Exhibit
10.1


 




 





 


PURCHASE AND SALE
AGREEMENT


 


by and among


 


NSP HOLDINGS
L.L.C.,


 


NORCROSS SAFETY
PRODUCTS L.L.C.,


 


and


 


SAFETY PRODUCTS
HOLDINGS, INC.


 


 


MAY 20, 2005


 




 





 


1





















 


	
  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

  	
   

  



 


i





















 


	
  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

  	
   

  



 


ii





















 


	
  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

  	
   

  



 


iii





















 


	
  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

  	
   

  



 


iv





















 


	
  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

  



 


i





















 


PURCHASE AND SALE AGREEMENT


 


THIS PURCHASE AND SALE
AGREEMENT is made as of May 20, 2005, by and among NSP Holdings L.L.C., a
Delaware limited liability company (the “Seller”), Norcross Safety
Products 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) 100
Class A Membership Units of the Company (the “Company Equity Interests”),
being all of the issued and outstanding equity interests of the Company and (ii) 1,000
shares of common stock, par value $0.01 per share, of NSP Capital (the “NSP
Capital Shares”), being all of the issued and outstanding capital stock of
NSP Capital, and Buyer and Seller desire to enter into this Agreement providing
for the purchase and sale of the Company Equity Interests of the Company and
the NSP Capital Shares of NSP Capital from Seller to Buyer and the assignment
to, and assumption by, Buyer and its Subsidiaries of obligations in respect of
the Holdco Notes.


 


NOW, THEREFORE, in
consideration of the premises and the mutual representations, warranties and
covenants herein contained, and intending to be legally bound, the parties
hereto hereby agree as follows:


 


ARTICLE 1

PURCHASE AND SALE


 


1A.                             Purchase
and Sale of the Company Equity Interests and NSP Capital Shares.  On the terms and conditions set forth in this
Agreement, and in reliance upon the representations, warranties, covenants and
agreements contained herein, at the Closing (as defined below) and upon payment
of the Purchase Price by the Buyer in accordance with Section 1B
hereof and assumption of the Holdco Notes in accordance with Section 1C
hereof, Buyer shall purchase and accept from the Seller, and the Seller shall
sell and transfer to Buyer, all of the Company Equity Interests and NSP Capital
Shares.


 


1B.                               Payment
of the Purchase Price.  At the
Closing, the Buyer agrees to pay to the Seller, by wire transfer of immediately
available funds from the Buyer to an account designated by the Seller at least
one business day prior to the Closing Date, an amount in cash equal to the
Purchase Price.


 


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


 





















 


required to
effectuate such assignment and assumption), duly executed by Buyer, in order to
assume all obligations of Seller in respect of the Holdco Notes and the Holdco
Notes Indenture (including purchase agreements and registration rights
agreements with respect thereto), and (ii) Seller shall deliver to Buyer
any certificate representing (x) the Company Equity Interests and (y) the NSP
Capital Shares, each duly endorsed in blank or otherwise together with a
transfer power executed in favor of Buyer. 
Buyer acknowledges and agrees that, on the Closing Date, Buyer shall, or
shall cause the Company to, pay to the intended beneficiaries thereof (as
identified by Seller to Buyer prior to Closing) (a) amounts due and owing
pursuant to the Senior Credit Facility on the Closing Date as reflected in a
payoff letter in customary form delivered to Buyer at Closing, (b) amounts
due and owing pursuant to the Seller Notes, (c) the Company Expenses (but
only to the extent that (1) the amount therefor is included in the
computation of Adjustment Amount or the proviso to the definition of
Transaction Expenses and (2) Buyer has been delivered an invoice with
respect thereto), and (d) the Senior Executive Obligations (but only to
the extent that the amount therefor is included in the computation of
Adjustment Amount).


 


ARTICLE 2

CONDITIONS TO CLOSING


 


2A.                             Conditions
to All Parties’ Obligations.  The
obligation of each of the Seller, NSP Capital, the Company, and the Buyer to
consummate the Closing is subject to the satisfaction of the following
conditions as of immediately prior to the Closing:


 


(i)                                     No
injunction or order of any court or administrative agency of competent
jurisdiction shall be in effect as of the Closing which restrains or prohibits
the consummation of the purchase and sale of the Company Equity Interests or
NSP Capital Shares to Buyer;


 


(ii)                                  All
waiting period requirements shall have expired or been terminated under the HSR
Act (the “HSR Approval”);


 


(iii)                               Any
required clearances, approvals or confirmations of the transactions
contemplated hereunder shall have been obtained pursuant to any foreign
acquisition control statutes; and


 


(iv)                              This
Agreement shall not have been terminated in accordance with Section 8A.


 


Any condition specified
in this Section 2A may be waived prior to Closing only by a written
instrument signed by the Seller, the Company and the Buyer.


 


2B.                               Conditions
to the Buyer’s Obligations.  The
obligation of the Buyer to consummate the Closing is subject to the
satisfaction of each of the following additional conditions as of immediately
prior to the Closing:


 


(i)                                     Each
of the representations and warranties of the Company and the Seller made in
this Agreement, in any other Transaction Document or in any written certificate
delivered pursuant to this Agreement shall (disregarding any Company Material
Adverse


 


2





















 


Effect or materiality qualification) be true and correct on the date of
this Agreement, such Transaction Document or such certificate, as the case may
be, and shall (disregarding any Company Material Adverse Effect or materiality
qualification, but not disregarding any specific dollar thresholds set forth
therein) be true and correct on and as of the Closing Date, as though made on
and as of the Closing Date (except, in each case, for representations and
warranties that speak as of a specific date or time (which need only be true
and correct as of such date or time)), except where the failure of such
representations and warranties to be true and correct on the date hereof, the
date of such Transaction Document or the date of such written certificate, on
the Closing Date or as of a specific date or time, would not (individually or
together with other failures of such representations and warranties to be true
and correct as of such date) have a Company Material Adverse Effect (other than
the representation and warranty in the penultimate sentence of Section 4D,
which shall be true and correct in all respects) and the Company shall have
delivered to the Buyer a certificate to the foregoing effect dated the Closing
Date and signed by a senior executive officer of the Seller and the Company on
behalf of the Seller and the Company confirming the foregoing;


 


(ii)                                  [intentionally
omitted]


 


(iii)                               The
Company and the Seller shall have performed or complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by the Company and the Seller, respectively (except
for the covenants contained in Section 3B(xvi) of this Agreement
which shall be complied with in all respects), by the time of the Closing and
the Company shall have delivered to the Buyer a certificate to the foregoing
effect dated the Closing Date and signed by a senior executive officer of the
Seller and the Company on behalf of the Seller and the Company confirming the
foregoing;


 


(iv)                              On
the Closing Date, the Seller or the Company shall have delivered to the Buyer
the following:


 


(1)                                  the
original certificates evidencing the Company Equity Interests and NSP Capital
Shares issued to the Seller, accompanied by unit powers or stock powers, as
applicable, duly executed in blank;


 


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


 


3





















 


(3)                                  certificates
of 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 the
Company, each Subsidiary organized under the laws of the United States and NSP
Capital is in good standing in the state of its incorporation;


 


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


 


(vi)                              Since
the date of the Latest Balance Sheet, the Company shall not have suffered a
Company Material Adverse Effect;


 


(vii)                           Each
of the agreements listed on Section 2B(vii) of the Company
Disclosure Letter shall have been
terminated effective on or prior to the Closing Date;


 


(viii)                        On
or prior to the Closing Date, the Company shall have delivered to Buyer (A) a
payoff letter in customary form with respect to the Senior Credit Facility and (B) releases
of all Liens (other than Permitted Encumbrances) with respect to the capital
stock, property and assets of NSP Capital, the Company or any Subsidiary of the
Company with respect to indebtedness for borrowed money that is being repaid on
the Closing Date (including the Senior Credit Facility), which Lien releases
shall be in customary form and may be effective upon repayment of the loans
giving rise to such Liens;


 


(ix)                                The
Seller shall have delivered to the Buyer an affidavit of the type described in
Treas. Reg. Section 1.1445-2(b), dated the Closing Date;


 


(x)                                   The
Company shall have obtained the third party consents, approvals, and waivers
listed on Section 2B(x) of the Company Disclosure Letter;


 


(xi)                                Assuming
delivery from the Buyer or other assignee of the Holdco Notes of any support
certificate reasonably requested by Kirkland & Ellis LLP regarding the
matters set forth in Section 5.01 of the Holdco Notes Indenture, the Buyer
shall have


 


4





















 


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


 


(xii)                             The
Buyer shall have received from the Seller and holders of common or preferred
units of the Seller a fully executed copy of the Seller Member Representation
Letter and Release in the form attached hereto as Exhibit 2B(xii)
(the “Seller Member Letter”) providing for indemnification in an
aggregate amount equal to the Purchase Price for the matters specified therein;
and


 


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


 


Any condition specified
in this Section 2B may be waived prior to Closing only by a written
instrument signed by the Buyer.


 


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


 


(i)                                     Each
of the representations and warranties of the Buyer contained in this Agreement,
in any other Transaction Document or in any written certificate delivered
pursuant to this Agreement shall be true and correct on the date of this
Agreement, 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 on
and as of the Closing Date (except for representations and warranties that
speak as of a specific date or time (which need only be true and correct as of
such date or time)), and except otherwise where the failure to be true and
correct (disregarding material adverse effect and other materiality
qualifications contained therein other than specific dollar thresholds
contained therein) would (individually or together with other failures of
representations and warranties to be true and correct) not have a material
adverse effect on the Buyer’s ability to consummate the transactions
contemplated hereby, and the Buyer shall have performed or complied in all
material respects with all obligations and covenants required by this Agreement
to be performed or complied with by the Buyer by the time of the Closing; and
the Buyer shall have delivered to the Company a certificate to the foregoing
effect dated the Closing Date and signed by a senior executive officer of the
Buyer on behalf of the Buyer confirming the foregoing;


 


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


 


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


 


5





















 


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


 


(2)                                  certificates
of 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 the
Buyer is in good standing in the state of its incorporation; and


 


(iii)                               Buyer
and its Affiliates shall have taken all actions required by the Holdco Notes
Indenture such that, upon effectiveness of the assignment and assumption of the
Holdco Notes and Holdco Notes Indenture contemplated by Section 1C
attached hereto Seller shall have been released from all liability in respect
of the Holdco Notes and/or the Holdco Notes Indenture, and Seller shall have
been so released from all such liability.


 


Any condition specified
in this Section 2C may be waived prior to Closing only by a written
instrument signed by the Company and the Seller.


 


2D.                              Waiver
of Condition.  All conditions to the
Closing shall be deemed to have been satisfied or waived from and after the
Closing.


 


ARTICLE 3

COVENANTS PRIOR TO THE CLOSING


 


3A.                             Access.  During the period from the date of this
Agreement to the earlier of the Closing and the date that this Agreement is
terminated in accordance with its terms, the Company shall grant to the Buyer
or cause to be granted to the Buyer and its authorized representatives
reasonable access, during normal business hours and upon reasonable notice, to
the personnel, accountants, properties, books and records, contracts,
commitments and other documents and information of NSP Capital, the Company and
its Subsidiaries (including with respect to pending and recently settled
litigation against the Company and its Subsidiaries) as the Buyer may
reasonably request that are in the possession of NSP Capital, the Company and
its Subsidiaries or under the control of NSP Capital, the Company and its
Subsidiaries; provided  that such access does not unreasonably
interfere with the normal operations of the Company or its Subsidiaries; provided
further that all requests for access shall be directed to Robert A.
Peterson, David F. Myers, Jr. or such other person as the Company may
designate in writing from time to time; and provided  further that
the Buyer is not authorized to and shall not (and shall not permit any of its
employees, agents, representatives or Affiliates to) contact any officer,
director, employee, franchisee, supplier, distributor or other material
business relation of the Company or any of its Subsidiaries prior to the
Closing without the prior written consent of the Company.  For the avoidance of doubt, in no event shall
the access provided for in this Section 3A or any other obligation
of the Company or its Subsidiaries hereunder include any right of Buyer or any
of its Affiliates to conduct, without the Company’s consent, any “Phase I
Environmental Investigation”, any sampling and analysis of environmental media
of the nature commonly referred to as a “Phase II Environmental Investigation”
or any invasive soil testing.


 


6





















 


3B.                               Ordinary
Conduct of Company.  During the
period from the date of this Agreement to the earlier of the Closing and the
date that this Agreement is terminated in accordance with its terms, except as
set forth on Section 3B of the Company Disclosure Letter, or as
otherwise consented to by the Buyer in writing (which consent shall be withheld
only in the exercise of Buyer’s reasonable business judgment) or as otherwise
specifically contemplated by this Agreement, the Company shall, and shall cause
each of its Subsidiaries to, conduct its business in the ordinary course and
consistent with past practices, and the Company shall not, and shall cause each
of its Subsidiaries not to:


 


(i)                                     make
any material change in the conduct of its business;


 


(ii)                                  enter
into a new agreement that would be included in the definition of Company
Material Contracts or Leases if it had been entered into as of the date of this
Agreement or amend in a material manner, cancel, terminate or waive any
material term of any of the Company Material Contracts or Leases, other than in
the ordinary course of business consistent with past practice; provided
that nothing herein shall prevent the Company or any of its Subsidiaries from (A) extending
the term of any Lease that is expiring, or (B) amending the Senior Credit
Facility to provide that any cash contributed by the Seller may be paid to the
Seller in the event that the transactions contemplated hereby are not
consummated, to permit the transactions contemplated by Section 3J
hereof and/or to permit the re-borrowing of certain amounts repaid in the
period between the date of this Agreement and the Closing Date;


 


(iii)                               amend
its Certificate of Formation, Certificate of Incorporation, Limited Liability
Company Agreement, by-laws or other constitutive documents;


 


(iv)                              acquire
by merging or consolidating with, or agreeing to merge or consolidate with, or
purchase substantially all the assets of, or otherwise acquire any business or
any corporation, partnership, association or other business organization or
division thereof;


 


(v)                                 except
for Permitted Encumbrances, sales of inventory or obsolete or worn assets in
the ordinary course of business consistent with past practice, sell, lease,
sublease, mortgage, license, pledge, abandon, fail to maintain or otherwise
encumber or dispose of any of the assets or properties owned by the Company or
its Subsidiaries;


 


(vi)                              make
any capital expenditure of more than $250,000 except in accordance with the
budget set forth in Section 3B(vi) of the Company Disclosure
Letter (the “Budget”);


 


(vii)                           issue
or sell any membership interests or capital stock in the Company or any of its
Subsidiaries or any options, warrants or other rights to purchase any such
membership interests or capital stock in the Company or any of its Subsidiaries
or any securities convertible into or exchangeable for such membership
interests or capital stock;


 


(viii)                        (a) enter
into any employment, deferred compensation, severance, retirement or similar
agreement or arrangement with any director, officer or employee of


 


7





















 


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


 


(ix)                                make
any payments of any material liability of the Company or any of its
Subsidiaries or settle or compromise any material claim, dispute, action or
litigation (including with respect to Taxes), or forgive or cancel any material
liability of any third party to the Company or any of its Subsidiaries, other
than in the ordinary course of business consistent with past practices, pension
plan fundings in accordance with applicable law (as determined pursuant to
actuarial reports) and settlements of respiratory product liability claims for
which the Company and its Subsidiaries are indemnified;


 


(x)                                   alter
through merger, liquidation, reorganization, restructuring, election or in any
other manner the corporate structure, ownership or classification for Tax
purposes of the Company or any Subsidiary;


 


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


 


(xii)                             make
any loan, advance or capital contribution to or investment in any Person other
than (A) Subsidiaries and (B) travel advances to employees in the
ordinary course of business;


 


(xiii)                          change
any method of accounting or accounting practice by the Company or any
Subsidiary, except for any such changes required by reason of a concurrent
change in GAAP;


 


(xiv)                         make
any new, or change any existing, Tax elections, or settle any material Tax
claim or assessment;


 


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


 


8





















 


(xvi)                         except
for 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 other
equity holders of the Company (in their capacity as a shareholder or equity
holder), except for payment of fees or reimbursement of expenses incurred in
connection with service as a member of the Company’s or Seller’s board of
managers in amounts not to exceed $25,000 in the aggregate;


 


(xvii)                      repay
any Indebtedness, other than (A) payments in respect of Indebtedness under
the Senior Credit Facility and (B) regularly scheduled payments in
accordance with the terms governing such Indebtedness;


 


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


 


(xix)                           first
incur Rebate Obligations to any customer of more than $100,000 or to all
customers of more than $500,000 for any twelve-month period; or


 


(xx)                              enter
into any agreement to do any of the foregoing.


 


3C.                               Cancellation
of Accounts from Seller.  The Buyer
acknowledges and agrees that, notwithstanding anything herein to the contrary,
at or prior to the Closing, the Company and its Subsidiaries may cancel or
forgive any receivable, note or other liability or obligation owing from the
Seller or any holder or equity interests of the Seller to the Company or any of
its Subsidiaries that is included in the “Accumulated Deficit” or “Due from NSP
Holdings L.L.C.” line items of the Company’s balance sheet (as updated through
the Closing Date), that such cancellation or forgiveness shall be without
liability to the Seller or any holder of equity interests of the Seller and
that all representations and warranties made hereunder shall be made as though
such receivable, note, or other liability or obligation was never
outstanding.  Furthermore, for the
avoidance of doubt, nothing in this Agreement shall prevent, or be construed to
prevent, Seller from distributing its cash to its equityholders or any other
Person using the basket provided in Section 4.11(B)(8) of the Holdco
Notes Indenture (with it being understood that in the event that any cash is
left in the Seller, such cash shall be for the exclusive benefit of the Seller
and its equityholders).


 


3D.                              Ordinary
Conduct of NSP Capital.  During the
period from the date of this Agreement to the Closing, the Seller shall cause
NSP Capital to not engage in any business or activities other than as necessary
to (i) maintain its corporate existence and (ii) perform its
obligations under the Holdco Notes, the Holdco Notes Indenture and any other
agreement related thereto or contemplated therein.


 


3E.                                Financial
Statements.  Promptly after becoming
available and in any event within 30 days after the end of each month after the
date hereof, the Company shall deliver to the Buyer a consolidated balance
sheet of the Company and its Subsidiaries as of the end of such month, and
consolidated statements of income and cash flows of the Company and its


 


9





















 


Subsidiaries for
such monthly period, prepared in a manner consistent with the Company’s
customary practice for monthly financial statements.


 


3F.                                Financing
Sources.


 


(i)                                     From
the date hereof until the Closing Date, unless otherwise agreed in writing by
Buyer, the Company shall, and shall cause its Subsidiaries and their respective
personnel and advisors to, take, at the Buyer’s expense, commercially
reasonable efforts to cooperate in connection with the proposed debt financing
by Buyer of the transaction contemplated hereby as may be reasonably requested
by Buyer, including without limitation, the participation of Company personnel
in 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 legal
opinions in connection with Buyer’s debt financing.  The Buyer agrees that the execution of any
documents referred to in the preceding sentence shall be subject to the
consummation of the Closing.


 


(ii)                                  In
the event that Buyer elects to make a tender offer for all or any portion of
the Notes or the Holdco Notes (collectively, the “Debt Tender”) and/or
elects to seek consents to amendment or waiver of one or more covenants in the
Notes, the Holdco Notes, the Indenture or the Holdco Notes Indenture (collectively,
the “Consent Solicitation”), the Buyer shall commence the Debt Tender
and Consent Solicitation in sufficient time to permit a closing thereof on or
prior to the Termination Date.  The Buyer
shall cause the Debt Tender to be accomplished in accordance with applicable
law, including Rule 14e promulgated pursuant to the Exchange Act, and the
Consent Solicitation to be accomplished in accordance with applicable law.  The Buyer shall use reasonable best efforts
to cause the Debt Tender and the Consent Solicitation to seek consent for the
waiver of covenants set forth in the Holdco Notes Indenture reasonably
necessary for the transactions contemplated hereby (and shall seek consent for
waivers of the covenants under Section 4.11 and Section 5.01(c) thereof)
such that such provisions shall not be applicable to the transactions
contemplated hereby.  The Buyer shall
provide the Company and the Seller a reasonable opportunity to review and
comment upon all filings, mailings and other submissions and documents prepared
in connection with the Debt Tender and the Consent Solicitation, as applicable,
and shall reflect any comments that are reasonable or necessary to comply with
applicable law.  The Seller and the
Company shall use commercially reasonable efforts to assist Buyer in connection
with the preparation of all filings, mailings or other submissions to be made
in 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 Consent
Solicitation or (y) any representation or warranty in connection with the Debt
Tender or the Consent Solicitation that may, directly or indirectly, provide
for liability to the Seller at any time or the Company or any of its
Subsidiaries at any time at or prior to the Closing (with it being understood
and agreed that no representation, warranty or covenant hereunder shall be
deemed breached as a result of delivery of documents requested by the Buyer in
connection with the Debt Tender or the Consent Solicitation).  The Buyer shall ensure that the Debt Tender
shall


 


10





















 


not be consummated, nor shall any amounts be payable to the holders of
the Notes or Holdco Notes in connection with the Debt Tender or the Consent
Solicitation, at any time prior to Closing or in the event this Agreement is
terminated.  Notwithstanding anything
herein to the contrary, except to the extent included in the computation of March Net
Indebtedness, all amounts (including premiums, consent fees and interest
accruals related to the Debt Tender and the Consent Solicitation), and all
costs, fees and expenses incurred in connection with the Debt Tender and the
Consent Solicitation or payments made in connection therewith, including
payments made to the investment banking firm managing such Debt Tender and/or
Consent Solicitation, and legal and accounting fees and expenses incurred in
connection therewith, shall be paid by the Buyer.


 


(iii)                               If,
at any time prior to the Closing, any information relating to the Company or
any Subsidiary, or any of its Affiliates, officers, directors or employees
should be discovered by Buyer, Merger Sub, the Company or any Subsidiary of a
type which should be set forth in an amendment or supplement to the documents
filed or mailed in respect of the Debt Tender or the Consent Solicitation so
that such documents would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading, the party which discovers such information shall promptly notify
the other parties hereto and, to the extent required by law, rules or
regulations, an appropriate amendment or supplement describing such information
shall promptly be prepared by Buyer, and, if required, filed with the
Securities Exchange Commission and/or disseminated to the holders of the Notes
and/or Holdco Notes, as applicable.


 


3G.                               280G
Cooperation.  The Seller will, and
will cause the Company to, prior to the Closing Date, seek to ensure that the
shareholder approval requirements of Section 280G(b)(5)(B) of the
Code and the regulations promulgated pursuant thereto are satisfied to the
extent necessary such that payments by the Seller or the Company to any
employees of the Company or any of its Subsidiaries arising in whole or in part
as a result of the transactions contemplated hereby based on arrangements in
place at the Closing (other than arrangements entered into at the direction of
Buyer on the Closing Date) will not be characterized as parachute payments
under Section 280G of the Code.


 


3H.                              Exclusive
Transaction.  In consideration of the
substantial expenditures of time, effort and expense to be undertaken by Buyer
in connection with its due diligence review and the preparation and negotiation
of this Agreement with Seller, Seller agrees that from the date of this
Agreement and until the earlier of the Closing Date and the date that this
Agreement is terminated in accordance with its terms, neither the Seller nor
the Company or any of their Subsidiaries shall, directly or indirectly, through
any officer, director, employee or agent (including through any investment
banker, attorney or accountant retained by any of the foregoing), solicit the
submission of any proposal, offer, inquiry or contact from any Person relating
to (i) any sale of all or any portion of the Company Equity Interests or
NSP Capital Shares or assets of the Seller, the Company or any of their Subsidiaries
with any Person other than the Buyer, its Affiliates and their representatives
(other than sales of inventory or obsolete or worn assets in the ordinary
course of business consistent with past practice) or (ii) any merger,
consolidation, recapitalization, liquidation, dissolution or similar
transaction involving the Seller, NSP Capital, the Company or any of their
Subsidiaries, or participate in any discussions or


 


11





















 


negotiations
regarding any of the foregoing (each such transaction being referred to herein
as a “Proposed Acquisition Transaction”).  The Seller, the Company and their
Subsidiaries shall promptly cease and cause to be terminated any and all
negotiations with such third parties regarding any of the foregoing.  The Seller shall not waive any provision of
any confidentiality agreement that it entered into in connection with the
transactions contemplated hereby.  In the
event that the Company, the Seller or UBS receives any bona fide proposal to
enter into negotiations in respect of, or a written or bona fide verbal
proposal regarding, a Proposed Acquisition Transaction, the Company shall
provide prompt notice of such proposal to the Buyer and the Company’s response
thereto.


 


3I.                                   Closing
Net Indebtedness.  Not less than two (2) days
prior to Closing, the Company shall provide to Buyer a good faith estimate of
Net Indebtedness as of the Closing based on currency exchange rates as of two
days prior to the date of delivery (the “Closing Net Indebtedness”)
(with it being understood that because of the number of the Company’s bank
accounts, it will be difficult to provide a precise amount of the cash portion
of Closing Net Indebtedness).  The schedule setting
forth Buyer’s estimate of Closing Net Indebtedness shall be in substantially
the form of the calculation of March Net Indebtedness attached hereto.


 


3J.                                  Equity
Transactions.


 


(i)                                     Notwithstanding
anything in this Agreement to the contrary, to the extent that any such
distribution does not violate the Indenture or the Holdco Notes Indenture
(determined after giving effect to any amendment or waiver of any provision
thereof in connection with the transactions contemplated hereby) the Company
may either (x) distribute to the Seller a number of shares of North (“North
Management Shares”) having a value, as reasonably determined by the Buyer,
equal to the Management Equity Rollover Amount and, to the extent necessary to
make such transaction a “Restricted Payment” for purposes of the Indenture, the
Seller may redeem certain membership interests of the Company (whereupon such
membership interests shall be canceled) and thereafter the Seller shall
distribute such North Management Shares to certain of its unitholders that are
members of Seller that are intending to acquire equity in the Buyer or its
parent company (the “Rollover Management Unitholders”) in redemption of
units of the Seller having a value, as reasonably determined by the Seller,
equal to the Management Equity Rollover Amount or (y) distribute to the
Rollover Management Unitholders a number of North Shares having a value, as
reasonably determined by the Buyer, equal to the Management Equity Rollover
Amount in exchange for units of Seller having a value, as reasonably determined
by the Seller, equal to the Management Equity Rollover Amount.  Prior to making any such distribution, the
Company shall (A) have received reasonable assurance that the Rollover
Management Unitholders have entered into an agreement with Buyer agreeing that
at the Closing, such Rollover Management Unitholders will contribute the North
Management Shares to Buyer or Buyer’s ultimate parent company (the “Ultimate
Parent Company”) in exchange for equity securities of the Ultimate Parent
Company having a value equal to the Management Equity Rollover Amount in a
transaction intended to qualify as an exchange under Section 351(a) or
Section 721 of the Code, and otherwise containing customary
representations, warranties and covenants from the Ultimate Parent Company and
such Rollover Management Unitholder regarding such exchange and (B) have
ensured that the Rollover Management


 


12





















 


Unitholders have agreed in writing for the benefit of the Seller and
its unitholders that, from and after the Closing, he or she agrees that the
aggregate amount of cash to be distributed by Seller in respect of its
outstanding units to such Rollover Management Unitholder shall be reduced to
reflect the redemption of units described in the immediately preceding
sentence.  In the event that the
transactions contemplated by this Section 3J(i) are completed,
the parties agree that the Purchase Price paid to the Seller at Closing shall
be reduced by the Management Equity Rollover Amount.  Each of the Company and the Buyer shall use
reasonable best efforts to cause the management rollover described in this Section 3J(i) to
occur.


 


(ii)                                  The Seller has advised Buyer that certain
unitholders of the Seller are “blocker corporations”.   Prior to Closing, the Seller may present
Buyer with a structure that would provide for Buyer to purchase, directly or
indirectly, the blocker corporations.  At
Seller’s request, the Seller and the Buyer shall, and shall cause their
respective Affiliates to, use commercially reasonable efforts to negotiate in
good faith the terms of an agreement for the purchase and sale of the blocker
corporations in connection with either the sale of the Company pursuant to this
Agreement or, pursuant to Section 3K below, the sale of Seller, it
being understood that Buyer shall not be required to acquire the blocker
corporations in a structure that the Buyer reasonably believes would have
adverse consequences (whether economic, tax or otherwise) to Buyer.


 


(iii)                               No
representation, warranty or covenant of the Seller or the Company made
hereunder shall be deemed breached or untrue as a result of the transactions
contemplated by Section 3J(i); provided that nothing herein
shall relieve the Seller or the Company for breach of the covenants set forth
in Section 3J(i).


 


3K.                              Sale
of Seller.  At the request of the
Buyer, the Seller and the Buyer shall, and shall cause their respective
Affiliates to, use commercially reasonable efforts to negotiate in good faith
the terms of an agreement for the purchase and sale of the outstanding units of
the Seller (the “Replacement Agreement”) in which the provisions of Section 5.01(c) of
the Holdco Notes Indenture would be inapplicable.  The Replacement Agreement shall (i) provide
for no change in the amount or form of the Purchase Price, (ii) include
representations, warranties, covenants and agreements for the respective
parties 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 Buyer
prior to signing if such schedules set forth a Company Material Adverse Effect
relative to the disclosures in the Company Disclosure Letter) and other changes
reasonably necessary to reflect the difference between the Seller as target
versus the Company as target), (iii) provide for post-Closing remedies
against the Seller’s unitholders only to the extent and on the terms set forth
in the Seller Member Letter and otherwise shall not provide for post-Closing
remedies in respect of representations, warranties or pre-Closing covenants, (iv) impose
no additional conditions to the parties’ respective obligations hereunder, (v) contain
a reaffirmation of obligations of the counterparties to the Debt Commitment
Letter and the Equity Commitment Letter, and (vi) include only such
modifications as may be necessary to reflect the sale of the Seller as opposed
to the sale of the Company and as may be necessary to deliver Buyer a clean
equity capital structure (i.e., termination of UAR rights and option grants
upon the Closing).  In the event that the
Seller enters into the Replacement Agreement, it shall (A) promptly advise
its unitholders of


 


13





















 


the Replacement Agreement
and the terms thereof, (B) advise its unitholders that the transactions
contemplated by the Replacement Agreement constitute an “Approved Company Sale”
as such term is set forth in the Second Amended and Restated Limited Liability
Company Agreement of the Seller (as amended, the “Seller LLC Agreement”),
and/or (C) inform its unitholders that, subject to compliance with the
terms of Section 9.3 of the Seller LLC Agreement, failure to execute and
deliver the Replacement Agreement and perform its obligations thereunder shall
constitute a breach of Section 9.3 of the Seller LLC Agreement.  The Seller shall cause its counsel to respond
promptly after receipt of any draft of the Replacement Agreement prepared by
Buyer’s counsel, regardless of when prepared by Buyer’s counsel.  The Replacement Agreement shall be executed
by the relevant parties promptly after the later of (1) the date that both
of (x) and (y) have occurred: (x) the Buyer advises the Seller that the Buyer
has concluded that, after consultation with its debt financing sources, it will
not be able to obtain a consent to waive the applicability of the Company
Coverage Ratio Exception (as defined in the Holdco Notes Indenture) under Section 4.11
and Section 5.01(c) of the Holdco Notes Indenture with respect to the
transactions contemplated hereby (a “Replacement Notice”) and (y) the
Company’s Chief Financial Officer could not reasonably conclude that the
Company will be able to incur at least $1 of additional Indebtedness (as
defined in the Holdco Notes Indenture) under the Company Coverage Ratio
Exception as of immediately after the assignment and assumption of the Holdco
Notes 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 that
the Replacement Agreement is agreed to between the parties.  In reaching such conclusion, each of the
Buyer and the Company agree to use reasonable best efforts to deliver to the
other such additional information as may reasonably be requested to confirm the
Chief Financial Officer’s conclusions regarding the Company Coverage Ratio
Exception after the Closing.  No party
shall willfully take any action that would cause the Seller to not be able make
the certification in respect of Section 5.01(c) of the Holdco Notes
Indenture to the Trustee under the Holdco Notes Indenture in connection with
the assignment and assumption of the Holdco Notes and Holdco Notes Indenture.


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY


 


As an inducement to the
Buyer to enter into this Agreement, the Company hereby represents and warrants
that:


 


4A.                             Organization
and Corporate Power.  The Company is
a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and is qualified to do
business as a foreign limited liability company and is in good standing in each
jurisdiction in which the failure to so qualify would reasonably be expected to
have a Company Material Adverse Effect. 
The Company and its Subsidiaries have all requisite corporate or limited
liability company power and authority necessary to own and operate their
properties and to carry on their businesses as now conducted and to enter into
this Agreement and consummate the transactions contemplated hereby.  The copies of the Company’s Certificate of
Formation and Agreement of Limited Liability Company which have been made
available to the Buyer reflect all amendments made thereto at any time prior to
the date of this Agreement.


 


14





















 


4B.                               Company
Equity Interests.  All of the Company
Equity 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 Company
or securities or obligations of any kind convertible into or exchangeable for
any equity interests of the Company.  The
Company Equity Interests represent all of the issued and outstanding equity
interests in the Company.


 


4C.                               Subsidiaries.  Section 4C of the Company
Disclosure Letter sets forth the name of each Subsidiary of the Company, the
jurisdiction of its incorporation or organization, the direct owner of the
outstanding capital stock or other equity securities of such Subsidiaries and
the percentage of the outstanding capital stock or other equity interests of
such Subsidiary owned by the Company or any of its Subsidiaries.  Each such Subsidiary listed on Section 4C
of the Company Disclosure Letter is an entity validly existing and in good
standing (or an equivalent foreign concept to the extent applicable) under the
laws of the jurisdiction of its incorporation or organization and is qualified
to do business in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a Company Material Adverse Effect.  Except as set forth on Section 4C
of the Company Disclosure Letter, all of the outstanding capital stock or other
equity securities of each such Subsidiary are owned by the Company or another
Subsidiary free and clear of any Liens, except for Liens arising pursuant to
the Senior Credit Facility and restrictions on transfer under applicable
securities law.  There are no rights,
subscriptions, warrants, or options to purchase or otherwise acquire any shares
of capital stock or equity securities of any of the Subsidiaries or obligations
of any kind convertible into or exchangeable for any shares of capital stock or
equity securities of such Subsidiaries. 
Except for the Subsidiaries or except as set forth on Section 4C
of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries owns or holds the right to acquire any shares of stock or any
other security or interest in any other Person or has entered into any joint
venture arrangement.  Other than as set
forth on Section 4C of the Company Disclosure Letter, there are no
shareholders agreements, voting trusts or other agreements or understandings to
which 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 equity
securities of such Subsidiaries.


 


4D.                              Authorization;
No Breach.  This Agreement has been
duly executed and delivered by the Company, and constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
limited by the application of bankruptcy, moratorium and other laws affecting
creditors’ rights generally and as limited by the availability of specific
performance and the application of equitable principles.  Except as set forth on Section 4D
of the Company Disclosure Letter, assuming receipt of HSR Approval, the
execution and delivery of this Agreement by the Company do not (i) result
in any material breach of any of the provisions of, (ii) constitute a
material default under, (iii) give any third party the right to terminate
or accelerate any material right under, (iv) result in the creation of any
Lien upon any of the equity interests or any assets of the Company or its
Subsidiaries under, or (v) require any authorization, consent, approval,
exemption or other action by or notice to any court or other governmental body
under (a) the provisions of the Certificate of Formation or Limited
Liability Company Agreement of the Company, (b) any Company Material
Contract or Lease, (c) any judgment, order or decree to which the Company
or any of its Subsidiaries is subject, or (d) any law, statute, rule or
regulation, to which the Company or its Subsidiaries is subject, except in the
cases of clause (b) foregoing, as would not result in a Company Material
Adverse Effect.


 


15





















 


Immediately prior
to the Closing, without giving effect to the transactions contemplated hereby,
(x) no Default or Event of Default (as defined in the Indenture and the Holdco
Notes Indenture, respectively) shall have occurred and be continuing (including
as 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 additional
Indebtedness (as defined in the Indenture and the Holdco Notes Indenture,
respectively) (other than Permitted Indebtedness (as defined in the Indenture
and the Holdco Notes Indenture, respectively)) for purposes of the Coverage
Ratio Exception (as defined in the Indenture) and the Company Coverage Ratio
Exception (as defined in the Holdco Notes Indenture) under the Indenture and
the Holdco Notes Indenture, as applicable; provided that no
representation or warranty shall be deemed made pursuant to this clause (y)
with respect to the Holdco Notes Indenture to the extent compliance with Section 4.11
and Section 5.01(c) of the Holdco Notes Indenture is waived in
accordance with the Holdco Notes Indenture prior to Closing, whether as part of
the Debt Tender, the Consent Solicitation or otherwise.  Notwithstanding anything to the contrary
contained herein, the parties agree that no representation or warranty is being
made by the Company pursuant to this Section 4D or elsewhere in
this Agreement with regard to any default under the Indenture or the Holdco
Notes Indenture as a result of the amount of debt financing (including
preferred equity that is treated as debt for accounting purposes) arranged by
Buyer or any of its Affiliates for the Buyer, the Company and their respective
Subsidiaries with respect to periods from and after the Closing or the merger
of any Subsidiary of Buyer with and into the Company after the Closing.


 


4E.                                Financial
Statements; Company SEC Reports.  Section 4E
of the Company Disclosure Letter sets forth the following financial
statements:  (i) the audited
consolidated 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 for
the fiscal years then ended and (ii) the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of April 2, 2005 (the “Latest
Balance Sheet”) and the related unaudited consolidated statements of income
and cash flows for the three-month period then ended.  Each of the foregoing financial statements
(including the notes thereto, if any, collectively, the “Financial
Statements”) has been prepared in accordance with GAAP applied on a
consistent basis and presents fairly in all material respects the financial
position of the Company and its Subsidiaries at December 31, 2003, December 31,
2004 and April 2, 2005, respectively, and results of their operations for
the periods referred to therein (subject in the case of the unaudited financial
statements to the lack of footnote disclosure and changes resulting from normal
year-end adjustments).  None of the
Company SEC Reports, as of their respective dates (and, if amended or superseded
by 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 any
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (with
it being understood that (x) no representation is being made regarding any
financial statements included in the Company SEC Reports except as set forth in
the immediately foregoing sentence and (y) the Company SEC Reports (other than
the consolidated financial statements (without regard to footnotes) contained
therein) did not include information regarding Subsidiaries that are not
guarantors of the Notes or the Holdco Notes).


 


16





















 


4F.                                Permits.  Each of the Company and its Subsidiaries
holds all permits, licenses or other authorizations of governmental agencies
that are required for the conduct of its business as presently conducted,
except where the failure to obtain or hold any such permits, licenses or
authorizations would not be reasonably likely to result in a Company Material
Adverse Effect, and each of the Company and its Subsidiaries is in compliance
with such required permits, licenses and authorizations, except where the
failure to comply would not be reasonably likely to result in a Company
Material Adverse Effect.


 


4G.                               Absence
of Certain Developments.  Except as
set forth in Section 4G of the Company Disclosure Letter or as
otherwise contemplated by this Agreement (including Section 3B),
since the date of the Latest Balance Sheet, neither the Company nor any of its
Subsidiaries has:


 


(i)                                     suffered
a Company Material Adverse Effect;


 


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


 


(iii)                               except
for Permitted Encumbrances and except for sales of inventory or obsolete or
worn assets in the ordinary course of business consistent with past practice,
sold, leased, subleased, mortgaged, licensed, pledged or otherwise encumbered or
disposed of any of the assets or properties owned by the Company or its
Subsidiaries 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 assets
owned by the Company or any of its Subsidiaries, except in the ordinary course
of business;


 


(v)                                 (a) entered
into any employment, deferred compensation, severance, retirement or similar
agreement or arrangement with any director, officer or employee of the Company
or any Subsidiary (or amended any such existing agreement), (b) granted
any severance or termination pay to any director, officer or employee of the
Company or any Subsidiary or (c) materially changed any compensation,
benefit plans or other benefits payable to any director, officer or employee of
the Company or any Subsidiary, in each case other than with respect to
non-executive employees in the ordinary course of business consistent with past
practice or except as required by applicable law or contractual obligations or
other agreements or employee benefit plans existing on the date hereof and
disclosed in the Company Disclosure Letter;


 


(vi)                              amended
in any material manner, cancelled, terminated or waived any material term of
any of the Company Material Contracts or Leases, other than in the ordinary
course of business consistent with past practices;


 


(vii)                           entered
into or agreed to enter into any new or amended contract with any unions
representing employees of the Company or any Subsidiary;


 


17





















 


(viii)                        made
any capital expenditure of more than $250,000, except in accordance with the
Budget;


 


(ix)                                changed
an annual accounting period or adopted or changed any material accounting
method unless required by GAAP;


 


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


 


(xi)                                altered
through merger, liquidation, reorganization, restructuring, election or in any
other manner the corporate structure, ownership or classification for Tax
purposes of the Company or any Subsidiary;


 


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


 


(xiii)                          settled
or compromised any material claim, dispute, action or litigation (including
with respect to Taxes), or forgiven or cancelled any material liability of any
third party to the Company or any of its Subsidiaries,


 


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


 


(xv)                            incurred,
assumed, or guaranteed any Indebtedness, other than (A) amounts to be
included in the definition of Adjustment Amount, (B) interest accruing on
Indebtedness, (C) issuances of letters of credit in replacement of
expiring letters of credit as long as the obligation of the Company and its
Subsidiaries under the new letter of credit does not exceed the obligation of
the Company and its Subsidiaries under the expiring letter of credit and (D) the
completion of the exchange offer in connection with the Holdco Notes; provided
that increases in the amount of Indebtedness arising from fluctuations in
foreign exchange rates shall not be deemed an incurrence or assumption of
Indebtedness


 


(xvi)                         made
any loans or advances to, or guarantees for the benefit of, any Persons other
than the Company or any of its Subsidiaries and travel advances to employees in
the ordinary course of business; or


 


(xvii)                      suffered
any material damage, destruction or other casualty loss with respect to
property owned by the Company or any of its Subsidiaries that is not covered by
insurance.


 


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4H.                              Title
to Properties, etc.


 


(i)                                     Section 4H
of the Company Disclosure Letter sets forth the address of each parcel of Owned
Real Property.  With respect to each
parcel of Owned Real Property and, in the cases of clauses (b) and (c), as
does not materially impair the business operations of the Company and its
Subsidiaries:  (a) the Company or
one of its Subsidiaries has good fee simple title, free and clear of all Liens,
except Permitted Encumbrances; (b) except as set forth on Section 4H
of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries has leased or otherwise granted to any Person the right to use or
occupy such Owned Real Property or any portion thereof; and (c) there are
no outstanding options, rights of first offer or rights of first refusal to
purchase such Owned Real Property or any portion thereof or interest therein.


 


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


 


(iii)                               Except
(a) as set forth on Section 4H of the Company Disclosure
Letter attached hereto, (b) as set forth on the Latest Audited Balance
Sheet, and (c) for Permitted Encumbrances, the Company or one of its
Subsidiaries owns, free and clear of all Liens, or has a contract, license or
lease to use, all of the personal property and assets shown on the Latest
Audited Balance Sheet, acquired thereafter or located on its premises which is
material to its business or operations. 
The assets of the Company and its Subsidiaries will as of the Closing
include all of the tangible assets, whether real or personal, that are
necessary for the Company and its Subsidiaries immediately after Closing to
conduct in all material respects the business of the Company and its
Subsidiaries as conducted immediately prior to the Closing.


 


(iv)                              To
the Company’s knowledge there is no, and neither the Company nor any of the
Subsidiaries has received written notice of an existing or threatened, change
in 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, in
each instance, which would be reasonably expected to have a Company Material
Adverse Effect.


 


(v)                                 Except
as listed on Section 4H of the Company Disclosure Letter, neither
the Company nor any of its Subsidiaries has received, since January 1,
2000, written notice of an outstanding violation of any applicable law, rule or
regulation relating to any material part of the Owned Real Property or Leased
Real Property or the operation thereof or written notice of condemnation,
special assessment or the like, with respect


 


19





















 


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


 


4I.                                   Tax
Matters.  Except as set forth on Section 4I
of the Company Disclosure Letter, (i) the Company and each of its
Subsidiaries has timely filed all Tax Returns that it is required to file and all such Tax Returns are true, correct
and accurate in all material respects; (ii) all Taxes due and owing
by the Company or any of its Subsidiaries have been timely paid, all Taxes required to have been withheld
and paid over to a Taxing authority by the Company or any Subsidiary have been
so withheld and paid over, and there are no Liens (other than Permitted
Encumbrances) with respect to Taxes on any of the assets or properties or the
Company or any of its Subsidiaries; (iii) no deficiency or proposed
adjustment which has not been paid or resolved for any material amount of Tax
has been asserted or assessed by any Taxing authority against the Company or
any of its Subsidiaries; (iv) neither the Company nor any of its
Subsidiaries has consented to extend the time in which any Tax may be assessed
or collected by any Taxing authority; (v) as of the date hereof, there are
no ongoing or pending Tax audits by any Taxing authority against the Company or
any of its Subsidiaries; (vi) neither
the Company nor any of its Subsidiaries is a party to or bound by any Tax
allocation, indemnification or sharing agreement; (vii) during the last
three fiscal years, none of the Company nor any of its Subsidiaries has
distributed stock of another Person, or has had its stock distributed by
another Person, in a transaction that was purported or intended to be governed
in whole or in part by Section 355 of the Code; (viii) since the date
of the Latest Balance Sheet, neither the Company nor any of its Subsidiaries
has incurred any material liability for Taxes arising from extraordinary gains
or losses, as that term is used in GAAP, outside the ordinary course of
business consistent with past practice; (ix) none of the Company nor any
of its Subsidiaries (A) has been a member of an affiliated group of
corporations, within the meaning of Section 1504 of the Code, or (B) has
any liability for the Taxes of any Person under Treas. Reg. §1.1502-6 (or any
similar provision of state, local or foreign income Tax law), as a transferee
or successor, by contract, or otherwise; (x) no claim has been made by a Taxing
authority in a jurisdiction where the Company and its Subsidiaries do not file
Tax Returns that the Company or any of its Subsidiaries is or may be subject to
Taxes assessed by such jurisdiction, (xi) the unpaid income Taxes of the
Company and its Subsidiaries did not, as of the date of the Latest Balance
Sheet, exceed the reserve for income Tax liability set forth on the Latest
Balance Sheet, (xii) none of the Company nor any of its Subsidiaries has
entered into any transaction which is a “reportable transaction” (as defined in
Treasury Regulation Section 1.6011-4) or a “potentially abusive tax
shelter” (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 the
consummation of the transactions contemplated hereby, result in the payment of
any amount that will not be deductible pursuant to the terms of Section 280G
of the Code, (xiv) no corporate subsidiary of the Company is, nor has
any corporate subsidiary of the Company been, a United States real property
holding corporation within the meaning of Code Section 897(c)(2) during
the applicable period described in Code Section 897(c)(1)(A)(ii), (xv) Section 4I of the Company
Disclosure Letter sets forth, with respect to the Company and each of its
Subsidiaries, the name of such entity and the characterization of such entity
for U.S. federal Tax purposes, and (xvi) neither the Company nor any of
its Subsidiaries (during such period that such Subsidiaries have been owned by
the Company) has made any election to change the characterization of such
entity for U.S. federal income tax purposes.


 


20





















 


4J.                                  Company
Material Contracts.  Section 4J
of the Company Disclosure Letter sets forth a list as of the date of this
Agreement of each of the following types of written contracts to which any of
the Company or its Subsidiaries is a party:


 


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


 


(ii)                                  any
employee collective bargaining agreement, workers’ council or similar statutory
organization agreement or other labor union contract;


 


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


 


(iv)                              any
lease or similar agreement under which (A) the Company or one of its
Subsidiaries is lessee of, or holds or uses, any machinery, equipment, vehicle
or other tangible personal property owned by a third party or (B) the
Company or one of its Subsidiaries is a lessor or sublessor of, or makes
available for use by any third party, any tangible personal property owned or
leased by the Company or one of its Subsidiaries, in any case which has future
liability in excess of $250,000 in any 12-month period and which cannot be
terminated for a liability of $250,000 or less;


 


(v)                                 any
agreement or contract under which the Company or one of its Subsidiaries has
borrowed any money or issued any note, indenture or other evidence of
indebtedness or guaranteed indebtedness or liabilities of others (other than
intercompany indebtedness solely among the Company and its Subsidiaries,
endorsements for the purpose of collection, loans made to employees for
relocation, travel or other employment-related purposes, or purchases of
equipment or materials made under conditional sales contracts, in each case in the
ordinary course of business), in each case having an outstanding principal
amount in excess of $250,000;


 


(vi)                              any
material agreement or contract with a governmental entity providing for
payments to the Company and its Subsidiaries in excess of $250,000 in the next
twelve-month period;


 


(vii)                           any
agreement or contract pursuant to which a counterparty thereto has made a
written claim for indemnification against the Company or any of its
Subsidiaries which has not been settled or resolved (other than warranty claims
in the ordinary course of business);


 


(viii)                        any
other agreement, contract, lease, license or instrument, in each case not
included in clauses (i) through (vii) above or set forth on any of
the other Sections of the Company Disclosure Letter, to which the Company or
one of its Subsidiaries is a party or by or to which any of their assets are
bound or subject which has future liability


 


21





















 


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 60
calendar days or less without the payment of any termination penalty (other
than warranty obligations in the ordinary course of business, purchase orders
in the ordinary course of business, Leases, License Agreements and Acquisition
Agreements); or


 


(ix)                                any
agreement, contract, memorandum of understanding, side letter or other
arrangement, whether written or oral, pursuant to which the Company or any of
its Subsidiaries has asserted claims for indemnification or contribution
against a prior owner of the Company or any of its Subsidiaries for asbestosis,
silicosis, mixed dust, benzene or similar claims or litigation to which the
Company or any of its Subsidiaries is subject (including as may relate to
respiratory product liability litigation or claims) relating to products
manufactured, distributed or sold by the Company or any of its Subsidiaries.


 


The Company has delivered
to, 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 4J
of the Company Disclosure Letter (collectively, the “Company Material
Contracts”), other than exhibits or schedules to such contract, lease,
license, instrument or other agreement that would not reasonably be expected to
impact the unexpired rights or obligations of the Company or its Subsidiaries
under such Company Material Contracts in any material respect.  The Company Material Contracts are valid and
binding agreements of the Company or a Subsidiary and are in full force and
effect.  Each Company Material Contract
is enforceable against the Company or its Subsidiaries, as applicable (and, to
the Company’s knowledge, any other parties to such Company Material Contract),
in accordance with its terms.  Except as
disclosed on Section 4J of the Company Disclosure Letter or any
other section of the Company Disclosure Letter, the Company or one of its
Subsidiaries, as applicable, has performed all material obligations required to
be 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 breach
or default thereunder in any material respect.


 


4K.                              Intellectual
Property.


 


(i)                                     Set
forth on Section 4K of the Company Disclosure Letter is a true and
accurate list of all material (A) issued patents and patent applications, (B) trademark
and service mark registrations and applications for registration thereof and
material unregistered trademarks, (C) registrations of and applications
for copyrights and mask works, and (D) internet domain name registrations
and applications therefor, in each case that are owned by the Company or any of
its Subsidiaries.  Each such item of
Company Intellectual Property and each pending patent application has been duly
maintained or prosecuted, as applicable, and has not been cancelled, expired or
abandoned.  Section 4K of the
Company Disclosure Letter also sets forth (1) each material license in
effect as of the date of this Agreement of Company Intellectual Property to a
third party, (2) each material third party license of Intellectual
Property Rights to the Company or its Subsidiaries, excluding licenses of
commercially available off the shelf software, and (3) any material joint
development agreement for next generation fire products (each, a “License
Agreement”). Except as set forth on Section 4K of the Company
Disclosure Letter, (x) each License Agreement is in full force and effect and
is valid and legally


 


22





















 


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 such
License Agreement, and no event has occurred that with notice or lapse of time
would constitute a material default or breach or permit termination, or any
material modification, or acceleration of material rights thereunder; and
(z) neither the Company nor any Subsidiary has granted any sublicense with
respect to such License Agreement except in the ordinary course of business and
as permitted under the applicable License Agreement.  Except as set forth on Section 4K
of the Company Disclosure Letter, the Company or one of its Subsidiaries owns
and possesses good title to all Company Intellectual Property, free of Liens
(other than Permitted Encumbrances).  The
Company and its Subsidiaries own or have a valid right to use all material
Intellectual Property Rights used in their businesses as presently conducted.  Except as set forth on Section 4K
of the Company Disclosure Letter, no claims are pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries with
respect to the ownership, use, enforceability or validity of any Company
Intellectual Property and neither the Company nor any of its Subsidiaries has
brought any claim for infringement or misappropriation of Company Intellectual
Property against any third party.  Each
item of (i) Company Intellectual Property, and (ii) Intellectual
Property Rights owned by third parties which are the subject of a License
Agreement will be owned or available for use by the Company and the
Subsidiaries on substantially the same terms and conditions immediately
subsequent to the Closing as immediately prior to the Closing, except in the
case of Intellectual Property Rights which are the subject of a License
Agreement, where the failure to be owned or available for use would not result
in a Company Material Adverse Effect. 
Except as set forth on Section 4K of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries have been sued or
charged as a defendant in, or to the knowledge of the Company, threatened in
writing with any claim, suit, action, or proceeding which involves a claim of
infringement, misappropriation or dilution of any Intellectual Property Rights
of any third party or conflicting ownership rights of any Company Intellectual
Property and which has not been finally terminated prior to the date hereof
which if determined adversely to the Company and its Subsidiaries would result
in a Company Material Adverse Effect. 
Except as would not result in a Company Material Adverse Effect, all
Company Intellectual Property and Intellectual Property Rights owned by third
parties which are the subject of a License Agreement which derive independent
economic value, actual or potential, from not being generally known to the
public have been maintained by the Company and its Subsidiaries in confidence
in accordance with protection procedures that the Company believes are adequate
for protection.


 


(ii)                                  Except
as would not result in a Company Material Adverse Effect, the information
technology systems owned, licensed, leased, operated on behalf of, or otherwise
held for use in the business by Company and/or its Subsidiaries, including all
computer hardware, software, firmware and telecommunications systems used in
the business of Company and its Subsidiaries, perform reliably and in material
conformance with the appropriate specifications or documentation for such
systems.  Except as would not result in a


 


23





















 


Company Material Adverse Effect, the Company and its Subsidiaries have
taken 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 Company
Material Adverse Efect, all material computer software, including without
limitation any separately sold component elements of computer software used by
or on behalf of the Company or any Subsidiary in the conduct of its business
and material thereto (collectively, the “Business Software”) is
adequately documented, and the Company or the relevant Subsidiary(ies) has made
adequate provision for the maintenance and support of the Business Software for
its continued use in conduct of its business.


 


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


 


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


 


4N.                              Company
Employee Benefit Plans.


 


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


 


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


 


24





















 


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


 


(iii)                               Except
as set forth on Section 4N of the Company Disclosure Letter, none
of the Company or any of its Subsidiaries contributes to, or has any obligation
to contribute to, any Title IV Plan or any Multiemployer Plan.  No Title IV Plan has been completely or
partially terminated or been the subject of a Reportable Event, and no Title IV
Plan has an accumulated funding deficiency or has applied for or received a
minimum funding waiver.  No proceeding by
the PBGC to terminate any Title IV Plan has been instituted or, to the
knowledge of the Company, threatened. 
None of the Company, its Subsidiaries or any ERISA Affiliate has
incurred 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 incurred
or is reasonably likely to incur any material liability, including any contingent
liability under Section 4204 of ERISA, on account of a “partial withdrawal”
or a “complete withdrawal” (within the meaning of Sections 4205 and 4203 of
ERISA) from any Multiemployer Plan.


 


(iv)                              Except
as set forth on Section 4N of the Company Disclosure Letter, all
contributions to, and payments from, the Employee Benefit Plans which may have
been 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)                                 The
Company, each Subsidiary and each ERISA Affiliate have complied in all material
respects with the notice and continuation coverage requirements of Section 4980B
of the Code and the regulations thereunder, including, without limitation, the “M&A
regulations” set out in Treas. Reg. 54.4980B-9, with respect to each Employee
Benefit Plan that is, or was during any taxable year of the Company, any
Subsidiary or any ERISA Affiliate for which the statute of limitations on the
assessment of federal income taxes remains open, by consent or otherwise, a
group health plan within the meaning of Section 5000(b)(1) of the
Code.


 


(vi)                              Neither
the Employee Benefit Plans, the Company or any Subsidiary, nor any employee of
the foregoing, nor, to the Company’s knowledge, any trusts created thereunder,
nor any trustee, administrator or other fiduciary thereof, has engaged in a “prohibited
transaction” (as such term is defined in Section 4975 of the Code or Section 406
of ERISA) which could reasonably be expected to subject any thereof to a
material tax or penalty on prohibited transactions imposed by such Section 4975
or the sanctions imposed under Title I of ERISA in a material amount.


 


(vii)                           A
true and complete copy of each Employee Benefit Plan, and, as applicable, a
copy of the most recent IRS Determination Letter received, the three most
recent IRS Forms 5500 filed, and the most recent actuarial report with respect
to each such Employee Benefit Plan, have been furnished to Buyer.


 


25





















 


(viii)        Except
as set forth on Section 4N of the Company Disclosure Letter, no
employee of the Company will be entitled to any additional compensation or
benefits or any acceleration of the time of payment or vesting of any
compensation or benefits under any Employee Benefit Plan, including, without
limitation, any payment or acceleration under any equity based plan, solely as
a result of the transactions contemplated by this Agreement.


 


(ix)           Section 4N
of the Company Disclosure Letter contains a list of each Foreign Benefit
Plan.  The Company, each Subsidiary and
each ERISA Affiliate and each of the Foreign Benefit Plans are in compliance in
all material respects with the provisions of the applicable laws of each jurisdiction
in which any of the Foreign Benefit Plans are maintained.


 


(x)            Except
as set forth in Section 4N of the Company Disclosure Letter, all
contributions to, and payments from, the Foreign Benefit Plans (other than
payments 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 such
plan, and, when applicable, the law of the jurisdiction in which such plan is
maintained, have been timely made.


 


(xi)           Except
as set forth in Section 4N of the Company Disclosure Letter, each
of the Foreign Benefit Plans has obtained from the government or governments
having jurisdiction with respect to such plan any required determinations that
such plans are in compliance with the laws and regulations of any government.


 


(xii)          Each
of the Foreign Benefit Plans for which an applicable statute of limitations
remains open has been administered at all times, in all material respects, in
accordance with its terms.  Except as set
forth in Section 4N of the Company Disclosure Letter, there are no
pending investigations by any governmental agency involving the Foreign Benefit
Plans, no claims pending or threatened in writing (except for claims for
benefits payable in the normal operation of the Foreign Benefit Plans), suits
or proceedings against any Foreign Benefit Plan or asserting any rights or
claims to benefits under any Foreign Benefit Plan which could reasonably be
expected to give rise to any material liability.


 


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


 


4P.           Compliance with Applicable Laws.  Except as set forth on Section 4P
of the Company Disclosure Letter, since December 31, 2000, the Company and
its Subsidiaries have complied in all material respects with all applicable
statutes, laws, ordinances, rules, orders,


 


26





















 


judgments and
regulations of any governmental authority or instrumentality, domestic or
foreign applicable to the Company and its Subsidiaries.  Except as set forth on Section 4P
of the Company Disclosure Letter, to the Company’s knowledge, since December 31,
2000, neither the Company nor any of its Subsidiaries has received any written
communication from a Governmental Authority that alleges that any of them is
not in compliance with any federal, state, foreign or local laws, rules and
regulations in any material respect.


 


4Q.          Environmental.  Except as set forth on Section 4Q
of the Company Disclosure Letter, (i) neither the Company nor any of its
Subsidiaries (a)  has received any material written communication
from, or been subject to a material claim asserted in writing by, any third
party (including, without limitation, a governmental authority), or (b)  to
the knowledge of the Company, has been subject to any material investigation by
a governmental authority, that, in the case of (a) or (b) above,
alleges that the Company or any of its Subsidiaries is not in material
compliance with any Environmental Laws and which allegation has not been
resolved, (ii) the Company and its Subsidiaries hold, and are in material
compliance with, all material permits, licenses and governmental authorizations
required to be obtained by the Company or its Subsidiaries under Environmental
Laws, and the Company and its Subsidiaries are in material compliance with all
Environmental Laws; (iii) to the knowledge of the Company, neither the
Company nor any of its Subsidiaries has treated, stored, disposed of, arranged
for 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 material
liabilities under Environmental Laws for environmental site investigation or
cleanup, corrective action, other response action, or damages or injuries to
persons, property or natural resources; (iv) with respect to properties or
facilities currently or formerly owned, leased or operated by the Company or
any 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 release
by the Company or any of its Subsidiaries, or, to the Company’s knowledge, by
others, of any hazardous substance, pollutant, contaminant or waste where such
release or threat of a release has given rise to, or that is reasonably likely
to give rise to, any material liability for environmental site investigation or
cleanup, corrective action, other response action or damages or injuries to
persons, property or natural resources under Environmental Laws; and (v) no
Liens arising under Environmental Laws are recorded against any property owned
or leased by the Company or any of its Subsidiaries.  As used in this Agreement, the term “Environmental
Laws” means the Clean Air Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended (“CERCLA”), the
Resource Conservation and Recovery Act, as amended, the Clean Water Act, as
amended, and any other foreign, federal, provincial, state or local laws,
regulations or ordinances regulating or imposing standards of conduct or
liability relating to pollution or protection of the environment or worker
health and safety as the foregoing are enacted and in effect on or prior to the
Closing.


 


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


 


27





















 


material unfair
labor practice complaint, grievance, or arbitration proceeding filed against
the Company or any of its Subsidiaries that has not been settled, resolved or
dismissed, 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 are
in compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and are not engaged in any unfair labor practice.


 


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


 


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


 


4U.          Product
Warranties.


 


(i)            Except
where the obligations of the Company or its Subsidiaries in respect of such
terms and conditions would not reasonably be expected to have a Company
Material Adverse Effect, the Company has made available to Buyer complete and
correct copies of the standard terms and conditions for each of the products of
the Company and its Subsidiaries presently being sold by the Company.  Except as required by applicable law or as
set forth on Section 4U of the Company Disclosure Letter and except
as would not otherwise result in a Company Material Adverse Effect, no product
manufactured, sold or delivered by, or services rendered by or on behalf of the
Company or any of its Subsidiaries is subject to any express guaranty, warranty
or other indemnity beyond such standard terms and conditions.


 


(ii)           Neither
the Company nor any of its Subsidiaries has entered into any agreement,
contract, commitment or other arrangement (whether written or oral) pursuant to
which the Company or any of its Subsidiaries is or will be obligated to make
any rebates or similar payments to any customer (“Rebate Obligations”),
other than (A) Rebate Obligations that are included on the liabilities
side of balance sheets included in the Financial Statements, (B) other
Rebate Obligations incurred in the ordinary course of


 


28





















 


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


 


4V.          Affiliate Transactions.  Except as included on Section 4V
of the Company Disclosure Letter, neither the Company and any of its
Subsidiaries, on the one hand, and any Affiliate (other than the Company or any
of 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 4V
of the Company Disclosure Letter, no Affiliate of the Company or any of its
Subsidiaries (other than the Company or one of its Subsidiaries), has any
interest in any material property (whether real, personal or mixed and whether
tangible or intangible) used or held for use by the Company and its
Subsidiaries in the conduct of their respective businesses.


 


4W.         Customers and Suppliers.  Section 4W of the Company
Disclosure Letter sets forth a complete and accurate list of the 10 largest
customers and 10 largest suppliers of the Company and its Subsidiaries (on a
consolidated basis) for the twelve-month period ended December 31, 2004
and the three-month period ended April 2, 2005.  Except to the extent set forth on Section 4W
of 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 it
intends to materially reduce the dollar amount of business that it intends to
do 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 4X
of the Company Disclosure Letter, the Company and its Subsidiaries do not have
any outstanding liabilities except (i) liabilities under the Company
Material Contracts or under contracts or agreements that are not required to be
listed in Section 4J of the Company Disclosure Letter or under
contracts or agreements otherwise disclosed in the Company Disclosure Letter, (ii) liabilities
included on the liabilities side of the Latest Balance Sheet, (iii) liabilities
which have arisen after the date of the Latest Balance Sheet in the ordinary
course of business, (iv) liabilities arising in connection with the
transactions contemplated hereby, (v) liabilities to be included in clause
(ii) or (iii) of the definition of Purchase Price, (vi) liabilities
disclosed on another section of the Company Disclosure Schedule, and (vii) liabilities
which would not, individually or in the aggregate, have a Company Material
Adverse Effect.


 


4Y.          Compliance
with the Foreign Corrupt Practices Act and Export Control and Antiboycott Laws.  Except as
set forth on Section 4Y of the Company Disclosure Letter,


 


(i)            Neither
the Company, its Subsidiaries nor any of their directors, officers, agents,
employees or any other Persons acting on their behalf has, in connection with
the operation of the business of the Company or its Subsidiaries, (i) used
any corporate or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures relating to political activity
to government officials or established or maintained any unlawful or unrecorded
funds in violation of Section 104 of the Foreign Corrupt Practices Act of
1977, as amended, or any other applicable foreign, federal or state law; or (ii) accepted
or received any unlawful contributions, payments, expenditures or gifts.


 


29





















 


(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 control
laws, including the Export Administration Regulations, The International
Traffic in Arms Regulations and the Foreign Assets Control Regulations.


 


(iii)          Since December 31, 2000, neither of the Company nor
any of its Subsidiaries has violated in any material respect the U.S.
antiboycott regulations contained in 50 U.S.C. § 2401 et seq. or the
penalty provisions contained in Section 999 of the Code.


 


ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE SELLER RE NSP CAPITAL


 


As an inducement to Buyer
to 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 Delaware
and is qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect upon the financial
condition or operating results of NSP Capital. 
NSP Capital has all requisite corporate power and authority necessary to
own and operate their properties and to carry on their businesses as now
conducted.  The copies of the NSP Capital’s
Certificate of Incorporation and Bylaws which have been made available to the
Buyer reflect all amendments made thereto at any time prior to the date of this
Agreement.


 


5B.          NSP Capital Shares.  All of the NSP Capital Shares have been duly
authorized 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 Capital
or securities or obligations of any kind convertible into or exchangeable for
any equity interests of NSP Capital.  The
NSP Capital Shares represent all of the issued and outstanding equity interests
in NSP Capital.


 


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


 


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


 


30





















 


ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF SELLER


 


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


 


6A.          Organization and Corporate Power.  The Seller is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  The Seller has all
requisite limited liability company power and authority necessary to own and
operate its properties and to carry on its businesses as now conducted and to
enter into this Agreement and consummate the transactions contemplated
hereby.  The copies of the Seller’s Certificate
of Formation and Second Amended and Restated Limited Liability Company
Agreement which have been made available to the Buyer reflect all amendments
made thereto at any time prior to the date of this Agreement.


 


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


 


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


 


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


 


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


 


31





















 


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


 


ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF BUYER


 


As an inducement to the
Company to enter into this Agreement, the Buyer hereby represents and warrants
that:


 


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 Delaware
and is qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect upon the ability of the Buyer to consummate the
transactions contemplated hereby.  The
Buyer and its Subsidiaries have all requisite corporate power and authority
necessary to own and operate their properties and to carry on their businesses
as now conducted and to enter into this Agreement and consummate the
transactions contemplated hereby.  The
copies of the Buyer’s certificate of incorporation and by-laws which have been
made available to the Company reflect all amendments made thereto at any time
prior to the date of this Agreement.


 


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


 


7C.          Litigation.  Except as set forth on Schedule 7C
attached 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, or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign that
would reasonably be expected to materially adversely affect the ability of the
Buyer to consummate the transactions contemplated by this Agreement.


 


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


 


7E.           Financing.  The Buyer has received the executed
commitment letter from Credit Suisse First Boston LLC attached hereto as Exhibit 7E(i) (the
“Debt Commitment Letter”), and the executed equity commitment letter
from Odyssey Investment Partners, LLC attached hereto as Exhibit 7E(ii) (the
“Equity Commitment Letter” and together with the Debt Commitment Letter,
the “Commitment Letters”).  The
aggregate proceeds of the financing as contemplated by the Commitment Letters
(if and when received) will be sufficient to pay all obligations of the Buyer
hereunder (including fees and expenses). 
The obligations to fund the commitments under the Commitment Letters are
not subject to any condition, other than the conditions set forth in the
Commitment Letters.  The Buyer has
delivered to Seller’s counsel a true, correct and complete copy of the “market
flex” provisions to which the Debt Commitment Letter is subject.  Each Commitment Letter that has been executed
by Buyer has been duly executed by Buyer and, to the knowledge of Buyer, each
other Person party thereto, and each such Commitment Letter is in full force
and effect.


 


7F.           Acquisition for Investment.  The Company Equity Interests acquired by the
Buyer pursuant to this Agreement are being acquired for investment only and not
with a view to any public distribution thereof, and the Buyer will not offer to
sell or otherwise dispose of the Company Equity Interests so acquired by it in
violation of any of the registration requirements of the Securities Act, or any
comparable state law.  Buyer is an “accredited
investor” within the meaning of Regulation D promulgated pursuant to the
Securities Act.


 


ARTICLE 8

TERMINATION


 


8A.          Termination.  Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time:


 


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


 


(ii)           by
the Buyer, if there has been a material violation or breach by the Company or
Seller of any covenant, representation or warranty contained in this Agreement
which has prevented the satisfaction of any condition to the obligations of
Buyer at the Closing and such violation or breach has not been waived by the
Buyer or cured by the Company or Seller within twenty (20) days after written
notice thereof from the Buyer (provided  that the failure to
deliver the Company Equity Interests and the NSP Capital Shares at the Closing
as required hereunder shall not be subject to cure hereunder unless otherwise
agreed to in writing by the Buyer);


 


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


 


33





















 


such violation or breach has not been waived by the Seller and the
Company or cured by the Buyer within twenty (20) days after written notice
thereof by the Seller (provided  that the failure to deliver the
Purchase Price at the Closing as required hereunder shall not be subject to
cure hereunder unless otherwise agreed to in writing by the Seller);


 


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


 


(v)           by
the Seller on or after the 7th business day after the Buyer delivers
a Financing Notice unless on or prior to such 7th business day Buyer
has delivered to Seller an Alternative Financing Proposal; or


 


(vi)          by
the Buyer or the Seller if the transactions contemplated hereby have not been
consummated prior to August 5, 2005 (the “Termination Date”); provided
that (a) the Buyer shall not be entitled to terminate this
Agreement pursuant to this subparagraph (vi) if the Buyer’s knowing or
willful breach of this Agreement has prevented the consummation of the
transactions contemplated hereby and (b) the Seller shall not be entitled
to terminate this Agreement pursuant to this subparagraph (vi) if the
Company’s or the Seller’s knowing or willful breach of this Agreement has
prevented the consummation of the transactions contemplated hereby.


 


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


 


ARTICLE 9

DEFINITIONS


 


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


 


“Adjustment Amount”
means the sum of (i) Transaction Expenses and (ii) any prepayment
penalties, breakage fees or similar fees accrued after the date of the Latest
Balance Sheet requiring payment of any Indebtedness (other than pursuant to the
Notes or the Holdco Notes) of the Company and its Subsidiaries is required to
be paid pursuant to this Agreement or otherwise (whether or not paid on or
prior to the Closing Date); provided that, notwithstanding the
foregoing, in no event shall “Adjustment Amount” include (x) liabilities or
obligations incurred or arranged by Buyer or its Affiliates in connection with
the transactions contemplated


 


34





















 


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


 


“Affiliate” means
any 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” shall
have the meaning set forth in Section 10M(i).


 


“Alternative Financing
Proposal” means a written proposal from Buyer to consummate the
transactions contemplated hereby on the terms set forth herein on or prior to
the Termination Date, with no amendment or modification that is adverse to
Seller or the Company, and that includes with such proposal, written equity and
debt commitment letters from reputable financial institutions that (i) provide
for the full debt and equity financing for Buyer to consummate the transactions
contemplated hereby on the terms set forth herein on or prior to the
Termination Date, (ii) do not contain terms or conditions that are,
individually or in the aggregate, in addition to or more burdensome (from the
perspective of consummating the transactions contemplated hereby) than the
conditions set forth in the Equity Commitment Letter and the Debt Commitment
Letter, (iii) do not cause, and upon consummation of the transactions
contemplated hereby would not cause, the Seller or the Company to be in breach
of any of their representations, warranties or covenants hereunder or in breach
of any other agreement or instrument to which it is party, and (iv) is
reasonably 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 have
the meaning set forth in the preamble.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Company” shall
have the meaning set forth in the preamble.


 


35





















 


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


 


“Company Equity
Interests” shall have the meaning given to such term in the preamble
hereto.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


36





















 


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


 


“Debt Commitment
Letter” 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) of
ERISA) and each other material employee benefit plan, program or arrangement
including, without limitation, any bonus, LLC unit purchase, LLC unit
ownership, LLC unit option, LLC unit appreciation, deferred compensation,
incentive, severance, or termination plan or arrangement, or other material
employee fringe benefit plan that is maintained, sponsored or contributed to by
the Company or its Subsidiaries on behalf of employees located in the United
States.


 


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


 


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


 


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


 


“ERISA” means the
United 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 for
purposes 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 the
Company or its Subsidiaries on behalf of employees of the Company or its
Subsidiaries located outside of the United States.


 


“GAAP” means
United States generally accepted accounting principles.


 


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


 


37





















 


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


 


“Governmental
Authority” means any foreign or United
States federal, state or local court, administrative agency, commission or
governmental or regulatory authority.


 


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


 


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


 


“HSR Act” shall
have 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 owing
by NSP Capital, the Company and its Subsidiaries for debt for borrowed money
and penalties owed to any third party (i.e., specifically excluding
intercompany debt between NSP Capital, the Company and any of its Subsidiaries
and any Subsidiary of the Company and another Subsidiary of the Company),
including pursuant to the Senior Credit Facility, the Notes and the Seller
Notes, (ii) all principal, accrued interest and penalties owing by Seller
and NSP Capital in respect of the Holdco Notes, but only to the extent that the
liability therefor is assumed by the Buyer or one of its Subsidiaries from and
after the Closing, (iii) all obligations of the Company and its
Subsidiaries as lessee or lessees under leases that have been recorded as
capital leases in accordance with GAAP, (iv) all unpaid reimbursement
obligations of the Company and its Subsidiaries with respect to letters of
credit, bankers’ acceptances or similar facilities issued for the account of
such Person, (v) all fees and other expenses owed with respect to the
indebtedness referred to above (and any prepayment penalties or fees or similar
breakage costs or other fees and costs and similar expenses required to be paid
in respect of any such Indebtedness to be satisfied and discharged in full at
the Closing (other than the Notes and the Holdco Notes)), and (vi) all
indebtedness 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) foregoing
above guaranteed directly or indirectly in any manner by the Company or any of
its Subsidiaries; provided that, notwithstanding the foregoing, in no
event shall “Indebtedness” include (x) liabilities or obligations incurred or
arranged by Buyer or its Affiliates in connection with the transactions
contemplated hereby, (y) liabilities or obligations in respect of any accrued
but unpaid interest for the period from April 2, 2005 through and
including the Closing Date, or (z) any tender cost, tender premium, consent
solicitation fee, exit consent fee, make-whole premium, redemption premium,
change in control premium, termination payment or other payment related to the
refinancing, purchase or redemption or potential refinancing, purchase or
redemption of the Notes, the Holdco Notes and/or the German Credit Facilities.


 


38





















 


“Indenture” means
that certain Indenture, dated as of August 13, 2003, by and among the
Company, Norcross Capital Corp., the guarantors named therein and Wilmington
Trust Company, as trustee.


 


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


 


“Intellectual Property
Rights” means all rights, worldwide, in and to the following: (i) patents
and patent applications, (ii) trademarks, service marks, trade dress,
trade names, domain names, logos and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) works of authorship and other copyrightable
works, including registered or unregistered copyrights,  and applications for registration thereof, (iv) mask
works and registrations and applications for registration thereof, (v) computer
software (including source code and executable code) and (vi) trade
secrets, confidential information, inventions (whether patentable or
unpatentable and whether or not reduced to practice) and know-how, (vii) all
other proprietary rights.


 


“knowledge,” when
used in the phrase “to the knowledge of the Company” or similar phrases
means, and shall be limited to, the actual knowledge of the Senior Executive
Employees, after reasonable inquiry of Charles S. Ellis, Mary Grilliot, and
Kenneth R. Martel.


 


“Latest Audited
Balance 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 occupy
any land, buildings, structures, improvements, fixtures, or other interest in
real property that is used in the Company’s or any of its Subsidiaries’
business.


 


“Leases” means all
leases, subleases, licenses, concessions and other agreements (written or
oral), including all amendments, extensions, renewals, guaranties and other
agreements with respect thereto, pursuant to which the Company or any of its
Subsidiaries holds any Leased Real Property and for which the annual rent
obligation 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 any
mortgage, pledge, lien, equitable interest, right-of-way, easement,
encroachment, security interest, preemptive right, right of first refusal or similar
restriction, charge or right, option, judgment, title defect or encumbrance of
any kind.


 


“Management Equity
Rollover Amount” means (i)  in the event that the transactions
contemplated 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) are
consummated, not less than the greater of $1,900,000 and the pre-Tax equivalent
of $1,500,000 (applying the effective Tax rates for the Rollover Management
Unitholders related to the sale of the Company by the Seller); provided
that in no event shall the Management Equity Rollover Amount exceed $3,000,000.


 


39





















 


“March Net
Indebtedness” means $331,518,000 (which is calculated to equal the
aggregate 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) cash
and cash equivalents (determined in a manner consistent with the preparation of
the Latest Balance Sheet) of the Company and its Subsidiaries.


 


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


 


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


 


“Notes” means the
97/8% Senior Notes of the Company and Norcross Capital
Corp. 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, and
fixtures located thereon, and all easements and other interests and rights
appurtenant thereto, owned by the Company or any of its Subsidiaries and used
in 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, the
Seller, the Company and the Buyer.


 


“PBGC” means the
United States Pension Benefit Guaranty Corporation.


 


“Permitted
Encumbrances” means (i) any restriction on transfer arising under
applicable securities law, (ii) Liens for Taxes not yet due and payable or
for Taxes that the taxpayer is diligently contesting in good faith through
appropriate proceedings and for which adequate reserves have been established
in accordance with GAAP, (iii) purchase money Liens and Liens securing
payments under lease arrangements or license arrangements, (iv) Liens
under the Senior Credit Facility, the German Credit Facilities, the South
African line of credit or the Seller Notes, (v) Liens of lessors and
licensors under any lease or license agreement to which the Company or any of
its Subsidiaries is party, (vi) mechanics’, material men’s, warehousemen’s,
contractors’, workers’, repairmen’s, carriers’ and similar Liens attaching by
operation of law, incurred in the ordinary course of business and securing
payments not delinquent or payments which are being diligently contested in
good faith by appropriate proceedings or bonded and for which adequate reserves
have been established in accordance with GAAP, (vii) zoning, building
codes, and other land use laws regulating the use or occupancy of Owned Real
Property or


 


40





















 


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


 


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


 


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


 


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


 


“Purchase Price”
means the result equal to (i) the Base Purchase Price, minus (ii) the
March Net Indebtedness, minus (iii) the Adjustment Amount, as
adjusted 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” shall
have 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 than
those with respect to which notice is waived by regulation.


 


“Rollover Management
Unitholders” 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” means
the each of the promissory notes for which the Company or any of its
Subsidiaries is an obligor as set forth on Section 9B of the
Company Disclosure Letter.


 


41





















 


“Senior Credit
Facility” means that certain Second Amended and Restated Credit Agreement,
dated as of March 20, 2003, by and among the Company, certain of its
Subsidiaries, the lenders party thereto, and Fleet National Bank, as
administrative 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, that
certain Fourth Amendment, dated as of December 29, 2004, as further
amended, modified, supplemented or waived from time to time, and each other
document or agreement executed in connection therewith.


 


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


 


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


 


“Subsidiary”
means, with respect to any Person, any corporation, partnership, association or
other business entity of which (i) if a corporation, a majority of the
total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or 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 a
combination thereof, or (ii) if a partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination
thereof.  For purposes hereof, a Person
or Persons shall be deemed to have a majority ownership interest in a
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of partnership, association or other business
entity 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-on
minimum or other tax, fee, assessment or charge of any kind whatsoever
including any interest, penalties or additions to Tax or additional amounts in
respect of the foregoing.


 


“Tax Return” means
any Tax return, declaration, report, claim for refund, or information return or
statement filed or required to be filed by the Company or any of its
Subsidiaries.


 


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


 


42





















 


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


 


“Transaction
Documents” means, collectively, this Agreement and each of the other
agreements and instruments to be executed and delivered by either or both of
the Parties in connection with the consummation of the transactions
contemplated hereby; provided that notwithstanding anything herein to
the contrary, except for any Supplemental Indenture executed in connection with
the assignment and assumption of the Holdco Notes and the Holdco Notes
Indenture, in no event shall any documents executed in connection with Buyer’s
financing 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) the
Senior Executive Obligations; provided that, for the avoidance of doubt,
in no event shall “Transaction Expenses” be deemed to include (x) any fees and
expenses to any of the Persons named in clauses (i) and (iv) of the
definition of “Company Expenses”, but only to the extent relating to Buyer’s
financing for the transactions contemplated hereby or (y) any tender cost,
consent solicitation fee, exit consent fee, makewhole premium, redemption
premium, change in control premium, termination payment or other payment
related to the refinancing or redemption or potential refinancing or redemption
of the Notes, the Holdco Notes and/or the German Credit Facilities.


 


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


 


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


 


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


 


ARTICLE 10

ADDITIONAL AGREEMENTS


 


10A.        Survival.  Except for the representations and warranties
contained in Sections 4A, 4B, 5A, 5B, 6A and
6E, which shall survive to the extent provided in the Seller Member
Letter, and the representations and warranties set forth in Section 7A
and Section 7B, each of which shall survive the Closing
indefinitely, each of the representations and warranties set forth in this
Agreement or in any certificate delivered in connection with this Agreement
(other than the certificate executed by Buyer or one or more of its Affiliates
in favor of Seller and/or one or more of its Affiliates or representatives in
connection with the assignment and assumption of the Holdco Notes) shall
terminate effective immediately as of the Closing such that no claim for breach
of any such representation or warranty, detrimental reliance or other right or
remedy (other than for common law actual fraud) may be brought after the
Closing.  Except for the respective
covenants of the parties pursuant to Section 1C (which covenants
shall survive the Closing indefinitely), the covenants of any party set forth
in this Agreement and in any other document delivered in connection herewith
that require performance by such party on or prior to the Closing Date shall
terminate effective immediately as of the Closing such that no claim for breach
of any such covenant, detrimental reliance or other right or remedy may be
brought after the Closing.  Notwithstanding
the fact that the representations and warranties in Article 4 hereof are
made by the Company, the Seller agrees that it shall be jointly and severally


 


43





















 


responsible for
any common law actual fraud committed by the Company in making such
representations or warranties.


 


10B.        Press Release and Announcements.  The Company and the Buyer agree that, from
the date hereof through the Closing Date, no public release or announcement
concerning the transactions contemplated hereby shall be issued or made by or
on behalf of any party without the prior consent of the other parties, except
that each of the Parties and their respective Affiliates may make announcements
from time to time (i) to their respective equityholders, (ii) to
their respective employees, (iii) the Buyer’s financing sources and (iv) as
such party may, after consultation with counsel, reasonably determine is
necessary to comply with applicable law. 
Notwithstanding the foregoing, the Buyer and the Company shall cooperate
to prepare a joint press release to be issued on the Closing Date.  Each party may disclose the terms of this
Agreement to their respective accountants and other representatives as
necessary in connection with the ordinary conduct of their respective
businesses (so long as such Persons agree to keep the terms of this Agreement
confidential).  Furthermore, Buyer
understands that the Seller and the Company will need to publicly announce and
file this Agreement promptly after the execution hereof; provided that
the Seller and the Company shall make available to the Buyer a copy of such
public announcement prior to filing and, to the extent such comments would not
cause the Seller or the Company to violate applicable law, shall incorporate
any reasonable comments of Buyer made prior to filing in such public release.


 


10C.        Confidentiality.


 


(i)            The
Buyer acknowledges that all information provided to any of its and its
Affiliates, agents and representatives by the Company and its Affiliates,
agents and representatives is subject to the terms of a confidentiality
agreement between or on behalf of the Company and Buyer or one or more of their
respective Affiliates or other beneficial owners (the “Confidentiality
Agreement”), the terms of which are hereby incorporated herein by reference
and (to the extent signed by an Affiliate of Buyer) shall be binding on Buyer
as a recipient of information from the Seller, the Company and their respective
Subsidiaries as though the Buyer was an original signatory thereto.


 


(ii)           From
and after the Closing the Seller shall keep confidential and not disclose to
any other person or entity or use for his or its own benefit or the benefit of
any other person or entity any Evaluation Materials (as such term is defined in
the Confidentiality Agreement) in its possession or control.  The obligations of the Seller under this Section 10C(ii) shall
not apply to Evaluation Material which (i) is or becomes generally
available 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 court
or tribunal or governmental authority; provided, however, that,
in any such case, the Seller shall notify the Buyer as early as reasonably
practicable prior to disclosure to allow the Company or the Buyer to take
appropriate measures to preserve the confidentiality of such Evaluation
Material 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 if
such Person obtains knowledge that any of the representations and warranties in
this Agreement, the Company Disclosure Letter and


 


44





















 


the Schedules
hereto are not true and correct in all material respects, or if such Person
obtains knowledge of any material errors in, or omissions from, the Company
Disclosure Letter or the Schedules to this Agreement provided, however,
that the delivery of any notice pursuant to this Section 10D shall
not limit or otherwise affect the remedies available under this Agreement to
any Party receiving such notice.


 


10E.         Consents.  Prior to the Closing, the Company shall, and
shall cause the Subsidiaries to, use commercially reasonable efforts to obtain
all 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 (other
than consents (i) in connection with the Debt Tender and Consent Solicitation,
which is governed by Section 3F and (ii) from Governmental
Authorities, which is governed by Section 10G) necessary for the
consummation of the transactions contemplated hereby; provided that
neither the Company nor its Subsidiaries shall be required to commence any
litigation against any third party or to expend any material sum to obtain such
consent.  To the extent requested by the
Company, the Buyer shall cooperate with the Company in all reasonable respects
in connection with obtaining any such consents and approvals.


 


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


 


10G.        Regulatory Act Compliance.  The Buyer and the Company shall each file or
cause 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-Rodino
Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and other
anti-competition laws with respect to the transactions contemplated hereby and
the Buyer shall pay all filing and similar fees payable in connection
therewith.  With respect to filings under
the HSR Act, each of the parties hereto shall seek early termination of the
waiting period under the HSR Act.  The
Buyer and the Company shall use their respective best efforts to respond to any
requests for additional information made by any agencies and to cause the
waiting periods or other requirements under the HSR Act to terminate or expire
at the earliest possible date and (subject to the Party’s rights under Section 8A
above) to resist in good faith, at each of their respective cost and expense
(including the institution or defense of legal proceedings), any assertion that
the transactions contemplated hereby constitute a violation of the antitrust
laws, all to the end of expediting consummation of the transactions
contemplated hereby.  Each of the Buyer
and the Company shall consult with the other prior to any meetings, by
telephone or in person, with the staff of the Federal Trade Commission, the
United States Department of Justice or any other regulatory agency, and each of
the Buyer and the Company shall have the right to have a representative present
at any such meeting.  Notwithstanding the
foregoing, no party shall be required to divest, or offer or agree to divest,


 


45





















 


any assets or
properties (including any assets or properties of the Company or any of its
Subsidiaries).


 


10H.        Director and Officer Liability and
Indemnification.


 


(i)            Buyer
shall cause the limited liability company agreement, certificate of
incorporation, By-Laws, and/or other constitutive documents of the Company and
each of its Subsidiaries (collectively, the “Constitutive Documents”) to
contain the provisions with respect to indemnification set forth in the
Constitutive Documents on the date of this Agreement, which provisions shall not
be amended, repealed or otherwise modified for a period of not less than six (6) years
after the Closing in any manner that would adversely affect the rights
thereunder of individuals who at any time prior to the Closing were members,
officers, directors, managers or employees of the Seller, the Company or any of
their respective Subsidiaries in respect of actions or omissions occurring at
or prior to the Closing Date (including without limitation the transactions
contemplated by this Agreement), unless such modification is required by law.


 


(ii)           Buyer
shall cause the Company and its Subsidiaries to maintain in effect for six
years from the Closing Date directors’ and officers’ liability insurance
covering 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 such
existing insurance coverage; provided that in the event that any claim
is brought under any such policy prior to the six year anniversary of the
Closing Date, such directors’ and officers’ liability insurance policy shall be
maintained until final disposition thereof; provided, however, that
during such period, the Company shall not be required to maintain any coverage
in excess of the amount that can be obtained for the remainder of such period
for an annual premium of 150% of the current annual premium paid by the Company
for its existing directors’ and officers’ liability insurance coverage as of
the date hereof.


 


10I.          Employee
Benefits Matters.


 


(i)            Immediately following the Closing
Date, the Buyer shall or shall cause the Company and its Subsidiaries to
provide 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 the
aggregate to the compensation and employee benefit plans, programs,
arrangements and policies that were provided to the Continuing Employees
immediately prior to the execution of this Agreement.  The Buyer shall have the same right,
following Closing, to terminate the employment of any Continuing Employee or
amend or terminate any compensation or employee benefit plan, program or
agreement as the Company, its Subsidiaries and ERISA Affiliates have on the
date hereof.  The Buyer agrees
that it or one of its Affiliates shall be solely responsible for satisfying the
continuation coverage requirements of Section 4980B of the Code for all “M&A
qualified beneficiaries” as such term is defined in Treas. Reg. § 54.4980B-9.


 


46





















 


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


 


(iii)          Except to the extent
otherwise agreed between the Buyer and such director, officer or employee, the
Buyer shall cause the Company and its Subsidiaries to honor for the one-year
period following the Closing Date all employment, change-of-control and
severance agreements existing as of the date hereof between the Company or its
Subsidiaries and any current or former director, officer or employee of the
Company or its Subsidiaries.


 


10J.         Facility Closings; Employee Layoffs.  For a period of ninety days after the
Closing Date, none of the Buyer, the Company or any of its Subsidiaries shall
terminate employees of the Company or any of its Subsidiaries in such numbers
as 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 severance
law.  The Buyer shall cause the Company
and its Subsidiaries following the Closing Date to comply with any notice or
filing requirements under WARN and any state or foreign plant closing or
severance law.


 


10K.        Provision Respecting Representation
of Company and Seller.  Each of the
parties to this Agreement hereby agrees, on its own behalf and on behalf of its
directors, members, partners, officers, employees and Affiliates, that Kirkland &
Ellis LLP may serve as counsel to each and any of Seller, its unitholders, and
their respective Affiliates (individually and collectively, “Seller Group”),
on the one hand, and the Company and its Subsidiaries, on the other hand, in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and
that, following consummation of the transactions contemplated hereby, Kirkland &
Ellis LLP (or any successor) may serve as counsel to the Seller Group or any
director, member, partner, officer, employee or Affiliate of Seller Group, in
connection with any litigation, claim or obligation arising out of or relating
to this Agreement or the transactions contemplated by this Agreement
notwithstanding such representation or any continued representation of the
Company and/or any of its Subsidiaries. 
Each of the parties hereto hereby consents to such representation and
waives any conflict of interest arising therefrom, and each of such parties
shall cause any Affiliate thereof to consent to waive any conflict of interest
arising from such representation.


 


47





















 


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


 


(i)            Without
limiting the generality of Buyer’s obligations under Section 10F or
elsewhere in this Agreement, the Buyer agrees to take the following actions
with 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 or
entering into a new agreement) the terms of the Commitment Letters or any “market
flex” language (as previously presented to Seller’s counsel) in any agreement
executed in connection with the Commitment Letters to include any additional
conditions to the financing set forth in the Commitment Letters in the forms
attached to this Agreement or that could otherwise reasonably be expected to
impair its obligations hereunder.  Buyer
shall provide updates to the Company as to the progress of its financing and
shall make its financing sources available to the Company and its representatives
to determine the progress of the Buyer’s financing efforts, in each case upon
reasonable notice from the Company or its representatives.  Buyer shall promptly (but in any event within
24 hours after so learning) provide the Company with written notice (a “Financing
Notice”) in the event that any party to the Debt Commitment Letters has
informed Buyer in writing that it has determined that any condition to the Debt
Commitment Letters will not be satisfied or waived prior to the Termination
Date (with it being understood that if Buyer gets verbal notice of such
determination, it shall immediately request written notification from such
counterparty and, if not received within 24 hours after such request, shall
provide the Financing Notice based on such verbal information) or Buyer becomes
aware that any counterparty repudiates its obligations under the Debt
Commitment Letter.   In the event that
Buyer needs any of the proceeds of the financing contemplated by paragraphs
(a), (b) and (c) of the prefatory paragraphs to the Debt Commitment
Letter in order to consummate the transactions contemplated hereby, and as of
the Termination Date, the Newco Notes and/or the Parent Notes (each as defined
in the Debt Commitment Letter) will not be issued, the Buyer shall, and shall
cause its parent company to, use reasonable best efforts to cause the issuance
of the Senior Facilities (including the Opco Backstop Term Amount, the Newco
Bridge Facility and the Parent Bridge Facility (each as defined in the Debt
Commitment Letter)), as needed, by the counterparties to the Debt Commitment
Letter and such other Persons to whom such obligations are syndicated in
accordance with the Debt Commitment Letter. 
If the Closing has not occurred on or prior to the Termination Date, the
Newco Notes and/or the Parent Notes will not be issued in whole or in part and
the conditions to Closing set forth in Section 2A and Section 2B have
been satisfied or will be satisfied, Buyer shall accept borrowings available in
respect of the Senior Facilities (including the Opco Backstop Term Amount), the
Newco Bridge Facility and the Parent Bridge Facility on the terms set forth in
the Debt Commitment Letter, as necessary.


 


(ii)           At
or after the Closing, the Buyer shall, and shall cause the Company and each of
its Subsidiaries to, deliver any notice required to be delivered and take other
actions required to be performed pursuant to Section 4.16 of the Indenture
and/or the Notes as a result of the transactions contemplated hereby in
accordance with the Indenture and/or the Notes, as the case may be.


 


48





















 


(iii)          At
or after the Closing, the Buyer shall, and shall cause any of its Subsidiaries
to, deliver any notice required to be delivered and take other actions required
to be performed pursuant to Section 4.16 of the Holdco Notes Indenture
and/or Holdco Notes as a result of the transactions contemplated hereby in
accordance with the Holdco Notes Indenture and/or the Holdco Notes, as the case
may be.


 


10M.       Certain Tax Matters.


 


(i)            Within
60 days following to the Closing, the Buyer shall allocate the Purchase Price
in accordance with Section 1060 of the Code (the “Allocation”)
among the assets of the Company and any of its Subsidiaries that is
characterized as a disregarded entity for U.S. federal income Tax purposes (“Disregarded
Subsidiaries”), and shall deliver the Allocation (along with a copy of the
appraisals, if any, on which the Allocation is based) to the Seller.  The Buyer and the Seller agree to consult in
good faith with regard to the Allocation, provided that the Seller shall accept
the Buyer’s final determination of the Allocation to the extent that the
Proposed Allocation is reasonable and consistent with applicable law.  The parties acknowledge that the fair market
value of the inventory and tangible property, plant and equipment of the
Company and its Disregarded Subsidiaries is approximately equal to the net book
value of such items.  Accordingly, Buyer
will not allocate an amount of the Purchase Price in excess of 110% of the net
book value of inventory and tangible property, plant and equipment of the
Company and its Disregarded Subsidiaries without the prior written consent of
the Seller, which consent shall not be unreasonably withheld (provided, however
that the parties acknowledge and agree that the Seller’s failure to consent
shall not be deemed unreasonable if such failure is supported by a third-party
appraisal of the inventory and/or the tangible property, plant and equipment of
the Company and its Disregarded Subsidiaries).  For
purposes of the Allocation, the Purchase Price shall mean an amount equal to
the Purchase Price plus any liabilities of the Company or the Disregarded
Subsidiaries that are treated as assumed liabilities for U.S. federal income
Tax purposes.  The Seller and the Buyer
agree to prepare and file an IRS Form 8594 for or such other form or
statement as may be required by applicable law, rule or regulation, and
any comparable state or local income tax form, in a manner consistent with the
Allocation. The Seller and the Buyer shall adhere to the Allocation for all
Tax-related purposes including any federal, foreign, state, county or local
income and franchise Tax Return filed by them after the Closing Date, including
the determination by the Seller of taxable gain or loss on the sale of the
Company and its Subsidiaries and the determination by the Buyer of its tax
basis with respect to the Company and its Subsidiaries.  Neither Buyer nor the Seller shall file any
Tax Returns or, in a judicial or administrative proceeding, assert or maintain
any Tax reporting position that is inconsistent with this Agreement or the
Allocation agreed to in accordance with this Agreement, unless required to do
so by applicable law.


 


(ii)           Buyer
shall, and shall cause the Company and the Disregarded Subsidiaries to, utilize
the alternate procedure set forth in Revenue Procedure 2004-53 with respect to
wage reporting.  After the Closing, Buyer
shall 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


 


49





















 


their representatives with such assistance and access as they may
reasonably request in connection with the preparation of Tax Returns required
to be filed, any audit or other examination by or communication with any
governmental authority relating to Taxes or customs duties, any judicial or
administrative 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 normal
business hours and upon reasonable advance notice, to the Sellers, the holders
of equity interests in the Seller and their respective representatives,
providing additional information and explanation of any material to be
provided, furnishing to or permitting the copying by the Seller, the holders of
equity interests in the Seller and their respective representatives of any records,
returns, schedules, documents, work papers or other relevant materials which
might reasonably be expected to be used in connection with such return, audit,
examination, proceeding or claim.  The
Sellers will reimburse the Company or its Subsidiaries (as applicable) for any
reasonable out of pocket expenses incurred in assisting the Sellers pursuant to
this Section 10M(ii).  The
Buyer will, and will cause the Company and its Subsidiaries to, retain for a
period of five (5) years after the Closing Date, and
upon the reasonable request of the Seller, the holders of equity interests in
the Seller and their respective representatives provide, any records or
information which may be relevant to such reporting, return, audit,
examination, proceeding or claim.


 


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


 


10N.        Expenses; Transfer Taxes.  If this Agreement is terminated prior to
consummation of the Closing, each party shall pay all fees and expenses
incurred by such party in connection with this Agreement and the transactions
contemplated hereby.  If the Closing
occurs, the Buyer shall pay, or cause to be paid, all fees and expenses
incurred by the Buyer and its Affiliates in connection with this Agreement and
the transactions contemplated hereby, any and all Transaction Expenses and all
property or transfer taxes imposed on the Company, NSP Capital or their
Subsidiaries and any real property transfer tax imposed on the Seller or any
holder of equity interests in the Seller resulting from the transactions
contemplated hereby.  Except to the
extent included as Transaction Expenses, Seller shall pay all fees and expenses
incurred by the Seller, the Company and NSP Capital in connection with this
Agreement and the transactions contemplated hereby.


 


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


 


50





















 


10P.         Seller Release.  As of immediately after the Closing, the
Seller, to the fullest extent permitted by applicable law, for itself only (and
not any of its Affiliates, unitholders, officers, managers or any other
Person), 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, debts
and liabilities whatsoever, whether known or unknown, suspected or unsuspected,
both at law and in equity (“Claims”), which the undersigned now has, has ever
had or may hereafter have against the respective Releasees arising as a result
of or on account of, or arising out of, any matter, cause or event occurring
prior to the Closing Date, and whether or not relating to claims pending at, or
asserted after, the Closing Date (collectively, the “Released Matters”).  For the avoidance of doubt, in no event shall
the foregoing release and discharge extend to, and in no event shall the “Released
Matters” include, (i) any Claims or rights of the Seller or the Seller’s
Affiliates under any contract, agreement or arrangement disclosed on the
Company Disclosure Letter (other than such contracts, agreements or
arrangements that are terminated on or prior to Closing pursuant to the
Agreement), (ii) any Claims or rights to reimbursement, indemnification or
contribution of the Seller or the Seller’s representatives in his, her or its
capacity as an officer, director, manager, stockholder, unitholder or employee
of the Company or any of its Subsidiaries (whenever arising) under the governing
documents of the Seller, the Company and/or any of their respective
Subsidiaries, the D&O Policies or applicable law, or (iii) any Claims
or rights of any Seller or any unitholder thereof that relates to any
obligation of the Buyer or the Company under this Agreement or any Transaction
Document.


 


ARTICLE 11

MISCELLANEOUS


 


11A.        Amendment and Waiver.  This Agreement may be amended or any
provision of this Agreement may be waived; provided  that any
amendment or waiver shall be binding only if such amendment or waiver is set
forth in a writing executed by the party against whom enforcement is
sought.  Any amendments or waivers under
this Agreement following the Closing shall require the prior written consent of
the 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 respect
to amendments).  No course of dealing
between or among any Persons having any interest in this Agreement shall be
deemed effective to modify, amend or discharge any part of this Agreement or
any rights or obligations of any person under or by reason of this Agreement.


 


11B.        Notices.  All notices, demands and other communications
that are required or may be given pursuant to the terms of this Agreement or
the other Transaction Documents shall be in writing and shall be deemed to have
been duly given (i) on the date of delivery, when delivered, if delivered
personally 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 day
following the date of dispatch if delivered by a nationally recognized next-day
courier service, or (iii) on the third business day following the date of
mailing if delivered by registered or certified first-class mail, return
receipt requested, postage prepaid. All notices hereunder shall be delivered as
set forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:


 


51





















 


Notices to the
Company (prior to Closing):


 


Norcross Safety
Products L.L.C.


2211 York Road, Suite 215


Oak Brook, IL
60523


Telephone:  630.572.8231


Telecopy:
630.572.8518


Attn: Mr. Robert
A. Peterson


 


With a copy to:


 


Kirkland &
Ellis LLP


200 East Randolph
Drive


Chicago, Illinois
60601


Attention:  Richard J. Campbell


Telephone:  312.861.2000


Telecopy:  312.861.2200


 


Notices to the
Seller or NSP Capital:


 


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


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


 


NSP Holdings
L.L.C. (after Closing)


c/o John Hancock
Life Insurance Company


200 Clarendon
Street


Boston, MA 02117


Attn:  Stephen Blewitt


Telephone:
617.572.9624


Telecopy:  617.572.6454


 


And a copy (in
each case) to:


 


Kirkland &
Ellis LLP


200 East Randolph
Drive


Chicago, Illinois
60601


Attention:  Richard J. Campbell


Telephone:  312.861.2000


Telecopy:  312.861.2200


 


Notices to the
Buyer:


 


c/o Odyssey
Investment Partners, LLC


280 Park Avenue


West Tower, 38th
Floor


New York, New York
10017


Attention:  Brian Kwait


 


52





















 


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 provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, successors and permitted assigns; provided  that
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned (including by operation of law) (i) by the
Buyer without the prior written consent of the Seller (except that the Buyer
may assign its rights, interest and obligations to any Affiliate without the
consent of the Seller (provided such assignment does shall not relieve the
Buyer from its obligations hereunder) and the Buyer may assign its rights,
interests and obligations as collateral to secure its obligation under any
financing arrangements) or (ii) by the Seller or the Company without the
prior written consent of the Buyer; provided that Seller may assign its
rights hereunder to its unitholders upon liquidation of the Seller.  For all purposes hereof, a transfer, sale or
disposition of a majority of the voting capital stock or other voting interests
of a Party (whether by contract or otherwise) shall be deemed an assignment
hereunder.


 


11D.        Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.  Notwithstanding anything
herein to the contrary, no representation or warranty regarding or relating to (i) Tax
matters is being made, except as set forth in Section 4I, (ii) employee
benefit matters is being made, except as set forth in Section 4N, (iii) environmental
matters is being made, except as set forth in Section 4Q, and (iv) any
asbestosis, silicosis, mixed dust or similar litigation or claim (including as
may relate to respiratory product liability litigation or claims) is being
made, except as set forth in the last sentence of Section 4E; provided
that clause (iv) of this sentence shall not be intended to limit the
representations and warranties regarding (w) indemnification for asbestosis,
silicosis, mixed dust or similar litigation or claims to the extent provided in
Section 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 in
Section 4S, or (z) product warranties related to respiratory
products for which asbestosis, silicosis, mixed dust or similar litigation or
claims to the extent provided in Section 4U(i).


 


53





















 


11E.         No Strict Construction.  Notwithstanding the fact that this Agreement
has been drafted or prepared by one of the parties, each of the Buyer, the
Company and the Seller confirm that they and their respective counsel have
reviewed, negotiated and adopted this Agreement as the joint agreement and
understanding of the parties hereto and the language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction shall be applied
against any Person.


 


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


 


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


 


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


 


11I.          No Additional Representations;
Disclaimer.


 


(i)            The
representations and warranties of the Parties expressly and specifically set
forth in this Agreement constitute the sole and exclusive representations and
warranties of the Parties in connection with the transactions contemplated
hereby, and each Party understands, acknowledges and agrees that all other
representations and warranties of any kind or nature expressed or implied are
specifically disclaimed by the Parties. 
The Buyer further agrees that neither the Seller nor any of its
Affiliates will have or be subject to any liability to the Buyer or any other
Person resulting from the distribution to the Buyer, or the Buyer’s use of, any
such information, including the Confidential Information Memorandum prepared by
Credit Suisse First Boston, LLC


 


54





















 


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


 


(ii)           Except
for the representations and warranties of the Company and the Seller set forth
in this Agreement, the Company Equity Interests and NSP Capital Shares are
being acquired AS IS WITHOUT ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR INTENDED USE OR OTHER EXPRESSED OR IMPLIED WARRANTY.


 


(iii)          In
connection 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 operations
of the Company and its Subsidiaries and certain business plan information of
the Company and its Subsidiaries.  The
Buyer acknowledges that there are uncertainties inherent in attempting to make
such estimates, projections and other forecasts and plans, that the Buyer is
familiar with such uncertainties, that the Buyer is taking full responsibility
for making its own evaluation of the adequacy and accuracy of all estimates,
projections and other forecasts and plans so furnished to it (including the
reasonableness of the assumptions underlying such estimates, projections and
forecasts), and that the Buyer shall have no claim against the Seller or any
other Person with respect thereto. 
Accordingly, the Company makes no representations or warranties
whatsoever with respect to such estimates, projections and other forecasts and
plans (including the reasonableness of the assumptions underlying such
estimates, projections and forecasts).


 


(iv)          Each
party to this Agreement acknowledges and agrees that, except for (i) the
Seller’s unitholders solely to the extent provided in the Seller Member Letter
and (ii) the obligations of Buyer’s Affiliates solely to the extent
provided 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 any
of such party’s Affiliates shall have any personal or institutional liability
or obligation of any kind to any other party to this Agreement or such other
party’s Affiliates in connection with this Agreement, any delivery made
pursuant to this Agreement or the transactions contemplated hereby or
thereby.  Notwithstanding anything herein
to the contrary, the immediately foregoing sentence is for the benefit of, and
enforceable by, each Affiliate of each party hereto and each officer, director,
employee, and agent and representative of each party hereto or such party’s
Affiliates and shall serve as an absolute and complete defense to any claim or
action against such Person.


 


11J.         Counterparts.  This Agreement may be executed in multiple
counterparts (including by means of telecopied or electronically transmitted
signature pages), all of which taken together shall constitute one and the same
Agreement.


 


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


 


55





















 


interpretation of
this Agreement and the performance of the obligations imposed by this
Agreement.


 


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


 


11M.       Third-Party Beneficiaries and
Obligations.  This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. 
Nothing in this Agreement, express or implied, is intended to or shall
confer upon any Person other than the parties hereto or their respective
successors and permitted assigns, any rights, remedies or liabilities under or
by reason of this Agreement, other than Section 10H, Section 11I(iv) (but
solely to the extent raised as a defense or counterclaim in a suit brought by
the Buyer or any of its Affiliates), and this Section 11M (each of
which is intended to be for the benefit of the Persons covered thereby or that
would benefit therefrom and may be enforced by such Persons); provided
that, except for any Person to whom the rights of Seller are assigned in
accordance with Section 11C or any Person for whom the amendment
rights of Seller are bestowed in accordance with Section 11A,  for the avoidance of doubt in no event shall
any of the intended beneficiaries have any rights to consent to any amendment,
modification, supplement or waiver of any such provision and such intended
beneficiaries 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 agrees
that neither Seller nor any of its Subsidiaries will not comply with, and
hereby waives compliance by the Seller and its Subsidiaries with, any “bulk
sales”, “bulk transfer” or similar law relating to the transactions
contemplated hereby.


 


11O.        Liquidation of Seller.  The Buyer understands and agrees that Seller
will be liquidated, dissolved or otherwise wound up on or before December 31,
2005.  Except for the Seller’s
unitholders solely to the extent set forth in the Seller Member Letter, no
recourse shall be available to the assets of any Person that is an Affiliate of
or 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 their
respective Subsidiaries, for any obligations of the Company or the Seller
pursuant to this Agreement.  Upon any
liquidation, dissolution or winding up of the Seller, all rights and remedies
of the Seller shall (without further action on the part of any Person) be
enforceable by, and for the benefit of, each equity holder of Seller,
individually and/or collectively.


 


*     *    
*     *


 


56





















 


IN WITNESS WHEREOF, the
parties 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