DATED 27th April 2000
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(1) ▇▇▇▇▇▇▇▇▇ WORLD INDUSTRIES INC.
- and -
(2) "ORION" EINUNDVIERZIGSTE BETEILIGUNGSGESELLSCHAFT MBH
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AGREEMENT
for the sale and purchase of the Armstrong Insulation Business
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CONFORMED COPY
▇▇▇▇▇▇▇ ▇▇▇▇▇
Exchange House
Primrose Street
London EC2A 2HS
Tel: ▇▇▇▇-▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇-▇▇▇ ▇▇▇▇
Ref: 2328/2219
THIS AGREEMENT is made on 27th April 2000
BETWEEN:
(1) ▇▇▇▇▇▇▇▇▇ WORLD INDUSTRIES INC. a company incorporated in Pennsylvania, USA
and whose registered office is at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ (the "Vendor" or "AWI"); and
(2) "ORION" EINUNDVIERZIGSTE BETEILIGUNGSGESELLSCHAFT MBH (to be re-named
Armacell Holding GmbH) a company incorporated in Germany (commercial
registry number 49000) and whose registered office is at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇, ▇▇▇▇▇▇▇ (the "Purchaser").
RECITALS:
A. The Vendor (through the Insulation Business Undertakings) is engaged in the
manufacture and marketing of elastomeric and polyethylene flexible
technical insulation products and polyurethane technical insulation
products for use in mechanical systems in residential, commercial and
industrial buildings, heating and air conditioning, plumbing and
refrigeration and others applications (as carried on by the Insulation
Business Undertakings as at the date hereof, but subject to the exclusions
in clause 3.3, the "Insulation Business").
B. The Vendor has agreed to sell (or procure the sale of) its (and the members
of its Group's) interests in the Insulation Business to the Purchaser (or
members of its Group) in accordance with the terms of this Agreement.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement and in the Schedules the following definitions (and the
words and expressions defined in the Recitals and in Schedule 1) are used:
"Accounting Policies" means the bases, practices and policies set out or
referred to in Schedule 8 (in each case applied on bases consistent with
the application of those bases, practices and policies in the Accounts and
the Group Accounts);
"Accounts" means, in relation to each Company and AIP Germany, the balance
sheet of that company as at the Accounts Date, together with a profit and
loss account of that company for the 12 month period to the Accounts Date,
where appropriate prepared on a consolidated basis, in the form annexed
hereto (and initialled for identification by or on behalf of each of the
Parties);
"Accounts Date" means 31 December 1999;
"AIP Germany" means Armstrong Insulation Products GmbH, a company which
merged with ▇▇▇▇▇▇▇▇▇ Germany on or about 4 April 2000, but was previously
incorporated in Germany with registered number HRB 4814 and whose
registered office was at ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
"Aon Insurance Recommendations" means the insurance recommendations made by
Aon Risk Services to the Purchaser in relation to the insurance policies to
be put in place by or on behalf of the Purchaser and its Group with effect
from Completion;
"Arcadis Environmental Report" means the final environmental due diligence
report dated on or prior to the date hereof prepared by Arcadis for the
Purchaser in relation to the Insulation Business Undertakings;
"Armstrong Architectural Products Spain" means ▇▇▇▇▇▇▇▇▇ Architectural
Products SL, a company incorporated in Spain and registered at Barcelona
Mercantile Register in Tomo 28.527, Folio ▇▇▇, ▇▇▇▇ ▇-▇▇▇▇▇▇ and whose
principal place of business and registered fiscal and social address is at
carretera de Viladamat a ▇▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇;
"Armstrong Benelux" means AIPB SPRL, a company incorporated in Belgium with
registered number Formule IIB Bruxelles Number 576384 and whose registered
office is at ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
"▇▇▇▇▇▇▇▇▇ Building Products Germany" means ▇▇▇▇▇▇▇▇▇ Building Products
GmbH a company incorporated in Germany with registered number HRB4597 and
whose registered office is at ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇;
"▇▇▇▇▇▇▇▇▇ China Shares" means the equity interests in Armstrong China
referred to in part 1 of Schedule 1;
"▇▇▇▇▇▇▇▇▇ Management" means ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (VP, Treasurer), ▇▇▇▇▇ ▇▇▇▇▇
(Director of Taxes), ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Controller), ▇▇▇▇▇
▇▇▇▇▇▇ (Benefits Manager), ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Executive VP, HR), ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ (VP, Information Systems), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Intellectual Property
Counsel), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Environmental Counsel) and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(Deputy General Counsel International);
"▇▇▇▇▇▇▇▇▇ Name" means any trade name or business name or mark comprising
or including the word "▇▇▇▇▇▇▇▇▇";
"▇▇▇▇▇▇▇▇▇ Name Licence" means a licence of the "▇▇▇▇▇▇▇▇▇" name and
trademarks in the agreed terms;
"Armstrong Poland Shares" means the entire issued share capital of
Armstrong Poland referred to in part 1 of Schedule 1;
"▇▇▇▇▇▇▇▇▇ UK Unlimited" means Armstrong Insulation Products (UK), a
company incorporated in England and Wales with registered number 3114931
and whose registered office is at ▇▇▇▇▇▇▇▇▇ House, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
"Asbestos Claim" means (a) any action against an Insulation Business
Undertaking by a regulatory authority or (b) a claim by a third party
(including any employee of the Vendor's Group or of any Insulation
Business Undertaking) directly or indirectly as a result of any activities
of:
(A) any member of the Vendor's Group or any Insulation Business
Undertaking; or
(B) any other person who, as at Completion is a predecessor in title
or affiliate of a person referred to in paragraph (A) above;
involving, using, maintaining or cleaning asbestos, asbestos
fibres or asbestos containing materials (whether in buildings or
otherwise) prior to Completion;
"Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇ Legal Reports" means the final legal due diligence
reports dated on or prior to the date hereof prepared by the Purchaser's
Solicitors for the Purchaser in relation to the Insulation Business
Undertakings;
"Assets" means the assets referred to in part 3 of Schedule 1 and all other
Business Intellectual Property;
"Assignments" means the patent, trade mark and general intellectual
property assignments by the Vendor (or member(s) of its Group), in the
agreed terms;
"Business Day" means a day (not being a Saturday or Sunday) on which banks
are open for general banking business in the City of London, New York,
Madrid and Frankfurt am Main;
"Business Intellectual Property" means the Intellectual Property Rights
which are owned by or licensed to the Vendor or a member of the Vendor's
Group and used in the Insulation Business (other than any rights in the
▇▇▇▇▇▇▇▇▇ Name), together with the goodwill relating thereto;
"Capital Expenditure Budget" means the combined budget for capital
expenditure by the Insulation Business Undertakings during the course of
the year from the Accounts Date to 31 December 2000, in the form annexed
hereto (and initialled for identification by or on behalf of each of the
Parties);
"Cash" means the aggregate cash and cash equivalents, as determined in
accordance with the Accounting Policies, of the Insulation Business
Undertakings as at the close of business on the date of Completion, as
stated in the Statement;
"Chinese Condition Subsequent" means the issuance, to the reasonable
satisfaction of both the Purchaser and the Vendor, of:
(A) an Approval Reply by the Panyu Committee of Foreign Trade and
Economic Co-operation approving the sale and purchase of the
▇▇▇▇▇▇▇▇▇ China Shares; and
(B) the amended Foreign Investment Enterprise Certificate of Approval
and the amended Enterprise Legal Person Business Licence required
to complete the sale and purchase of the ▇▇▇▇▇▇▇▇▇ China Shares;
"Companies" means all of the undertakings referred to in part 1 of Schedule
1;
"Companies Act" means the Companies Act 1985;
"Company" means any undertaking referred to in part 1 of Schedule 1;
"Company Intellectual Property" means the Intellectual Property Rights
which are owned by or licensed to the Insulation Business Undertakings
(other than any rights in the ▇▇▇▇▇▇▇▇▇ Name and any Business Intellectual
Property), together with the goodwill relating thereto;
"Completion" means completion of the matters set out in sub-clauses 5.2 and
5.3 and Schedule 5 (save, but only where required by sub-clause 5.4 or 5.5,
in relation to ▇▇▇▇▇▇▇▇▇ China and ▇▇▇▇▇▇▇▇▇ Poland);
"Completion Account Documents" means the Completion Account Documents as
defined in sub-clause 6.2;
"Completion Accounts" means, in relation to each Insulation Business
Undertaking (including ▇▇▇▇▇▇▇▇▇ China and ▇▇▇▇▇▇▇▇▇ Poland), a balance
sheet of that Insulation Business Undertaking as at Completion together
with a profit and loss account of that Insulation Business Undertaking for
the period from the Accounts Date to Completion, where appropriate prepared
on a consolidated basis, in each case expressed in but otherwise
prepared in accordance with clause 6 and Schedules 7 and 11 and using the
Accounting Policies;
"Completion Group Net Assets" means the combined net assets of the
Insulation Business Undertakings (including ▇▇▇▇▇▇▇▇▇ China and ▇▇▇▇▇▇▇▇▇
Poland) as at Completion, as stated in the Statement;
"Completion Longstop Date" means the date 4 months after the date hereof;
"Conditions Precedent" means the conditions set out in sub-clause 2.1;
"Confidential Information" means, in relation to each Party, all
information relating to the business, financial or other affairs of any
member of its Group (including future plans and targets) which is not in
the public domain, from time to time;
"Debt" means the aggregate debts (as determined in accordance with the
Accounting Policies), including the line item "Short term debt" (as set out
in line 15 of Schedule 11) and including amounts owed by an Insulation
Business Undertaking to a member of the Vendor's Group, including the line
item "Due to affiliated companies non-current portion (as set out in line
20 of Schedule 11) other than amounts arising from the sale and purchase of
goods or services in the ordinary course of business, being the line item
"Intercompany payables" (as set out in line 14 of Schedule 11), of the
Insulation Business Undertakings as at the close of business on the date of
Completion, as stated in the Statement;
"Disclosed Scheme" means the Vendor's Scheme, the US Disclosed Schemes, the
Spanish Scheme and the German Schemes each as defined in part 1 of Schedule
1;
"Disclosure Letter" means the letter delivered to the Purchaser by the
Vendor immediately prior to the execution of this Agreement by the Parties;
"Employees" means those persons employed by or wholly or mainly in an
Insulation Business Undertaking at Completion;
"Encumbrance" means any mortgage, charge (fixed or floating), pledge, lien,
hypothecation, trust, right of set off or other third party right or
interest (legal or equitable) including any right of pre-emption,
assignment by way of security, reservation of title or any other security
interest of any kind however created or arising or any other agreement or
arrangement (including a sale and repurchase arrangement) having similar
effect;
"Environment" means any and all living organisms (including, for the
avoidance of doubt, man), ecosystems, property and the media of air
(including air in buildings, natural or man-made structures, below or above
ground), water (including water drains and sewers) and land (including
under any water);
"Environmental Consents" means, in relation to each Insulation Business
Undertaking, any consent, approval, permit, licence, authorisation,
exemption, registration, permission and any related agreement required by
that Insulation Business Undertaking at or prior to Completion under any
Environmental Law in relation to:
(A) the Properties;
(B) the use of the Properties by that Insulation Business
Undertaking; or
(C) the activities of that Insulation Business Undertaking;
"Environmental Law" means, in relation to the Properties and each
Insulation Business Undertaking, all international, EU, national, federal,
state or local statutes, bylaws, orders, regulations or other law or
subordinate legislation or common law, orders or ordinances which, in each
case, have as a purpose or effect the protection of harm to the Environment
or the protection of human health and safety in any jurisdiction in which
that Insulation Business Undertaking had been or was then operating and
which are in force or existence prior to or at Completion (or in draft form
at Completion, where the details of any such draft are generally known and
are reasonably likely to come into effect within 2 years of the date
hereof);
"Environmental Warranties" means the warranties set out in paragraph 13 of
part 1 of Schedule 2;
"Estimate" means the estimate defined in sub-clause 4.8;
"EURIBOR" means the rate for deposits in Euros of 5,000,000 which appears
on the relevant display page of the Dow ▇▇▇▇▇ Telerate Service or, failing
that, the rate quoted by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding Inc at or about 11am
(London time) on the last Business Day prior to Completion;
"Excluded Long Term Liabilities" means, from time to time, the net accrued
amount (if any) by which:
(A) (save in relation to the Disclosed Schemes provided for in
paragraphs 2.4.2, 3 and 4 of Schedule 3) any liabilities (or
increase in liabilities) of an Insulation Business Undertaking
arising as a consequence of changes or additions to post
retirement and post employment liabilities (as described in
accordance with the Accounting Policies) between the Accounts
Date and Completion (and which have been disregarded in
calculating the Completion Group Net Assets) require a payment
after Completion; exceed
(B) (save in relation to any Disclosed Scheme provided for in
paragraphs 2.4.2, 3 and 4 of Schedule 3) any assets (or reduction
in liabilities) of an Insulation Business Undertaking arising as
a consequence of changes or additions to post retirement and post
employment liabilities (as determined in accordance with the
Accounting Policies) between the Accounts Date and Completion
(and which have been disregarded in calculating the Completion
Group Net Assets);
"Expert" means the London Office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or, failing them, the
London Office of PriceWaterhouseCoopers;
"Facility Agreement" means the facility agreement between, inter ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding Inc and the Purchaser in the form annexed
hereto (and initialled for identification by or on behalf of each of the
Parties);
"Final Longstop Date" means the date 4 months after Completion;
"General Warranties" means the warranties set out in part 1 of Schedule 2;
"Group" means:
(A) in relation to the Vendor, the Vendor's Group; and
(B) in relation to the Purchaser, the Purchaser's Group;
"Group Accounts" means the audited combined balance sheet of the Insulation
Business Undertakings and AIP Germany as at the Accounts Date, together
with the audited combined profit and loss account and audited combined cash
flow statement of the Insulation Business Undertakings and AIP Germany for
the 12 month period to the Accounts Date in the form annexed hereto (and
initialled for identification by or on behalf of each of the Parties);
"Group Completion Accounts" means a combined balance sheet of the
Insulation Business Undertakings (including ▇▇▇▇▇▇▇▇▇ China and ▇▇▇▇▇▇▇▇▇
Poland) as at Completion, together with a profit and loss account of those
Insulation Business Undertakings for the period from the Accounts Date to
Completion, in each case expressed in but otherwise prepared from the
Completion Accounts in accordance with clause 6 and Schedules 7 and 11 and
using the Accounting Policies;
"Hazardous Substance" means any natural or artificial substance (whether
solid, liquid, gas, noise, ion, vapour, electromagnetic or radiation, and
whether alone or in
combination with any other substance) which is capable of causing
significant harm to or of having a significant deleterious effect on the
Environment;
"Insulation Business Undertakings" means the Companies (but, for the
avoidance of doubt, excluding ▇▇▇▇▇▇▇▇▇ Russia);
"Intellectual Property Rights" means all patents, registered designs,
design rights, database rights, copyrights and trade marks, business or
domain names (whether registered or not) and rights in inventions, know-
how, trade secrets and other confidential information and the goodwill
therein and applications for any of the same and any rights or forms of
protection of a similar nature and having equivalent or similar effect to
any of them which may subsist anywhere in the world;
"Inter Creditor Deed" means the inter creditor deed between, inter ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding Inc, the Purchaser and the Vendor in the form
annexed hereto (and initialled for identification by or on behalf of each
of the Parties);
"Interest Rate" means EURIBOR plus 1% per annum;
"Investment Agreement" means the framework agreement dated on or about the
date hereof between, inter alia the initial shareholders of the Purchaser
and all relevant members of the Senior Management;
"Loan Note Instruments" means the Series A Loan Note Instrument and the
Series B Loan Note Instrument;
"Loan Notes" means the Series A Loan Notes and the Series B Loan Notes;
"Management Accounts" means, in relation to each Company and AIP Germany,
the management accounts for that company for the period from the Accounts
Date to the end of March 2000 in the form annexed hereto (and initialled
for identification by or on behalf of each of the Parties);
"Material Adverse Effect" means a Material Adverse Affect for the purposes
of, and as defined in, the Facility Agreement;
"Management Disclosure Letter" means the letter dated on or about the date
hereof from all relevant members of the Senior Management to the initial
shareholders of the Purchaser pursuant to the Investment Agreement;
"Normalised Group Working Capital" means 42,600,000;
"Parties" means the Purchaser and the Vendor (and, where appropriate and
subject to sub-clause 15.1, the assignees (if any) of each of them);
"Polish Condition Subsequent" means the making or submission of all
statutory and other official notices and filings that are required to be
made by or on behalf of either Party or ▇▇▇▇▇▇▇▇▇ Poland with, and the
issue or grant of all permits, consents and statements from or by, all of
the Polish Ministry of Interior Affairs and Administration, the Polish
Ministry of the State Treasury and the Polish Office for the Protection of
Competition and Consumers' Rights in order to enable, approve and authorise
the completion of the sale and purchase of the ▇▇▇▇▇▇▇▇▇ Poland Shares in
accordance with the terms of this Agreement (and where necessary stamped
and approved) to the reasonable satisfaction of both the Purchaser and the
Vendor;
"Previous Accounts" means, in relation to each Company and AIP Germany, the
balance sheets and profit and loss accounts and, where appropriate, cash
flow statements of that company (if any) for the 12 months (or any part
thereof) immediately prior to the period covered by the Accounts, where
appropriate prepared on a consolidated basis, in the form annexed hereto
(and initialled for identification by or on behalf of each of the Parties);
"Properties" means the properties referred to in Schedule 4;
"Purchase Price" means [_]303,420,000;
"Purchaser's Accountants" means, from time to time, such firm of
accountants (other than the Expert) as shall be nominated by the Purchaser
for the purposes of this Agreement;
"Purchaser's Group" means the Purchaser and, from time to time, each of its
subsidiary undertakings (including, from Completion, each Insulation
Business Undertaking);
"Purchaser's Solicitors" means Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇ of Broadwalk House, ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"Release" means, in relation to any Hazardous Substance, any intentional,
negligent or accidental spilling, leaking, pumping, pouring, emitting,
emptying, exposure, discharging, injecting, leaching, dumping or disposing
of that Hazardous Substance including the abandonment or discharging of
containers and receptacles containing any Hazardous Substances;
"Relevant Claim" means a claim against the Vendor under or for breach of
the Warranties or the Repeated Warranties (in each case other than in
relation to the Warranties at paragraphs 7.3, 7.6 and 14 of Part 1 of
Schedule 2) or (save where expressly stated otherwise) the provisions of
clause 7 or the Specific Indemnities;
"Reorganisation" means the pre-Completion reorganisation and restructuring
of the Insulation Business, the Insulation Business Undertakings and the
Vendor's Group, comprising:
(A) the transfer or sale (or proposed transfer or sale) of Armstrong
Architectural Products Spain, ▇▇▇▇▇▇▇▇▇ Building Products Germany
and Armstrong Benelux to a member of the Vendor's Group;
(B) the sale of Armstrong Textile Products GmbH to DAY German
Holdings GmbH;
(C) the incorporation of, and commencement of business of (including
the transfer of Employees and Properties to), Armstrong Europa,
Armstrong Australia, Armstrong USA, ▇▇▇▇▇▇▇▇▇ ▇▇ and ▇▇▇▇▇▇▇▇▇
UK;
(D) the merger of ▇▇▇▇▇▇▇▇▇ Germany with AIP Germany;
(E) the transfer or sale (or proposed transfer or sale) of the
Properties at Dallas, Georgia and Mebane, North Carolina to
Armstrong USA;
(F) the matters referred to in Schedule 6; and
any other act, matter or thing done, occurring or carried out by an
Insulation Business Undertaking or a member of the Vendor's Group prior to
Completion where one of the principal purposes of any such act, matter or
thing was to transfer assets or liabilities from or to an Insulation
Business Undertaking in order to or otherwise to enable or facilitate any
of the transactions anticipated by this Agreement to be implemented;
"Repeated Warranties" means the Warranties (other than the Warranty set out
in paragraph 6.2.2 of part 1 of Schedule 2 ), provided that:
(A) each such Repeated Warranty shall be deemed to include an
additional statement that each aspect of that Repeated Warranty
is limited by reference to the actual knowledge as at Completion
of the ▇▇▇▇▇▇▇▇▇ Management (having made reasonable enquiries of
the Senior Management in relation to those Repeated Warranties);
and
(B) any reference in Schedule 2 to the date hereof shall be deemed to
be a reference to the date of Completion;
"Resignation Letter" means a resignation letter in the agreed terms;
"Senior Management" means ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇▇▇▇▇;
"Series A Loan Note Instrument" means the series A loan note instrument in
the agreed terms;
"Series A Loan Notes" means the series A loan notes constituted by the
Series A Loan Note Instrument;
"Series B Loan Note Instrument" means the series B loan note instrument in
the agreed terms;
"Series B Loan Notes" means the series B loan notes constituted by the
Series B Loan Note Instrument;
"Services Agreements" means the agreements in the agreed terms in relation
to the provision of certain services by the Vendor or members of its Group
to the Purchaser or members of its Group (and vice versa) from Completion;
"Shares" means, in respect of each Company, the entire issued share capital
or equity interests or partnership interests (as the case may be) of that
Company, as referred to in part 1 of Schedule 1;
"Specific Indemnities" means the indemnities set out in sub-clauses 8.10,
9.2, 9.4, 9.6, 9.7, and paragraph 6 of part 1 of Schedule 3;
"Statement" means the statement defined in sub-clause 6.2.2;
"Stock Exchange" means each recognised investment exchange for the purposes
of the Financial Services Act 1986 and any similar exchange or trading
facility in any jurisdiction outside the United Kingdom (including, without
limitation, the New York Stock Exchange);
"Subsidiary" means the undertaking referred to in part 2 of Schedule 1;
"Substantial Customer" means a customer accounting for more than five per
cent. of the Insulation Business Undertakings' sales in the financial year
ended on the Accounts Date;
"Substantial Supplier" means a supplier accounting for more than five per
cent. of the Insulation Business Undertakings' purchases in the financial
year ended on the Accounts Date;
"Target Group Net Assets" means [_]114,253,300, as the same may be
increased or decreased, as the case may be, in accordance with paragraph
1.2 of Schedule 7;
"Taxation" or "Tax" means taxation or tax as defined in the Tax Deed;
"Tax Deed" means the tax deed in the agreed terms;
"Tax Warranties" means the warranties set out in part 2 of Schedule 2;
"VAT" means value added tax in the United Kingdom and any equivalent sales
Tax elsewhere in the world;
"Vendor's Group" means the Vendor and, from time to time, each of its
subsidiary undertakings (but excluding the Insulation Business
Undertakings);
"Vendor's Accountants" means, from time to time, such firm of accountants
(other than the Expert) as shall be nominated by the Vendor for the
purposes of this Agreement;
"Warranties" means the General Warranties and the Tax Warranties;
"Waste" means waste, including anything which is discarded or which the
holder intends or is required to discard and anything which is abandoned,
irrespective of whether it is capable of being recovered or recycled; and
"Working Capital" means accounts receivable and inventories less accounts
payable, in each case determined in accordance with the Accounting Policies
(and as represented by the corresponding line items in Schedule 11) (but,
for the avoidance of doubt, excluding all Cash and Debt).
1.2 In this Agreement, save where the context otherwise requires:
1.2.1 a reference to a statute or statutory provision shall include a
reference to that statute or provision as it may be amended or
re-enacted by any statute or statutory provision as at the date
hereof;
1.2.2 words in the singular shall include the plural (and vice versa);
1.2.3 the masculine gender shall include the feminine and neutral (and vice
versa);
1.2.4 a reference to a person shall include a reference to an individual,
an undertaking and a public authority and to any such person's
nominees, representatives, trustees, executors and administrators (in
each case, whether or not having separate legal personality and
irrespective of the jurisdiction in or under the law of which it was
incorporated or exists);
1.2.5 a reference to a clause, sub-clause or Schedule (other than to a
schedule to a statutory provision) shall be a reference to a clause,
sub-clause or Schedule (as the case may be) of or to this Agreement;
1.2.6 if a period of time is specified and dates from a given day or the
day of an act or event, it shall be calculated exclusive of that day;
1.2.7 a reference to any English legal term (including any statute,
statutory instrument, resolution, by-law or other requirement) for any
action, remedy, method or judicial proceeding, legal or constitutional
document, legal status, procedure, court, official or any legal
concept or thing shall in respect of any jurisdiction other than
England be deemed to include that which most nearly approximates in
that jurisdiction to the relevant English legal term;
1.2.8 a reference to writing shall include any modes of reproducing words
in a legible and non-transitory form (excluding electronic mail);
1.2.9 a reference to a balance sheet or profit and loss account shall
include a reference to any note forming part of it;
1.2.10 a reference to a document "in the agreed terms" shall be to a
document agreed between (and initialled for identification by or on
behalf of) each of the Parties;
1.2.11 the index to and headings in this Agreement are for convenience only
and shall not affect the interpretation of any provision of this
Agreement;
1.2.12 a reference to "includes" or "including" shall mean "including
without limitation";
1.2.13 the Schedules form part of the operative provisions of this
Agreement and any reference to this Agreement shall, unless the
context otherwise requires, include a reference to the Schedules; and
1.2.14 any reference to "or" (but not "and") shall, save where the context
does not allow, mean "and/or".
1.3 In this Agreement, save as otherwise provided:
1.3.1 words and expressions defined in the Accounting Policies shall bear
the same meaning as in those policies; and
1.3.2 (save as otherwise provided in and defined in the Accounting
Policies) words and expressions defined in the Companies Act shall
bear the same meaning as in that act.
2. CONDITIONS
2.1 The provisions of this Agreement, other than this clause, clause 7 (Pre
Completion Undertakings), clause 13 (Confidential Information), clause 14
(Announcements), clause 15 (Miscellaneous), clause 18 (Costs), clause 19
(Notices) and clause 20 (Governing Law, Jurisdiction and Service of
Process) are subject to each of the following Conditions Precedent:
2.1.1 the receipt by the Purchaser (or its shareholders) of cartel
clearance from the German Federal Cartel Office (Bundeskartellamt),
or the satisfaction of the statutory conditions for deemed cartel
clearance in each case, of the acquisition of, or subscription for
shares in, the Purchaser by its shareholders and, if required, of the
consummation and completion of this Agreement (and the acquisitions
contemplated hereby) by the Purchaser;
2.1.2 the receipt by the Purchaser (or its shareholders) of a declaration
of no objection (verklaring van geen bezwaar) from the Dutch Central
Bank (De Nederlandsche Bank N.V.) as referred to in section 23
paragraph 1 sub b. of the Dutch Act on the Supervision of the Credit
System 1992 (Wet Toezicht Kredietwezen) to the acquisition of, or
subscription for shares in, the Purchaser by its shareholders or of
the consummation and completion of this Agreement (and the
acquisitions contemplated hereby) by the Purchaser;
2.1.3 the Purchaser not being prevented, in accordance with the terms of
the Facility Agreement, from drawing down funds thereunder (whether
by reason of an Event of Default or Potential Event of Default (each
as defined in the Facility Agreement), a Material Adverse Effect, a
breach of the warranties in the Facility Agreement or otherwise); and
2.1.4 (as at Completion) there being no fact, matter, thing or information
actually known by either of the Parties (the nature, quality and
extent of which was not actually known by both of them at the date
hereof) that indicates that either the Chinese Condition Subsequent
or the Polish Condition Subsequent is unlikely to be satisfied by the
Final Longstop Date;
and if those Conditions Precedent have not been satisfied (or waived in
accordance with sub-clause 2.4) by the Completion Longstop Date the
provisions of this Agreement (other than clause 13 (Confidential
Information), clause 14 (Announcements), clause 15 (Miscellaneous), clause
18 (Costs), clause 19 (Notices) and clause 20 (Governing Law, Jurisdiction
and Service of Process)) shall from such date have no effect.
2.2 Each Party shall use all reasonable endeavours to procure that the
Conditions Precedent in sub-clauses 2.1.1, 2.1.2 and 2.1.3 are satisfied by
no later than the
Completion Longstop Date (and, for the avoidance of doubt, no Party shall
be entitled to withdraw from this Agreement before the Completion Longstop
Date unless, prior thereto, any of the Conditions Precedent becomes
incapable of being satisfied or waived) and, from time to time, each Party
shall keep the other Party informed of any material details known to it
relating to the progress towards satisfaction of those Conditions
Precedent.
2.3 In the event that any of the Conditions Precedent shall not have been
satisfied (or waived in accordance with sub-clause 2.4) by the Completion
Longstop Date neither Party shall have any liability under the provisions
of this Agreement other than in respect of:
2.3.1 any breach prior to the Completion Longstop Date of sub-clause 2.2;
or
2.3.2 any breach of clause 13 (Confidential Information) or clause 14
(Announcements).
2.4 The Purchaser may waive, without prejudice to its rights hereunder, in
whole or in part, the Conditions Precedent in sub-clauses 2.1.2 and 2.1.3;
the Vendor and the Purchaser may together waive, without prejudice to their
respective rights hereunder, in whole or in part, the Conditions Precedent
in sub-clauses 2.1.1 and 2.1.4.
3. SALE AND PURCHASE
3.1 The Vendor shall sell (or procure that the relevant member of its Group
which is the owner of the Shares or Assets as shown in Schedule 1 shall
sell, in any such case) as legal and beneficial owner and with full title
guarantee, and the Purchaser shall purchase (or procure that a member of
its Group shall purchase), the Shares and Assets.
3.2 The Shares and Assets shall be sold by the Vendor (or a member of its
Group) free from any Encumbrance (and together with all rights attached to
them as at Completion).
3.3 Notwithstanding any provision of this Agreement (but without prejudice to
clause 9), the Vendor (or a member of its Group) shall retain the following
undertakings:
3.3.1 Armstrong Architectural Products Spain;
3.3.2 Armstrong Benelux;
3.3.3 ▇▇▇▇▇▇▇▇▇ Building Products Germany; and
3.3.4 Armstrong UK Unlimited.
3.4 Without prejudice to sub-clause 3.2, the Vendor waives (or agrees to
procure the waiver of) any rights or restrictions conferred upon it (or any
other member of its Group) which may exist in relation to the Shares or
Assets under the articles of association of any of the Companies or the
Subsidiary or otherwise.
3.5 Neither Party shall be obliged to complete (or procure the completion by
any member of its Group of) the sale and purchase of any of the Shares or
Assets unless each Party
is in a position (and agrees) to complete the sale and purchase of all of
the Shares and all of the Assets simultaneously (other than the Armstrong
China Shares and the Armstrong Poland Shares), but completion of the sale
and purchase of some of the Shares or Assets shall not affect the rights of
the Parties with respect to the sale and purchase of any other Shares or,
as the case may be, Assets.
4. CONSIDERATION
4.1 The total consideration for the sale of the Shares and Assets by the Vendor
(or a member of its Group) to the Purchaser (or a member of its Group)
shall be the Purchase Price less an amount equal to the Debt, but plus an
amount equal to the Cash, as the same may be adjusted in accordance with
this clause 4 and such consideration shall be apportioned between the
Shares and Assets (and attributable to the Subsidiary) in accordance with
sub-clause 4.7.
4.2 The Purchase Price (as the same may be adjusted in accordance with this
clause 4) shall be satisfied by:
4.2.1 (subject to sub-clauses 4.8 and 4.9) the payment of 217,704,000 in
cash and the payment of US$ 36,898,000 (being deemed to be 40,000,000
at the rate agreed between the Parties to be the US$ / exchange rate
on the date hereof) in cash and US$, in each case at Completion;
4.2.2 the issue of 26,500,000 Series A Loan Notes, credited as fully paid,
at Completion;
4.2.3 the issue of 5,420,000 Series B Loan Notes, credited as fully paid,
at Completion;
4.2.4 (subject to sub-clause 4.11 and sub-clause 4.12) the payment of
8,361,000 in cash at Completion or, if completion of the sale and
purchase of the Armstrong China Shares takes place after Completion
in accordance with clause 5.4, at the date of such completion;
4.2.5 (subject to sub-clause 4.13 and sub-clause 4.14) the payment of
5,435,000 in cash at Completion or, if completion of the sale and
purchase of the Armstrong Poland Shares takes place after Completion
in accordance with clause 5.5, at the date of such completion; and
4.2.6 the payment in cash of such other amounts by either Party to the
other Party as shall be required in accordance with sub-clause 4.4 or
sub-clause 4.5.
4.3 The Purchase Price shall be adjusted (and the consideration for the sale of
the Shares and Assets by the Vendor (or a member of its Group) to the
Purchaser (or a member of its Group) shall be deemed to be increased or
reduced, as the case may be) in accordance with the provisions of paragraph
3 of Schedule 7 and paragraph 5 of Schedule 3 and sub-clauses 4.11 to 4.14
(inclusive).
4.4 In the event that the net effect of the adjustments in paragraphs 3.2 and
3.3 of Schedule 7 in relation to Debt or Cash (other than in relation to
Armstrong China or Armstrong Poland) shall require:
4.4.1 a net increase in the Purchase Price that exceeds any net increase in
the Purchase Price provided for at Completion in the Estimate;
4.4.2 a net increase in the Purchase Price when the Estimate at Completion
provided for a net decrease in the Purchase Price;
4.4.3 a net decrease in the Purchase Price that is less than any net
decrease in the Purchase Price provided for at Completion in the
Estimate;
(in this sub-clause 4.4 any such difference being the "Difference") or, as
the case may be, in the event that the Completion Group Net Assets shall
exceed the Target Group Net Assets (the "Excess"), then an amount equal to
that Difference or, as the case may be, the Excess (together with interest
thereon calculated at the Interest Rate and on a daily basis in respect of
the period from Completion to the date of actual payment) shall, subject to
paragraph 3.4 of Schedule 7, be paid by the Purchaser to the Vendor (by
electronic transfer for receipt in, free of all costs, deductions and
charges, to such account as the Vendor shall nominate for this purpose)
within 5 Business Days of the determination of the final form of the
Completion Account Documents in accordance with clause 6, save that:
4.4.4 in the event that the Cash (other than in relation to Armstrong China
or Armstrong Poland) shall exceed 100,000 (any such excess being
"Excess Cash") the Purchaser shall be entitled to delay payment of an
amount equal to such Excess Cash from any payment required under this
sub-clause 4.4 until the first anniversary of the determination of
the final form of the Completion Account Documents in accordance with
clause 6; and
4.4.5 the Purchaser shall be entitled to delay payment of an amount equal
to such Excess from any payment required under this sub-clause 4.4
until the date 45 days after the date of the determination of the
final form of the Completion Account Documents in accordance with
clause 6 provided that the Purchaser shall use (and shall procure
that the relevant members of its Group use) reasonable endeavours to
realise such Excess in the Purchaser (or any member of its Group
which is not an Insulation Business Undertaking) in cash (and to make
payment thereof) to the Vendor as soon as reasonable practical after
the determination of the final form of the Completion Account
Documents (and in any event within such 3 month period); and
provided that any such amount under sub-clause 4.4.4 or sub-clause 4.4.5
shall continue to accrue interest in accordance with this sub-clause 4.4
until the date of actual payment).
4.5 In the event that the net effect of the adjustments in paragraphs 3.2 and
3.3 of Schedule 7 in relation to Debt or Cash (other than in relation to
Armstrong China or Armstrong Poland) shall require either:
4.5.1 a net decrease in the Purchase Price that exceeds any net decrease in
the Purchase Price provided for at Completion in the Estimate;
4.5.2 a net decrease in the Purchase Price when the Estimate at Completion
provided for a net increase in the Purchase Price; or
4.5.3 a net increase in the Purchase Price that is less than any net
increase in the Purchase Price provided for at Completion in the
Estimate;
(in this sub-clause 4.5 any such difference being the "Difference"), or, as
the case may be, in the event that the Completion Group Net Assets shall be
less than the Target Group Net Assets (the "Shortfall"), then an amount
equal to that Difference or, as the case may be, the Shortfall, together
with any amount payable by the Vendor to the Purchaser pursuant to
paragraph 5 of Schedule 3 (in each case, together with interest thereon
calculated at the Interest Rate and on a daily basis in respect of the
period from Completion to the date of actual payment) shall be paid by the
Vendor to the Purchaser (by electronic transfer for receipt in, free of
all costs, deductions and charges, to such account as the Purchaser shall
nominate for this purpose) within 5 Business Days of the determination of
the final form of the Completion Account Documents in accordance with
clause 6.
4.6 Without prejudice to sub-clauses 4.3 to 4.5 (inclusive) and sub-clauses
4.11 to 4.14 (inclusive), the consideration payable for the sale of the
Shares and Assets by the Vendor (or a member of its Group) to the Purchaser
(or a member of its Group) shall, so far as lawful, be deemed to be reduced
by an amount equal to the aggregate amount (if any) paid by the Vendor to
the Purchaser as a consequence of any Relevant Claim or any claim under the
Tax Deed (and any such reduction in consideration shall either be
attributed to those Shares and Assets to which any such Relevant Claim or
claim under the Tax Deed relates or as the Parties may otherwise agree).
4.7 The Purchase Price shall be apportioned between the Shares and Assets (and
attributable to the Subsidiary) in accordance with the valuations set out
in Schedule 1, save that in the event of any adjustment of the Purchase
Price in accordance with sub-clause 4.4, sub-clause 4.5 and sub-clauses
4.11 to 4.14 (inclusive) the Parties shall agree such consequential
adjustments as shall be required to those valuations as are consistent
therewith (or, failing any such agreement, either Party shall be entitled
to refer the matter to be resolved by the Expert, in which event the
provisions of sub-clauses 6.7 and 6.8 shall apply).
4.8 Not later than 5 Business Days prior to the date fixed for Completion, the
Vendor shall notify the Purchaser in writing of its estimate (acting
reasonably, together with such evidence as it may have in support of its
calculation) of the Debt and of the Cash, other than to the extent that
they relate to Armstrong China or Armstrong Poland, (the "Estimate").
4.9 The payment to be made by the Purchaser to the Vendor at Completion
pursuant to sub-clause 4.2.1 shall be:-
4.9.1 reduced by an amount equal to the estimate of the Debt, other than to
the extent that they relate to Armstrong China or Armstrong Poland,
set out in the Estimate; and
4.9.2 increased by an amount, not exceeding 100,000, equal to the
estimate of ▇▇▇▇, other than to the extent that they relate to
Armstrong China or Armstrong Poland, set out in the Estimate.
4.10 The relevant portion of the Purchase Price allocated to Armstrong USA,
Armstrong UK, Armstrong Australia, Armstrong Hong Kong, ▇▇▇▇▇▇▇▇▇ Germany,
Armstrong Europa and any other entities that are disregarded as separate
from their owner for US Federal income tax purposes (together the
"Disregarded Entities") and to those of the Assets situated in the United
States of America, as determined in accordance with sub-clause 4.7, shall
be allocated to Armstrong USA, the Disregarded Entities and those Assets in
accordance with Section 1060 of the US Internal Revenue Code, provided that
if the Vendor and Purchaser are unable to agree to a final allocation
pursuant to this sub-clause 4.10 on or prior to Completion (or such later
date as the Parties may agree), such final allocation shall be prepared by
the Purchaser based on an appraisal conducted by an independent appraiser
chosen by the Purchaser. Each of the Parties shall report the federal,
state and local and other tax consequences of the purchase and sale of
Armstrong USA, the Disregarded Entities and those Assets (including the
filing of Internal Revenue Service Form 8594) in a manner consistent with
sub-clause 4.7 and this sub-clause 4.10. Each of the Parties shall not take
(and shall procure that no members of its Group takes) a position (except
as required pursuant to any order) on any tax return, before any
governmental agency charged with the collection of any tax, or in any
judicial proceeding, that is in any way inconsistent with the allocations
determined in accordance with sub-clause 4.7 and this sub-clause 4.10.
4.11 In the event that the completion of the sale and purchase of the Armstrong
China Shares shall take place prior to the determination of the final form
of the Completion Account Documents in accordance with clause 6, not later
than 5 Business Days prior to completion of the sale and purchase of the
Armstrong China Shares the Vendor shall notify the Purchaser in writing of
its estimate (acting reasonably, together with such evidence as it may have
in support of its calculation) of the Debt and of the Cash in so far as
they relate to Armstrong China (the "China Estimate") and the principal
amount of the payment to be made by the Purchaser to the Vendor at
completion of the sale and purchase of the Armstrong China Shares in
accordance with sub-clause 5.6 shall be:
4.11.1 reduced by an amount equal to the estimate of the Debt (in so far as
it relates to Armstrong China) set out in the China Estimate; and
4.11.2 increased by an amount equal to the estimate of ▇▇▇▇ (in so far as
it relates to Armstrong China) set out in the China Estimate.
Thereafter, following the determination of the final form of the Completion
Account Documents in accordance with clause 6, the consideration for the
Armstrong China Shares shall be:
4.11.3 reduced by an amount (if any) by which the actual Debt (in so far as
it relates to Armstrong China) as stated in the Statement shall
exceed the amount of such Debt set out in the China Estimate or by
which the actual Cash (in so far as it relates to Armstrong China)
as stated in the Statement shall be less than the amount of such
Cash set out in the China Estimate; and
4.11.4 increased by an amount (if any) by which the actual Debt (in so far
as it relates to Armstrong China) as stated in the Statement shall
be less than the amount of such Debt set out in the China Estimate
or by which the actual Cash (in so far
as it relates to Armstrong China) as stated in the Statement shall
exceed the amount of such Cash set out in the China Estimate;
by the payment within 5 Business Days of the determination of the final
form of the Completion Account Documents in accordance with clause 6 (in
the event that the aggregate decrease (if any) under sub-clause 4.11.3
shall be greater than the aggregate increase (if any) under sub-clause
4.11.4) by the Vendor or (in the event that the aggregate decrease (if any)
under sub-clause 4.11.3 shall be less than the aggregate increase (if any)
under sub-clause 4.11.4) by the Purchaser of an amount in cash and equal to
the difference between the aggregate decrease (if any) under sub-clause
4.11.3 and the aggregate increase (if any) under sub-clause 4.11.4 (in
either case, together with interest thereon calculated at the Interest Rate
and on a daily basis in respect of the period from Completion to the date
of actual payment).
4.12 In the event that the completion of the sale and purchase of the Armstrong
China Shares shall take place after the determination of the final form of
the Completion Account Documents in accordance with clause 6, the principal
amount of the payment to be made by the Purchaser to the Vendor at
completion of the sale and purchase of the Armstrong China Shares in
accordance with sub-clause 5.6 shall be:
4.12.1 reduced by an amount equal to the actual Debt (in so far as it
relates to Armstrong China) as stated in the Statement; and
4.12.2 increased by an amount equal to the actual Cash (in so far as it
relates to Armstrong China) as stated in the Statement.
4.13 In the event that the completion of the sale and purchase of the Armstrong
Poland Shares shall take place prior to the determination of the final form
of the Completion Account Documents in accordance with clause 6, not later
than 5 Business Days prior to completion of the sale and purchase of the
Armstrong Poland Shares the Vendor shall notify the Purchaser in writing of
its estimate (acting reasonably, together with such evidence as it may have
in support of its calculation) of the Debt and of the Cash in so far as
they relate to Armstrong Poland (the "Poland Estimate") and the principal
amount of the payment to be made by the Purchaser to the Vendor at
completion of the sale and purchase of the Armstrong Poland Shares in
accordance with sub-clause 5.6 shall be:
4.13.1 reduced by an amount equal to the estimate of the Debt (in so far as
it relates to Armstrong Poland) set out in the Poland Estimate; and
4.13.2 increased, subject to sub-clause 4.15.1, by an amount equal to the
estimate of ▇▇▇▇ (in so far as it relates to Armstrong Poland) set
out in the Poland Estimate.
Thereafter, following the determination of the final form of the Completion
Account Documents in accordance with clause 6, the consideration for the
Armstrong Poland Shares shall be:
4.13.3 reduced by an amount (if any) by which the actual Debt (in so far as
it relates to Armstrong Poland) as stated in the Statement shall
exceed the amount of such Debt set out in the Poland Estimate or by
which the actual Cash (in so far
as it relates to Armstrong Poland) as stated in the Statement shall
be less than the amount of such Cash set out in the Poland Estimate;
and
4.13.4 increased by an amount (if any) by which the actual Debt (in so far
as it relates to Armstrong Poland) as stated in the Statement shall
be less than the amount of such Debt set out in the Poland Estimate
or by which the actual Cash (in so far as it relates to Armstrong
Poland) as stated in the Statement shall exceed the amount of such
Cash set out in the Poland Estimate;
by the payment within 5 Business Days of the determination of the final
form of the Completion Account Documents in accordance with clause 6 (in
the event that the aggregate decrease (if any) under sub-clause 4.13.1
shall be greater than the aggregate increase (if any) under sub-clause
4.13.2) by the Vendor or (in the event that the aggregate decrease (if any)
under sub-clause 4.13.1 shall be less than the aggregate increase (if any)
under sub-clause 4.13.2) by the Purchaser, subject to sub-clause 4.15.3, of
an amount in cash and equal to the difference between the aggregate
decrease (if any) under sub-clause 4.13.1 and the aggregate increase (if
any) under sub-clause 4.13.2 (in either case, together with interest
thereon calculated at the Interest Rate and on a daily basis in respect of
the period from Completion to the date of actual payment).
4.14 In the event that the completion of the sale and purchase of the Armstrong
Poland Shares shall take place after the determination of the final form of
the Completion Account Documents in accordance with clause 6, the principal
amount of the payment to be made by the Purchaser to the Vendor at
completion of the sale and purchase of the Armstrong Poland Shares in
accordance with sub-clause 5.6 shall be:
4.14.1 reduced by an amount equal to the actual Debt (in so far as it
relates to Armstrong Poland) as stated in the Statement; and
4.14.2 increased, subject to sub-clauses 4.16.1 and 4.16.2, by an amount
equal to the actual Cash (in so far as it relates to Armstrong
Poland) as stated in the Statement.
4.15 In the event that the completion of the sale and purchase of the Armstrong
Poland Shares shall take place prior to the determination of the final form
of the Completion Account Documents in accordance with clause 6, for the
purposes of sub-clause 4.13:
4.15.1 in the event that the estimate of the Cash (in so far as it relates
to Armstrong Poland) as stated in the Poland Estimate shall exceed
100,000 less X (where X equals the estimate of the Cash (other
than in so far as it relates to Armstrong China or Armstrong Poland)
as stated in the Estimate), (any such excess being "Excess Polish
Estimated Cash") the Purchaser shall be entitled to ignore any such
Excess Polish Estimated Cash for the purposes of the estimate of the
Cash in sub-clause 4.13.2;
4.15.2 in the event that thereafter the actual Cash (in so far as it
relates to Armstrong Poland) as stated in the Statement shall exceed
100,000 less Y (where Y equals the actual Cash (other than in so
far as it relates to Armstrong China or Armstrong Poland) as stated
in the Statement), (any such excess being "Excess
Polish Cash") the Purchaser shall be entitled to delay payment of an
amount equal to such Excess Polish Cash from any payment required in
accordance with sub-clause 4.13 following the determination of the
final form of the Completion Account Documents in accordance with
clause 6 until the first anniversary of the determination of the
final form of the Completion Account Documents in accordance with
clause 6; and
4.15.3 in the event that the net effect of all of the adjustments required
by sub-clauses 4.13.2, 4.13.3 and 4.13.4 (in so far as they relate
to Cash) would otherwise require an increase in the payments to be
made by the Purchaser to the Vendor for the sale and purchase of the
Armstrong Poland Shares of more than 10,000,000 less Y (where Y
is an amount equal to the net effect of the adjustments in
paragraphs 3.1.1 and 3.2 of Schedule 7) (such amount being the
"Polish Maximum"), the increase shall be limited to the Polish
Maximum.
4.16 In the event that the completion of the sale and purchase of the Armstrong
Poland Shares shall take place after the determination of the final form of
the Completion Account Documents in accordance with clause 6, for the
purposes of sub-clause 4.14:
4.16.1 in the event that the actual Cash (in so far as it relates to
Armstrong Poland) as stated in the Statement shall exceed 100,000
less X (where X equals the actual Cash (other than in so far as it
relates to Armstrong China or Armstrong Poland) as stated in the
Statement), (any such excess being "Excess Polish Cash") the
Purchaser shall be entitled to delay payment of an amount equal to
such Excess Polish Cash from any payment required in accordance with
sub-clause 5.6 until the first anniversary of the determination of
the final form of the Completion Account Documents in accordance
with clause 6; and
4.16.2 in the event that the adjustment required by sub-clause 4.14.2 would
otherwise require an increase in the payment to be made by the
Purchaser to the Vendor at completion of the sale and purchase of
the Armstrong Poland Shares in accordance with sub-clause 5.6 of
more than 10,000,000 less Y (where Y is an amount equal to the
net effect of the adjustments in paragraphs 3.1.1 and 3.2 of
Schedule 7) (such amount being the "Polish Maximum"), the increase
shall be limited to the Polish Maximum.
4.17 For the purposes of sub-clauses 4.15 and 4.16, whenever any amount shall be
required to be calculated by the subtraction of one number from another
number, if any such equation shall produce a negative amount the relevant
figure shall be deemed to be zero.
5. COMPLETION
5.1 Save in the event of a failure to satisfy, or otherwise a breach of, either
of the Conditions Precedent at sub-clauses 2.1.3 and 2.1.4 (which failure
or breach is not waived in accordance with sub-clause 2.4), Completion
shall take place at the offices of the Purchaser's Solicitors or, in
relation to the sale and purchase of Shares in each Company other than
Armstrong UK, at such offices as the Parties shall agree on the last
Business Day of the calendar month following the later of:
5.1.1 the date on which the Condition Precedent at sub-clause 2.1.1 is
satisfied; and
5.1.2 the date on which the Condition Precedent at sub-clause 2.1.2 is
satisfied;
(or, if such date shall be less than 5 Business Days after the later of the
date referred to in sub-clause 5.1.1 and the date referred to in sub-clause
5.1.2, the last Business Day of the next calendar month), or at such other
place or time as the Parties may agree.
5.2 At Completion:
5.2.1 each of the Parties shall execute the Services Agreements, the
Assignments, the Armstrong Name Licence and the Tax Deed;
5.2.2 (subject to sub-clauses 5.4 to 5.6) the Vendor shall deliver the
documents and ensure the performance of the matters set out in
Schedule 5 in relation to each Insulation Business Undertaking and
Asset and shall deliver the documents referred to in sub-clauses
7.3.4 to 7.3.11 (inclusive);
5.2.3 (to the extent not already done) the Parties shall each execute (and
the Purchaser shall use its reasonable endeavours to procure that
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding Inc shall execute) the Inter Creditor
Deed;
5.2.4 the Purchaser and the Vendor shall each provide written confirmation
to the other that (so far as it is aware) the Condition Precedent at
sub-clause 2.1.4 has been satisfied (or waived);
5.2.5 the Vendor shall pay or, as the case may be, repay (or procure that
the relevant member or members of its Group shall pay or, as the
case may be, repay) all amounts owed by the Vendor's Group to any
Insulation Business Undertaking as at Completion (including any
amounts outstanding as at Completion, comprised in the line items
"Due from affiliated companies non-current portion" (as set out in
Schedule 11)), other than amounts arising from the sale and purchase
of goods or services in the ordinary course of business, being the
line item "Intercompany receivables" (as set out in Schedule 11);
5.2.6 the Vendor shall release (and shall procure that the relevant member
or members of its Group shall release) each Insulation Business
Undertaking, and their respective officers and employees, from any
liability whatsoever (actual or contingent) which may be owing to
the Vendor's Group by any Insulation Business Undertaking, except to
the extent:
(A) comprised within Debt;
(B) arising from the sale and purchase of goods or services in the
ordinary course of business; or
(C) provided in sub-clause 10.2 in relation to any liability of any
director or employee of an Insulation Business Undertaking for
fraud or fraudulent or wilful misrepresentation or wilful non-
disclosure.
5.2.7 the Purchaser shall convene a meeting of its board of directors at
which those directors shall approve and execute the Loan Note
Instruments and allot the
Loan Notes, enter the name of the Vendor in each register of
noteholders referred to in the Loan Note Instruments and issue loan
note certificates to the Vendor in respect of the Series A Loan
Notes and the Series B Loan Notes referred to in sub-clause 4.2;
5.2.8 (subject to sub-clauses 4.2.4, 4.2.5 and 4.9) the Purchaser shall
pay 217,704,000 and US$ 36,898,000 (by electronic transfer for
receipt in and US$ respectively, free of all costs, deductions and
charges, to such account(s) as the Vendor shall nominate for this
purpose); and
5.2.9 the Parties shall request ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding Inc to
confirm the rate for EURIBOR.
5.3 Without prejudice to sub-clause 5.2 (but subject to sub-clauses 5.4 to
5.6), where necessary for the purposes of the matters set out in Schedule
5, at Completion the Vendor shall procure that a meeting shall be held of
the officers or members (as necessary) of each Insulation Business
Undertaking to perform or approve the matters set out in Schedule 5 in
relation to that Insulation Business Undertaking.
5.4 Subject to sub-clause 5.6, in the event that the Chinese Condition
Subsequent has not been satisfied by Completion, the sale and purchase of
the Armstrong China Shares shall not take place at Completion (but in any
such case the matters set out in Schedule 5 under the heading "China (1)"
in relation to Armstrong China shall still take place on Completion,
whereas completion of the sale and purchase of the Armstrong China Shares
(and the matters set out in Schedule 5 under the heading "China (2)" in
relation to Armstrong China) shall take place on the 5th Business Day
following the satisfaction of the Chinese Condition Subsequent).
5.5 Subject to sub-clause 5.6, in the event that the Polish Condition
Subsequent has not been satisfied by Completion, the sale and purchase of
the Armstrong Poland Shares shall not take place at Completion and in so
far as they relate to Armstrong Poland (or the Armstrong Poland Shares) the
matters provided for in sub-clauses 5.2 and 5.3 and Schedule 5 shall not
take place at Completion (but in any such case completion of the sale and
purchase of the Armstrong Poland Shares, and the matters relating thereto
in sub-clauses 5.2 and 5.3 and in Schedule 5 shall take place on the 5th
Business Day following the satisfaction of the Polish Condition
Subsequent).
5.6 In the event that the sale and purchase of the Armstrong China Shares or
the Armstrong Poland Shares shall not take place at Completion the amount
of the Purchase Price attributed to the Armstrong China Shares or the
Armstrong Poland Shares (as the case may be) in Schedule 1 shall be
retained by the Purchaser until the completion of the sale and purchase of
the Armstrong China Shares or the Armstrong Poland Shares (as the case may
be) by the retention of the relevant amount of [x] from cash otherwise due
to be paid at Completion (and specified in sub-clauses 4.2.4 or 4.2.5, as
the case may be) provided that in the event of the subsequent completion of
the sale and purchase of the Armstrong China Shares or the Armstrong Poland
Shares (as the case may be) any cash that has been retained in respect of
those shares (as adjusted in accordance with sub-clauses 4.11 to 4.14
(inclusive)) shall be paid to the Vendor (in each case, together with
interest thereon calculated at the Interest Rate and
on a daily basis in respect of the period from Completion to the date of
actual payment).
6. completion accounts
6.1 The Purchaser and the Vendor shall use all reasonable endeavours to procure
that promptly after Completion, each Insulation Business Undertaking shall
prepare draft Completion Accounts for that Insulation Business Undertaking,
in accordance with the procedures set out in Schedules 7 and 11 and
otherwise on the basis of the Accounting Policies, as soon as practical
(and in any event within 90 days) after Completion.
6.2 The Purchaser shall procure that draft Group Completion Accounts shall be
prepared and shall be delivered to the Vendor and the Vendor's Accountants,
together with:
6.2.1 the draft Completion Accounts referred to in sub-clause 6.1; and
6.2.2 a statement (the "Statement") setting out:
(A) the Completion Group Net Assets;
(B) the Debt (other than in so far as it relates to Armstrong China
or Armstrong Poland), the Debt (in so far as it relates to
Armstrong China) and the Debt (in so far as it relates to
Armstrong Poland); and
(C) the Cash (other than in so far as it relates to Armstrong China
or Armstrong Poland), the Cash (in so far as it relates to
Armstrong China) and the Cash (in so far as it relates to
Armstrong Poland);
in each case, as derived from the Group Completion Accounts
6.2.3 a completed tax package in the Vendor's customary form (as supplied
to the Purchaser by the Vendor on or before the date of this
Agreement);
(together all such draft documents being the "Completion Account
Documents") within 14 days after the preparation of the draft Completion
Accounts referred to in sub-clause 6.1.
6.3 The Parties shall use all reasonable endeavours to procure that each Party
(and the Purchaser's Accountants and the Vendor's Accountants) shall each
be given all reasonable assistance (and access to documents, information
and working papers) by each person, Insulation Business Undertaking, the
Purchaser's Accountants and the Vendor's Accountants as it may reasonably
require in order to prepare, review and agree the Completion Account
Documents.
6.4 The Vendor shall notify the Purchaser (within 60 days of receipt by the
Vendor and the Vendor's Accountants of the Completion Account Documents)
whether it agrees with the Completion Account Documents and, if it does
not, such notification shall give reasonable details of any aspects of
those draft documents with which it disagrees and the adjustments which, in
the Vendor's opinion, should be made (the "Vendor's Notice" and "Disputed
Details" respectively). If the Vendor is satisfied with the Completion
Account Documents, either as originally submitted or after adjustments
agreed between the Vendor and the Purchaser, (or if the Vendor fails to
notify the Purchaser of any Disputed Details within the 30 day period
referred to in this sub-clause 6.4) then those draft documents shall
comprise the final form Completion Accounts, Group Completion Accounts and
the Statement for the purposes of this Agreement and the Completion Group
Net Assets, Debt and Cash shall be as set out therein.
6.5 In the event that the Vendor's Notice shall give details of any Disputed
Details, the Parties shall (where necessary in conjunction with the
Purchaser's Accountants and the Vendor's Accountants) meet and discuss the
Disputed Details in order to seek to reach agreement upon such adjustments
(if any) to the Completion Account Documents as are acceptable to the
Vendor and the Purchaser in order to put such draft documents in final
form.
6.6 If the Purchaser and the Vendor are unable to resolve all matters in
dispute, in the manner anticipated by sub-clause 6.5, within 30 days
following the delivery of the Vendor's Notice to the Purchaser, the matters
in dispute (but only those) shall be referred on the application of either
the Vendor or the Purchaser to the Expert for resolution by the Expert
stating what adjustments (if any) are necessary to the Completion Account
Documents in order to put such draft documents in final form.
6.7 In giving any decision anticipated by this Agreement:
6.7.1 the Purchaser (or the Purchaser's Accountants) and the Vendor (or
the Vendor's Accountants) shall each promptly prepare a written
statement on the matters in dispute which (together with any
relevant documents) shall be submitted to the Expert;
6.7.2 the Purchaser and the Vendor shall use all reasonable endeavours to
procure that the Expert is given such reasonable assistance and such
access to documents and other information as it may reasonably
require in order to give its decision;
6.7.3 the Expert shall be requested to give its decision, with reasons
therefor, within 30 days of receiving notice from either Party of
its appointment;
6.7.4 (save in the case of manifest error) the decision by the Expert
shall be final and binding on all concerned and shall be given by
the Expert acting as an expert and not as an arbitrator;
6.7.5 the Expert shall be entitled to take into account such evidence and
information as the Parties shall have put forward or the Expert
shall consider appropriate.
6.8 Any costs incurred by the Expert pursuant to the provisions of this
Agreement shall be borne by the Vendor and the Purchaser in such
proportions as the Expert shall determine in its absolute discretion (or,
in the absence of any such determination, by the Vendor and the Purchaser
in equal amounts).
6.9 The costs of the Purchaser's Accountants (and other advisers appointed by
the Purchaser) incurred pursuant to the provisions of this clause 6 shall
be borne by the Purchaser, whereas the costs of the Vendor's Accountants
(and other advisers
appointed by the Vendor) incurred pursuant to the provisions of this clause
6 shall be borne by the Vendor.
7. PRE COMPLETION UNDERTAKINGS
7.1 From the date hereof to Completion, the Vendor shall:
7.1.1 (subject to the matters requiring consent in accordance with sub-
clause 7.1.4) cause each Insulation Business Undertaking to continue
to carry on business in the normal course and in substantially the
same manner that such business has been carried on during the 12
months immediately prior to the date hereof so as to maintain its
business as a going concern;
7.1.2 procure that each Insulation Business Undertaking shall take all
reasonable steps to preserve and protect its business and assets
(including its goodwill and reputation);
7.1.3 procure that the Purchaser and its advisers (and any other person
reasonably authorised by the Purchaser for the purposes of this
Agreement and the matters anticipated by it, but excluding for the
avoidance of doubt anyone involved in any business that may compete
with the Insulation Business) are given (on request) such facilities
and access, at such times as the Purchaser may reasonably require,
to the Properties, Senior Management, books, records and information
regarding the business, assets, liabilities and affairs of each
Insulation Business Undertaking, in each case as the Purchaser may
reasonably require;
7.1.4 procure that without the prior consent of the Purchaser (in the case
of sub-clause (E), such consent not to be unreasonably withheld or
delayed or made the subject of any unreasonable conditions), no
Insulation Business Undertaking shall:
(A) create, extend, grant or issue any Encumbrance (in each case,
other than arising by operation of law, including any lien or
reservation of title arising in the ordinary course of its
business as carried on in the 3 months immediately prior to the
date of this Agreement);
(B) give or enter into any guarantee, indemnity or security in
respect of any liabilities of any third party (in each case,
other than in the ordinary course of the Insulation Business as
carried on by that Insulation Business Undertaking in the 3
months immediately prior to the date of this Agreement);
(C) create, allot, issue, acquire, reduce, repay or redeem any
shares or securities convertible into shares or grant any
option in respect of any shares or securities convertible into
shares or acquire an interest in an undertaking (in each case,
other than as specifically contemplated in or specifically
required as part of the matters set out in, Schedule 6);
(D) pass any resolution by its members in general meeting or make
any alteration to its memorandum or articles of association or,
in relation to
any Insulation Business Undertaking incorporated outside the
United Kingdom, similar constitutional document (in each case,
other than as specifically contemplated in or specifically
required as part of the matters set out in, Schedule 6);
(E) pay any creditors otherwise than in the ordinary course of its
business as carried on in the 3 months immediately prior to the
date of this Agreement (or make any material change to its
policy in relation to the payment of creditors);
(F) enter into, materially amend or terminate any material contract
(including any contract with a Substantial Customer or a
Substantial Supplier or otherwise falling within the Warranty
at paragraph 5.1 of part 1 of Schedule 2) otherwise than in the
ordinary course of its business as carried on in the 3 months
immediately prior to the date of this Agreement;
(G) enter into any material contract (including any contract with a
Substantial Customer or a Substantial Supplier or otherwise
falling within the Warranty at paragraph 5.1 of part 1 of
Schedule 2) other than on an arm's length basis and for its own
benefit (in each case, other than as specifically contemplated
in or specifically required as part of the matters set out in
Schedule 6);
(H) sell or transfer or otherwise dispose of any interest in any
shares or other securities of any undertaking or any business
or asset (in each case, other than in the ordinary course of
the Insulation Business as carried on by that Insulation
Business Undertaking in the 3 months immediately prior to the
date of this Agreement or as specifically contemplated in or
specifically required as part of the matters set out in
Schedule 6);
(I) purchase or otherwise acquire any interest in any shares or
other securities of any undertaking or any business or asset
(in each case, other than in the ordinary course of the
Insulation Business as carried on by that Insulation Business
Undertaking in the 3 months immediately prior to the date of
this Agreement or as specifically contemplated in or
specifically required as part of the matters set out in
Schedule 6);
(J) incur any liability or obligation to pay any material
management or consultancy charges after Completion (in each
case, other than in the ordinary course of the Insulation
Business as carried on by that Insulation Business Undertaking
in the 3 months immediately prior to the date of this
Agreement);
(K) enter into any joint venture, consortium or partnership
agreement;
(L) enter into any material arrangement for selling or discounting
receivables or otherwise factor any of its debts;
(M) disclose to any third party any know-how, secrets, confidential
information, lists of customers or suppliers (in each case,
other than in the ordinary course of the Insulation Business as
carried on by that Insulation Business Undertaking in the 3
months immediately prior to the date of this Agreement);
(N) commence, settle, release, discharge or compound any
litigation, arbitration, prosecution or other legal proceedings
(in each case, other than in relation to the recovery of debts
in the ordinary course of the Insulation Business as carried on
by that Insulation Business Undertaking in the 3 months
immediately prior to the date of this Agreement of less than
200,000);
(O) fail to pay any premium falling due for payment by that
Insulation Business Undertaking under any policy of insurance
or do or omit to do anything which renders any of those
policies void or voidable or which the Vendor is (or ought
reasonably to be) aware will prejudice the ability of that
Insulation Business Undertaking to effect equivalent insurance
on renewal at (or during the 3 month period after) Completion;
(P) remove its current auditors;
(Q) make or enter into any agreement to make any capital
expenditure exceeding in total 200,000;
(R) declare, pay or make a dividend or distribution (other than as
specifically contemplated in or as specifically required as
part of the matters set out in Schedule 6);
(S) in relation to each of the Properties:
(1) change its existing use;
(2) terminate, or give a notice to terminate, a lease, tenancy
or licence;
(3) (other than as specifically contemplated in or as
specifically required as part of the matters set out in,
Schedule 6) apply for consent to do something requiring
consent under a lease, tenancy or licence;
(4) approve an application by a tenant, licensee or occupier
to do something requiring its consent under a lease,
tenancy or licence;
(5) agree a new rent or fee payable under a material lease,
tenancy or licence;
(T) either:
(1) amend the terms of employment or engagement of a director
or other officer of an Insulation Business Undertaking
(except in the usual course of the Insulation Business as
carried on by that Insulation Business Undertaking in the
3 months immediately prior to the date of this Agreement);
or
(2) employ, engage, or terminate the employment or engagement
of any director or officer; or
(3) provide, or agree to provide, an ex gratia payment or
benefit to a director or officer of an Insulation Business
Undertaking; or
(4) amend the terms of employment or engagement of the
Employees generally or with regard to any category or
group of Employees (or make an ex gratia payment to any
such persons);
(U) materially amend the terms of any borrowing or indebtedness in
the nature of borrowing or create, incur, or agree to create or
incur, any borrowing or indebtedness in the nature of borrowing
(in each case, except where any such borrowing or indebtedness
will be repaid prior to Completion);
(V) materially amend or discontinue (wholly or partly) a Disclosed
Scheme or exercise a material discretion in relation to a
Disclosed Scheme (in each case in so far as it relates to any
Employees) unless any relevant legislation or regulatory
requirements so require;
(W) enter into a material agreement or obligation in which the
Vendor (or a member of its Group) or a director of, or person
connected with, any of them is interested and under which any
person shall have any material obligations outstanding after
Completion;
(X) incur any material liability under Environmental Law including
by way of breach of Environmental Law or Environmental Consents
and including agreeing with a regulatory authority to a
material amendment, revocation, grant, suspension of an
Environmental Consent;
(Y) enter into any legally binding agreement (or similar
arrangement which cannot be terminated or withdrawn from
without any obligation arising on the part of, or liability or
expense being incurred by, an Insulation Business Undertaking)
to do anything prohibited by this sub-clause 7.1.4.
7.2 From the date hereof to Completion, the Purchaser shall (and shall procure
that each member of its Group shall) not (without the prior consent of the
Vendor):
7.2.1 participate in the management or operation of the business or
affairs of any Company or Subsidiary (save as anticipated by sub-
clause 7.1); or
7.2.2 contact or communicate with any Employee (other than the Senior
Management).
7.3 Without prejudice to any other provision of this clause 7 (and save to the
extent already performed by the date hereof), the Parties undertake to use
reasonable endeavours to procure that, prior to Completion (or, in the case
of sub-clauses 7.3.1, 7.3.2 and 7.3.3 only, 31 December 2000), the
following Insulation Business Undertakings shall enter into the following
agreements or arrangements on terms approved by both Parties (acting
reasonably);
7.3.1 Armstrong Poland shall transfer any salesman employed by it at the
date hereof who is not wholly or mainly engaged in the Insulation
Business to a member of the Vendor's Group (pending which Armstrong
Poland shall continue to employ any such person and to charge a
member of the Vendor's Group for the services of any such person on
bases and practices consistent with those in place at the date
hereof);
7.3.2 a member of the Vendor's Group shall transfer any salesman employed
by it at the date hereof who is wholly or mainly engaged in the
Insulation Business in Canada to such member of the Purchaser's
Group as the Purchaser may nominate (pending which a member of the
Vendor's Group shall continue to employ any such person and to
charge Armstrong USA or such member of the Purchaser's Group as the
Purchaser may nominate for the services of any such person on bases
and practices consistent with those in place at the date hereof);
7.3.3 a member of the Vendor's Group shall transfer any salesman employed
by it at the date hereof who is wholly or mainly engaged in the
Insulation Business in India to such member of the Purchaser's Group
as the Purchaser may nominate (pending which a member of the
Vendor's Group shall continue to employ any such person and to
charge Armstrong UK or such member of the Purchaser's Group as the
Purchaser may nominate for the services of any such person on bases
and practices consistent with those in place at the date hereof);
7.3.4 Armstrong USA shall accept the transfer of the benefit and burden of
any manufacturing agreement in force at the date hereof between AWI
and Nomaco Inc;
7.3.5 ▇▇▇▇▇▇▇▇▇ Germany shall accept the transfer of the benefit and
burden of any manufacturing agreement in force at the date hereof
between Armstrong Benelux and NMC SA;
7.3.6 Armstrong USA shall enter into an agreement with ▇▇ ▇▇▇▇▇ Inc. for
the sale and purchase of glue used by Armstrong USA in the
manufacture of products in the Insulation Business;
7.3.7 ▇▇▇▇▇▇▇▇▇ Germany shall accept the transfer of the benefit and
burden of a consultancy agreement dated 10 September 1992 in force
on the date hereof between Armstrong Europe Services and ▇▇▇▇▇
▇▇▇▇▇▇▇▇ in the agreed terms;
7.3.8 Armstrong USA shall enter into and AWI will enter into the Storage
Agreement in the form attached at Schedule 4 of the facilities at
Marietta, Pennsylvania as soon as reasonably practicable;
7.3.9 (as soon as reasonably practical) Armstrong UK shall enter into and
AWI will grant a sub-lease of the facilities at Uxbridge, Middlesex
in accordance with the terms referred to in Schedule 4 and such
other terms as may be agreed between the Parties (acting
reasonably);
7.3.10 (as soon as reasonably practical) Armstrong Australia shall enter
into and AWI will grant a lease of the facilities at Braeside,
Victoria and a lease of the facilities at Thomastown, Victoria, in
each case in the agreed terms and in the form attached in Schedule
4;
7.3.11 Armstrong USA shall be granted a license by ▇▇ ▇▇▇▇▇ Inc to use the
Taggant patent in relation to the Insulation Business in the agreed
terms;
and that any consents, approvals or permissions that are necessary or
desirable for either Party or an Insulation Business Undertaking in
relation to any such agreement are obtained prior to Completion.
7.4
7.4.1 The Parties undertake to use reasonable endeavours to procure after
Completion (if not done before) that the leases and other agreements
referred to in sub-clauses 7.3.8, 7.3.9 and 7.3.10 are entered into
and that any necessary consents, approvals or permissions in
relation to the same.
7.4.2 In relation to the sub-lease to be entered into pursuant to
sub-clause 7.3.9:
(A) the Vendor shall forthwith apply for and use reasonable
endeavours to procure the grant of the reversioner's consent to
the grant of the sub- lease provided that the Vendor shall not
by reason of this obligation be obliged to institute or threaten
proceedings for a declaration that the reversioner's consent is
being unreasonably withheld nor shall the Vendor be required to
comply with any requirement or condition imposed by the
reversioner unless it is reasonable for the Vendor to do so; and
(B) the Purchaser shall supply all information reasonably required
by the reversioner in connection with the application for
consent and to comply with all proper requirements which the
reversioner may be entitled to impose on any underlessee as a
condition of the grant of consent to sub-let.
7.4.3 The Vendor shall obtain and place on deposit at HM Land Registry the
charge certificate relating to the land comprised in title number LA
135318 or shall procure that the chargee shall place on deposit the
charge certificate and shall give the deposit number to the Purchaser
as soon as received and provide such information as may be requested
and respond to such requisitions as may be raised by HM Land Registry
in connection with the registration of the transfer
of the land comprising title number LA 135318 from ▇▇▇▇▇▇▇▇▇ World
Industries Limited to ▇▇▇▇▇▇▇▇▇ UK.
7.5 Disputes
7.5.1 If any dispute or difference shall arise between the Parties as to
the terms and/or provisions of the leases referred to in sub-clauses
7.3.8 to 7.3.10 or as to any matter arising out of or in connection
with the same such dispute or difference shall if any Party so
requires at any time by notice served on the other Party (the
"Determination Notice") be referred to and determined by an
independent person (the "Independent Person") who shall have been
qualified in respect of the general subject matter of the dispute or
difference in the relevant jurisdiction for not less than ten years
and who shall be a specialist in relation to such subject matter.
7.5.2 The Independent Person shall be appointed by agreement between the
Parties or (if within ten 10) Working Days after service of the
Determination Notice the Parties have been unable to agree) on the
application of either of the Parties by such one of the following
persons as the Parties shall agree to be appropriate having regard to
the nature of the dispute or difference in question
(A) the Chairman for the time being of the Bar Council;
(B) the President for the time being of the Royal Institute of
British Architects;
(C) the President for the time being of the Royal Institution of
Chartered Surveyors;
(D) the President for the time being of the Institute of Chartered
Arbitrators;
(E) the President for the time being of the Institute of Chartered
Accountants in England and Wales;
(F) the Present for the time being of the Law Society
or (in each such case) the duly appointed deputy of such President or
any other person authorised by him to make appointments on his behalf
or (in relation to any jurisdiction outside the United Kingdom) the
equivalent in such jurisdiction.
7.5.3 If within fifteen (15) Working Days after service of the
Determination Notice the Parties have been unable to agree which of
the persons referred to in sub-clause 7.5.2 is appropriate to appoint
the Independent Person, then the Independent Person shall be
appointed, on the application of either of the Parties by the
President for the time being of the Law Society or his duly appointed
deputy or any other person authorised by him to make appointments on
his behalf or (in relation to any jurisdiction outside the United
Kingdom) the equivalent in such jurisdiction.
7.5.4 The Independent Person to be appointed under this sub-clause 7.5
shall act as an expert and the following provisions shall have
effect:-
(A) the Independent Person shall act as an expert and not as an
arbitrator and his decision shall be final and binding upon the
bodies hereto;
(B) the Independent Person shall consider (inter alia) any written
representations made on behalf of any Party (if made reasonably
promptly) but shall not be bound hereby;
(C) the Parties shall use all reasonable endeavours to procure that
the Independent Person shall give his decision as speedily as
possible;
(D) the costs of appointing the Independent Person and his costs and
disbursements in connection with his duties under this Agreement
shall be shared between the Parties in such proportions as the
Independent Person shall determine or in the absence of such
determination then equally between the Parties; and
(E) if the Independent Person shall be or become unable or unwilling
to act then the procedure herein before contained for the
appointment of an expert may be repeated as often as necessary
until a decision is obtained.
7.6 In the period prior to Completion and for a period of 1 year after
Completion the Vendor shall use reasonable endeavours to:
7.6.1 assign to the Purchaser (or a member of its Group) the benefit of any
confidentiality agreements which are either referred to in the
Disclosure Letter as being of continuing commercial significance or
relate to the Insulation Business and are the subject of a specific
written request for assignment by the Purchaser to the Vendor prior
to or at any time within 9 months after Completion;
7.6.2 ensure compliance with its obligations in sub-clause 17.4 at
Completion; and
7.6.3 assign to the Purchaser (or a member of its Group) the benefit of the
contract (number 7ONANB2H1260) between "The National Institute of
Scientific and Technical (ATP)" and the Vendor if a material part of
this Agreement relates to the Insulation Business.
7.7
7.7.1 Armstrong USA shall complete and the Vendor shall complete the
general warranty deed in the form attached in Schedule 4 in relation
to the land being lots 416 and 417 2nd District 3rd Section Paulding
County City of Dallas Georgia prior to Completion.
7.7.2 Armstrong USA shall complete and the Vendor shall complete an
assignment of each of the leases relating to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, Mebane and ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
respectively from the Vendor to Armstrong USA prior to Completion in
the form attached at Schedule 4.
7.7.3 The Vendor shall procure that all necessary consents, approvals or
permissions required to enable the transfer and assignment detailed
in sub- clauses 7.7.1 and 7.7.2 to be completed are available prior
to Completion.
7.8 The Purchaser undertakes to the Vendor that at Completion it will establish
a specific facility with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding Inc that will ensure
that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding Inc will provide the Purchaser (subject
to the Purchaser being in compliance with the obligations under the
Facility Agreement) on demand with:
7.8.1 (without the need to satisfy any drawdown criteria) at least
[_]11,296,000 in cash in [_]; and
7.8.2 a bank guarantee for at least [_]2,500,000;
both to be available to the Purchaser solely for the purposes of the
completion of the sale and purchase of the Armstrong China Shares or the
Armstrong Poland Shares (as the case may be).
8. Post completion undertakings
8.1 The Vendor shall procure that any guarantee or indemnity, debenture, charge
or other form of security or Encumbrance that has been provided for its
benefit or the benefit of any member of its Group by an Insulation Business
Undertaking shall be released on Completion (without any cost to the
Purchaser or any member of its Group) and pending (or in the absence of)
any such release the Vendor shall indemnify the Purchaser (and each member
of its Group) against all actions, claims, proceedings, losses, damages,
liabilities, costs and expenses (including fines, penalties, damages,
losses and legal and other professional fees) that the Purchaser (or any
member of its Group) may suffer or incur or which may be made against the
Purchaser (or any member of its Group) in connection with any such
guarantee or indemnity, debenture, charge or other form of security or
Encumbrance.
8.2 The Purchaser shall procure that any guarantee or indemnity, debenture,
charge or other form of security or Encumbrance that has been provided for
the benefit of any Insulation Business Undertaking by the Vendor or any
member of its Group (details of all of which are referred to in the
Disclosure Letter in relation to the Warranty at paragraph 3.4 of part 1 of
Schedule 2) shall be released as soon as practical after Completion
(without any cost to the Vendor or any member of its Group) and pending (or
in the absence of) any such release the Purchaser shall indemnify the
Vendor (and each member of its Group) against all actions, claims,
proceedings, losses, damages, liabilities, costs and expenses (including
fines, penalties, damages, losses and legal and other professional fees)
that the Vendor (or any member of its Group) may suffer or incur or which
may be made against the Vendor (or any member of its Group) in connection
with any such guarantee or indemnity, debenture, charge or other form of
security or encumbrance.
8.3 The Purchaser shall procure that:
8.3.1 as soon as practical (and in any event within 90 or, in the event
that the Purchaser shall not have received reasonable assurance that
it will be entitled to use the "Armacell" name in relation to the
Insulation Business throughout
the EU after Completion, 180 days) after Completion, each and any
Insulation Business Undertaking (other than Armstrong China and
Armstrong Poland) that is registered or incorporated at Completion
using the name "Armstrong" (or any name confusingly similar thereto,
but excluding, for the avoidance of doubt, the names "Armaflex",
"Armacell" or any other of the trade marks listed in Schedule 9)
shall change such registration or incorporation to remove the name
"Armstrong" (and any such confusingly similar name); and
8.3.2 after Completion no member of the Purchaser's Group (including,
without limitation, any Insulation Business Undertaking other than
Armstrong China and Armstrong Poland) shall carry on any business or
affairs using the name "Armstrong" (or any name confusingly similar
thereto, but excluding for the avoidance of doubt the names
"Armaflex", "Armacell" or any other of the trade marks listed in
Schedule 9), otherwise than in accordance with the Armstrong Name
Licence.
8.4 The Purchaser shall procure that:
8.4.1 as soon as practical (and in any event (in so far as it is able so to
do) within 90 days) after completion of the sale and purchase of the
Armstrong China Shares or the Armstrong Poland Shares (as the case
may be) Armstrong China or Armstrong Poland (as the case may be), if
it is then registered or incorporated using the name "Armstrong" (or
any name confusingly similar thereto, but excluding, for the
avoidance of doubt, the names "Armaflex", "Armacell" or any other of
the trade marks listed in Schedule 9), shall change such registration
or incorporation to remove the name "Armstrong" (and any such
confusingly similar name); and
8.4.2 after Completion Armstrong China or Armstrong Poland (as the case may
be) shall not carry on any business or affairs using the name
"Armstrong" (or any name confusingly similar thereto, but excluding
for the avoidance of doubt the names "Armaflex", "Armacell" or any
other of the trade marks listed in Schedule 9), otherwise than in
accordance with the Armstrong Name Licence.
8.5 The Vendor acknowledges that, immediately following Completion (or in the
case of the Armstrong China Shares or the Armstrong Poland Shares, the
completion of the sale and purchase of those shares) and until such time as
each transfer of Shares has been registered in the register of members of
the relevant Company, the Vendor will (and will procure that the relevant
member or members of the Vendor's Group will):-
8.5.1 hold those shares registered in its name on trust for and as nominee
for the Purchaser (or its nominee(s)) (and, if so required by the
Purchaser, will execute, or procure that the relevant member of its
Group executes a declaration of trust (in such form as the Purchaser
may reasonably require) to that effect) and undertakes to hold all
dividends and distributions paid, made or declared after Completion
and exercise all voting rights available in respect of those shares
in accordance with the directions of the Purchaser (or its
nominee(s)) (and the Purchaser undertakes to use its reasonable
endeavours to procure that each transfer of those shares shall be
registered in the register of members of the relevant Company as soon
as reasonably practicable after
Completion (or in the case of Armstrong China Shares or the Armstrong
Poland Shares, the completion of the sale and purchase of those
shares) and if the Vendor (or any such member of its Group) is in
breach of the undertakings contained in this clause 8.5 the Vendor
(on behalf of itself and each relevant member of its Group)
irrevocably authorises the Purchaser to appoint any person or persons
to execute all instruments or proxies (including consents to short
notice) or other documents which the Purchaser may reasonably require
and which may be necessary to enable the Purchaser (or its
nominee(s)) to attend and vote at general meetings of the relevant
Company and to do any thing or things necessary to give effect to the
rights contained in this clause 8.5;
8.5.2 comply, and procure compliance by any relevant member of its Group,
with all reasonable requests of the Purchaser (including requests for
information) in relation to such shares to the extent that it is able
to do so in compliance with applicable laws and regulations;
8.5.3 comply, and procure compliance by any relevant member of its Group,
with requests of the Purchaser in relation to the exercise of
shareholders' rights in respect of the shares which are not
transferred to the Purchaser at Completion;
8.5.4 use, and procure that any relevant member of its Group uses, its
votes in general meeting or, where relevant, the votes of its
representatives at board meetings of the relevant Company (save where
precluded by applicable laws or regulations) to procure that there
shall be appointed or removed as directors of each such Company such
person or persons as may from time to time be nominated by the
Purchaser as its representatives.
8.6
8.6.1 After Completion the Parties shall each use all reasonable endeavours
to procure the satisfaction of the Chinese Condition Subsequent and
the Polish Condition Subsequent by the Final Longstop Date at the
latest.
8.6.2 In the event that either the Chinese Condition Subsequent or the
Polish Condition Subsequent (or both) has not been satisfied by the
Final Longstop Date then the Vendor shall (and shall procure that the
relevant members of its Group shall) use all reasonable endeavours to
find other lawful methods available to it (or its Group), and which
are satisfactory to both the Vendor and the Purchaser (acting
reasonably), whereby full (or substantially full) enjoyment of the
business and assets of Armstrong China or, as the case may be,
Armstrong Poland can be afforded to the Purchaser (and its Group)
including, without limitation, the transfer of the business and
assets of Armstrong China or, as the case may be, Armstrong Poland to
a member of the Purchaser's Group.
8.6.3 If such full (or substantially full) enjoyment of the business and
assets of Armstrong China or, as the case may be, Armstrong Poland
cannot be afforded to the Purchaser (and its Group) within 8 months
after the Final Longstop Date (the "End Date"):
(A) neither Party shall be required to complete the sale and purchase
of the Armstrong China Shares or the Armstrong Poland Shares (as
the case may be) in the event that the Chinese Condition
Subsequent or the Polish Condition Subsequent (as the case may
be) shall not be satisfied by the Final Longstop Date;
(B) the provisions of this Agreement (in so far as they relate to
Armstrong China or, as the case may be, Armstrong Poland) (other
than this sub-clause 8.6, sub-clauses 8.7 and 8.8, clause 13
(Confidential Information), clause 14 (Announcements), clause 15
(Miscellaneous), clause 18 (Costs). clause 19 (Notices) and
clause 20 (Governing Law, Jurisdiction and Service of Process))
shall from such time have no effect;
(C) the Vendor shall pay (or procure that Armstrong China or, as the
case may be, Armstrong Poland pays) to the Purchaser the
Management Fee (in so far as it relates to Armstrong China or
Armstrong Poland, as the case may be);
(D) the net impact of the assets and liabilities of Armstrong China
or, as the case may be, Armstrong Poland on the Completion Group
Net Assets shall be reversed and the appropriate amount paid or
repaid (as the case may be) by the Vendor to the Purchaser or
vice versa; and
(E) neither Party shall have any liability under the provisions of
this Agreement (in so far as they relate to Armstrong China or,
as the case may be, Armstrong Poland) other than in respect of
any breach prior to the End Date of this sub-clause 8.6 or
sub-clause 8.8.
8.7 After Completion, and prior to the completion of the sale and purchase of
the Armstrong China Shares or the Armstrong Poland Shares, Armstrong China
or Armstrong Poland (as the case may be) shall be entitled to a royalty
free, irrevocable, exclusive licence to use the Intellectual Property
Rights the subject of the Assignments in the People's Republic of China or
Poland (as the case may be) and in the event that the completion of the
sale and purchase of the Armstrong China Shares or the Armstrong Poland
Shares shall not take place by the End Date the Parties shall execute such
documentation as may be necessary to assign (absolutely) the Intellectual
Property Rights the subject of the Assignments to the Vendor in so far as
they relate to the People's Republic of China or Poland (as the case may
be).
8.8 In the event that the sale and purchase of the Armstrong China Shares or
the Armstrong Poland Shares (as the case may be) shall not take place at
Completion, then, between Completion and the earlier of:
8.8.1 the End Date; and
8.8.2 completion of the sale and purchase of the Armstrong China Shares or
the Armstrong Poland Shares (as the case may be);
(without prejudice to any other provisions of this sub-clause 8.8) the
provisions of clause 8.5 shall apply (mutatis mutandis) during the period
referred to in this sub-
clause 8.8 (save that the Vendor shall not hold the Armstrong China Shares
or the Armstrong Poland Shares on trust for the Purchaser prior to the
completion of the sale and purchase of those Shares, the Purchaser shall
not be required to execute (or procure the execution of) a declaration of
trust in respect of those Shares and no transfer of those Shares shall be
registered in the register of members of Armstrong China or Armstrong
Poland provided that the Vendor shall not exercise any rights attaching to
the Armstrong China Shares or Armstrong Poland Shares, as the case may be,
other than as expressly contemplated in the proviso at the end of this
sub-clause 8.8) and accordingly the Purchaser shall be responsible for
managing and conducting the business and affairs of Armstrong China and
Armstrong Poland (as the case may be), in which regard it shall be entitled
to a management fee (in each case the "Management Fee") equal to the
profits after tax of Armstrong China and Armstrong Poland (as the case may
be) which arise during the period from Completion to the earlier of the
dates referred to in sub-clauses 8.8.1 and 8.8.2, and
8.8.3 the Purchaser shall indemnify the Vendor (for itself and as trustee
of each member of its Group, Armstrong China and Armstrong Poland)
against all liabilities arising directly from or in connection with
any actions taken by the Purchaser's representatives when acting as
such with respect to Armstrong China or Armstrong Poland (as the case
may be), any failure by any member of the Purchaser's Group properly
to perform its obligations under this clause 8 in relation to
Armstrong China or Armstrong Poland (as the case may be) or any step
taken or action or thing done or omitted to be done by any member of
the Purchaser's Group or its representatives pursuant to such
obligations or at and in accordance with the request or direction of
the Purchaser or its representatives, save (in any such case) in the
event of dishonesty on the part of the Vendor or any member of its
Group and provided that (save in the case of dishonesty) the
liability of the Purchaser under this sub-clause 8.8.3 in relation to
Armstrong China or Armstrong Poland (as the case may be) shall not
exceed the Management Fee in relation to Armstrong China or Armstrong
Poland (as the case may be);
8.8.4 the Vendor shall indemnify the Purchaser (for itself and as trustee
of each member of the Purchaser's Group, including the Insulation
Business Undertakings) against all liabilities arising directly from
or in connection with any actions taken by any the Vendor's
representatives when acting as such with respect to Armstrong China
or Armstrong Poland (as the case may be), any failure by any member
of the Vendor's Group to properly perform its obligations under this
clause 8 in relation to Armstrong China or Armstrong Poland (as the
case may be) or any step taken or action or thing done or omitted to
be done by any member of the Vendor's Group or its representatives
pursuant to such obligations or at and in accordance with the request
or direction of the Vendor or its representatives save (in any such
case) in the event of dishonesty on the part of the Purchaser or any
relevant member of the Purchaser's Group;
8.8.5 subject to sub-clause 8.8.4 (if applicable), no member of the
Vendor's Group shall be liable for any actions or omissions of any
representatives of the Purchaser on behalf of Armstrong China or
Armstrong Poland (as the case
may be) or for any actions or omissions of any employees of any
Insulation Business Undertaking and actions or omissions of such
persons shall not constitute the actions or omissions of any member of
the Vendor's Group;
provided always that during the period referred to in this sub-clause 8.8
the Purchaser shall use its reasonable endeavours to comply with the
undertakings set out in sub-clauses 7.1.1, 7.1.2 and 7.1.3 (as if those
undertakings were undertakings of the Purchaser and continued to apply
during the period from Completion to the earlier of the dates referred to
in sub-clauses 8.8.1 and 8.8.2) and shall use its reasonable endeavours to
procure that (save as expressly provided in this sub-clause 8.8) Armstrong
China and Armstrong Poland (as the case may be) shall not allow any of the
matters referred to in sub-clauses 7.1.4 (C), (D), (G), (H), (I), (J), (K),
(M), (N), (P), (Q), (R), (S) and (Y) to occur or be carried out in relation
to Armstrong China or Armstrong Poland (as the case may be) without the
prior consent of the Vendor (not to be unreasonably withheld or delayed or
made the subject of any unreasonable conditions).
8.9 In the event that the sale and purchase of the Armstrong China Shares or
the Armstrong Poland Shares (as the case may be) shall not take place at
Completion, the Vendor and the Purchaser shall ensure that no dividends or
other distributions shall be paid or declared (and that no other payment is
made or liability or obligation incurred to the Vendor or any member of its
Group, other than pursuant to a Services Agreement) by Armstrong China or
Armstrong Poland (as the case may be) during the period referred to in
sub-clause 8.8.
8.10 The Vendor shall indemnify and keep the Purchaser and each other member of
the Purchaser's Group (including the Insulation Business Undertakings)
indemnified fully from and against all actions, claims, proceedings,
losses, damages, liabilities, costs and expenses (including fines,
penalties, damages, losses, clean-up costs, costs in respect of remediation
or restoration works and relocation costs and legal and other professional
fees) suffered or incurred by the Purchaser or any member of its Group
which arise after Completion as a consequence of or out of:
8.10.1 any Asbestos Claim;
8.10.2 as a direct or indirect result of any Release of Hazardous
Substances whether or not by the Vendor (or any member of its
Group), the Insulation Business Undertakings or any third party
into, at or from any property owned, used or occupied at any time
prior to Completion by the Vendor (or any member of its Group) or
the Insulation Business Undertakings or of any non-compliance with
Environmental Law resulting in the presence of Hazardous Substances
in the Environment by the Vendor (or any member of its Group) or
the Insulation Business Undertakings prior to Completion;
8.10.3 any stand alone trading activities or other businesses carried on
by any Insulation Business Undertaking prior to Completion which
are no longer carried on by the Insulation Business Undertakings at
Completion (such as the former insulation and textile manufacturing
operations of AWI in Braintree, Massachusets, the former cork
manufacturing operations of Armstrong Spain and the former textile
manufacturing operations of ▇▇▇▇▇▇▇▇▇ Germany (other
than to the extent that such operations have been retained by
▇▇▇▇▇▇▇▇▇ Germany in relation to Accotex, Munster and Trezzano,
Italy);
8.10.4 the Reorganisation;
8.10.5 Armstrong Russia;
8.10.6 (in so far as it relates to any period prior to Completion, but
excluding for the avoidance of doubt any such actions, claims,
proceedings, losses, damages, liabilities, costs and expenses in so
far as they relate to any period after Completion) any failure by
Armstrong China prior to Completion to comply with the 50 per cent.
export ratio imposed on it under the Approval Document No. [1994]
O21, dated 18 January 1994, issued by the Panyu Committee of
Foreign Trade and Economic Co-operation;
8.10.7 the grant (prior to Completion) or exercise (whether prior to or at
any time after Completion) of any options granted prior to
Completion to directors or other officers of any Insulation
Business Undertaking or any Employee under any share option scheme
or any award prior to Completion of shares to any such person under
any profit sharing or share based incentive arrangements
established or operated by the Vendor or any member of its Group or
any Insulation Business Undertaking (including any income tax
payable under PAYE, national insurance contributions, social
security or any other statutory deduction arising on grant or
exercise of any of the foregoing, but excluding for the avoidance
of doubt any such actions, claims, proceedings, losses, damages,
liabilities, costs and expenses in so far as they relate to the
grant or award of any replacement incentive arrangements for
Employees after Completion);
8.10.8 the Excluded Long Term Liabilities;
8.10.9 any breach by the Vendor of sub-clause 8.9;
8.10.10 the loss, misplacement or absence of a register of members for
Armstrong Switzerland at any time prior to Completion; or
8.10.11 the existence of or failure to pay in full or discharge the charge
dated 6 December 1967 as noted in entry no.1 of the Charges
Register for the title no. LA 135318 relating to land at Mars
Street in Oldham in respect of any debts due from Armstrong UK to
the chargee, being Oldham Borough Council, prior to Completion.
8.11 The Parties agree that (unless the liquidation of Armstrong Russia shall
have been completed prior to Completion) after Completion the Vendor shall
be responsible (and, where necessary, shall be given all powers and
authorities by the Purchaser and Armstrong Switzerland as the shareholder
of Armstrong Russia) for the completion of the liquidation of Armstrong
Russia as soon as practical.
8.12 The Purchaser shall use its reasonable endeavours accurately to complete
and file (or procure the completion and filing on its behalf of) form BE-13
with the US Department of Commerce in relation to the sale and purchase of
the Shares in
Armstrong USA as soon as practical (and in any event within 45 days) after
Completion.
9. PENSIONS AND EMPLOYMENT
9.1 The provisions of Schedule 3 shall have effect as if set out in full in
this clause 9.
9.2 In the event that any person (other than the Employees) successfully claims
that they are an employee of any Insulation Business Undertaking
immediately prior to Completion and by virtue of this Agreement becomes an
employee of any member of the Purchaser's Group immediately after
Completion, the Vendor shall indemnify the Purchaser against:
9.2.1 all losses, damages, liabilities, reasonable costs and expenses,
fines, awards and penalties arising from any actions, claims, or
proceedings brought by any such persons in respect of the termination
of their employment by the Purchaser after Completion;
9.2.2 the basic salary and reasonable costs of providing any contractual
benefits to such employees up to the first reasonably appropriate
termination date;
provided the termination is effected by the Purchaser as soon as reasonably
practicable (subject to sub-clause 9.3) and no later than three months
after Completion.
9.3 In terminating the employment of any such person referred to in sub-clause
9.2, the Purchaser shall, or shall procure that the relevant company within
its Group shall, take all reasonable steps to mitigate the costs and
liabilities or potential liabilities resulting from such termination.
9.4 The Vendor shall hereby indemnify the Purchaser against all losses,
damages, liabilities, penalties, fines, reasonable costs and expenses
arising from or in respect of claims or complaints brought by or on behalf
of any of the Employees resulting from any failure or omission of any of
the Insulation Business Undertakings or any member of the Vendor's Group to
comply in all material respects with their obligations to consult with the
Employees prior to Completion under all relevant provisions of statutes,
regulations, agreements, terms and conditions of employment, relevant to
any Employees, save where such failure to comply arises as a result of
Purchaser's failure to comply with any of its obligations under the
Acquired Rights Directive 77/187/EEC or any other relevant statutes,
directives or regulations.
9.5 The Purchaser shall hereby indemnify the Vendor for itself and as trustee
for any member of its Group against all losses, damages, liabilities,
penalties, fines and reasonable costs and expenses arising from or in
respect of claims or complaints brought by or on behalf of any of the
Employees in respect of their employment or its termination after
Completion or any failure or omission of the Purchaser (or any member of
its Group) to comply with its obligations to provide information to or
consult with any person under the Acquired Rights Directive 77/187/EEC or
any other relevant statutes, directives or regulations.
9.6 The Vendor hereby indemnifies and shall keep the Purchaser and each other
member of the Purchaser's Group (including the Insulation Business
Undertakings) indemnified against any liability, assessment or claim for
Taxation whatsoever or for national insurance contributions or for social
security payments where such liability, assessment or claim arises or is
made in connection with the performance of services prior to Completion by
any person or company who is a self-employed contractor under an agreement
for services with Armstrong Spain working in South America. The Vendor also
agrees to indemnify and shall keep the Purchaser and each other member of
the Purchaser's Group (including the Insulation Business Undertakings)
indemnified against all reasonable costs and expenses and any penalty, fine
or interest accrued or payable by the Purchaser (or any member of its
Group) in connection with or in consequence of any such liability,
assessment or claim.
9.7 The Vendor shall hereby indemnify the Purchaser against any liability,
obligation, costs, claim and demand arising from or in respect of ▇▇▇▇▇
▇▇▇▇▇▇▇▇ (whether for unpaid remuneration, wrongful dismissal, unfair
dismissal, redundancy, payment in lieu of notice, loss of office, sex,
disability or race discrimination or otherwise) save to the extent
specifically provided for in the Completion Group Net Assets provided that,
in any event, the Purchaser shall consult with the Vendor prior to agreeing
any amount due to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ under the indemnity in this sub-clause
9.7.
10. WARRANTIES
10.1 The Vendor warrants to the Purchaser on the date hereof in the terms of the
Warranties and shall warrant to the Purchaser on the date of Completion in
the terms of the Repeated Warranties.
10.2 Any information supplied by or on behalf of any Insulation Business
Undertaking to or on behalf of the Vendor in connection with the Warranties
or the Repeated Warranties, the Disclosure Letter or otherwise in relation
to the business and affairs of any Insulation Business Undertaking, or
otherwise in relation to the Assets or the Insulation Business, shall not
constitute a representation or warranty or guarantee as to the accuracy
thereof by any Insulation Business Undertaking and the Vendor undertakes to
the Purchaser (on behalf of itself and as trustee of each Insulation
Business Undertaking and their respective directors and employees, Senior
Management and the Employees) that it waives any and all claims which it
might otherwise have against any Insulation Business Undertaking (or, save
in the case of any fraud or fraudulent or wilful misrepresentation or
wilful non-disclosure, any of their respective directors or employees ,
Senior Management and the Employees) in respect thereof.
10.3 Each of the Warranties shall be construed as a separate warranty and is
given subject to the matters which have been fairly disclosed to the
Purchaser:
10.3.1 in the Disclosure Letter; or
10.3.2 in any document which is specifically referred to in the Disclosure
Letter.
10.4 Each of the Repeated Warranties shall be construed as a separate warranty
and is given subject to the matters which have been fairly disclosed to the
Purchaser:
10.4.1 in the Disclosure Letter as at the date of this Agreement (and, for
the avoidance of doubt, no disclosure shall be made after the date
of this Agreement (or if so made or purported to be made, such
disclosures shall be of no force and effect)); or
10.4.2 in any document which is specifically referred to in the Disclosure
Letter.
10.5 The rights and remedies of the Purchaser and the members of the Purchaser's
Group in respect of a breach of any of the Warranties or the Repeated
Warranties shall not be affected by Completion or by the giving of any time
or other indulgence by the Purchaser to any person.
10.6 Save as otherwise expressly provided in this Agreement or any of the
documents referred to herein as being in the agreed terms, the Vendor
expressly disclaims all liability and responsibility for any opinion or
forecast contained within (or derived or capable of being derived from):
10.6.1 any investigation carried out, or made, by or on behalf of the
Purchaser in the course of any due diligence or other enquiry prior
to the Purchaser entering into this Agreement; or
10.6.2 any data, document, record or information disclosed by or on behalf
of the Vendor, a Company or Subsidiary (or any employee, agent or
adviser of any of them) to the Purchaser (or to any person on behalf
of the Purchaser).
10.7 Any Warranty expressed to be given "to the best of the Vendor's knowledge
and belief" or "so far as the Vendor is aware" or otherwise qualified by
reference to the knowledge of the Vendor shall be deemed to be, in the case
of the Warranties only, the knowledge or awareness (as the case may be) of
the ▇▇▇▇▇▇▇▇▇ Management and ▇▇▇▇▇▇ ▇▇▇▇▇▇ and, in the case of the Repeated
Warranties, shall be deemed to be the knowledge or awareness (as the case
may be) of the ▇▇▇▇▇▇▇▇▇ Management only and, in the case of both the
Warranties and Repeated Warranties, shall be deemed to include an
additional statement that the Vendor has made reasonable enquiries of the
Senior Management in relation to that Warranty or Repeated Warranty (as the
case may be).
10.8 At all times up to Completion the Vendor shall give (and shall procure that
the relevant members of its Group and the Insulation Business Undertakings
shall give) to the Purchaser all such information and documentation
relating to the Insulation Business Undertakings, the Assets and the
Insulation Business as the Purchaser shall reasonably require and request
to enable it to satisfy itself as to whether there has been any breach of
the Warranties or under the Tax Deed (or whether there will be a breach of
the Repeated Warranties).
10.9 In relation to the Warranty at paragraph 5.2 of part 1 of Schedule 2, the
reference to "matters" shall, for the avoidance of doubt, not include the
underlying economic, market, commercial or other circumstances relating to
such matters (whether or not evident on the face of the Disclosure Letter).
11. LIMITATIONS
11.1 No Relevant Claim shall be made unless written notice containing reasonable
details of that claim (based upon the information known to the Purchaser at
that time) is served on the Vendor by the Purchaser:
11.1.1 in the case of any claim under the Environmental Warranties or under
sub-clause 7.1.4(X) or the Warranty in paragraph 8.4.4 of part 1 of
Schedule 2, by not later than 5.00 p.m. on the sixth anniversary of
Completion;
11.1.2 in the case of any claim under the Tax Warranties, by not later than
5.00 p.m. on the date one month after the expiry of the period of
limitation during which the relevant Taxation authority in the
jurisdiction in respect of which the said claim arises would be
entitled to recover from an Insulation Business Undertaking any Tax
liability arising prior to Completion;
11.1.3 in the case of any Specific Indemnity (other than the indemnity at
sub-clause 8.10.2), by not later than 5.00 p.m. on the 40th
anniversary of Completion;
11.1.4 in the case of the Specific Indemnity at sub-clause 8.10.2, by not
later than 5.00 p.m. on the seventh anniversary of Completion; or
11.1.5 in any other case, by not later than 5.00 p.m. on the second
anniversary of Completion.
11.2 A Relevant Claim or claim under the Tax Deed shall not be enforceable
against the Vendor and shall be deemed to have been withdrawn unless (and
shall then be enforceable only to the extent that) any legal proceedings in
connection with it are commenced within 12 months after written notice of
it is first served on the Vendor by the Purchaser or, if later:
11.2.1 to the extent that it relates to any contingent liability, the date
on which the amount of that liability is ascertained; or
11.2.2 to the extent that it relates to any matter where the Purchaser is
engaged in any litigation, arbitration or similar proceedings with
any third party (in accordance with the provisions of this clause
11), the date on which the final judgment, award or decision (as the
case may be) is reached in that litigation, arbitration or other
such proceedings.
11.3 The aggregate amount of the liability of the Vendor in respect of all
Relevant Claims (other than the Specific Indemnities), the Specific
Indemnity at sub-clause 8.10.2 and claims under the Tax Deed shall not
exceed [_] 271,500,000.
11.4 No liability shall attach to the Vendor in respect of any Relevant Claim
(other than in respect of the Specific Indemnities) unless:
11.4.1 the aggregate liability of the Vendor in respect of that individual
claim and any like claim or claims arising out of the same breach
(which for the avoidance of doubt may be aggregated and counted as
one claim for the purposes of this sub-clause 11.4.1, but excluding
any liability in respect of any legal or other
costs of the Purchaser and interest that may be recovered in
relation thereto) shall exceed [_] 50,000; and
11.4.2 the aggregate amount of the liability of the Vendor in respect of
all Relevant Claims (other than under Specific Indemnities and
excluding any liability in respect of any legal or other costs of
the Purchaser and interest that may be recovered in relation to any
Relevant Claim) shall exceed [_] 500,000;
but, in each case, otherwise satisfying the requirements of this sub-clause
11.4, the Vendor shall be liable for the whole of any such amount and not
merely any excess.
11.5 The Vendor shall not be liable in respect of a Relevant Claim (other than
under clause 7 or, in relation to sub-clauses 11.5.1, 11.5.2, 11.5.3,
11.5.4(B) and 11.5.5(B) only, the Specific Indemnities (with the intent
that only sub- clauses 11.5.4(A) and 11.5.5(A) shall apply to the Specific
Indemnities)):
11.5.1 if it would not have arisen but for anything done or omitted to be
done at the written request or with the express consent of the
Purchaser (or a member of its Group) after the date hereof by the
Vendor (or a member of its Group);
11.5.2 if it would not have arisen but for anything voluntarily done or
omitted to be done, after Completion by the Purchaser (or a member
of its Group) or its (or their respective) agents, representatives,
assignees or other successors in title, save that this limitation
shall not exclude any liability which arises from or is increased by
any act or omission in the ordinary course of the Insulation
Business of an Insulation Business Undertaking as carried on during
the 12 months prior to Completion (including, without limitation,
any failure by the Insulation Business Undertakings to remove or
otherwise deal with any Release of Hazardous Substances in existence
prior to Completion);
11.5.3 to the extent that it arises as a result only of:
(A) an increase in any rates of Taxation after the date hereof;
(B) any change in generally accepted accounting practice (as
interpreted by an Insulation Business Undertaking's statutorily
appointed auditors, if any, in the jurisdiction in which the said
Insulation Business Undertaking is required to submit accounts)
after the date hereof;
(C) (save in relation to the passing of any Environmental Law which
is in draft form at Completion and where the details of any such
draft are generally known and are reasonably likely to come into
effect within 2 years of the date hereof) the passing of any
legislation, or making of any subordinate legislation after the
date hereof (which constitutes a change in law or its
interpretation);
11.5.4 to the extent that it relates to any loss for which the Purchaser
(or a member of its Group) or any of its (or their) assignees or
other successors in title:
(A) makes any recovery under any insurance; or
(B) would make any recovery under any insurance if (at the relevant
time) it maintained substantially the same level and type of
insurance cover as maintained by or on behalf of the Insulation
Business Undertakings in the 12 months immediately prior to
Completion or as is recommended in the Aon Insurance
Recommendations or such other level and type of insurance cover
as the Purchaser's insurance brokers advise from time to time;
11.5.5 to the extent that it relates to:
(A) any matter specifically provided for or included as a specific
liability in the Completion Group Net Assets;
(B) any liability for Taxation arising out of the ordinary course of
business of an Insulation Business Undertaking since Completion.
11.6 Subject to sub-clauses 11.8, 11.14 and 11.15, where the Purchaser (or a
member of its Group) or any of its (or their) assignees or other successors
in title is entitled to recover from some other person any sum in respect
of any matter or event which gives rise to a Relevant Claim, the Purchaser
shall (subject to the Purchaser's Group being indemnified and secured by
the Vendor to the Purchaser's reasonable satisfaction against all
reasonable costs and expenses which may be incurred by the Purchaser or any
member of its Group by reason of such action) take all such action as the
Vendor may reasonably request in writing (or procure that such action is
taken) to recover that sum and:
11.6.1 any sum so recovered will reduce the amount of that Relevant Claim;
or,
11.6.2 in the event of any such recovery being delayed until after that
Relevant Claim has been satisfied by the Vendor, the Purchaser shall
pay to the Vendor an amount equal to the lesser of (A) the amount so
recovered and (B) the amount paid by the Vendor to the Purchaser in
satisfaction of such Relevant Claim;
(in each case after deduction of any reasonable costs and expenses of the
recovery, including, in each case for the avoidance of doubt, any Tax
payable by the Purchaser in respect of any sum recovered) provided that no
action shall be required on the part of the Purchaser or any member of its
Group under or in respect of this clause 11.6 which would, in the
Purchaser's reasonable opinion, be materially prejudicial to the
Purchaser's or its Group's legitimate business interests and the business
and goodwill of the Insulation Business.
11.7 No liability shall attach to the Vendor in respect of any Relevant Claim to
the extent that sums in respect of the matter giving rise to that Relevant
Claim have been recovered under any other Relevant Claim or any claim under
the Tax Deed.
11.8 Subject to sub-clauses 11.14 and 11.15, the Purchaser shall (and shall
procure that its assignees or other successors in title shall), subject to
the Purchaser's Group being indemnified and secured by the Vendor to the
Purchaser's reasonable satisfaction against all reasonable costs and
expenses which may be incurred by the Purchaser or any member of its Group
by reason of such action:
11.8.1 take such action as the Vendor may reasonably require to avoid,
resist or contest any claim or matter which gives rise to a
Relevant Claim;
11.8.2 take such action as the Vendor may reasonably require to settle or
compromise any claim or matter which gives rise to a Relevant
Claim, subject to the Vendor first having admitted liability to the
Purchaser in the full amount of such proposed settlement or
compromise which is payable (or would, but for this sub-clause
11.8.2, be payable) by the Purchaser (or any member of its Group);
11.8.3 not settle or compromise any claim or matter which gives or may
give rise to a Relevant Claim without the prior written consent of
the Vendor (such consent not to be unreasonably withheld or delayed
or made the subject of any unreasonable conditions);
provided that no action shall be required on the part of the Purchaser or
any member of its Group under or in respect of this clause 11.8 which
would, in the Purchaser's reasonable opinion, be materially prejudicial to
the Purchaser's and its Group's legitimate business interests and the
business and goodwill of the Insulation Business.
11.9 Each Party shall procure that each member of its Group (and any assignee
or other successor in title thereof) shall accept and comply with sub-
clauses 11.8 and 11.14 as if each such person were a party to and bound by
this Agreement.
11.10 Notwithstanding anything in this Agreement to the contrary (but subject to
the Purchaser's Group being indemnified and secured by the Vendor to the
Purchaser's reasonable satisfaction against all reasonable costs and
expenses which may be incurred by the Purchaser or any member of its Group
by reason of such assignment), at the request of the Vendor the Purchaser
shall (and shall procure that any relevant member of the Purchaser's Group
shall) assign to the Vendor any and all rights that it may have to seek
reimbursement from any third parties or their insurers (whether in an
action at law or otherwise, and whether by way of a claim for
contribution, subrogation, or otherwise) in relation to any Relevant Claim
that has been satisfied by the Vendor, provided that no assignment shall
be required on the part of the Purchaser or any member of its Group under
or in respect of this clause 11.10 which would be materially prejudicial
to the Purchaser's and its Group's legitimate business interests and the
business and goodwill of the Insulation Business (and provided that to the
extent that any sums recovered by the Vendor in respect of any rights
assigned to it under this sub-clause 11.10 shall exceed the amount
previously paid by the Vendor to the Purchaser in satisfaction of the
Relevant Claim by virtue of which those rights are assigned to the Vendor,
the Vendor shall pay an amount equal to any such excess to the Purchaser
(after deduction of any reasonable costs and expenses of the recovery
including, in each case for the avoidance of doubt, any Tax payable by the
Vendor in respect of any sum recovered.
11.11 No employee, officer, agent or adviser of any member of the Vendor's Group
shall have any liability in relation to any Relevant Claim.
11.12 No liability shall attach to the Vendor in respect of any breach of the
Repeated Warranties that is outside the actual knowledge as at Completion
of the ▇▇▇▇▇▇▇▇▇
Management (having made reasonable enquiries of the Senior Management in
relation to those Warranties).
11.13 Other than in respect of an Asbestos Claim, no liability shall attach to
the Vendor in respect of a Relevant Claim associated with the removal
after Completion of any asbestos or asbestos fibres incorporated into any
building at Completion which are not required to be removed under any
applicable law in any applicable jurisdiction as at Completion save to the
extent that the presence of any asbestos or asbestos fibres are causing or
are reasonably likely to cause harm to the Environment.
11.14 Notwithstanding anything to the contrary in this Agreement, the Purchaser
shall (and shall procure that its assignees or other successors in title
shall) co-operate in any defence or settlement of an Asbestos Claim
carried out in accordance with sub-clause 11.15.
11.15 Notwithstanding anything to the contrary in this Agreement and subject to
the Purchaser being fully indemnified to the extent that it incurs costs
or expenses as a result, the Vendor shall have the right at any time upon
giving prior written notice to the Purchaser to:
11.15.1 select counsel to defend each Party (and each member of its Group
and its assignees or other successors in title) against any
Asbestos Claim; and
11.15.2 to conduct the defence of each Party (and each member of its Group
and its assignees or other successors in title) against any
Asbestos Claim (including the unilateral right to direct the
activities of counsel selected to defend any such proceedings and
to determine whether or not to conduct any such defence in the
name of the Purchaser or any other member of the Purchaser's Group
or any other person);
in each case with the consent of any such person (such consent not to be
unreasonably withheld or delayed), provided that for the avoidance of
doubt such consent shall be treated as being reasonably withheld where:
11.15.3 criminal conduct by an Insulation Business Undertaking is alleged
in the applicable Asbestos Claim;
11.15.4 any settlement provides for relief other than the payment of
monetary damages and the Vendor procures that any such monetary
damages are paid in full; or 11.15.5 any settlement does not
constitutes a complete and unconditional discharge and release of
each such person.
11.16 Nothing in this Agreement shall result in or be construed or asserted to
be, a waiver of any attorney-client privilege in connection with any
Relevant Claim by the Vendor or the Purchaser (or any member of their
respective Groups). In order to effectuate a vigorous and effective
defence to any Relevant Claim, the parties agree, where recognised by
applicable law, to execute and implement joint defence or similar
agreements.
11.17 The Vendor undertakes to defend the Purchaser (and each other member of
the Purchaser's Group) in relation to each Asbestos Claim (including the
provision of a legal defence) in accordance with the terms of this clause
11, but provided the Vendor shall provide such a defence in relation to
any Asbestos Claim the Purchaser (and each other member of the Purchaser's
Group) shall be responsible for any additional costs or expenses that it
may decide to incur in relation to any such Asbestos Claim (including any
legal or other advisers' costs and expense) other than any costs or
expenses which are reasonably required to be incurred by the Purchaser and
any other member of the Purchaser's Group in respect of such defence.
11.18 No liability shall attach to the Vendor under the Warranties or the
Repeated Warranties in respect of any matter stated as a fact in, and
evident on the face of:
11.18.1 the Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇ Legal Reports;
11.18.2 the Arcadis Environmental Reports; or
11.18.3 the specific disclosures (if any) in the Management Disclosure
Letter in relation to the guarantee under the Investment Agreement
by the Managers (as defined therein) that there are no
circumstances which constitute or will constitute (and that,
immediately following Completion, there will not be) a breach of
the Warranties;
to the extent that any such statement of fact, in any such case, is
sufficient to clearly indicate that the Vendor is, was or will be in
breach of any Warranty or Repeated Warranty and the Purchaser agrees that
copies of the ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Legal Reports, the Arcadis Environmental
Reports and the Management Disclosure Letter shall be provided to the
Vendor before or at the same time as the Purchaser brings any Relevant
Claim against the Vendor.
11.19 Subject to sub-clause 11.20, every person seeking to make any claim under
this Agreement (each a "Claimant") shall mitigate, to the extent
practicable, any loss suffered by such Claimant for which a claim is made
under this Agreement. Nothing in this Agreement shall release any person
of its duty to mitigate its loss at common law.
11.20 With respect to any claim under this Agreement that relates to an
environmental investigation, characterisation, testing, removal or
response action, cleanup, risk analysis, monitoring or similar activities,
whenever possible, the Party against which any such claim is brought (the
"Defendant") shall have the option on giving reasonable prior written
notice to the Purchaser to conduct the relevant activity at its own
control and expense without causing any unreasonable interference or
disturbance of the Purchaser's and its Group's business and in each such
case, the Claimant shall co-operate in all reasonable respects with the
Defendant in respect of all matters relating to that claim provided that
no action shall be taken which would in the Purchaser's reasonable
opinion, be materially prejudicial to the Purchaser's and the Group's
legitimate business interests and the business and goodwill of the
Insulation Business in which case the Purchaser or any person whom it
elects shall have the sole right to have conduct of such matters.
11.21 Each of the provisions of this clause 11 shall be construed as separate
and severable and in the event of any such provision being determined as
being unenforceable in whole or in part, for any reason whatsoever, such
unenforceability shall not affect or impair the enforceability of the
other provisions of this clause 11 or, in the case of any provision which
is unenforceable only in part shall not affect or impair the
enforceability of the remainder of that provision, and such other
provisions or parts thereof, as appropriate, shall continue to bind the
Parties.
11.22 Nothing in this Agreement shall exclude or limit (or shall be construed as
seeking to exclude or limit) any liability of any person for any fraud or
fraudulent or wilful misrepresentation by that person.
11.23 The provisions of this clause 11 shall apply notwithstanding any other
provision of this Agreement to the contrary (and shall not be discharged
or cease to have effect in consequence of Completion or any other
provision of this Agreement).
12. RESTRICTIVE COVENANTS
12.1 In this clause 12:
12.1.1 "competing business" means any business (other than the manufacture
or sale of man made mineral fibres) which competes with any
business carried on at Completion by an Insulation Business
Undertaking in a jurisdiction in which that Insulation Business
Undertaking carries on that business at Completion;
12.1.2 "restricted goods or services" means goods or services of the same
type as or similar to any goods or services supplied by an
Insulation Business Undertaking at Completion;
12.1.3 "Restricted Parties" means each member of the Vendor's Group; and
12.1.4 references to acting directly or indirectly include (without
prejudice to the generality of that expression) references to
acting alone or jointly with or by means of any other person.
12.2 Subject to sub-clause 12.3, the Vendor covenants with the Purchaser that
with effect from Completion:
12.2.1 until the expiration of 5 years from Completion, no Restricted
Party shall directly or indirectly carry on or be engaged or
interested in a competing business; and
12.2.2 until the expiration of 3 years from Completion, no Restricted
Party shall directly or indirectly:
(A) accept the custom of, solicit, canvass or approach or
endeavour to solicit, canvass or approach, in competition with
an Insulation Business Undertaking, any person for the purpose
of offering to that person restricted goods or services (or
supply on behalf of a competing business restricted goods or
services to any person):
(1) who was provided with goods or services by an Insulation
Business Undertaking at any time during the 12 months up to
and including Completion; or
(2) who was negotiating with an Insulation Business Undertaking
for the supply of goods or services at any time during the
12 months up to and including Completion; or
(B) employ, solicit or entice away or endeavour to solicit or entice
away from any Insulation Business Undertaking, any person who at
any time during the period of 12 months immediately prior to
Completion shall have been employed by an Insulation Business
Undertaking in an executive, technical, or sales capacity,
including Senior Management and including the Employees listed in
the document in the agreed form headed "Key Employees".
12.3 The provisions of this clause 12 shall apply to China and Poland with
effect from Completion but shall not apply to any interest held by the
Vendor (or any member of its Group) in Armstrong China or Armstrong Poland
prior to the completion of the sale and purchase of the Armstrong China
Shares or the Armstrong Poland Shares (as the case may be).
12.4 The Vendor agrees that the undertakings contained in this clause 12 are
reasonable and are entered into for the purpose of protecting the goodwill
of the business of each member of the Purchaser's Group.
12.5 Each undertaking contained in this clause 12 is and shall be construed as
separate and severable and if one or more of the undertakings is held to be
against the public interest or unlawful or in any way an unreasonable
restraint of trade or unenforceable in whole or in part for any reason the
remaining undertakings or parts thereof, as appropriate, shall continue to
bind the Vendor.
12.6 If any undertaking in this clause 12 shall be held to be void but would be
valid if deleted in part or reduced in application, such undertaking shall
apply with such deletion or modification as may be necessary to make it
valid and enforceable. Without prejudice to the generality of the
foregoing, if such invalidity arises by reason of the period being
excessive, such period (as the same may previously have been reduced by
virtue of this sub-clause 12.6) shall take effect as if reduced by six
months until the resulting period shall be valid and enforceable.
13. CONFIDENTIAL INFORMATION
13.1 Each Party shall (and shall procure that each member of its Group shall and
shall use its reasonable endeavours to procure that each director, officer,
employee, agent and adviser of its Group shall) not use or disclose any
Confidential Information of the other Party (or any member of its Group).
13.2 The provisions of this clause 13 shall not apply to the disclosure of any
Confidential Information:
13.2.1 to or at the request of the other Party;
13.2.2 permitted by clause 14;
13.2.3 to its professional advisers; or
13.2.4 which is in the public domain (other than by a breach of this clause
13 by that Party).
13.3 For the purposes of this clause 13 only, prior to Completion each
Insulation Business Undertaking shall be deemed to be a member of the
Vendor's Group.
14. ANNOUNCEMENTS
14.1 No Party shall disclose the making of this Agreement or its terms or make
(or procure or permit the making of) any announcement (whether before or
after Completion) with respect to this Agreement (or any matter ancillary
hereto) without the prior written consent of the other Party (not to be
unreasonably withheld or delayed or made the subject of any unreasonable
conditions), unless such disclosure is to its professional advisers or
pursuant to clause 14.2 or 14.3.
14.2 Each Party shall at the request of the other Party supply all such
information and reports as may be reasonably required by the requesting
Party in order for the requesting Party to comply with any requirement or
regulation of any law or Stock Exchange or other regulatory body to which
it (or any member of its Group) shall be subject and each Party (and each
member of its Group) shall be entitled to make any announcement with
respect to this Agreement (or any matter ancillary hereto) if such
announcement shall be required by any requirement or regulation of any law
or Stock Exchange or other regulatory body to which it (or any member of
its Group) shall be subject, provided that such Party has taken all steps
as may be reasonable in the circumstances to agree the content of such
announcement and provided that any such announcement shall only be made
after notice to the other Party (where practicable).
14.3 For the avoidance of doubt, nothing in this clause 14 shall be taken to
apply to announcements, communications or circulars made or sent by the
Purchaser after Completion to customers, clients or suppliers of any member
of the Group which merely inform them of the Purchaser's acquisition of the
Shares or to any announcements, communications or circulars containing only
information which has become generally available.
15. MISCELLANEOUS
15.1 No Party may assign any of its rights or obligations under this Agreement
(or, save as expressly set out therein, any document in the agreed terms),
save that upon giving written notice to the other Party:
15.1.1 the Purchaser shall be entitled to assign the benefit (but not the
burden) of this Agreement to a member of its Group (provided that
any such assignee remains a member of the Purchaser's Group and
provided further that before such assignee ceases to be a member of
the Purchaser's Group, the Purchaser will procure that the benefit
of this Agreement is assigned to the Purchaser or to another member
of its Group subject to the conditions of this sub-clause 15.1.1);
and
15.1.2 the Purchaser shall be entitled to assign the benefit (but not the
burden) of this Agreement to any person (A) by way of security for
borrowings of the Purchaser's Group incurred for the purposes of
financing or re-financing all or part of the Purchase Price or (B)
with the consent of the Vendor (such consent not to be unreasonably
withheld or refused or made the subject of unreasonable conditions).
15.2 This Agreement, together with the documents in the agreed terms or referred
to herein, represents the entire understanding, and constitutes the whole
agreement, in relation to its subject matter and supersedes any previous
agreement between the Parties with respect thereto and, without prejudice
to the generality of the foregoing, excludes any warranty, condition or
other undertaking implied at law or by custom (save as expressly set out
herein) PROVIDED THAT the provisions of this sub-clause 15.2 shall not
exclude any liability which either Party would otherwise have to the other
Party or any right which the other Party may have in respect of any
statements made fraudulently by that Party prior to the execution of this
Agreement or any right which the other Party may have in respect of fraud
or fraudulent misrepresentation by that Party.
15.3 Each Party confirms that neither it nor any member of its Group has relied
on any representation or warranty or undertaking in relation to the subject
matter of this Agreement which is not contained in this Agreement, or in
the documents in the agreed terms or referred to herein, and (without
prejudice to any liability for fraudulent misrepresentation) no Party (or
any member of its Group) shall either be under any liability to or have any
remedy against another Party (or any member of its Group) in respect of any
misrepresentation or untrue statement in relation to the subject matter of
this Agreement, or the documents in the agreed terms or referred to herein,
unless and to the extent that a claim lies under this Agreement, or in the
documents in the agreed terms or referred to herein.
15.4 The terms of this Agreement (insofar as not performed at Completion and
subject as specifically otherwise provided in this Agreement) shall
continue in force after and notwithstanding Completion (and, without
prejudice to the generality of the foregoing, any remedies of the Purchaser
in respect of any breach of any of the Warranties or Repeated Warranties
shall continue to subsist notwithstanding Completion).
15.5 After Completion each Party shall (at its own cost) execute all such deeds
and documents and do all such things as either Party may reasonably require
for perfecting the transactions intended to be effected under or pursuant
to this Agreement.
15.6 Without prejudice to the generality of sub-clause 15.5, following
Completion the Vendor shall (at its own cost), from time to time, forthwith
upon request from the Purchaser execute (or procure the execution by a
member of its Group or use reasonable endeavours to procure the execution
by any third party) of all such deeds and documents and do (or procure the
doing by a member of its Group or use reasonable endeavours to procure the
doing by any third party) of all such things, in a form reasonable
satisfactory to both Parties, for the purpose of vesting in the Purchaser
the full legal and beneficial title to the Shares (including, subject to
the
satisfaction of the China Condition Subsequent, the Armstrong China Shares
and, subject to the satisfaction of the Poland Condition Subsequent, the
Armstrong Poland Shares) and the Assets.
15.7 No single or partial exercise of (or failure to exercise or delay in
exercising) a right or remedy by a Party in connection with this
Agreement, or reliance upon (or failure to invoke or delay in invoking) a
right or remedy by either Party in connection with this Agreement, shall
constitute a waiver of that (or any other) right or remedy by that Party
or prevent any further or other exercise of any such right or remedy or
the exercise of any other right or remedy by that Party.
15.8 A waiver of any right or remedy by either Party in connection with this
Agreement must be an express waiver in writing and any such waiver on any
occasion shall not constitute a waiver of:
15.8.1 any other right or remedy; or
15.8.2 such right or remedy on any future occasion.
15.9 This Agreement may be executed in any number of counterparts and by each
Party on separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
15.10 Each Party agrees that this Agreement may only be varied or amended by an
instrument in writing duly signed by each Party (although any such
instrument may be executed in any number of counterparts and by each Party
on separate counterparts).
15.11 Each Party declares (and each Party agrees and acknowledges in relation to
the other Party) that insofar as any provision of this Agreement relates
to any or each other member of a Party's Group, that Party holds the
benefit of that provision as trustee for each such member of that Party's
Group (provided that in exercising any such right as trustee that Party
shall be entitled to limit the action that it takes to such action as it
may, in its absolute discretion, consider appropriate), but each Party
confirms that no term of this Agreement is enforceable under the Contracts
(Rights of Third Parties) Act 1999 by a person who is not a party to this
Agreement.
15.12 The perpetuity period for any trust established in this Agreement shall be
80 years from the date hereof.
15.13 Nothing in this Agreement shall be deemed to constitute a partnership
between the Parties.
15.14 If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect under the law of any jurisdiction:
15.14.1 the validity, legality and enforceability under the law of that
jurisdiction of any other provision; and
15.14.2 the validity, legality and enforceability under the law of any
other jurisdiction of that or any other provision,
shall not be affected or impaired in any way.
15.15 For the purposes of the Completion Accounts or any adjustment to the
consideration for the Shares required by clause 4, if any figure or amount
referred to in this Agreement is required to be expressed or paid in [_]
but shall need to be calculated from data or other information expressed
in another currency, then (save as expressly provided otherwise in this
Agreement) those amounts shall be converted into [_] by reference to the
relevant exchange rate, as published in the Financial Times Exchange Cross
Rates Table on the date of Completion.
15.16 For the purposes of determining whether any threshold or amount referred
to in sub-clause 7.1.4 or the Warranties or the Repeated Warranties has or
has not been exceeded, any figure or amount that shall need to be
calculated from data or information expressed in another currency shall be
converted into [_] by reference to the relevant exchange rate set out in
Schedule 10.
16. TAX RELATED MATTERS
16.1 The Purchaser shall or shall procure that an Insulation Business
Undertaking shall supply copies of any tax return filed or any other
document relating to the Taxation position of any Insulation Business
Undertaking in respect of any period commencing prior to Completion within
21 days of receiving a request from the Vendor or any member of the
Vendor's Group for the same.
16.2 The Purchaser warrants and represents that it will:
16.2.1 maintain all records and other documents required by law or
customary practice in any jurisdiction which are in the possession
of an Insulation Business Undertaking at Completion or which are
required to be brought into existence after Completion in respect
of all periods prior to Completion until the limitation period
applying to claims by a Taxation Authority (as that term is defined
in the Tax Deed) in any jurisdiction in which the said records or
other documents may be relevant;
16.2.2 indemnify the Vendor and any member of the Vendor's Group against
any liability of the Vendor or any member of the Vendor's Group to
pay any stamp duty or other documentary or transfer taxes arising
in any jurisdiction in relation to the purchase of the Shares and
Assets or the indirect acquisition of any of the assets owned by an
Insulation Business Undertaking in each case pursuant to or as a
consequence of the entering into of the Agreement (not including,
for the avoidance of doubt, any stamp duty or other documentary or
transfer taxes which are properly payable by an Insulation Business
Undertaking as a consequence of a transfer of an asset to or by
that Insulation Business Undertaking by a member of the Vendor's
Group at a time when arrangements were in place to effect the
purchase of the Shares and Assets) together with any costs incurred
by the Vendor or any member of the Vendor's Group as a result of
the non-payment by the Purchaser of any such stamp duty or other
documentary or transfer taxes.
17. Intellectual property
17.1 With effect from Completion the Vendor shall:
17.1.1 assign or procure the assignment to the Purchaser by the relevant
member or members of the Vendor's Group of legal and beneficial
title to the Business Intellectual Property in accordance with the
terms of the Assignments;
17.1.2 use its reasonable endeavours (reasonable expenses to be borne by
the Purchaser) to assign, novate or sublicense (where permitted) or
procure the assignment, novation or sublicensing to the Purchaser by
the relevant member of the Vendor's Group of the benefit subject to
the burden of all licences granted to the Vendor or any member of
the Vendor's Group to use Intellectual Property Rights owned by
third parties and used in respect of the Insulation Business. If any
third party consents are required for such purpose the Vendor shall
use its reasonable endeavours (reasonable expenses to be borne by
the Purchaser) to obtain any such consent;
17.1.3 provide all reasonable assistance to the Purchaser in respect of the
domain names ▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇.▇▇▇ in order to
effect the transfer of these to the Purchaser or as the Purchaser
shall direct.
17.2 With effect from Completion the Purchaser shall provide all reasonable
assistance to the Vendor in respect of the domain names ▇▇▇▇▇▇▇▇▇.▇▇,
▇▇▇▇▇▇▇▇▇.▇▇▇.▇▇, ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇.▇▇▇ , ▇▇▇▇▇▇▇▇▇-▇▇.▇▇▇,
▇▇▇▇▇▇▇▇▇-▇▇.▇▇▇ in order to effect the transfer of these to the Vendor or
as the Vendor shall direct.
17.3 Save as provided in 17.1.3 and 17.2 neither party shall be entitled to
continue or commence making any use of any domain name which is owned by
the other party or any member of the other party's Group.
17.4 The Vendor shall use reasonable endeavours to deliver to the Purchaser's
Group on Completion or promptly thereafter:
17.4.1 all original documents (or to the extent that originals are not
available copies thereof) or other evidence of title (including,
without limitation, all assignments and declarations of trust
existing prior to Completion) which pertain to the Business
Intellectual Property and Company Intellectual Property;
17.4.2 in respect of the registered Business Intellectual Property and the
Company Intellectual Property owned by the Vendor, a member of the
Vendor's Group or an Insulation Business Undertaking as the case may
be copies of all registration, renewal certificates and current
renewal certificates;
17.4.3 in respect of all applications by the Vendor, a member of the
Vendor's Group or an Insulation Business Undertaking to register any
Business Intellectual Property or Company Intellectual Property
copies of application documentation;
17.4.4 all records and other documentation relating to and necessary for
the information technology systems used in and required for the
business of the Insulation Business Undertakings including but not
limited to records, documentation and agreements in respect of
computer software, hardware, telephone systems and their licensing,
maintenance and support;
and shall for a period of 6 months following Completion provide upon
request by the Purchaser's Group reasonable assistance to the Purchaser's
Group to effect the transfer of the management of the Business Intellectual
Property and Company Intellectual Property from the Vendor to a company
nominated by the Purchaser.
17.5 From the date of Completion the Purchaser agrees to be bound by and to
observe and to procure that the members of its Group are bound by and
observe the obligations of confidentiality imposed by the Confidentiality
Agreements between the Vendor and the named third party in respect of
information and know how disclosed in the Disclosure Letter against
Warranty 4.1.6.
18. COSTS
Unless expressly provided otherwise in this Agreement (or any document in
the agreed terms), the Parties shall pay their own costs in connection with
the preparation and negotiation of this Agreement and any matter
contemplated by it.
19. NOTICES
19.1 A notice, approval, consent or other communication in connection with this
Agreement:
19.1.1 must be in writing;
19.1.2 in respect of each Party to whom it is addressed, must be marked for
the attention of the person specified by that Party in this clause;
and
19.1.3 in respect of each Party to whom it is addressed, must be left at
the address of that Party, or sent by prepaid ordinary post (airmail
if posted to a jurisdiction other than that from which it is posted)
to the address of that Party which, in each case, is specified in
this clause 19 or if that Party notifies the other Party of a
replacement address then to that replacement address; or
19.1.4 in respect of each Party to whom it is addressed, may be sent by
facsimile to the facsimile number of that Party which is specified
in this clause 19, or if that Party notifies the other Party of a
replacement facsimile number then to that replacement facsimile
number, provided that at the time of that facsimile transmission a
copy of the said notice, approval, consent or other communication is
also given to that Party in accordance with sub-clause 19.1.3;
where, the address and facsimile number of each Party is:
the Vendor
Address: - ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇
Facsimile: (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇ (Secretary and General Counsel)
the Purchaser
Address: Senckenbergaulage ▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇▇ ▇▇▇▇▇▇
Attention: Geschaftsfuhrer
with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ at ▇▇▇▇▇▇▇▇▇ House, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
19.2 A notice, approval, consent or other communication shall take effect from
the time it is received (or, if earlier, the time it is deemed to be
received in accordance with sub-clause 19.3) unless a later time is
specified in it.
19.3 A letter or facsimile is deemed to be received:
19.3.1 in the case of a posted letter, unless actually received earlier, on
the third (seventh, if posted to a jurisdiction other than that from
which it is posted) day after posting; and
19.3.2 in the case of a facsimile, on production of a transmission report
from the machine from which the facsimile was sent which indicates
that the facsimile was sent in its entirety to the facsimile number
of the recipient.
20. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
20.1 This Agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this Agreement or
its formation) shall be governed by, and construed in accordance with,
English law.
20.2 Each of the Parties irrevocably agrees that the courts of England shall
have exclusive jurisdiction to hear and decide any suit, action or
proceedings, or to settle any dispute, which may arise out of or in
connection with this Agreement (respectively, "Proceedings" and "Disputes")
and, for these purposes, each Party irrevocably submits to the jurisdiction
of the courts of England.
20.3 Each Party irrevocably waives any objection which it might at any time have
to the courts of England being nominated as the forum to hear and decide
any Proceedings and to settle any Disputes and agrees not to claim that the
courts of England are not a convenient or appropriate forum for any such
Proceedings or Disputes and further irrevocably agrees that a judgment in
any Proceedings or Disputes brought in any court referred to in this clause
20 shall be conclusive and binding upon the Parties and may be enforced in
the courts of any other jurisdiction.
20.4 Without prejudice to any other permitted mode of service the Parties agree
that service of any claim form, notice or other document (each a
"Document") for the purpose of any Proceedings begun in England shall be
duly served upon it if delivered personally or sent by registered post, in
the case of:
20.4.1 the Vendor to ▇▇▇▇▇▇▇ ▇▇▇▇▇, Exchange House, Primrose Street, London
EC2A 2HS (marked for the attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇); and
20.4.2 the Purchaser to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Broadwalk House, ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (marked for the attention of ▇▇▇▇▇▇▇
▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ with reference GIL01.00001)
or such other person and address in England or Wales as the Vendor shall
notify the Purchaser in writing (or vice versa) from time to time.
IN WITNESS of which the Parties have executed this Agreement on the date first
mentioned above.
SIGNED by ▇▇▇ ▇▇▇▇▇ )
for and on behalf of ARMSTRONG )
WORLD INDUSTRIES INC. ) ......▇▇▇ ▇▇▇▇▇ ..................
) Authorised Officer/Signatory
SIGNED by ▇▇▇▇▇▇ ▇▇▇▇▇▇ )
for and on behalf of "ORION" )
EINUNDVIERZIGSTE )
BETEILIGUNGSGESELLSCHAFT ) ......▇▇▇▇▇▇ ▇▇▇▇▇▇ .......
MBH )