Exhibit 10.38

27 March 2007

Flagstone Beheer B.V.

and

NPM Capital N.V.

and

Armstrong DLW AG

and

Armstrong World Industries, Inc.

 

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Agreement for the acquisition of all issued and outstanding shares in the
capital of

Tapijtfabriek H. Desseaux N.V.

 

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LOGO [g85057image005ex1038cov.jpg]

 

CMS Derks Star Busmann N.V.

Mondriaan Tower

Amstelplein 8A

1096 BC Amsterdam

The Netherlands

www.cms-dsb.com

 

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CONTENTS    1.   

DEFINITIONS AND INTERPRETATION

   4 2.   

SALE AND PURCHASE OF THE SHARES

   11 3.   

CONSIDERATION AND PAYMENT

   12 4.   

CONDITIONS PRECEDENT

   12 5.   

ACTIONS PENDING COMPLETION

   14 6.   

COMPLETION

   16 7.   

POST COMPLETION ADJUSTMENTS

   18 8.   

POST COMPLETION COVENANTS

   21 9.   

VENDOR WARRANTIES

   22 10.   

BREACH OF VENDOR WARRANTIES

   23 11.   

LIMITATION OF LIABILITY

   25 12.   

SPECIFIC INDEMNITIES

   27 13.   

PURCHASER WARRANTIES

   28 14.   

PARENT GUARANTEES

   28 15.   

CONFIDENTIALITY

   29 16.   

RESTRICTIVE COVENANTS

   29 17.   

TRANSFER OF RIGHTS AND OBLIGATIONS

   30 18.   

COSTS

   30 19.   

ANNOUNCEMENTS

   31 20.   

NO VARIATION

   31 21.   

ENTIRE AGREEMENT

   31 22.   

NO IMPLIED WAIVER; NO FORFEIT OF RIGHTS

   32 23.   

NOTICES

   32 24.   

NO RESCISSION

   34 25.   

GOVERNING LAW AND JURISDICTION

   34

 

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SCHEDULES

Schedule A:

   Group Companies

Schedule 1.1(a):

   Base Working Capital

Schedule 1.1(b):

   Deed of Transfer

Schedule 1.1(c):

   Disclosure Letter

Schedule 1.1(d):

   Due Diligence Information

Schedule 1.1(e):

   Format Net Debt Statement

Schedule 1.1(f):

   Purchaser Warranties

Schedule 1.1(g):

   Vendor Warranties

Schedule 1.1(h)

   Format Working Capital Statement

Schedule 9.7

   Employees in connection with ‘best knowledge’ reference

Schedule 12.1

   Bank guarantees

ANNEXES

Annex 1.4:

   Articles of association

Annex 1.5:

   Extracts

Annex 2.1:

   Capital structure

Annex 8.1:

   Insurance policies

Annex 9.1:

   Intellectual Property Rights

Annex 11.1:

   Owned Premises

Annex 11.2:

   Leased Premises

Annex 12.1:

   List of Employees

Annex 13.1:

   Pension Arrangements

Annex 13.3:

   VUT and disability pay out schedule

 

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SHARE PURCHASE AGREEMENT

THE UNDERSIGNED:

 

1. Flagstone Beheer B.V., a private limited liability company under the laws of
the Netherlands, having its registered office and principal place of business at
Breitnerstraat 1, 1077 BL Amsterdam, the Netherlands (the “Purchaser”);

 

2. NPM Capital N.V., a limited liability company under the laws of the
Netherlands, having its registered office and principal place of business at
Breitnerstraat 1, 1077 BL Amsterdam, the Netherlands (“NPM”);

 

3. Armstrong DLW AG, a limited liability company under the laws of Germany,
having its registered office and principal place of business at
Stuttgarterstrasse 75, D-74321 Bietigheim-Bissingen, Germany (the “Vendor”);

 

4. Armstrong World Industries, Inc., a corporation under the laws of the State
of Pennsylvania, having its registered office and principal place of business at
2500 Columbia Avenue, Lancaster, Pennsylvania 17604, United States of America
(“AWI”),

WHEREAS:

 

(A) the Vendor holds all issued and outstanding shares (the “Shares”) in the
capital of Tapijtfabriek H. Desseaux N.V., a limited liability company under the
laws of the Netherlands, having its registered office and principal place of
business at Taxandriaweg 15, 5142 PA Waalwijk, the Netherlands (the “Company”);

 

(B) the Desseaux group of companies, comprising the Company and the companies
listed in Schedule A, is engaged in the development, production, marketing,
sale, installation, inspection and maintenance of woven, non-woven (fibre
bonded) and tufted textile floor coverings for residential and commercial use
and for outdoor sport applications;

 

(C) NPM holds the majority of all issued and outstanding shares in the capital
of the Purchaser while AWI indirectly holds all issued and outstanding shares in
the capital of the Vendor;

 

(D) the Vendor wishes to sell and the Purchaser wishes to purchase the Shares
under the terms and subject to the conditions set out herein;

 

(E) the Vendor and NPM entered into a letter of intent on 23 August 2006 setting
out some terms and conditions of the contemplated transaction;

 

(F) the Vendor and the Purchaser have notified the proper authorities and the
relevant works councils within the Group Companies as required under the Dutch
Merger Code (SER-besluit Fusiegedragsregels 2000) and the Works Council Act (Wet
op de ondernemingsraden) respectively in connection with the transactions set
out herein;

 

(G) the transactions contemplated in this Agreement are subject to the
fulfillment of certain conditions precedent,

 

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HAVE AGREED AS FOLLOWS:

 

1. DEFINITIONS AND INTERPRETATION

 

1.1 In this agreement, unless the context otherwise requires or unless otherwise
specified hereinafter, the following words shall have the following meaning:

 

Accounts:

   the audited consolidated balance sheet and profit and loss account prepared
in accordance with the Agreed Accounting Principles, consolidating the assets,
liabilities and results of the Group Companies as of the Accounts Date and for
the 12 (twelve) month period ended on the Accounts Date and including certain
assets and liabilities which are not owned, directly or indirectly, by the Group
Companies but over which the Group Companies exercise sufficient management
control to warrant inclusion in the consolidated financial statements of the
Group Companies as per the Accounts Date, together with the explanatory notes
thereto and an unqualified audit certificate (goedkeurende
accountantsverklaring);

Accounts Date:

   31 December 2006;

Affiliate:

   in relation to a company, a legal entity which is either direct or indirect
subsidiary of the company. For the purpose of this definition an entity is
deemed a subsidiary of a party if such party holds 50% (fifty per cent) or more
of its issued share capital or in respect of which such party is otherwise able
to exercise Control;

Agreed Accounting Principles:

   in connection with the Group Companies incorporated in the Netherlands, the
accounting practices and principles generally accepted in the Netherlands and in
connection with the other Group Companies, the generally accepted accounting
principles and practices under International Accounting Standards, applied on a
basis consistent with that applied by the Group Companies over the last 3
(three) years;

Agreed Form:

   in relation to any document, such document in the form agreed as being final
or, prior to Completion, to be finalized between the Purchaser and the Vendor,
initialed on behalf of the Purchaser and the Vendor for the purposes of
identification only;

Agreement:

   this agreement regarding the sale and purchase of the Shares, including all
Schedules and Annexes thereto;

 

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Approval Date:

   the date on which the Working Capital Statement and Debt Statement are
finally determined in accordance with Clauses 7.1 through 7.5;

AWI:

   Armstrong World Industries, Inc.;

Base Working Capital:

   in relation to the Group Companies, the consolidated amount specified
Schedule 1.1(a);

Business Day:

   a day other than a Saturday or Sunday, and on which banks are generally open
for business in Amsterdam;

Cash:

   cash in hand, in transit or deposited at a bank (either for guarantee
purposes or otherwise) or cash equivalents held by any Group Company, including
any accrued but unpaid interest in respect thereto, at the Completion Date but,
for the avoidance of doubt, excluding any items which are to be treated as
Intercompany Debt and Intercompany Receivables or are reflected in the Working
Capital;

Collective Agreement:

   any agreement or arrangement made by or on behalf of a Group Company and by
or on behalf of any trade union, works council, staff association or other body
representing employees and any agreement or arrangement made by or on behalf of
any employers’ or trade association and one or more trade unions, works
councils, staff associations, association of trade unions or other central body
representing employees which applies to any Group Company or to which any Group
Company is subject;

Company:

   Tapijtfabriek H. Desseaux N.V.;

Completion:

   the finalization of the sale, purchase and transfer of the Shares pursuant to
Clause 6;

Completion Date:

   2 April 2007 or such other date agreed in writing between the parties;

Computer Hardware:

   any and all computer hardware, including peripherals, storage, media and
communication links, owned and/or used by the Group Companies in relation to
their respective businesses;

Computer Software:

   any and all computer software and/or computer programs (including source
code, object code and databases) owned and/or used by the Group Companies in
relation to their respective businesses;

Consideration:

   an amount of € 40,050,000 (forty million and fifty thousand euros), being the
consideration payable by the Purchaser to the Vendor in cash for the Shares;

 

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Control:

   the ability, whether directly or indirectly whether through the exercise or
non exercise of any voting power whether in general meeting or in any meeting of
directors or supervisory directors (if any) or managers or whether by agreement
or otherwise, to direct decisively the business affairs of a company;

Deed of Transfer:

   the notarial deed of transfer of shares in connection with the transfer of
the Shares by the Vendor to the Purchaser substantially in the form of Schedule
1.1(b);

Disclosure Letter :

   the letter written by the Vendor to the Purchaser qualifying the Vendor
Warranties, annexed to this Agreement as Schedule 1.1(c);

Due Diligence Information:

   all information and documents that were made available to the Purchaser in a
virtual data room furnished by the Vendor, a list of which is set out in
Schedule 1.1(d);

Employees:

   those persons who are immediately prior to Completion employed by any of the
Group Companies;

Encumbrance:

   any encumbrance or security interest whatsoever including (without
limitation) any charge, mortgage, pledge, in security, lien, right of
pre-emption, option, right to acquire, conversion right, third party right,
interest and claim, right of set-off, right of counterclaim, title retention,
conditional sale arrangement, and any other preferential right, agreement or
arrangement having similar effect;

Environment:

   (a) land, including surface land, sub-surface strata, sea bed and river bed
under water (as defined in paragraph (b)) and natural and man-made structures;
(b) water, including coastal and inland waters, surface waters, ground waters
and water in drains and sewers; (c) air, including air inside buildings and in
other natural and man-made structures above or below ground; and (d) any and all
living organisms or systems supported by those media;

Estimated Intercompany Debt:

   the amount of Intercompany Debt per the Completion Date as estimated by the
Vendor and submitted in writing to the Purchaser, with reasonable evidence
substantiating the amount, 5 (five) Business Days prior to Completion;

Estimated Intercompany Receivable:

   the amount of Intercompany Receivable per the Completion Date as estimated by
the Vendor, with reasonable evidence substantiating the amount, 5 (five)

 

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   Business Days prior to Completion;

Group Companies:

   the Company and the companies listed in Schedule A;

Hazardous Substance:

   any natural or artificial substance, preparation or article which when
generated, processed, transported, stored, treated, used or disposed of is
harmful to the Environment or which is prohibited or restricted by law;

Intellectual Property Rights:

   all industrial and intellectual property rights, including registered trade
marks, service marks, patents, petty patents, utility models, registered
designs, applications for, and the right to apply for, any such rights,
inventions, unregistered trade marks, unregistered service marks, trade and
business names (including rights in any get-up or trade dress), copyrights,
unregistered design rights, databases and rights in databases and all other
similar proprietary rights which may subsist in any part of the world together
with all renewals, extensions and revivals thereof;

Intercompany Debt:

   any and all amounts from any cause of action arising and whether due and
payable or not, including accrued but unpaid interest, owing from any Group
Company to any member of the Vendor’s Group, where such Group Company is primary
debtor (rather than a guarantor or a surety) as at the Completion Date,
including any amounts owed from trade with members of the Vendor’s Group in the
ordinary course of business;

Intercompany Receivable:

   any and all amounts from any cause of action arising and whether due and
payable or not, including accrued but unpaid interest, owing from any member of
the Vendor’s Group to any of the Group Companies, where such member of the
Vendor’s Group is primary debtor (rather than a guarantor or a surety) as at the
Completion Date, including any amounts owing from the Vendor’s Group from trade
with members of the Vendor’s Group in the ordinary course of business;

IT Systems:

   the Computer Hardware and the Computer Software;

Know-how:

   technical information, including specifications, designs, drawings, manuals,
prototypes, models, discoveries, improvements, processes, formulae,
manufacturing technology, engineering and development data used or developed by
any of the Group Companies necessary for the effective operation of their
businesses;

Leased Premises:

   all Premises that are the object of a valid, binding and

 

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   enforceable lease agreement;

Losses:

   all losses, liabilities, costs (including reasonable attorney and expert
fees), charges, expenses, actions, claims and demands;

Net Debt:

   (a) any and all interest bearing debt to any third party, excluding all
trading creditors but including any and all financial lease obligations,
financial guarantees (but excluding the amounts due or tied up under or pursuant
to the bank guarantees issued for the benefit of the Group Companies as set out
in Schedule 12.1), bills of exchange, discounted drafts and factored
receivables, accrued but unpaid or due and payable by any one or more Group
Companies as the Completion Date; plus (b) the Intercompany Debt; plus (c) any
dividends declared by the Group Companies to the Vendor in connection with their
fiscal years 2006 and 2007 and outstanding at the Completion Date; less (d)
Cash; less (e) the Intercompany Receivable;

Net Debt Statement:

   the statement to be prepared in accordance with Clause 7.1 and in the form of
Schedule 1.1(e);

NPM:

   NPM Capital N.V.;

Notary:

   Mr. R.D. Bos, civil law notary with CMS Derks Star Busmann N.V. or his/her
substitute or successor in office;

Owned Premises:

   all Premises legally and beneficially owned by the Group Companies;

Permits :

   all permits, licences, consents, approvals, certificates, registrations and
other authorizations required under any law or any agreement for the operation
of the business of any Group Company, the ownership possession, occupation or
use of any asset of any Group Company or required for the occupation and use of
the Premises;

Premises:

   the Leased Premises and the Owned Premises;

Purchaser:

   Flagstone Beheer B.V.;

Purchaser’s Group:

   NPM Capital N.V. and all its Affiliates (but excluding the Group Companies);

Purchaser Warranties:

   the representations and warranties by the Purchaser referred to in Clause 13
and set out in Schedule 1.1(f);

Related Agreements:

   in the Agreed Form: (a) the transitional services agreement between the
Vendor, the Purchaser and the

 

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   relevant Group Companies in connection with the provision of IT services
(including arrangements for assistance in obtaining or maintaining a SAP license
and the right to use the business warehouse); (b) the transitional services
agreement between the Vendor, the Purchaser and the relevant Group Companies in
connection with customer order services to be performed by certain employees of
the Vendor for the benefit of the Group Companies and certain employees of the
Group Companies for the benefit of the Vendor’s Group (including the right to
manage textile samples through the CES-system); (c) transitional agreements
between members of the Vendor’s Group and certain Group Companies relating to
the sharing of office space used by certain representative and branch offices of
members of the Vendor’s Group and certain Group Companies; (d) the transitional
services agreement between the Vendor and the relevant Group Companies in
connection with printing services onto yarn and broadloom to be provided by the
relevant member of the Vendor’s Group and the sale of the asset (Variotronic)
used for those services to the relevant Group Company; (e) an agreement between
the relevant members of the Vendor’s Group and certain Group Companies
concerning the sale and delivery by the relevant Group Companies to the relevant
members of the Vendor’s Group of fibre bonded tiles; (f) the transitional
services agreement between the relevant members of the Vendor’s Group and the
relevant Group Companies maintaining the current integrated structure of the
Armstrong and Desseaux sales teams from the Completion Date, varying from
specific sales teams as to be agreed between the parties, but ultimately until
30 June 2007 and providing arrangements for the payment of bonuses to those
sales people who will sell textile and resilient products during said period;
and (g) any such other agreements that all parties may deem necessary or
desirable;

Shares:

   5,318,140 ordinary shares in the capital of the Company, each having a
nominal value of € 1.17, numbered 1 through 5,318,140, together comprising the
entire issued share capital of the Company;

Social Security Contributions:

   any and all contributions or premiums which are payable by the Group
Companies pursuant to industry or governmental social security regulations,
including but not limited to penalties, interest and any other costs or expenses
relating to or associated with any social security matter regarding the Group
Companies;

Supplementary Disclosure Letter:

   the letter written by the Vendor to the Purchaser prior

 

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   to the Completion Date qualifying the Vendor Warranties but covering only the
period from the date of this Agreement to the date of the letter;

Tax:

   any and all forms of taxation by any tax authority, whether international,
national or local, including without limitation to the generality of the
foregoing, corporate income tax, capital tax, wage tax, real property tax,
transfer taxes, registration tax, VAT, dividend withholding tax, environmental
tax, disinvestment payments, custom duties, stock exchange tax, exercise tax or
gift tax, including but not limited to penalties, interest and any other costs
or expenses related to or associated with any tax matter regarding the Company;

Taxation:

   Tax and Social Security Contributions;

VAT:

   Value Added Tax;

Vendor:

   Armstrong DLW AG;

Vendor’s Group:

   Armstrong World Industries Inc. and all its Affiliates (but excluding the
Group Companies);

Vendor Warranties:

   the representations and warranties by the Vendor referred to in Clause 9 and
set out in Schedule 1.1(g);

Working Capital:

   In respect of the Group Companies jointly (i) the aggregate of Working
Capital Inventory; plus (ii) Working Capital Receivables; less Working Capital
Payables, but excluding, for the avoidance of doubt, all Cash and Net Debt;

Working Capital Inventory:

   in relation to each Group Company, all raw materials, consumables, work in
progress, part-processed stocks, finished goods, goods for resale and stock in
transit, net of adequate provisions, of the Group Company as at the Completion
Date;

Working Capital Payables:

   in relation to each Group Company, the aggregate of all amounts owing,
accrued or deferred by, as the case may be, the Group Company in respect of
trading creditors (excluding trade with members of the Vendor’s Group in the
ordinary course of business) as at the Completion Date;

Working Capital Receivables:

   in relation to each Group Company, the aggregate of all amounts receivable,
accrued or prepaid by or owed to the Group Company in respect of trading debtors
(excluding trade with members of the Vendor’s Group in the ordinary course of
business), net of adequate

 

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   provisions, as at the close of business at the Completion Date, excluding any
item to be treated as part of the Cash of that Group Company and debts owed to
that Group Company which are not included in any Working Capital Statement;
Working Capital Statement:    the statement to be prepared in accordance with
Clause 7.1 and in the form of Schedule 1.1(h);

 

1.2 In this Agreement, unless otherwise specified hereinafter:

 

  (a) a reference to any statute or statutory provision shall be construed as a
reference to the same as it may have been, or may from time to time be, amended,
modified or re-enacted;

 

  (b) references to a person shall be construed so as to include any individual,
firm, company, government, state or agency of a state or any joint venture,
association or partnership (whether or not being a separate legal entity);

 

  (c) references to times of the day are to Amsterdam time;

 

  (d) the singular includes the plural and vice versa;

 

  (e) headings to Clauses and Schedules are for convenience only and do not
affect in any way the interpretation thereof;

 

  (f) the Schedules, Annexes to Schedules and any other attachments to this
Agreement form an integral part of this Agreement and shall have the same force
and effect as if expressly set out in the body of this Agreement and any
reference to this Agreement shall include the Schedules, Annexes to Schedules
and any other attachments to this agreement;

 

  (g) a reference to “includes” or “including” means “including but without
limitation to the foregoing”; and

 

  (h) English language words used in this Agreement intend to describe Dutch
legal concepts only so that the consequences attaching to the use of such words
under any other set of rules than Dutch law will be disregarded.

 

2. SALE AND PURCHASE OF THE SHARES

 

2.1 The Vendor hereby sells the Shares to the Purchaser and the Purchaser hereby
purchases the Shares from the Vendor together with all rights attaching or
accruing to them as per the date hereof, free from any and all Encumbrances. The
transactions contemplated by this Agreement are subject to the fulfilment or
waiver of the conditions set out in Clause 4.

 

2.2 The Vendor hereby irrevocably waives, and undertakes to procure the waiver
of, all rights of pre-emption and all other restrictions whatsoever on transfer
over or in respect of the Shares.

 

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2.3 The Vendor hereby undertakes to transfer at Completion to the Purchaser the
Shares, and the Purchaser undertakes to accept the Shares from the Vendor at
Completion free from any and all Encumbrances together with all rights attaching
or accruing to them as per the Completion Date.

 

3. CONSIDERATION AND PAYMENT

 

3.1 The Consideration shall equal an amount of € 40,050,000 (forty million and
fifty thousand euros) in cash (subject to any adjustments pursuant to Clause 7).
On or prior to the Completion Date, but in any event prior to Completion, the
Purchaser shall cause the receipt by the Notary of the Consideration, free of
any deductions, set-off or bank charges (to be transferred by the Notary to the
Vendor at the Completion Date in accordance with Clause 6.2).

 

3.2 Parties acknowledge and confirm that the agreed consideration for the Shares
has been mutually determined at an amount of € 40,250,000 (forty million two
hundred and fifty thousand euros) but that it has been reduced by an amount of
€ 200,000 (two hundred thousand euros) for all matters resulting from or
relating to the pension scheme of Desso Dendermonde N.V. of Belgium, thus
resulting in the Consideration.

 

4. CONDITIONS PRECEDENT

 

4.1 Completion shall be subject to each of the following conditions precedent
(opschortende voorwaarden) being fulfilled or waived in accordance with the
provisions of Clause 4.4, on or prior to the Completion Date (or such earlier
date as may be stipulated below):

 

  (a) any notifications and applications required under any statutory provision
relating to merger control in connection with the conclusion or performance of
this Agreement have been made to the competent authorities and in respect of
each such notification or application, the relevant government authority has
stated in writing that the transactions contemplated in this Agreement are
permitted (to the extent the permission is given subject to conditions or
obligations, such conditions or obligations being reasonably satisfactory to the
Purchaser and the Vendor), or that there are no objections to them or that they
will not be subject to any further investigations, or, where applicable, the
period during which the relevant government authority may refuse permission for,
object to or start an investigation into the transactions contemplated in this
Agreement has expired without any such action having taken place;

 

  (b) the resolution of any and all outstanding issues in connection with the
notification and consultations with any and all trade unions and the works
councils of the relevant Group Companies including the rendering of advice that
may be necessary by law, all in a manner satisfactory to the Vendor and the
Purchaser, with respect to the transactions contemplated in this Agreement and
the composition of the supervisory board of directors of the Company;

 

  (c) the board of supervisory directors of the Vendor approving all the
transactions contemplated by this Agreement in writing;

 

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  (d) the Investment Committee of NPM approving in writing all the transactions
contemplated by this Agreement;

 

  (e) the Vendor Warranties being true and accurate in all material respects and
not misleading in any material respect as at the Completion Date or, if a
Supplementary Disclosure Letter is submitted, the contents thereof being
reasonably satisfactory to the Purchaser;

 

  (f) the Purchaser Warranties being true and accurate in all material respects
and not misleading in any material respect as at the Completion Date;

 

  (g) the Vendor and the Purchaser having complied in all material respects with
their respective obligations under this Agreement;

 

  (h) the board of directors of AWI approving all the transactions contemplated
in this Agreement;

 

  (i) the Related Agreements being signed and becoming unconditional;

 

  (j) no material change or effect having occurred, adversely affecting the
Group Companies’ business, operations, assets or prospects taken as a whole.

 

4.2 The parties shall use their best endeavours to achieve the satisfaction of
the conditions set out in Clause 4.1 as soon as possible but in any event on or
prior to the Completion Date (save where an earlier date is specifically
stipulated). Without prejudice to the foregoing, the parties agree that all
requests and enquiries from any government, governmental, supranational or trade
agency, court or other regulatory body shall be dealt with by the Vendor and the
Purchaser in consultation with each other and the Vendor and the Purchaser shall
promptly co-operate with and provide all necessary information and assistance
reasonably required by such government, agency, court or body upon being
requested to do so by the other.

 

4.3 If at any time the Vendor or the Purchaser becomes aware of a fact or
circumstance that might prevent a condition set out in Clause 4.1 being
satisfied, it shall immediately inform the other parties.

 

4.4 At any time prior to the date of fulfillment thereof:

 

  (a) the Purchaser may waive, in whole or in part and on any terms it decides,
a condition set out in Clauses 4.1 (d), (e) and (j) (same having been inserted
for the Purchaser’s sole benefit);

 

  (b) the Vendor may waive, in whole or in part and on any terms it decides, a
condition set out in Clauses 4.1 (c), (f) and (h) (same having been inserted for
the Vendor’s sole benefit);

 

  (c) the Purchaser and the Vendor may waive, in whole or in part and on any
terms the decide, a condition set out in Clauses 4.1 (a), (b), (g) and (i) to
the extent of the other parties’ obligations only,

in all cases by written notice to the Vendor or the Purchaser, as the case may
be. Any such waiver notice shall be narrowly construed as relating only to the
matters expressly mentioned therein.

 

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4.5 If a condition set out in Clause 4.1 has not been waived by the Purchaser
and/or the Vendor, as the case may be, or has not been satisfied by noon on the
Completion Date, the Purchaser or the Vendor may on the Completion Date, by
written notice to the Vendor or the Purchaser, as the case may be:

 

  (a) waive the condition;

 

  (b) request the other party to consent to the postponement of Completion to a
date not later than 30 April 2007,

it being understood that, without prejudice to the parties’ accrued rights and
obligations at such time, the Purchaser and the Vendor shall not unreasonably
withhold their consent to a request in terms of Clause 4.5(b) unless the
respective conditions are not reasonably capable of being satisfied within the
extended time period.

 

4.6 If any of the conditions set out in Clause 4.1 has not been timeously
fulfilled or waived, as the case may be, this Agreement shall lapse and be of no
further force or effect, without prejudice to the parties’ accrued rights and
obligations at such time.

 

4.7 If the Purchaser or the Vendor postpone Completion to another date in
accordance with Clause 4.5(b), the provisions of this Agreement shall apply as
if that other date is the date set for Completion, provided that such later date
shall in no event be later than 30 April 2007.

 

5. ACTIONS PENDING COMPLETION

 

5.1 To the extent not completed prior to the date of this Agreement, the Vendor
and the Purchaser shall jointly continue all requisite notifications and all
consultations with trade unions, works councils and any and all similar bodies
in each relevant jurisdiction, including those required under the Dutch Merger
Code (SER-besluit Fusiegedragsregels 2000) and the Works Council Act (Wet op de
ondernemingsraden).

 

5.2 The Vendor shall procure that between the date of this Agreement and the
Completion Date:

 

  (a) the Purchaser is given such information regarding the business, assets,
liabilities and affairs of the Group Companies as the Purchaser may reasonably
require;

 

  (b) the Purchaser and any person so authorized by the Purchaser is given
access, during regular business hours and upon reasonable advance notice, to all
Premises, books and records of each Group Company so notified to the Vendor by
the Purchaser in the notice referred to herein.

 

5.3 The Vendor shall procure that pending Completion, no Group Company shall
without the Purchaser’s prior written consent (such consent not being
unreasonably withheld):

 

  (a) create, extend, grant, issue or permit to subsist any Encumbrance over any
of its assets, undertakings or revenues, except in the ordinary course of
business;

 

  (b) acquire or dispose of any asset with a value of more than € 100,000;

 

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  (c) assume or guarantee the obligations of, or make any loans or advances to,
any third party;

 

  (d) create, issue or increase any shares or loans, give any option in respect
of any shares or loans, or materially change the principal amount or amend the
terms of any debt to any third party, including the Vendor;

 

  (e) enter into any capital commitment (i.e. investment in fixed assets) which
individually exceeds the sum of € 100,000 (one hundred thousand euros);

 

  (f) make any material increase in the remuneration of any of the its
directors, officers or employees or make any material change in the terms and
conditions of employment of any of its directors, officers or employees , except
as required by applicable law or regulation;

 

  (g) enter into or terminate any material agreement or arrangement, except in
the ordinary course of business;

 

  (h) renew any guarantee or security for the obligations of any third party;

 

  (i) enter into any material agreement or arrangement with a member of the
Vendor’s Group, except in the ordinary course of business;

 

  (j) declare or pay any dividend or other distribution in kind, whether from
capital or reserves;

 

  (k) make any alteration in the manner of keeping its books, accounts or
records except to the extent required by the Agreed Accounting Principles;

 

  (l) amend its articles of association;

 

  (m) enter into any obligation to issue any shares to any of its directors or
Employees; or

 

  (n) agree to take any of the foregoing actions.

 

5.4 Without prejudice to the provisions of Clause 5.3, the Vendor shall take all
reasonable measures to ensure that pending Completion, the Group Companies shall
continue to operate their businesses in a normal and prudent manner consistent
with past practice and preserve good customer and supplier relationships and
furthermore continue to maintain the Premises in good working order and state of
maintenance and repair.

 

5.5 The Vendor and the Purchaser shall use their best endeavours to ensure that
prior to Completion, all employees, to be identified jointly by the Vendor and
the Purchaser:

 

  (a) employed by the Vendor or members of the Vendor’s Group in the sale of
woven, non-woven (fibre bonded) and tufted textile floor coverings for
residential and commercial use for the benefit of the Group Companies are
offered employment at the Group Companies against identical terms and
conditions;

 

  (b)

employed by the Group Companies in the sale of resilient floor coverings for
residential and commercial use for the benefit of the Vendor or members of the

 

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Vendor’s Group are offered employment at the Vendor or members of the Vendor’s
Group against identical terms and conditions.

Parties shall provide to each other all reasonable co-operation to achieve the
above objective as soon as possible following the date hereof.

 

5.6 Parties acknowledge that ABN Amro Bank N.V. has confirmed in writing to
Euler Hermes Kredietverzekeringen N.V., with a copy to the Vendor, that it shall
revoke a guarantee for the total amount of € 3,000,000 (three million euros)
issued on behalf of the Company for the benefit of Euler Hermes
Kredietverzekeringen N.V. (guarantee number GAR/112.78.77.640) on or prior to
30 March 2007. Euler Hermes Kredietverzekeringen N.V. has acknowledged said
revocation. Parties agree and confirm that the amount to be released by ABN Amro
Bank N.V. to the Company, including interest accrued thereon, pursuant to the
revocation, shall be considered as Cash for the purposes of this Agreement. To
the extent such amount has not been disposed of by the Company upon its release,
it shall form part of the Net Debt.

 

6. COMPLETION

 

6.1 Unless otherwise agreed by the Purchaser and the Vendor, Completion shall
take place at the Completion Date at the offices of CMS Derks Star Busmann N.V.,
Mondriaantoren, Amstelplein 8A, 1096 BC Amsterdam, the Netherlands in the
presence of the Notary.

 

6.2 At Completion, the Vendor and the Purchaser shall, and shall cause the
relevant Group Companies to, do all such acts and execute all such documents as
shall in the reasonable opinion of the Vendor or the Purchaser be necessary to
fully effect the transactions contemplated in this Agreement, including (in the
following order):

 

  (a) the Notary shall confirm to the parties that he has received the
Consideration and that it is available to him;

 

  (b) the Vendor and the Purchaser shall confirm that the conditions precedent
set out in Clause 4.1 have been either fulfilled or waived in accordance with
the provisions of Clause 4.4 and parties will deliver to each other copies of
all such documents executed pursuant to Clause 4 in fulfillment of those
conditions precedent that have not been waived;

 

  (c) the Vendor shall deliver to the Purchaser:

 

  (i) the shareholders’ register of the Company in which the transfer of the
Shares is to be recorded;

 

  (ii) a certificate in the Agreed Form to the effect that the Vendor Warranties
continue to be true and accurate in all material respects and not misleading in
any material respect as per Completion except to the extent of those matters
that are disclosed in the Disclosure Letter or any additional disclosures made
in the Supplementary Disclosure Letter and that the Vendor has complied with its
respective obligations under this Agreement;

 

  (iii) the Supplementary Disclosure Letter, if any;

 

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  (iv) the written resignation of Messrs. D.M. Randich and A.S. Raaphorst, as
per Completion, as managing director and employee from all Group Companies and
their written confirmation that they have no claims from any cause of action
against any of the Group Companies for the period up to an including the date of
their resignation;

 

  (v) the written resolutions of the general meeting of shareholders of the
respective Group Companies in the Agreed Form in which it is resolved to accept
the resignations of Messrs. D.M. Randich and A.S. Raaphorst and to discharge
them in respect of their management of the respective Group Companies as of the
Accounts Date through the Completion Date;

 

  (d) the Purchaser shall deliver to the Vendor a certificate in the Agreed Form
to the effect that the Purchaser Warranties continue to be true and accurate in
all material respects and not misleading in any material respect as per
Completion and that the Purchaser has complied with its respective obligations
under this Agreement;

 

  (e) to the extent the Estimated Intercompany Debt exceeds the Estimated
Intercompany Receivable, the Vendor shall procure that the Company pay the
difference to the Vendor by way of electronic transfer and free of deduction,
set-off or bank charges, to an account designated by the Vendor and to the
extent Estimated Intercompany Debt is less than the Estimated Intercompany
Receivable, the Vendor shall pay the difference to the Company by way of
electronic transfer and free of deduction, set-off or bank charges, to an
account designated by the Company

 

  (f) the Vendor and the Purchaser shall execute the Deed of Transfer pursuant
to which the Vendor shall transfer the Shares to the Purchaser;

 

  (g) the Purchaser shall cause the Notary to transfer the Consideration by way
of electronic transfer and free of deduction, set-off or bank charges to an
account designated by the Vendor;

 

  (h) the Vendor and the Purchaser shall execute and, where appropriate, procure
that the relevant Group Companies shall execute, the Related Agreements and take
all actions or execute all agreements and documents to be taken or executed
pursuant thereto.

 

6.3 If any of the parties fails to comply with any of its obligations under
Clause 6.2 on or prior to the Completion Date, the Purchaser or the Vendor, as
the case may be, may after consulting the other party and without prejudice to
any other right or remedy available to them:

 

  (a) proceed to Completion so far as practicable;

 

  (b) request the other parties to consent to postponement of Completion to a
date not later than 30 April 2007, it being understood that such other parties
shall not unreasonably withhold their consent to a request in terms of this
Clause 6.3(b) unless such non complying party is reasonably incapable of
complying with the respective obligations; or

 

  (c) terminate this Agreement by way of written notice to the other parties.

 

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6.4 If the Agreement is terminated in accordance with Clause 6.3(c) or if
Completion does not occur ultimately on 30 April 2007, then the party failing to
comply with its obligations under Clause 6.2 shall indemnify and hold the other
parties harmless from and against any and all costs, expenses, damages,
liabilities, actions and legal proceedings (including reasonable legal fees and
expenses) incurred by the other parties resulting from such failure to comply
with its obligations. In case of termination pursuant to this Clause, all
actions already taken shall be deemed not to have been taken and shall remain
without effect or, as may be appropriate, shall be reversed, unless the parties
agree otherwise. The parties shall provide their full co-operation to the
reversal of any actions hereunder should such reversal be required.

 

6.5 To the extent that any of the documents or actions listed in Clause 6.2
shall have been executed before Completion, they shall be deemed to have taken
place at Completion.

 

6.6 If the Purchaser or the Vendor postpones Completion to another date in
accordance with Clause 6.3(b), the provisions of this Agreement shall apply as
if that other date is the date set for Completion, provided that such later date
shall in no event be later than 30 April 2007.

 

6.7 Parties acknowledge and confirm that all agreements and arrangements between
the Vendor’s Group on the one hand and the Group Companies on the other shall
terminate or be deemed terminated, as the case may be, as a result of or
following Completion, with some of these agreements or arrangements being
replaced by the Related Agreements in accordance with the terms and subject the
conditions of the relevant Related Agreement.

 

7. POST COMPLETION ADJUSTMENTS

 

7.1 The Purchaser shall procure that as soon as practicable but in any event
within 3 (three) months following the Completion Date:

 

  (a) a draft consolidated Working Capital Statement setting out the Working
Capital; and

 

  (b) a draft consolidated Net Debt Statement setting out the Cash and the Net
Debt,

will be prepared and submitted to the Vendor.

 

7.2 The draft Working Capital Statements and the draft Net Debt Statements
shall:

 

  (a) be prepared in accordance with the Agreed Accounting Principles; and

 

  (b) be expressed in euros, translating amounts in other currencies into euros
at the spot rate of exchange on the Business Day immediately prior to the
Completion Date as published in the European edition of the Financial Times
first published thereafter, it being understood that the draft Working Capital
Statement shall not take into account:

 

  (i) any fixed assets, goodwill or any other intangible asset (excluding
debtors and creditors relating to any such items);

 

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  (ii) pension assets or liabilities, unfunded retirement benefits, post
retirement benefits (other than pension contributions payable to state pension
schemes or under the agreed funding policy of a funded group scheme or a funded
stand-alone scheme, and except for liabilities in respect of which an invoice
has been received);

 

  (iii) environmental matters, except for liabilities in respect of which an
invoice has been received;

 

  (iv) provisions in respect of redundancy costs;

 

  (v) any employee bonuses related to the transaction contemplated in this
Agreement;

 

  (vi) any contingent liabilities; and

 

  (vii) any Taxation items in respect of income, gains or profits.

 

7.3 The Vendor shall submit its objections to the draft Working Capital
Statement and the draft Net Debt Statement, if any, to the Purchaser in writing,
setting forth a reasonable level of detail, within 30 (thirty) Business Days of
receipt of same pursuant to Clause 7.1, failing which the draft Working Capital
Statement and the draft Net Debt Statement shall be deemed to be final and
agreed by all parties to this Agreement.

 

7.4 In the event that the Vendor submits written objections in accordance with
Clause 7.3, the Vendor and the Purchaser shall endeavour to approve in writing
the Working Capital Statement and the Net Debt Statement and any such approval
shall constitute an agreement between all the parties’ to this Agreement on the
Working Capital Statement and the Net Debt Statement and the elements thereof.

 

7.5 If within 30 (thirty) Business Days of the submission to the Vendor of the
Working Capital Statement and the Net Debt Statement in accordance with Clause
7.1, the same shall not have been approved, the matter shall be referred to such
firm of registered accountants as the Vendor and the Purchaser may agree in
writing, or failing such agreement within 10 (ten) Business Days following the
expiry of the 30 (thirty) Business Days period mentioned in the first line of
this Clause 7.5, appointed upon the Purchaser’s or the Vendor’s request, on that
basis by the chairperson for the time being of the Nederlands Instituut voor
Register Accountants (NIVRA) for final determination. The independent accountant
shall act on the following basis:

 

  (a) the independent accountant shall determine the dispute by means of final
determination (bindend advies) and both the Vendor and the Purchaser shall
adhere to that determination;

 

  (b) the item or items in dispute shall be notified to the independent
accountant in writing by the Vendor and/or the Purchaser within 10 (ten)
Business Days of the independent accountant’s appointment;

 

  (c) the independent accountant’s term of reference shall be to determine the
item or items in dispute and therefore the determination of the Working Capital
Statement and the Net Debt Statement and the elements thereof;

 

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  (d) the independent accountant shall decide the procedure to be followed in
the determination, but shall allow the parties to make written representations;

 

  (e) the Vendor and the Purchaser shall each provide (and shall procure that
their respective accountants and the Purchaser shall procure that the Group
Companies provide) the independent accountant promptly with all information
which the independent accountant reasonably requires and the independent
accountant shall be entitled (to the extent he considers it appropriate) to base
his opinion on such information and on the accounting and other records of the
Company; and

 

  (f) the costs of the determination, including fees and expenses of the
independent accountant shall be borne as determined by the independent
accountant.

 

7.6 In order to enable the review and determination of the draft Working Capital
Statement and draft Net Debt Statement, the Purchaser shall procure the keeping
up-to-date and, subject to reasonable notice, making available and allowing
access to the Vendor’s representatives and advisors to all premises, papers,
books, accounts, records and returns relating to the Purchaser and the Group
Companies during normal office hours and co-operate with them with regard to the
preparation and agreement of the draft Working Capital Statement and draft Net
Debt Statement. The Purchaser agrees, in so far as it is reasonable to do so, to
make available the services of the employees of the Group Companies, including
in particular Messrs. Jan Blokzijl, Piet den Ouden and Wil Rovers, to assist the
Vendor in the performance of the Vendor’s duties under this Agreement.

 

7.7 In respect of the Group Companies:

 

  (a) if their Working Capital is less than the Base Working Capital, the Vendor
shall, within 5 (five) Business Days of the Approval Date by way of post closing
adjustment of the Consideration, repay to the Purchaser an amount equal to the
deficit of Working Capital below the Base Working Capital; or

 

  (b) if their Working Capital exceeds its Base Working Capital, the Purchaser
shall, within 5 (five) Business Days of the Approval Date by way of post closing
adjustment of the Consideration, pay to the Vendor an additional amount equal to
the excess of Working Capital over the Base Working Capital.

 

7.8 In respect of the Group Companies:

 

  (a) if the amount of the Net Debt shown in the Net Debt Statement exceeds the
amount of € 0 (zero euros), the Purchaser shall, within 5 (five) Business Days
of the Approval Date by way post closing adjustment of the Consideration, pay to
the Vendor an additional amount equal to the Net Debt amount; or

 

  (b) if the amount of the Net Debt shown in the Net Debt Statement is less than
the amount of € 0 (zero euros), the Vendor shall, within 5 (five) Business Days
of the Approval Date by way post closing adjustment of the Consideration, pay to
the Purchaser an amount equal to the Net Debt amount.

 

7.9 Any payment obligation under this Clause 7 shall, to the extent possible, be
discharged by way of set-off (verrekening) against other payment obligations
referred to in this Clause. Payments due under this Clause 7 shall be made by
way of electronic transfer and free of deduction or bank charges to an account
designated by the Vendor or the Purchaser, as the case may be.

 

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7.10 Any payment to be made in accordance with this Clause 7 shall include
interest thereof calculated from the Completion Date to the actual date of
payment at a rate per annum equal to one month EURIBOR, plus 25 basis points.
Such interest shall accrue from day to day and shall be compounded monthly.

 

8. POST COMPLETION COVENANTS

 

8.1 As and when requested by the Purchaser or the Vendor following Completion,
the Vendor or the Purchaser, as the case may be, shall take all actions (or
refrain from taking any action) and execute or procure to be executed all such
further documents, forms, assignments, transfers, assurances and other things as
the Purchaser or the Vendor, as the case may be, may reasonably consider
necessary or appropriate to give full effect to the transactions contemplated in
this Agreement. For this purpose, the Purchaser shall retain for a period of 5
(five) years from the Completion Date, or such longer period as may be
prescribed by applicable law, all books, records and other information (whether
stored electronically or otherwise) relating to the Group Companies existing on
the Completion Date.

 

8.2 Subject to any confidentiality undertakings and in that event subject to
similar confidentiality undertakings being given by the receiving party, the
Vendor and the Purchaser shall provide or procure to be provided to the other
party and their advisers all information in their possession or under their
control that they shall from time to time reasonably require (both before and
after Completion) in connection with the business and affairs of the Group
Companies and will give or procure to be given to the other party and its
advisers such reasonable access (including the right to make copies) to all
documents that contain or relate to such information.

 

8.3 The Vendor shall:

 

  (a) assume as of the Completion Date any and all guarantees and other
securities of any kind (including guarantees given to financial institutions,
suppliers or other third parties) that any Group Company has executed and/or
assumed on behalf or for the benefit of any member of the Vendor’s Group;

 

  (b) procure that the Group Companies be released from such guarantee or
security no later than the Completion Date; and

 

  (c) provide to the Purchaser on the Completion Date written evidence
(satisfactory to the Purchaser) that the obligations set out sub (a) and
(b) above have been fulfilled.

 

8.4 The Purchaser undertakes to lend all reasonable assistance to the Vendor in
connection with the performance of the obligations referred to in Clause 8.3.

 

8.5 The Purchaser shall:

 

  (a) assume as of the Completion Date any and all guarantees and other
securities of any kind (including guarantees given to financial institutions,
suppliers or other third parties) that the Vendor or any member of the Vendor’s
Group has executed and/or assumed on behalf or for the benefit of the Group
Companies;

 

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  (b) procure that the Vendor or any member of the Vendor’s Group be released
from any and all such guarantee or security no later than the Completion Date;
and

 

  (c) provide to the Vendor on the Completion Date written evidence
(satisfactory to the Vendor) that the obligations set out sub (a) and (b) above
have been fulfilled.

 

8.6 The Vendor undertakes to lend all reasonable assistance to the Purchaser in
connection with the performance of the obligations referred to in Clause 8.5.

 

8.7 The Purchaser acknowledges that all insurance policies currently maintained
by the Group Companies and listed in Annex 8.1 of the Vendor Warranties shall be
terminated and cease to provide cover with effect on Completion. The Purchaser
shall be fully responsible for maintaining insurance coverage in respect of the
Group Companies as it deems appropriate following Completion.

 

8.8 The Vendor undertakes to lend all reasonable assistance to the Purchaser and
the Group Companies in connection with Tax matters relating to the Group
Companies for the period preceding Completion. For this purpose, the Vendor
shall retain for a period of 5 (five) years from the Completion Date all books,
records and other information (whether stored electronically or otherwise)
relating to Tax matters relating to the Group Companies in the period preceding
Completion to the extent such books, records and information remain with the
Vendor following Completion.

 

8.9 The Vendor and the Purchaser shall lend to each other all reasonable
assistance as may be requested by the Purchaser or the Vendor, as the case may
be, for the purpose of ensuring that the requesting party can promptly comply
with its financial reporting and tax compliance obligations following
Completion.

 

9. VENDOR WARRANTIES

 

9.1 The Vendor represents and warrants (garandeert en staat er voor in) to the
Purchaser that each of the Vendor Warranties is true and accurate and not
misleading, as at the date of this Agreement and will be true and accurate and
not misleading at the Completion Date. For the purpose of the automatic
repetition of the Vendor Warranties as of the Completion Date, each reference in
the Vendor Warranties to the “date hereof” or “the date of this Agreement” is to
be construed to include a reference to the Completion Date.

 

9.2 The Purchaser’s ability to rely on the Vendor Warranties shall be limited
by:

 

  (a) matters explicitly and specifically disclosed in the Vendor Warranties,
the Disclosure Letter or the Supplementary Disclosure Letter (if any);

 

  (b) all information and matters disclosed in the Due Diligence Information and
in the written answers given to questions raised by the Purchaser during its due
diligence review, to the extent such information and matters are of a nature
that it can reasonably be expected that they are discovered or assessed in a
review of the type and scope carried out by the Purchaser and its advisers;

 

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  (c) all information provided during the management interviews with senior
managers of the various Group Companies, as explicitly laid down in reports made
of these interviews and site visits, as set out in the Due Diligence
Information; and

 

  (d) all matters which could have been reasonably discovered prior to the date
of this Agreement from records which are available at the Trade Register of the
Chamber of Commerce (Handelsregister van de Kamer van Koophandel en Fabrieken),
the land registry (Kadaster), Benelux Trademark Register (Benelux Merkenbureau)
or any equivalent registers in the countries where the Group Companies are
active as at the date of this Agreement.

 

9.3 The Purchaser acknowledges and confirms that it has carefully reviewed the
Due Diligence Information and has duly inquired to the extent it had questions
or comments in regard thereto. As per the date hereof, the Purchaser is not
aware of any Vendor Warranty being untrue, inaccurate or misleading. If at
Completion the Purchaser has such knowledge it shall inform the Vendor at
Completion.

 

9.4 The representations and warranties set out in the Vendor Warranties are the
only and exclusive representations and warranties given by the Vendor to the
Purchaser in connection with the Group Companies, their business and affairs and
they are in lieu of and supersede any other representations or warranties given,
whether in writing or verbally, express or implied, if any.

 

9.5 The parties agree that the Vendor’s duty to disclose to the Purchaser all
facts, circumstances or developments that are or may be material to the
Purchaser will be limited to the disclosures that are made under the Vendor
Warranties.

 

9.6 Each of the Vendor Warranties shall be construed as a separate
representation and/or warranty and shall not be limited by the terms of any of
the other Vendor Warranties, either expressly or by means of reference.

 

9.7 Where any Vendor Warranty refers to the Vendor’s best knowledge, such
reference shall be deemed to include the knowledge of, and information available
to the Vendor after having made reasonable enquiries with the employees of the
Group Companies whose names are set out in Schedule 9.7 relating to the relevant
matters but only to the extent such matters fall within their job description
and expertise.

 

10. BREACH OF VENDOR WARRANTIES

 

10.1 If there is a breach of a Vendor Warranty, the Vendor shall:

 

  (a) indemnify and hold harmless the Purchaser (or at the Purchaser’s option
the relevant Group Company) from and against any and all Losses, suffered by the
Purchaser, directly resulting from such breach of the Vendor Warranty; and

 

  (b) at the request of the Purchaser, shall take such steps that are required
for the Purchaser to be brought in the position (financial or otherwise) it
would have been in if such breach of the Vendor Warranty would not have
occurred, it being understood that where such steps require acts or omissions
that are not under the Vendor’s control, its obligations to remedy the matter
will be limited to a financial compensation.

 

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10.2 If the Purchaser becomes aware of any fact, matter, event or circumstance
that in the reasonable opinion of the Purchaser is likely to result in the
Vendor’s liability under the Vendor Warranties, the Purchaser shall:

 

  (a) within 45 (forty five) Business Days after becoming aware of such fact,
matter, event or circumstance give written notice containing summary details
thereof to the Vendor;

 

  (b) thereafter, as soon as possible pass on to the Vendor any further
particulars the Purchaser receives in connection with such claim including the
nature and amount of the claim and such other specifics as reasonably requested
by the Vendor to enable it to investigate the claim and form an opinion as to
whether the claim is justified;

 

  (c) take such action as the Vendor may reasonably request to avoid, dispute or
mitigate the claim;

 

  (d) take all such action as may in the reasonable opinion of the Purchaser be
required to avoid or dismiss an adverse effect on the financial position of the
business of the Purchaser or the relevant Group Company, such action to be in
consultation with the Vendor and taking the Vendor’s and the Company’s interests
into account; and

 

  (e) where a time limit applies to a claim giving rise to a liability or a
potential liability under the Vendor Warranties, the Purchaser shall use its
best endeavours to ensure that such time limit (whether for appeal or otherwise)
is timeously complied with (unless otherwise instructed by the Vendor).

 

10.3 Neither the Purchaser nor any of the Group Companies shall settle or
compromise any potential claim without the prior consent of the Vendor (such
consent not to be unreasonably withheld), provided that such consent shall no
longer be required if timeously requested by the Purchaser and no reaction has
been received within 20 (twenty) Business Days after despatch to the Vendor of a
notice given by the Purchaser pursuant to Clause 10.2.

 

10.4 The Vendor shall be entitled, if it so elects within 20 (twenty) Business
Days after despatch of a notice given by the Purchaser pursuant to Clause 10.2
(a), to take control of the defence, settlement, negotiation or other resolution
of any claim or other event giving rise to any liability for indemnification
hereunder and to employ and engage counsel of its own choice to defend such
matter, at its cost, risk and expense, and the Purchaser and the relevant Group
Company shall co-operate in all necessary respects with the Vendor in such
matter, provided that the Purchaser and the relevant Group Company shall on
timely basis receive full information of any action to be taken by the Vendor.
If the Vendor does not timeously notify the Purchaser in writing that it has
elected to assume the defence of a matter, the Purchaser shall be entitled to
take control of that matter at the Vendor’s cost and expense but always in close
consultation with the Vendor.

 

10.5

The parties shall co-operate with each other in dealing with any third party
claim made against any of the Group Companies pursuant to this Agreement and
will allow each other access to all relevant books and records during normal
business hours and at the place where the same are normally kept, with full
right to make copies thereof or take extracts therefrom. Such books and records
shall be subject to a duty of confidentiality

 

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except for disclosure necessary for resolving such third party claim or
otherwise required by applicable law or stock exchange regulations.

 

10.6 Where the Vendor is liable in respect of any claim under or in relation to
this Agreement and makes payment thereof to the Purchaser and the Purchaser has
a right of reimbursement (in whole or in part) against any person, the Purchaser
shall assign to the Vendor the benefit of such right for no further
consideration or procure that the relevant Group Company shall assign to the
Vendor the benefit of such right. Where a third party’s consent to such
assignment is required, the Purchaser shall use its best endeavours to obtain
it.

 

11. LIMITATION OF LIABILITY

 

11.1 The Vendor shall not be liable for any claims under or in relation to this
Agreement if and to the extent that such claim is attributable to:

 

  (a) any act, omission, transaction, or arrangement carried out at the express
request of the Purchaser before Completion or in respect of which the Purchaser
has given its prior written consent;

 

  (b) any act, omission, transaction, or arrangement carried out by the
Purchaser or by a Group Company (or its management) after the Completion Date
and outside the ordinary course of business, where such party was aware or ought
to have been aware that it would give rise to, or significantly increase the
amount of, a claim;

 

  (c) a change in law effective after Completion, including any changes in the
applicable tax rates.

 

11.2 The Vendor’s liability under or in relation to this Agreement shall be
limited as follows:

 

  (a) the Vendor shall not be liable in respect of any individual claim (or a
series of claims arising from substantially identical facts or circumstances)
where the liability agreed or determined in respect of any such claim (or series
of claims) does not exceed € 30,000 (thirty thousand euros), provided, however,
that if this threshold is exceeded, the Vendor shall be liable, subject to
Clause 11.2(b), for the full amount (i.e including the portion below € 30,000)

 

  (b) the Vendor shall not be liable in respect of any claim unless the
aggregate amount for all claims for which the Vendor would otherwise be liable
exceeds € 300,000 (three hundred thousand euros), provided, however, that if
this threshold is exceeded the Vendor shall be liable for the full amount (i.e.
including the portion below € 300,000);

 

  (c) except for claims involving or relating to the Vendor Warranties
concerning Section 2 (Shares and Group Company shares) of the Vendor Warranties,
no claim:

 

  (i) for a breach of any Vendor Warranty (save those mentioned in Clause
11.2(c)(ii)) can be made unless such claim has been notified in writing to the
Vendor within 18 (eighteen) months after Completion;

 

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  (ii) for a breach of any Vendor Warranty set out in Section 5 (Taxation) of
the Vendor Warranties can be made unless such claim has been notified in writing
to the Vendor within the statutory limitation period for such liability or
within 6 (six) months after such statutory limitation period has lapsed;

 

  (d) the Vendor’s maximum aggregate liability under or in relation to this
Agreement shall not exceed € 12,000,000 (twelve million euros), except for
claims involving or relating to the Vendors’ Warranties concerning title to the
Shares in which case there shall be no maximum limit to the Vendor’s liability.

 

11.3 The provisions set out above shall apply instead of Section 7:23(2) of the
Dutch Civil Code.

 

11.4 The Vendor shall not be liable in respect of any claim to the extent that
the Losses in respect of which such claim is made:

 

  (a) are covered by a policy of insurance in force and only to the extent that
such Losses are actually received or certain to be received by the Purchaser or
the respective Group Company;

 

  (b) would have been covered if a policy of insurance in force immediately
prior to Completion had been maintained beyond Completion and only to the extent
that such Losses or part thereof would actually have been received.

 

11.5 The Vendor shall not be liable in respect of any Losses suffered by the
Purchaser or any of the Group Companies to the extent of any corresponding
savings by or quantifiable net financial benefit to the Purchaser or any Group
Company arising from such Losses or the facts giving rise to such Losses (for
example, without limitation, where the amount (if any) by which any Taxation for
which the Purchaser or any Group Company would otherwise have been accountable
or liable to be assessed is actually reduced or extinguished as a result of the
matter giving rise to such liability).

 

11.6 The Vendor shall not be liable in respect of any Losses suffered by the
Purchaser or any of the Group Companies to the extent that and up to the amount
for which an allowance, provision or reserve for the liability or matter giving
rise to the Losses has been made in the Accounts or the Working Capital
Statement. If and to the extent that the amount of any allowance, provision or
reserve (including any allowance, provision or reserve taken into account in
calculating the value of an asset) made in the Accounts or the Working Capital
Statement or otherwise taken into account or reflected therein (and not released
prior to Completion) is in excess of the amount actually accrued or paid in
respect of the matter for which such allowance, provision or reserve was made or
is established to have been excessive, the amount of such excess shall be
credited against and applied in relieving the Vendor from any liability it would
otherwise incur in respect of any claim, provided that any such individual
excess which is less than € 50,000 (fifty thousand euros) shall not be so
credited.

 

11.7 The Vendor shall have no liability in respect of any claim which is based
upon a liability which is contingent only.

 

11.8 The Purchaser shall procure that all necessary steps are taken and all
necessary assistance is given to avoid or mitigate any Losses which in the
absence of mitigation might give rise to a liability in respect of any claim
under this Agreement.

 

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11.9 If, before the Vendor pays an amount in discharge of any claim under this
Agreement, the Purchaser or any Group Company recovers or is entitled to recover
(whether by payment, discount, credit, relief, insurance or otherwise) from a
third party a sum which indemnifies or compensates the Purchaser or the Group
Company (in whole or in part) in respect of the loss or liability which is the
subject matter of the claim, the Purchaser shall procure that, before steps are
taken to enforce a claim against the Vendor following notification under Clause
10.2 of this Agreement, all reasonable steps are taken to enforce recovery
against the third party and any actual recovery (less any reasonable costs
incurred in obtaining such recovery) shall reduce or satisfy, as the case may
be, such claim to the extent of such recovery.

 

11.10 In no event shall the Vendor be liable more than once for the same Losses.

 

12. SPECIFIC INDEMNITIES

 

12.1 The Vendor shall indemnify and hold harmless the Purchaser or, at the
Purchaser’s election, the Group Companies, for any Losses suffered by them as a
result of:

 

  (a) the preference shares in the capital of the Company, redeemed at
8 December 1998, not being fully paid up at the time of their issuance to their
holders;

 

  (b) any and all amounts becoming due and payable by the respective bank under
the bank guarantees listed in Schedule 12.1. The Purchaser shall ensure that any
notification or communication received from the respective bank or any matter,
circumstance or fact of which the Purchaser or a Group Company becomes aware
relating to the status or the revocation of the bank guarantee or the bank’s
obligation to pay under it, shall be forwarded, submitted or communicated in
full to the Vendor immediately upon receipt thereof by the Purchaser or the
management or treasury department of the Desseaux group of companies (currently
located at Waalwijk), thus allowing the Vendor to fully exercise its rights
under the provisions of Clause 10. The Purchaser shall use its best efforts to
ensure that all the Group Companies are aware of this obligation and that they
inform either the Purchaser or the management or treasury department of the
Desseaux group of Companies immediately upon gaining knowledge of any matter,
circumstances or facts referred to herein. Parties acknowledge and agree that
the Vendor shall not be liable vis-à-vis the Purchaser or the Group Companies
under this specific indemnity if it is able to reasonably demonstrate that the
Purchaser has not complied with its obligations hereunder to timely inform the
Vendor;

 

  (c) VAT being due and payable by any of the Group Companies incorporated in
and trading from the Netherlands on the Ex-Works supplies of goods to a
destination outside the Netherlands for which erroneously a zero rate VAT has
been applied by the Group Company concerned;

 

  (d) the tax authorities determining that the loan granted by the Vendor to the
Company in the amount of € 16,000,000 (sixteen million euros) and converted into
capital on 9 December 2005 qualified as equity prior to 9 December 2005.

 

12.2

For the avoidance of doubt, the Vendor’s obligations under Clause 12.1 shall not
be limited or qualified in any respect by the provisions of Clause 11.2, the
Disclosure Letter,

 

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the Due Diligence Information or the Supplementary Disclosure Letter, it being
clearly understood that the remaining provisions of Clause 11 and Clauses 10.2,
10.3, 10.4, 10.5 and 10.6 shall apply in connection with the Vendor’s
obligations under Clause 12.1.

 

13. PURCHASER WARRANTIES

 

13.1 The Purchaser represents and warrants (garandeert en staat er voor in) to
the Vendor that each of the Purchaser Warranties is true and accurate in all
material respects and not misleading in any material respect, as at the date of
this Agreement and will be true and accurate in all material respects and not
misleading in any material respect at the Completion Date. For the purpose of
the automatic repetition of the Purchaser Warranties as of the Completion Date,
each reference in the Purchaser Warranties to the “date hereof” or “the date of
this Agreement” is to be construed to include a reference to the Completion
Date.

 

13.2 The Vendor hereby confirms that as per the date hereof, it is not aware of
any Purchaser Warranty being untrue, inaccurate or misleading in a material
respect. If at Completion the Vendor has such knowledge it shall inform the
Purchaser.

 

13.3 If there is a breach of a Purchaser Warranty, the Purchaser shall:

 

  (a) indemnify and hold harmless the Vendor from and against any and all
Losses, with exception of any loss of profits or consequential, indirect and/or
punitive damages, suffered by the Vendor, directly resulting from such breach of
the Purchaser Warranty; and

 

  (b) at the request of the Vendor, shall take such steps that are required for
the Vendor to be brought in the position (financial or otherwise) they it would
been in if such breach of the Vendor Warranty would not have occurred, it being
understood that where such steps require acts or omissions that are not under
the Purchaser’s control, their obligations to remedy the matter will be limited
to a financial compensation.

 

14. PARENT GUARANTEES

 

14.1 NPM guarantees to the Vendor the full, due and punctual performance by the
Purchaser of all its obligations under or pursuant to this Agreement up to and
including Completion. If the Purchaser fails in the full, due and punctual
performance and observance of any of its obligations hereunder up to and
including Completion, then NPM shall be liable vis-à-vis the Vendor for such
obligations of the Purchaser as if it were a primary obligator and not a surety.
The obligations of NPM under this Clause 14 shall be continuing obligations and
shall not be impaired or affected by any change in the constitution or control
of, or the insolvency of, or any liquidation or winding up relating to the
Purchaser.

 

14.2

AWI guarantees to the Purchaser the full, due and punctual performance by the
Vendor of all its obligations under or pursuant to this Agreement. If the Vendor
fails in the full, due and punctual performance and observance of any of its
obligations hereunder, then AWI shall be liable vis-à-vis the Purchaser for such
obligations of the Vendor as if it were a primary obligator and not a surety.
The obligations of AWI under this Clause 14

 

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shall be continuing obligations and shall not be impaired or affected by any
change in the constitution or control of, or the insolvency of, or any
liquidation or winding up relating to the Vendor.

 

15. CONFIDENTIALITY

 

15.1 Subject to Clause 15.3, each of the parties shall treat as strictly
confidential all information received or obtained as a result of entering into
or performing this Agreement which relates to the negotiations relating to this
Agreement, the business and affairs of the other party, any document referred to
in this Agreement or the provisions or subject matter of this Agreement.

 

15.2 Subject to Clause 15.3, each of the parties shall ensure that their
shareholders, managing directors and officers shall, before and after Completion
not make use of or disclose to any person any of the information referred to in
Clause 15.1.

 

15.3 The parties may disclose information to a third party which would otherwise
be confidential if and to the extent:

 

  (a) required by the law of any relevant jurisdiction or for the purpose of any
legal proceedings, but only after consultation with the other parties about the
timing and content of such disclosure; or

 

  (b) required by any recognized securities exchange or by any regulatory or
governmental body, but only after consultation with the other parties about the
timing and content of such disclosure; or

 

  (c) such information is disclosed on a strictly confidential basis to that
third party’s professional advisers, auditors or bankers for the purpose of
advising that third party in connection with this agreement provided that such
disclosure shall be made subject to the terms set out in Clause 15.2; or

 

  (d) the information has come into the public domain otherwise than through
that third party; or

 

  (e) prior written consent to the disclosure has been given by all other
parties; or

 

  (f) required to enable a party to enforce its rights or remedies under this
Agreement.

 

16. RESTRICTIVE COVENANTS

 

16.1 The Vendor hereby undertakes towards the Purchaser that it will not itself
or allow any of the companies of its group without the prior written consent of
the Purchaser:

 

  (a)

for a period of 2 (two) years from the Completion Date in any capacity or in any
way whatsoever in the Netherlands and Belgium, either directly or indirectly be
engaged in or concerned with, or approach any person with a view to being
engaged in or concerned with, the development, production, marketing, sale,
installation, inspection and maintenance of woven, non-woven (fibre bonded) and
tufted textile floor coverings for residential and commercial use and for indoor
and outdoor sport applications, other than at any time owning in the aggregate
for investment

 

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purposes only, 5% (five percent) or less of any class of securities of any
entity traded on any national securities exchange which is engaged or concerned
in the activities set out herein;

 

  (b) for a period of 2 (two) years from the Completion Date, subject to Clause
5.5 and the relevant Related Agreements, persuade or cause, or attempt to
persuade any Employee (earning a salary of more than € 50,000 (fifty thousand
euros)) or any distributor or commercial agent of any of the Group Companies to
terminate his relationship with any of the Group Companies, or employ or engage
any such person within 1 (one) year of the effective termination of his
relationship with any of the Group Companies, unless such person has been made
redundant by the respective Group Company in which case the vendor may employ or
engage such person immediately upon termination of his relationship with the
Group Company concerned;

 

  (c) for a period of 2 (two) years from the Completion Date persuade or cause
or attempt to persuade any customer, supplier of or person otherwise doing
business with any of the Group Companies to terminate his relationship with any
of the Group Companies;

 

  (d) use the name “Desseaux” or “Desso” or any abbreviation thereof or any
combination including such name, or the logo of any of the Group Companies.

 

16.2 In the event that the Vendor breaches its obligations under this Clause 16
it shall, upon receipt of a written notice from the Purchaser notifying it of
such breach, become liable to the Purchaser and/or the Group Companies for an
immediately due and payable penalty of € 100,000 (one hundred thousand euros)
for each such breach and for a periodic penalty payment of € 10,000 (ten
thousand euros) for each day such breach continues, without the Purchaser or the
Group Companies having to prove any loss or damage, and without prejudice to the
right of the Purchaser and the Group Companies to claim damages in addition if
there are grounds for so doing.

 

16.3 The Vendor’s obligations under or pursuant to Clause 16.1 shall lapse and
become ineffective upon the occurrence of a change of Control over AWI as a
result of an acquisition of shares in the capital of AWI by a third party.

 

17. TRANSFER OF RIGHTS AND OBLIGATIONS

No party may:

 

  (a) assign, transfer or encumber any of its rights under or interest in, this
Agreement or any of the Related Agreements;

 

  (b) sub-contract any or all of their respective obligations under this
Agreement or the Related Agreements,

except in accordance with a prior waiver given by the other parties.

 

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18. COSTS

Each party shall bear its own costs, charges and expenses in relation to the
negotiation, preparation, execution and implementation of this Agreement and the
transactions contemplated thereby, it being understood that the Purchaser shall
pay the Notary’s fees in connection with the preparation and execution of the
notarial deed of transfer giving effect to the transfer of the Shares.

 

19. ANNOUNCEMENTS

 

19.1 Subject to Clause 19.2, no party shall make or issue at any time (whether
before or after Completion) any announcement, circular or other publicity
relating to any matter referred to in this Agreement without the other parties’
prior written approval of the form and content of such announcement.

 

19.2 Clause 19.1 shall not apply to any announcement, circular or other
publicity:

 

  (a) required by the law of any relevant jurisdiction or by the rules or
regulations of any recognized securities exchange or of any regulatory or
governmental body. In such an event, the party making or sending the
announcement, circular or other publicity shall, as far as practicable, consult
with the other parties as to the form and content of such announcement; or

 

  (b) which is made or sent by or on behalf of the Company after Completion
advising the press, customers, suppliers or agents of the Company of the
transfer of the Shares.

 

20. NO VARIATION

 

20.1 No variation to this Agreement shall be of any effect unless it is agreed
in writing and signed by or on behalf of each party.

 

20.2 Each of the provisions of this Agreement is severable. If any such
provision is or becomes illegal, invalid or unenforceable (whether in whole or
in part) in any respect under the law of any jurisdiction:

 

  (a) that shall not affect or impair the legality, validity or enforceability
in that jurisdiction of the other provisions of this Agreement (if these other
provisions are not inextricably related to the illegal, invalid or unenforceable
provision), or of that or any provisions of this Agreement in any other
jurisdiction; and

 

  (b) the parties will use reasonable endeavours to negotiate in good faith with
a view to replacing it with one or more provisions which are not illegal,
invalid or unenforceable and which differ from the replaced provision as little
as possible, always taking into account the substance and purpose of this
Agreement.

 

21. ENTIRE AGREEMENT

This Agreement (together with all documents referred to in it or executed at
Completion) constitutes the whole and only agreement and understanding between
the parties in relation to its subject matter. All previous understandings,
letters of intent, agreements,

 

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undertakings, representations, warranties and arrangements of any nature
whatsoever between the parties or member of the Vendor’s Group and the
Purchaser’s Group respectively with any bearing on the subject matter of this
Agreement are superseded and extinguished (and all rights and liabilities
arising by reason of them, whether accrued or not at the date of this Agreement,
are cancelled) to the extent that they have such a bearing, it being understood
that the letter agreement of 23 August 2006, executed by Armstrong World
Industries Holding GmbH and the Purchaser dealing with the reimbursement of
costs in the event that the transactions contemplated herein do not complete,
shall remain in force until Completion and shall lapse or extinguish upon
Completion. For the avoidance of doubt, the letter agreement of 23 August 2006
shall not apply if parties do not proceed to Completion due condition precedent
set out in Clause 4.1 not being timely fulfilled or waived, as the case may be,
in accordance with the provisions of Clause 4.

 

22. NO IMPLIED WAIVER; NO FORFEIT OF RIGHTS

 

22.1 Any waiver under this Agreement must be given by notice to that effect.

 

22.2 Where a party does not exercise any right under this Agreement (which shall
include the granting by a party to any other party of an extension of time in
which to perform its obligations under any provision hereof), this shall not be
deemed to constitute a forfeit of any such rights (rechtsverwerking)

 

23. NOTICES

 

23.1 Any communication to be given in connection with the matters contemplated
by this Agreement shall except where expressly provided otherwise be in writing
and in the English language and shall either be delivered by hand or sent by
first class pre-paid post or facsimile transmission, addressed as follows,
unless and until any party notifies the other party in accordance with this
Clause 23 of a change of address:

 

(a)

   if to the Purchaser:    Flagstone Beheer B.V.    Attn. Mr. L. Mes   
Breitnerstraat 1    1077 BL Amsterdam    The Netherlands    Fax: +31 20 671 08
55    with a copy to:    Nauta Dutilh    Attn. Mr. J.H.J. Preller    Weena 750
   3014 DA Rotterdam    The Netherlands    Fax: +31 10 224 00 55

(b)

   if to NPM:    NPM Capital N.V.

 

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   Attn. Mr. L. Mes    Breitnerstraat 1    1077 BL Amsterdam    The Netherlands
   Fax: +31 20 671 08 55

(c)

   if to the Vendor    Armstrong DLW AG    Attn. Mr. D. Randich   
Stuttgarterstrasse 75    D-74321 Bietigheim-Bissingen    Germany    Fax: +49 714
271 270    with a copy to:    CMS Derks Star Busmann    Attn. Mr. R. Tarlavski
   Mondriaan Tower    Amstelplein 8-A    1096 BC Amsterdam    The Netherlands   
Fax: +31 20 301 63 35

(d)

   if to AWI    Armstrong World Industries, Inc.    Attn. Mr. W. Gangl    2500
Columbia Avenue    Lancaster, Pennsylvania 17604    United States of America   
Fax: +1 717 396 6121

Delivery by courier shall be regarded as delivery by hand.

 

23.2 A communication shall be deemed to have been served:

 

  (a) if delivered by hand at the time of delivery;

 

  (b) if sent by first class pre-paid post at the expiration of two clear days
after the time of posting; and

 

  (c) if sent by facsimile at the time of completion of transmission by the
sender evidenced by a positive transmission report.

 

23.3 In proving service of the communication, it shall be sufficient to show
that delivery by hand was made or that the envelope containing the communication
was properly addressed and posted as a first class pre-paid letter or that the
facsimile was despatched and a confirmatory transmission report received.

 

23.4 A party may notify the other parties of a change to its name, relevant
person, address or facsimile number for the purposes of Clause 23.2 provided
that such notification shall only be effective on the date specified in the
notification as the date on which the change is to take place.

 

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23.5 The provisions of this Clause 23 shall not apply in relation to the service
of documents for the purpose of litigation.

 

24. NO RESCISSION

Subject to the conditions precedent set out in Clause 4 being fulfilled or
waived in accordance with the relevant provisions of Clause 4, the parties waive
their rights under Sections 2:265 through 2:272 of the Dutch Civil Code to
rescind (ontbinden) this Agreement, to demand in legal proceedings the
rescission (ontbinding) of this Agreement or to nullify (vernietigen) it
following Completion.

 

25. GOVERNING LAW AND JURISDICTION

 

25.1 This Agreement shall be governed by and construed in accordance with Dutch
law, without regard to any conflict of law rules under Dutch private
international law.

 

25.2 Any and all disputes between the parties arising out of or in connection
with this Agreement and/or any agreement, arrangement or undertaking arising out
of this Agreement shall be referred to the competent court in Amsterdam, the
Netherlands, subject to appeal and appeal in second instance.

THUS AGREED AND EXECUTED in four copies in Amsterdam on 27 March 2007.

 

/s/ S.G.H. Kranendijk

   

/s/ J.W. Baud

Flagstone Beheer B.V.     NPM Capital N.V.

By:

  S.G.H. Kranendijk     By:   J.W. Baud

Its:

  Managing Director     Its:   Managing Director

 

/s/ D.M. Randich

     

/s/ F. Nicholas Grasberger III

Armstrong DLW AG     Armstrong World Industries, Inc.

By:

  D.M. Randich     By:   F. Nicholas Grasberger

Its:

  Managing Director     Its:   Chief Financial Officer

 

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SCHEDULE 1.1(f)

PURCHASER WARRANTIES

 

1. Organisation

 

1.1 The Purchaser is duly incorporated and existing as a private company with
limited liability (besloten vennootschap met beperkte aansprakelijkheid) under
the laws of the Netherlands and has the power to own its property and to carry
on its business as presently conducted.

 

1.2 Neither the execution of this Agreement or any agreement in connection
herewith by the Purchaser, nor the consummation by the Purchaser of the
transactions contemplated herein or therein will constitute a violation of,
conflict with, or constitute or create a default under any agreement or
arrangement binding upon the Purchaser or result in the creation of any
Encumbrance.

 

1.3 No statutory or regulatory rule or order of a court or a governmental body
and no agreement between the Purchaser and any such governmental body is in
effect that restrains or prohibits the execution of this Agreement or the
consummation of the transactions contemplated in this Agreement, nor is there to
Purchaser’s best knowledge any pending, threatened or any basis for any action,
suit, proceeding or investigation by any person, entity or governmental body
which questions or might jeopardise the validity of this Agreement or challenges
any of the transactions contemplated hereby.

 

1.4 No consent, approval, or authorisation of or registration, designation,
declaration or filing with any governmental authority on the part of the
Purchaser is required in connection with the purchase of the Business pursuant
to or contemplated in this Agreement or the consummation of any other
transaction contemplated hereby except as set out in this Agreement.

 

2. No brokers’ fee

No finder’s fee or brokerage commission to any person is payable by the Vendor
or by any member of the Vendor’s Group as a result of any action by the
Purchaser or any action known to the Purchaser by any other person, in
connection with the transactions contemplated by this Agreement.

 

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SCHEDULE 1.1(g)

VENDOR WARRANTIES

 

1. The Group Companies

 

1.1 Each Group Company is a body corporate duly incorporated and existing (where
such concept is meaningful) in good standing under the laws of the country in
which it is incorporated and has the requisite power and authority to own its
property and to carry on its business at present conducted in each jurisdiction
in which it conducts its business.

 

1.2 No proposal has been made by the relevant corporate body authorised to make
such a proposal or resolution adopted for the dissolution or liquidation of any
Group Company, statutory merger (juridische fusie) or division (splitsing), or
an equivalent arrangement under the laws of any applicable jurisdiction other
than the Netherlands, involving any of the Group Companies.

 

1.3 None of the Group Companies has either been (i) declared bankrupt (failliet
verklaard) or (ii) granted a moratorium of payments (surséance van betaling) or
(iii) made subject to any insolvency proceedings nor has (iv), to the best of
Vendor’s knowledge, any third party applied for a declaration of bankruptcy or
any such similar arrangement for any of the Group Companies under the laws of
any applicable jurisdiction.

 

1.4 The current articles of association of each of the Group Companies read in
conformity with the copies thereof set out in Annex 1.4.

 

1.5 The Group Companies are registered with the Trade Register of the Chamber of
Commerce and Industry or with an equivalent institution as may be required under
the laws of any applicable jurisdiction and evidence thereof (where available in
the form of extracts) is set out in Annex 1.5. This evidence is correct and
includes essential particulars of the relevant Group Company.

 

1.6 The minutes of all meetings of shareholders, managing directors and
supervisory directors kept by the Group Companies fully and correctly reflect
the matters which have been dealt with during these meetings.

 

1.7 The Group Companies have no directors (bestuurders) or proxyholders
(procuratiehouders) or their equivalents under any applicable jurisdiction other
than the Netherlands, other than those named in Annex 1.5 and no Group Company
has otherwise granted powers of attorney to any person authorising such person
to represent it for any special purpose other than as listed in Annex 1.5.

 

1.8 None of the Group Companies has a registered branch office (filiaal) or is a
group company (groepsmaatschappij) of any other company than of the Group
Companies and none of them is a party to any partnership agreement.

 

1.9 No Group Company has any activities that do not relate directly or
indirectly to the development, production, marketing, sale, installation,
inspection and maintenance of woven, non-woven (fibre bonded) and tufted textile
floor coverings for residential and commercial use and for indoor and outdoor
sport applications.

 

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2. Shares and Group Company shares

 

2.1 Annex 2.1 sets out an accurate description of the capital structure, share
ownership, and directors of each Group Company. No Group Company has issued and
no obligation exists for any Group Company to issue or transfer to anyone at any
time, any shares, debentures, options, warrants, subscription rights, founder
certificates, profit sharing certificates or other securities of any kind in
respect of any Group Company. The entities listed in Annex 2.1 as the owner or
owners of the shares in a Group Company have full legal and (where such concept
is meaningful) beneficial title to all of those shares, free and clear of any
Encumbrance and with full right and capacity to transfer the same. Apart from
the obligations resulting from this Agreement, there are no obligations to any
third party (for the avoidance of doubt including members of the Vendor’s Group)
with respect to any of the Shares or the shares in the capital of the Group
Companies pursuant to trust, shareholders’ or voting agreements or agreements
restricting the transfer of such shares or the payment of dividends (other than
those reflected in the articles of association of the Group Companies) or
agreements pursuant to which approval therefor is required or otherwise.

 

2.2 All shares in each Group Company have been duly authorized, validly issued
and fully paid up and no obligation exists for anyone to make further
contributions to the equity capital (whether by subscription for further shares,
by payment of share premium or otherwise) or to provide loan financing to that
Group Company or bonds, debentures, notes or other indebtedness entitling the
holder thereof to vote on any matters on which the holders of shares in the
relevant Group Company may vote.

 

2.3 None of the Group Companies has either issued any profit sharing
certificates (winstbewijzen) or granted any other rights to third parties to
share in its profits (winstrechten).

 

3. Accounts

 

3.1 The Accounts:

 

  3.1.1 have been prepared in accordance with applicable statutory requirements
and fully comply with the Agreed Accounting Principles and, without limiting the
generality of the foregoing, provide in full for all known commitments and
liabilities of the Group Companies, whether actual or contingent, due or to
become due in accordance with the Agreed Accounting Principles;

 

  3.1.2 are true and accurate, and in all respects fairly represent:

 

  3.1.2.1 each of the items separately specified in the balance sheets and
profit and loss statement therein;

 

  3.1.2.2 the consolidated financial position of the Group Companies as a whole;

 

  3.1.2.3 the results of operations of the Group Companies on a consolidated
basis for the twelve month period ending on the Accounts Date;

 

  3.1.3

to the extent required by the Agreed Accounting Principles, contain provisions
adequate to cover all known commitments and liabilities of the

 

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Group Companies, whether quantified, actual, contingent or otherwise, as at the
Accounts Date; and

 

  3.1.4 are not affected by any unusual or non-recurring items or by any
transaction of an unusual nature other than those reflected in the Accounts.

 

3.2 No Group Company has issued any guarantees for the benefit of, or is
otherwise generally liable for obligations of, other Group Companies or third
parties other than those reflected or identified in the Accounts.

 

3.3 There are no payables due to any member of the Vendor’s Group other than
those set out in the Accounts.

 

3.4 The Group Companies have fulfilled their obligations to timely file their
annual financial statements with the Trade Register of the Chamber of Commerce
and Industry or any such equivalent body with whom financial statements should
be filed in accordance with the relevant applicable laws for the financial years
2004 and 2005.

 

3.5 All of the books of account, ledgers, registers, records, data, systems,
controls and other information of the Group Companies (recorded, stored,
maintained operated or held in whatever form or by whatever means) (and
including all means of access to all such information) are owned exclusively by,
and are in the possession of or under the direct control of the Group Company
concerned and the Group Companies’ books of account have been kept in accordance
with all applicable statutory requirements.

 

4. Matters since the Accounts Date

 

4.1 Since the Accounts Date:

 

  4.1.1 no Group Company, other than in the usual course of its business, has:

 

  4.1.1.1 acquired or disposed of, or agreed to acquire or dispose of, any
material asset;

 

  4.1.1.2 assumed or incurred, or agreed to assume or incur, any material
liability, expenditure or obligation, save to the extent that such material
liability, expenditure or obligation was assumed or incurred, or agreed to be
assumed or incurred in accordance with the provisions of Clause 5;

 

  4.1.2 no material change has occurred to the Group Companies, their
operations, assets, condition (financial or otherwise) or prospects taken as a
whole, save to the extent that such material change occurred:

 

  4.1.2.1 in accordance with the provisions of Clause 5; and

 

  4.1.2.2 as a result of general economic conditions or as a result of
developments occurring on an industry-wide basis;

 

  4.1.3 no Group Company has acquired, repaid or redeemed or agreed to acquire,
repay or redeem any of its shares.

 

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4.2 All accounts receivable of the Group Companies either as per the Accounts
Date or arisen since then represent receivables which Vendor regards as
collectible in the normal course of business, or to the extent that any
receivable is not regarded as collectible, such amount has been adequately
insured for or an adequate provision has been made in the Accounts.

 

5. Taxation

 

5.1 All Taxation for which a Group Company at the date hereof, or at any time
thereafter, may have become or may hereafter become liable, whether for its own
account or in its capacity as a withholding agent, to be assessed in respect of
any period ending on or before the date hereof, including in respect of any
fiscal unities, have either been paid in full or adequate provision therefore
has been made in the Accounts. To the Vendor’s best knowledge, with respect to
all such Taxation assessed and paid prior to the date hereof, no further
payments or penalties or interest charges are or will become due with respect
thereto, save to the extent provided for in the Accounts.

 

5.2 To the Vendor’s best knowledge, there are no agreements with or with respect
to a Group Company or a fiscal unity affecting any Group Company for the
extension of time for the assessment or payment of any Taxation.

 

5.3 All documents required to be filed by or on behalf of or relating to the
Group Companies in respect of all Taxation, including consolidated returns in
respect of any fiscal unities, have been timeously filed.

 

5.4 None of the Group Companies or a fiscal unity affecting any Group Company is
involved in any dispute (in respect of which the matters in question have been
brought to the attention of the relevant Group Company in writing but whether or
not formal proceedings have been instituted) with any Tax authorities or others
concerning any matter likely to affect any liability of a Group Company or a
fiscal unity affecting any Group Company to Taxation, and no such dispute has
been threatened in writing and to the Vendor’s best knowledge no facts or
circumstances exist that are likely to give rise to any such dispute.

 

5.5 There have been no “legal mergers”, “share mergers”, “business mergers”,
“internal reorganisations” and other similar transactions involving any Group
Company that have occurred in 2006 and each of the preceding five (5) calendar
years where a reduction of, or exemption from, Taxation has been claimed or a
party has elected to take advantage to an exemption from certain Taxation
obligations.

 

5.6 For Tax purposes, each of the Group Companies is and has been resident only
in the jurisdiction in which it is incorporated and does not have nor had a
permanent establishment or permanent representative or other taxable presence in
any jurisdiction other than that in which it is resident for Tax purposes. None
of the Group Companies constitutes or has constituted a permanent establishment
or is or has been a permanent representative of another person.

 

5.7 None of the Group Companies has been a party to any transaction or series of
transactions which is or forms part of a scheme for the avoidance of Tax.

 

5.8 The signing an consummation of the Agreement will not have any adverse Tax
consequences for any of the Group Companies in the Netherlands.

 

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5.9 None of the Group Companies has tainted (share) capital (besmet fusie
aandelenkapitaal en/of agio) within the meaning of Section 3a of the Dutch
Dividend Tax Act 1965.

 

6. Agreements and Commitments

 

6.1 No Group Company is in default under any material contract to which it is a
party and no Group Company has received any notice (written or oral) of
cancellation, termination, rescission, invalidation or claim pursuant to any
actual or alleged breach or default of such material contract.

 

6.2 No Group Company is bound by any unusual or especially onerous contracts, or
contracts not concluded on an arm’s length basis.

 

6.3 None of the agreements to which the Group Companies are bound contain any
non-compete or similar limitations or, more generally, restrict their freedom to
carry on their businesses in the manner presently conducted.

 

6.4 None of the Group Companies has any obligations under rental (other than in
connection of Leased Premises), hire purchase or factoring agreement.

 

6.5 None of the Group Companies is a party to any joint venture agreements,
shareholders’ agreements, consortium agreements or agreements for joint research
or development.

 

6.6 None of the Group Companies is a party to any loan agreement (either as a
lender or as a borrower) or obtained any credit facility.

 

6.7 None of the Group Companies either acts as a surety for, or has issued any
guarantee or provided any security in favour of, any third party or the Vendor,
or agreed to do any of the foregoing. None of the Group Companies has filed any
declaration pursuant to section 2:403 of the Dutch Civil Code or withdrawn any
such declaration within the period of 1 (one) year preceding the date hereof.

 

6.8 There are no written or oral agreements or arrangements between a Group
Company and any member of the Vendor’s Group.

 

6.9 No substantial customer or supplier of any of the Group Companies has
ceased, or indicated an intention to cease, trading with or supplying or has
reduced, or indicated an intention to reduce, substantially its level of trade
with or supplies to the Group Companies and to the Vendor’s best knowledge there
is no reason to believe that any customer or supplier of the Group Companies
will terminate or substantially limit its business with any of the Group
Companies as a result of the execution of this Agreement.

 

7. Assets

 

7.1 All assets exceeding a replacement value of € 50,000 (fifty thousand euros)
per asset:

 

  7.1.1 included in the Accounts; or

 

  7.1.2 acquired by any Group Company since the Accounts Date; or

 

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  7.1.3 included in the asset registers of any Group Company (other than stock
acquired and disposed of in the ordinary course of business) (the “Assets”), are
legally and, where such concept is meaningful, beneficially owned by the
relevant Group Company, free from Encumbrance and, where capable of being
possessed, in the possession of the relevant Group Company, and are in adequate
condition and have been properly maintained and are not subject to any defect,
except for ordinary wear and tear.

 

7.2 The Group Companies are entitled to the unrestricted use of all Assets
currently used by the Group Companies required to enable the Group Companies to
conduct their businesses as they are currently conducted.

 

7.3 The stocks (voorraden) including raw material, work in progress, finished
products, merchandise, parts, packaging and promotional material, have been
acquired or produced in the ordinary course of the business of the Group
Companies and are of a quality consistent with previous practice while their
quantity is adequate for the level at which the businesses have been conducted.

 

8. Insurance

 

8.1 The Group Companies maintain the insurance policies listed in Annex 8.1,
which are all in full force and effect and all premiums due thereunder have been
duly paid, and none of the Group Companies is a party to any other insurance
policies than those listed in Annex 8.1.

 

8.2 To the Vendor’s best knowledge the Assets of an insurable nature are and
have been insured in amounts to the full replacement value thereof against all
accident, damage, third party loss (including product liability) and other risks
normally insured against by persons carrying on the same type of business as
that carried on by the relevant Group Company, and nothing has been done or
omitted or happened that, individually or in the aggregate, would make any
insurance policy relating to the Group Companies void or voidable. There are no
claims outstanding under any such insurance policy. No Group Company has failed
to give any notice or to present any claim under any such policy when due.

 

8.3 No notifications have been received by the Group Companies with regard to
the non-renewal of any insurance policy to which a Group Company is a party or
continuation or renewal on substantially less favourable terms and conditions.

 

9. Intellectual Property Rights

 

9.1 All Intellectual Property Rights are either owned by the Group Company
concerned or the subject of a valid license agreement with a third party
permitting the use thereof by the relevant Group Companies and all Intellectual
Property Rights owned by the Group Companies are free of Encumbrances. Full
details of all registered Intellectual Property Rights owned by the Group
Companies are set out in Annex 9.1.

 

9.2 The Group Companies have all the Intellectual Property Rights and Know-How
necessary for each Group Company, and no Intellectual Property Rights or
Know-How is subject to any license or other rights of the Vendor.

 

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9.3 Where Intellectual Property Rights have been licensed to Group Companies,
the Group Companies have, to the Vendors’ best knowledge at all times complied
with all material conditions of the applicable license agreements.

 

9.4 To the Vendor’s best knowledge the Intellectual Property Rights are not
being infringed.

 

9.5 To the Vendor’s best knowledge, the Group Companies are in compliance with
all material conditions of the applicable license agreements relating to the
Intellectual Property Rights used by the Group Companies.

 

9.6 To the Vendor’s best knowledge the Group Companies do not infringe
Intellectual Property Rights of third parties.

 

9.7 The Group Companies have duly paid all registration and/or renewal fees in
respect of all registered Intellectual Property Rights in which they use in
their respective businesses.

 

10. IT Systems

 

10.1 The IT Systems:

 

  (a) are, save for software licensed to the Group Companies and/or third party
telecommunication infrastructure, owned by the Group Companies and are under
their sole control and not shared with or used by or on behalf of or accessible
by any other person;

 

  (b) have adequate capacity to satisfy the reasonable commercial requirements
of the respective businesses of the Group Companies;

 

  (c) meet the purposes for which they were acquired or set up in an efficient
manner without material downtime on errors; and

 

  (d) have for the Group Companies’ purposes and within the limits of
commercially reasonable cost adequate security, back-ups, duplication, hardware
and software support and maintenance, including emergency cover, provided by
suitably trained personnel.

 

10.2 All the Computer Software:

 

  (a) performs in accordance with its specification and does not contain any
material defect of feature which adversely affects its performance or the
performance of any other software or hardware with which the same interacts; and

 

  (b) is lawfully held and used and its use, to the Vendor’s best knowledge,
does not infringe the copyright or other intellectual property rights of any
person and all copies of it have been lawfully made.

 

10.3 The specific users of the IT Systems of the Group Companies are adequately
trained to enable the same to be used and operated at the capacity required by
the respective businesses of the Group Companies to meet its operational
requirements.

 

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10.4 All records and data required by the Group Companies and stored in
electronic or magnetic means are capable of ready access through the present IT
Systems without recourse to any third party.

 

10.5 Where any Computer Software or Computer Hardware has been developed by
persons other than employees of the Group Companies and is used by the Group
Companies in the course of their business, either as part of their IT Systems or
as a software product or a part thereof, the Group Companies have obtained
written assignments of copyright in such software, or licences to use such
software, from such person(s), and no third parties have notified any claims
against the Group Companies in respect of the Group Companies’ use of such
software.

 

11. Premises

 

11.1 The Owned Premises are set forth in Annex 11.1 and are legally and (where
such concept is meaningful) beneficially owned by the relevant Group Company.
The Owned Premises have not been sold or agreed to be sold and they are not
subject to any purchase options or rights of first refusal exercisable by third
parties.

 

11.2 The Leased Premises are set forth in Annex 11.2 and are the object of a
valid, binding and enforceable lease agreement.

 

11.3 The occupation and use of each of the Premises by the Group Companies is in
all material respects in accordance with all applicable law and complies with
the agreements entered into with the owners of the Leased Premises.

 

11.4 The Owned Premises are not subject to any Encumbrance. No person other than
the Group Companies has a right to possess, occupy or use them other than
pursuant to a valid lease or sublease agreement entered into with the Group
Companies on an arm’s length basis and on customary terms.

 

11.5 No governmental subsidy has been granted with respect to the Owned Premises
which is subject to any conditions in respect of the use of such Premises that
have not been fulfilled or waived by the granting body.

 

11.6 With respect to the Leased Premises:

 

  11.6.1 no person has a right to terminate any of the relevant lease agreements
prior to its scheduled expiry date (other than in the event of breach of its
terms by the lessee); and

 

  11.6.2 there are no restrictions on the possession, occupation or use of, or
the development thereof.

 

11.7 The Premises are in an adequate state of maintenance and repair and fit for
the purpose for which they are currently used.

 

11.8 The Group Companies have no liabilities relating to, or any interest in,
land or other real property other than the Premises, other than the type of
liabilities specifically referred to in paragraph 15 (Environmental and safety
matters) below.

 

11.9

Other than the lease agreements referred to in paragraph 11.2 above, no other
agreements pertaining to the Leased Premises exist with the lessors of the
Leased

 

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Premises and no obligations have been assumed by the Group Companies towards the
lessors with respect to the Leased Premises other than those set out in the
lease agreements.

 

11.10 To the Vendor’s best knowledge, the Group Companies are in compliance with
their obligations under the lease agreements and there are no rent disputes
outstanding between the Group Companies and the lessors of the Lease Premises in
connection with the Leased Premises.

 

12. Employees

 

12.1 Annex 12.1 contains a complete list of the Employees, including part-time
employees and employees receiving sickness or disability benefits, setting out
the name, age, title, remuneration (including proposed entitlements to bonus,
profit sharing or stock or share options) and date of commencement of employment
of each Employee. Save as set out in Annex 12.1 no person has a management
agreement or an agreement for the rendering of services (een overeenkomst tot
het verrichten van diensten) with any Group Company.

 

12.2 The basis of remuneration or other terms of employment payable to the
directors of the Group Companies or Employees is the same as that at the
Accounts Date and none of the Group Companies or the Vendor is under any
contractual or other obligation to increase the rates of remuneration of, or to
provide any bonus or incentive or stock option or other similar payments to, any
of its directors or Employees at any future date, except to the extent that:

 

  12.2.1 any increase in remuneration results from the promotion of any
individual employee and such promotion is in the ordinary course and consistent
with past practices; or

 

  12.2.2 any Collective Agreement requires an increase in base salary and such
increase is not higher than the average rate of wage increases in the relevant
industry in the relevant jurisdiction for the year concerned.

 

12.3 The employment agreements with or terms of employment applicable to any of
the Employees do not contain any provision that is unusual for a relationship of
the kind concerned or, in the case of the twenty-five (25) highest paid (taking
into account all remuneration benefits) Employees provide for a notice period
for termination materially in excess of the statutory minimum or for other
termination arrangements exceeding minimum statutory requirements.

 

12.4 The Vendor and Group Companies is in relation to each Employee in
compliance with (a) all material obligations imposed on it by law; and (b) all
material obligations pursuant to all applicable Collective Agreements, if any.

 

12.5 None of the Group Companies nor the Vendor is party to any Collective
Agreement.

 

12.6 There are no agreements with any works council or other representative body
of employees.

 

12.7 There are no loans or guarantees made by a Group Company to or for the
benefit of any of the Employees or any person connected with them where the
outstanding principal amount exceeds € 5,000 (five thousand euros).

 

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12.8 No Group Company nor the Vendor is involved in any dispute (in respect of
which the matters in question have been brought to the attention of the relevant
Group Company in writing but whether or not formal proceedings have been
instituted) with a trade union, works council, staff association or other body
representing its employees and no such disputes have been threatened in writing.

 

12.9 None of the Group Companies have, within the period of two years prior to
the date of this Agreement, initiated or completed the implementation of any
collective dismissals or implemented or entered into a social plan and none of
the Group Companies have been a party to a transaction involving the transfer of
assets as a result whereof employees have transferred to Group Companies by
operation of law or could claim such transfer.

 

12.10 There are no disputes pending (in respect of which the matters in question
have been brought to the attention of the relevant Group Company in writing
whether or not formal proceedings have been instituted) and none have been
threatened in writing between any of the Group Companies and any former Employee
and, the Vendor’s best knowledge, no facts or circumstances exist that are
likely to give rise to such a dispute.

 

12.11 Since the Accounts Date, none of the Employees have seriously injured
themselves at work or contracted any serious illness or disease at work and, to
the extent that there have been such injuries, there is and there has been
sufficient employer’s liability insurance in respect of any such liability up to
the date hereof. As per the date of this Agreement none of the Employees has
been ill for a consecutive period exceeding four weeks.

 

13. Pensions

 

13.1 The pension arrangements to which the Group Companies are a party are set
out in Annex 13.1 (the “Pension Arrangements”). The Pension Arrangements apply
to all Employees and none of the Group Companies is a party to any other pension
arrangement relating to the Employees, including pension insurance or excess
(excedent) insurance other than the Pension Arrangements.

 

13.2 Subject to Clause 3.2, all premiums that have become due under the Pension
Arrangements have been paid or have been adequately provided for and none of the
Group Companies has any obligation with respect to the Pension Arrangements
which are not been fully funded or provided for.

 

13.3 The VUT and disability supplement is for a closed group and the payouts
thereunder will not significantly differ from the payout schedule set out in
Annex 13.3.

 

13.4 No defined benefit pension plans are applicable to the Employees. Other
benefit programs applicable to the Employees are fully insured defined
contribution plans.

 

14. Litigation

No Group Company is involved in any civil, criminal, administrative or arbitral
proceedings, or any governmental or other investigations, enquiries or
proceedings and no such proceedings, investigations or enquiries have been
threatened in writing against any of the Group Companies.

 

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15. Environmental and safety matters

 

15.1 Except as disclosed in the Accounts, no Group Company has or will have any
liability, damage, cost or expense or reduction in the value of any Premises or
Assets (whether actual or contingent) resulting from or associated with:

 

  15.1.1 the intentional or unintentional release or discharge into or
contamination of the Environment of any Hazardous Substance; or

 

  15.1.2 any exposure, whether in the ordinary course of business or otherwise,
of any past of present employees, contractors, suppliers or other person to any
Hazardous Substance used, stored or produced by or originating from any Group
Company or present in the Environment as a result of an act or omission by any
Group Company; or

 

  15.1.3 the violation of any law relating to Environment, whether intentionally
or unintentionally, by any Group Company or any person to the extent that a
Group Company may be responsible or liable.

 

15.2 Each Group Company has obtained any and all environmental Permits, consents
and exemptions necessary to conduct its business in full compliance with any law
relating to the Environment and the same are in full force and effect. No Group
Company has received written notice that any such Permit, consent or exemption
will be revoked, varied or not renewed.

 

15.3 There have not been any written complaints over the last year, whether
formally or informally, against the Group Companies about noise, smells,
pollution or other Environment related matters caused by any of the Group
Companies and there have not been any such claims over the preceding years which
have not been settled yet.

 

15.4 None of the Group Companies operates any installations which has applied
for or obtained a CO² emission permit, or has temporarily been excluded from
such obligation.

 

16. Compliance with laws and Permits

 

16.1 Each of the Group Companies has complied in all material aspects with all
law applicable to it in each relevant jurisdiction.

 

16.2 None of the Group Companies has received any written notice by any
governmental body or any other person of a violation or alleged violation by a
Group Company of any law, and to the Vendor’s best knowledge no facts or
circumstances exist that are likely to give rise to such a written notice. To
the Vendor’s best knowledge there are no draft proposals pending before the
relevant authorities for a law, the adoption of which is likely to have adverse
effects on the prospects, activities or operations of any of the Group
Companies.

 

16.3 All Permits have been obtained and are valid and subsisting. The Group
Companies have complied with all material conditions imposed by such Permits.

 

16.4 Where Group Companies have received any investment, subsidy or other state
aid, all conditions of such grant of aid have been fully and timely complied
with and it will have no obligation to reimburse any part of that grant of aid.

 

16.5 None of the Permits contains a change of control restriction.

 

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16.6 To the Vendor’s best knowledge, none of the Group Companies is a party to
any agreement, takes part in any concerted practice or is bound by any decision
of an association of undertakings which forms a violation of the Dutch
Competition Act (Mededingingswet) or equivalent legislation in force in any
other country where the Group Companies are active and has not received written
notification claiming that such violation exists.

 

17. Full disclosure

 

17.1 All written information given by the Vendor or any of its directors,
auditors or advisers to the Purchaser or the Purchaser’s legal or financial
advisers in the course of negotiations leading to this Agreement was true and
accurate in all material aspects and contained no material omissions and was not
misleading in any material respect at the date they were supplied.

 

17.2 Neither the Vendor nor any of its Affiliates are entitled on any basis to
seek recourse against any directors of any of the Group Companies or Employees
with respect to any liability incurred by the Vendor under or in connection with
this Agreement save only in cases of and fraud or fraudulent or willful
misrepresentation or fraudulent non-disclosure by any such director or Employee.

 

18. No brokers’ fee

 

18.1 No commission is payable to any person by the Purchaser or by any of the
Group Companies as a result of any action by the Vendor or any action known to
the Vendor by any person, in connection with the transactions contemplated by
this Agreement.

 

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