebate or reduction andsubject to no counterclaim or offset, on the dates specified herein.  A “business day” shall be any day, other thana Saturday, Sunday, or any other date in which banks located in New York, NewYork or Chicago, Illinois are closed for business as a result of federal, stateor local holiday.

##  

## 11M.       Third-Party Beneficiaries andObligations.  This Agreement shallinure to the benefit of and be binding upon the parties hereto and theirrespective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shallconfer upon any Person other than the parties hereto or their respectivesuccessors and permitted assigns, any rights, remedies or liabilities under orby reason of this Agreement, other than Section 10H, Section 11I(iv) (butsolely to the extent raised as a defense or counterclaim in a suit brought bythe Buyer or any of its Affiliates), and this Section 11M (each ofwhich is intended to be for the benefit of the Persons covered thereby or thatwould benefit therefrom and may be enforced by such Persons); providedthat, except for any Person to whom the rights of Seller are assigned inaccordance with Section 11C or any Person for whom the amendmentrights of Seller are bestowed in accordance with Section 11A,  for the avoidance of doubt in no event shallany of the intended beneficiaries have any rights to consent to any amendment,modification, supplement or waiver of any such provision and such intendedbeneficiaries shall benefit from such provisions, as they may be amended,modified, supplemented or waived from time to time.

##  

## 11N.        Waiver of Bulk Sales Laws.  Each of the parties acknowledges and agreesthat neither Seller nor any of its Subsidiaries will not comply with, andhereby waives compliance by the Seller and its Subsidiaries with, any “bulksales”, “bulk transfer” or similar law relating to the transactionscontemplated hereby.

##  

## 11O.        Liquidation of Seller.  The Buyer understands and agrees that Sellerwill be liquidated, dissolved or otherwise wound up on or before December 31,2005.  Except for the Seller’sunitholders solely to the extent set forth in the Seller Member Letter, norecourse shall be available to the assets of any Person that is an Affiliate ofor holder of equity interests in the Company or the Seller, or any officer,director, agent or employee of the Seller, the Company or any of theirrespective Subsidiaries, for any obligations of the Company or the Sellerpursuant to this Agreement.  Upon anyliquidation, dissolution or winding up of the Seller, all rights and remediesof the Seller shall (without further action on the part of any Person) beenforceable by, and for the benefit of, each equity holder of Seller,individually and/or collectively.

##  

*     *    *     *

 

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

 
|   | NSP HOLDINGS L.L.C.              |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By:                              | /s/ Robert A. Peterson |   |
|   |                             |   |   |
|   | Its:                             | President and CEO |   |
|   |                             |   |   |
|   | NORCROSS SAFETY  PRODUCTS L.L.C. |
|   |                             |   |   |
|   | By:                              | /s/ Robert A. Peterson |   |
|   |                             |   |   |
|   | Its:                             | President and CEO |   |
|   |                             |   |   |
|   | SAFETY PRODUCTS  HOLDINGS, INC.  |
|   |                             |   |   |
|   | By:                              | /s/ Brian D. Kwait |   |
|   |                             |   |   |
|   | Its:                             | President |   |

 

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