1
EXHIBIT 10.12
INVESTMENT AGREEMENT
BY AND AMONG
GRANT PRIDECO, INC.
A DELAWARE CORPORATION
AND
VOEST-ALPINE SCHIENEN GMBH & CO KG
AN AUSTRIAN LIMITED PARTNERSHIP
DATED AS OF APRIL 29, 1999
2
-2-
TABLE OF CONTENTS
R E C I T A L S......................................................................................................3
1. Definitions......................................................................................................4
2. Sale and Assignment..............................................................................................4
3. Purchase Price...................................................................................................5
4. Adjustment of the Purchase Price.................................................................................7
5. Effectiveness of the Agreement...................................................................................7
6. Conditions Precedent.............................................................................................8
7. Termination; Amendment; Waiver..................................................................................13
8. Certain Covenants...............................................................................................13
9. Representations and Warranties..................................................................................14
10. Indemnification.................................................................................................36
11. Miscellaneous...................................................................................................38
3
-3-
I N V E S T M E N T A G R E E M E N T
This investment agreement dated as of April 29, 1999 ("Investment Agreement") by
and among (i) GRANT PRIDECO, Inc., a Delaware corporation with its principal
place of business in The Woodlands, Texas and business address at 0000 Xxxx
Xxxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx 00000 ("GRANT"), on the one hand, and (ii)
VOEST-ALPINE SCHIENEN GmbH & Co KG, an Austrian limited partnership, with its
principal place of business in Leoben-Donawitz and business address at
Xxxxxxxxxxxxxx 000, 0000 Xxxxxx-Xxxxxxxx, Xxxxxxx, registered in the commercial
register of the Higher Court of Leoben under the registration number 165399 i
("VA SCHIENE"), on the other hand.
R E C I T A L S
WHEREAS, VA SCHIENE is the sole limited partner of VOEST-ALPINE STAHLROHR
KINDBERG GMBH & Co KG, a limited partnership, duly organized, validly existing
and in good standing under the laws of Austria, with its principal place of
business in Kindberg and business address at Xxxxxx Xxxxxxx 00, X-0000 Xxxxxxxx,
Xxxxxxx, registered in the commercial register of the Higher Court of Leoben
under the registration number 165400 k, ("VASK GmbH & Co KG"), whose registered
liability amount is of ATS 247,500,000 (in words: Austrian Shillings two hundred
forty-seven million five hundred thousand);
WHEREAS, VA SCHIENE is the sole shareholder of VOEST-ALPINE STAHLROHR KINDBERG
GMBH, a limited liability company, duly organized, validly existing and in good
standing under the laws of Austria, with its principal place of business in Linz
and business address at XXXXX-XXXXXX-Xxx. 0, 0000 Xxxx, registered in the
commercial register of the Higher Court of Linz under the registration number
106933 f, having an entire nominal capital of ATS 500,000 (in words: Austrian
Shillings five hundred thousand), which is fully paid-up, ("VASK GmbH"), being
the general partner and therefore the management company of VASK GmbH & Co KG;
WHEREAS, GRANT intends to acquire from VA SCHIENE and VA SCHIENE intends to sell
and transfer a 50.01 % of VA SCHIENE's limited partnership interest in VASK GmbH
& Co KG, corresponding to a limited partnership interest of ATS 123,774,750 (in
words: Austrian Shillings one hundred twenty-three million and seven hundred
seventy-four thousand seven hundred fifty), ("Limited Partnership Interest") and
50 % of VA SCHIENE's interest in VASK GmbH, corresponding to a fully paid-up
nominal capital of ATS 250,000 (in words: Austrian Shillings two hundred fifty
thousand) ("Shares"), on the terms and conditions set out in this Investment
Agreement; and
4
-4-
WHEREAS, in connection with such sale and purchase, VA SCHIENE is prepared to
make certain representations and warranties and covenants to GRANT;
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
GRANT and VA SCHIENE hereby covenant and agree as follows:
1. DEFINITIONS
1.1 All capitalized or other defined terms are used and defined in this
Investment Agreement or are used in this Investment Agreement with
the meanings assigned thereto in Annex 1 to this Investment
Agreement.
1.2 References to Sections, Schedules and Annexes are to Sections in,
Schedules to and Annexes to this Investment Agreement unless the
context requires otherwise and the Schedules and Annexes shall be
deemed to form a part of this Investment Agreement.
1.3 Unless the context requires otherwise, words importing the singular
include the plural and vice versa and words importing a gender
include every gender.
2. SALE AND ASSIGNMENT
2.1 Upon the terms and conditions of this Investment Agreement, VA
SCHIENE will sell the Shares and sell, convey, transfer and deliver
its legal and beneficial interest in the Limited Partnership Interest
to GRANT or its nominee(s), and GRANT will purchase from VA SCHIENE
at the Closing, all (but not fewer than all) of the Shares and the
Limited Partnership Interest free and clear of all liabilities and
obligations, pledges, security interests, liens, contractual
commitments, equities and encumbrances. For the sale and assignment
of the Shares the parties are obliged to execute an assignment
agreement in the form of a notarial deed as attached hereto as
Schedule 2.1.
2.2 At Closing VA SCHIENE agrees to assign the Limited Partnership
Interest to GRANT, who hereby accepts such assignment.
5
-5-
3. PURCHASE PRICE
3.1 The aggregate purchase price for the sale of the Limited Partnership
Interest and the Shares shall be ATS 400,000,000 (in words: Austrian
Shillings four hundred million), ("Purchase Price"), and is allocated
as follows:
(i) the purchase price for the sale of the Shares shall be an
aggregate price of ATS 250,000 (in words: Austrian Shillings
two hundred fifty thousand), ("Purchase Price I"), and shall
be paid in accordance with the terms and conditions of the
assignment agreement attached hereto as Schedule 2.1;
(ii) the purchase price for the sale of the Limited Partnership
Interest shall be an aggregate price of ATS 399,750,000 (in
words: Austrian Shillings three hundred ninety-nine million
seven hundred fifty thousand), ("Purchase Price II").
3.2 The Purchase Price II shall be satisfied by Grant's transfer of cash
to VA SCHIENE's Bank Account on the dates and in the amounts set
forth below:
(i) 20 % of the Purchase Price II minus the Purchase Price
amounting to ATS 79,950,000 (in words: Austrian Shillings
seventy nine million nine hundred fifty thousand) shall be
transferred on or before the Closing Date ("Installment I");
(ii) 30 % of the Purchase Price II amounting to ATS 119,925,000 (in
words: Austrian Shillings one hundred nineteen million nine
hundred twenty-five thousand) shall be paid over three years
in six equal installments at the end of each six month period,
each in the amount of ATS 19,987,500 (in words: Austrian
shillings nineteen million nine hundred eighty seven
thousand), ("Installment II"). The first Installment II shall
be paid six months after Installment I was due;
(iii) the remaining 50 % of the Purchase Price II amounting to ATS
199,875,000 (in words: Austrian Shillings one hundred ninety
nine million eight hundred seventy-five thousand) shall be
paid over a seven and one-half year period out of the annual
Dividend (each and such installment hereinafter referred to as
"Installment III"). The first Installment III shall be paid
within 14 days after the annual financial statements of the
business year 1999/2000 have been approved by the partner's
meeting by a transfer of the profits, if any, attributable to
GRANT's interest in VASK GmbH & Co KG and VASK GmbH to VA
SCHIENE's Bank Account. During the first five years, the
annual Installment III shall be equal to the annual
6
-6-
Dividend, provided, however that no payment shall be in excess
of the unpaid Purchase Price II. If an Installment III so
exceeds the unpaid Purchase Price II, the Installment III
shall be reduced accordingly.
If the sum of the amounts actually paid of Installment I, Installment
II and III are not equal to the Purchase Price II by the 5th
anniversary of the Closing Date, the unpaid principal shall be paid
in five equal semi-annual installments (each and such installment
hereinafter referred to as "Installment IV"). The first Installment
IV shall be paid on December 1 of the calendar year during which the
5th anniversary of the Closing Date occurs.
3.3 GRANT shall pay interest on the unpaid principal amount of the
Purchase Price from the Closing Date until the principal amount
thereof shall have been paid in full. Interest shall be computed on
the basis of six months EURIBOR in effect from time to time. The
interest due in accordance with this section shall accrue from day to
day, shall be computed under the basis of the actual number days
elapsed and a year of 360 days, and shall be paid in arrears by GRANT
in semi-annual installments on the end of every six months, following
the Closing Date.
3.4 GRANT shall pay interest on overdue Installments and on overdue
interest from the due date up to the date of actual payment at the
rate determined to be three percent (3 %) per annum above the six
months EURIBOR.
3.5 The outstanding Purchase Price shall be secured by a pledge in favor
of VA SCHIENE on the ownership interest and the profit distribution
rights allocated to the Shares and the Limited Partnership Interest
and GRANT agrees to execute at Closing a pledge agreement in the form
attached hereto as Schedule 3.5 (the "Pledge Agreement").
3.6 (a) 10 % of the Purchase Price II shall be payable as a deposit
within 14 days from the Signing Date to an account designated
by VA SCHIENE ("Deposit"). In the event this Investment
Agreement is terminated pursuant to Section 7 hereof other
than as a result of a material default by GRANT, VA SCHIENE
shall immediately return the Deposit to GRANT.
(b) The Deposit shall be applied against Installment I.
7
-7-
4. ADJUSTMENT OF THE PURCHASE PRICE
4.1 If at the end of the business quarter immediately prior to the
Closing VASK GmbH & Co KG's equity ("Target Equity") is less than its
equity at March 31, 1998 then the Purchase Price shall be reduced by
50 % of the deficiency, provided, however, that VA SCHIENE may in
lieu of such adjustment elect to pay 100 % of such deficiency to VASK
GmbH & Co KG.
For purposes of calculating the Target Equity:
(a) the same accounting standards and policies shall be used to
calculate the March 31, 1998 equity, consistently applied;
(b) any payment or distribution payable to VA SCHIENE or VASK GmbH
in respect of earnings for the business year ended March 31,
1999 shall be reported as a liability notwithstanding the fact
that such payment or distribution may not otherwise be
recorded as liability at that time; it being understood that
such payment or distribution may be made to VA SCHIENE;
(c) the term equity shall refer to the line item "Eigenmittel" set
forth on the March 31, 1998 balance sheet; and
(d) the transfer of the entire legal ownership as of the Signing
Date of VOEST-ALPINE TUBULAR Corporation to any of the TARGET
COMPANIES ENTITIES shall not result in any adjustment.
The calculation of the Target Equity shall be audited if requested by
GRANT.
5. EFFECTIVENESS OF THE AGREEMENT
5.1 This Investment Agreement shall become binding upon the contracting
parties upon its execution by VA SCHIENE and GRANT subject to
Sections 6.1 and 6.2.
5.2 The transfer of the Shares and the Limited Partnership Interest shall
become effective upon Closing. All rights and obligations, benefits
and charges pass as of that date from VA SCHIENE to GRANT. From the
Closing Date onwards VA SCHIENE shall not participate in the profit
and losses attributable to the Limited Partnership Interest.
8
-8-
6. CONDITIONS PRECEDENT
6.1 The obligations of GRANT to consummate the transaction contemplated
by this Investment Agreement are subject to the satisfaction and
proof in a form and substance satisfactory to GRANT or waiver on or
prior to the Closing Date, of each of the following conditions
("Conditions Precedent I"):
(a) VASK GmbH & Co KG has concluded an agreement with VOEST-ALPINE
or its Affiliates regarding
(i) the usage of the trade name and xxxx, including the
usage of the trade name and xxxx by GRANT and its
Affiliates for marketing purposes; and
(ii) VASK GmbH & Co KG's joining of the IT framework
agreement for SAP; and
(iii) the services per the service agreements in form and
substance acceptable to GRANT attached hereto as
Schedule 6.1 (a) (iii).
(b) VA SCHIENE has obtained the approval of the ERP-Funds to
conclude this Investment Agreement;
(c) VASK GmbH & Co KG has concluded an agreement with VA SCHIENE
regarding the dissolution and final settlement of the
"Besserungsschein" as attached hereto as Schedule 6.1 (c) (i).
(d) VA SCHIENE has provided commercial registry extracts as of the
Closing Date for VASK GmbH & Co KG;
(e) IVM Industrieversicherungsmakler GmbH has issued an official
confirmation that the present terms and conditions of all
insurance policies in favor of VASK GmbH & Co KG or its
employees will remain valid and unchanged following the
Closing of this Investment Agreement;
(f) An agreement has been concluded between the TARGET COMPANIES
and the VA-Group concerning
9
-9-
(i) the TARGET COMPANIES allocations to premiums of
group insurance policies; and
(ii) the supply of steel billets in a form as attached
hereto as Schedule 6.1.g. (ii);
(g) The members of VASK GmbH's supervisory board delegated by VA
SCHIENE have declared their resignation from office in
writing;
(h) VA SCHIENE shall have taken all necessary steps towards the
transfer of the shareholding of VA SCHIENE in VOEST-ALPINE
SOUTH AMERICA, S.A. to an entity of the TARGET COMPANIES
ENTITIES;
(i) Each Party shall have furnished the other Party with
(i) a certified copy of a resolution or resolutions duly
adopted by the supervisory board of such Party
approving the transaction documents to which it is a
party and consummation of the transaction contemplated
hereby;
(ii) a favorable legal opinion, dated the Closing Date, in
customary form and substance of Dorda, Xxxxxxx &
Jordis, outside counsel for VA SCHIENE, and Fulbright &
Xxxxxxxx LLP, outside counsel for GRANT to the effect
that:
(A) Each Party is duly organized, existing and in
good standing under the applicable laws and has
all requisite corporate power and authority to
execute and deliver each of the Transaction
Documents to which it is a party and to perform
its obligations thereunder. The execution,
delivery and performance by the Parties of the
Transaction Documents have been duly and validly
authorized and all necessary corporate action on
the part of the Parties has been taken. Each of
the Transaction Documents has been duly and
validly executed and delivered by the Parties;
(B) the execution and delivery by the Parties of the
Transaction Documents, the consummation of the
transaction contemplated hereby and compliance
by the Parties with the provisions thereof will
not conflict with, constitute a default under or
violate any of the terms, conditions or
provisions of the Parties' partnership agreement
or by-laws;
10
-10-
(iii) a favorable officer's certificate, dated the Closing
Date, in customary form and substance for VA SCHIENE
and GRANT, to the effect that:
(A) each Party is duly organized, existing and in
good standing under the applicable laws and has
all requisite corporate power and authority to
execute and deliver each of the Transaction
Documents to which it is a party and to perform
its obligations thereunder. The execution,
delivery and performance by the Parties of the
Transaction Documents have been duly and validly
authorized and all necessary corporate action on
the part of the Parties has been taken. Each of
the Transaction Documents has been duly and
validly executed and delivered by the Parties;
(B) the execution and delivery by the Parties of the
Transaction Documents , the consummation of the
transaction contemplated hereby and compliance
by the Parties with the provisions thereof will
not conflict with, constitute a default under or
violate any of the terms, conditions or
provisions of the Parties' partnership agreement
or by-laws;
(j) The representations, covenants and warranties of VA SCHIENE
contained in this Investment Agreement (other than any
representations, covenants and warranties made as of a
specific date) shall be true in all material respects on and
as of the Closing Date with the same effect as though such
representations, covenants and warranties had been made on and
as of such date, except for such representations, covenants
and warranties that are no longer true or complete in any
material respect provided that VA SCHIENE has disclosed to
GRANT in writing the nature of the change in circumstances and
such changes do not result in a material adverse change in
respect of the TARGET COMPANIES ENTITIES. GRANT shall receive
a certificate to that effect on the Closing Date, executed on
behalf of VA SCHIENE, by the managing board.
(k) The Parties shall have received evidence, in form and
substance reasonably satisfactory to it, that such licenses,
permits, consents, approvals, authorizations, qualifications
and orders of Governmental Authorities and any third parties
as are necessary, if any, in connection with the transactions
contemplated hereby have been obtained.
11
-11-
(l) There shall not be pending or threatened by any Governmental
Authority any suit, action or proceeding (or by any other
Person any pending suit, action or proceeding which has a
reasonable likelihood of success),
(i) challenging or seeking to restrain or prohibit the
consummation of the transactions contemplated by this
Investment Agreement or seeking to obtain from the
TARGET COMPANIES ENTITIES any damages that are material
in relation to TARGET COMPANIES ENTITIES taken as a
whole; or
(ii) seeking to prohibit or limit the ownership or operation
of any material portion of the TARGET COMPANIES
ENTITIES or to dispose of or hold separate any material
portion of the business or assets of the TARGET
COMPANIES ENTITIES, as a result of the transactions
contemplated by this Investment Agreement.
6.2 The respective obligations of GRANT and VA SCHIENE to consummate the
transactions contemplated by this Investment Agreement are subject to
the clearing from cartel authorities and the payment of Installment I
to VA SCHIENE ("Conditions Precedent II").
6.3 All Conditions Precedent I mentioned under Section 6.1.a to 6.1.r
above, shall be fulfilled by September 30, 1999 (in words: September
thirty, nineteen ninety nine) at the latest. The application to the
cartel authorities according to Section 6.2 shall be filed without
undue delay after the Signing Date.
6.4 As soon as the Condition Precedent II has been fulfilled, the closing
of the transactions contemplated by this Investment Agreement (the
"Closing") shall take place at the offices of Bruckhaus Xxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxxxxx 00, 0000 Xxxxxx, beginning at 10:00 am on
the Closing Date. All actions to be taken at the Closing as set forth
herein and all agreements, documents and instruments delivered and
payments made with respect thereto shall be considered to have been
taken and delivered or made and shall be effective simultaneously at
5 pm Vienna time on the Closing Date (except as otherwise expressly
provided in such agreements, documents and instruments), and no such
action, delivery or payment shall be considered as complete until all
such actions, delivery and payments incident to the Closing have been
completed.
6.5 At Closing the following agreements and documents shall be executed
and action shall be taken:
12
-12-
(a) a notarial deed regarding the sale and assignment of the
Shares from VA SCHIENE to GRANT in substantially the form as
attached hereto as Schedule 2.1 shall be executed;
(b) the execution of the Operating Agreement by VA SCHIENE and
GRANT in substantially the form as attached hereto as Schedule
6.5.b;
(c) the execution of the Supply Agreement by VASK GmbH & Co KG and
GRANT in substantially the form as attached hereto as Schedule
6.5.c;
(d) the approval of VASK GmbH & Co KG's partnership agreement by
the partners' meeting in substantially the form as attached
hereto as Schedule 6.5.d;
(e) approval of VASK GmbH's articles of association by the
shareholders' meeting in substantially the form as attached
hereto as Schedule 6.5.e;
(f) execution of the Pledge Agreement by VA SCHIENE and GRANT in
substantially the form as attached hereto as Schedule 3.5;
(g) execution of the registration to be filed with the commercial
register, to register the transfer of the Limited Partnership
Interest from VA SCHIENE to GRANT by VA SCHIENE, VASK GmbH and
GRANT; and
(h) execution by the managing director's of VASK GmbH of the
registration to be filed with the commercial register, to
register the transfer of Shares from VA SCHIENE to GRANT.
6.6 Forthwith after Closing a shareholders' meeting of VASK GmbH shall be
held electing the new members of the supervisory board.
6.7 After the election the constituent supervisory board meeting shall
take place, electing a chairman and a deputy-chairman and approving
(i) the by-laws for the supervisory board in substantially the
form attached hereto as Schedule 6.7.i; and
(ii) the by-laws for the management board in substantially the form
as attached hereto as Schedule 6.7.ii.
13
-13-
Both Parties shall undertake with their best efforts to cause their
designated members of the supervisory board to comply with this
provision.
7. TERMINATION; AMENDMENT; WAIVER
7.1 This Investment Agreement may be terminated at any time prior to the
Closing Date
(i) by mutual written consent of the Parties hereto;
(ii) by either VA SCHIENE or GRANT:
(A) if any court of competent jurisdiction or any
Governmental Authority shall have issued a permanent
injunction or other order or have taken any other
action permanently enjoining, restraining or otherwise
prohibiting the transaction contemplated hereby, or
(B) if the transactions contemplated hereby shall not have
been consummated by September 30, 1999, unless the
failure to consummate the transaction contemplated
hereby is a result of a material breach of this
Investment Agreement by the Party seeking to terminate
this Investment Agreement.
(iii) by GRANT, if VA SCHIENE materially breaches any of its
representations, warranties or covenants herein or fails to
perform in material respect any of its covenants, agreements
or obligations under this Investment Agreement.
7.2 In the event of termination of this Investment Agreement as provided
in Section 7.1 above, this Investment Agreement shall forthwith
become null and void and have no effect, without any liability or
obligation on the part of GRANT or VA SCHIENE, other than
(i) the provisions of Section 11.1, 11.5 and 11.7; and
(ii) such termination shall not relieve any Party hereto for any
intentional breach of this Investment Agreement prior to such
termination.
14
-14-
8. CERTAIN COVENANTS
8.1 Between the Signing Date and Closing Date VA SCHIENE shall use its,
and shall cause the TARGET COMPANIES to use their, best efforts to
preserve intact the present assets and goodwill of the TARGET
COMPANIES ENTITIES and to ensure that the TARGET COMPANIES ENTITIES
operate their businesses in all material respects only in the usual
course of business and not to take any action that would cause any of
the VA SCHIENE's representations and warranties pursuant to Section 9
not to be true and correct as of the Closing Date and shall not enter
into any agreements that would otherwise be required to be scheduled
under the Transactions Documents without prior consent of GRANT.
8.2 Prior to Closing, VA SCHIENE will use all reasonable endeavors to
procure that the employees of the TARGET COMPANIES ENTITIES at the
date hereof remain and continue as employees of the TARGET COMPANIES
ENTITIES after the Closing Date.
8.3 Prior to Closing, VA SCHIENE shall not take, nor allow any of the
TARGET COMPANIES ENTITIES to take, any action that would have
required GRANT's consent under the Operating Agreement if the
Operating Agreement had been in effect at such time, except as
otherwise provided in this Investment Agreement or as agreed to in
writing by GRANT.
8.4 Prior to Closing the Parties shall use all best endeavors to ensure
that all conditions precedent shall be timely fulfilled.
9. REPRESENTATIONS AND WARRANTIES
9.1 VA SCHIENE represents, covenants and warrants to GRANT at the Signing
Date and again as of the Closing Date, subject to VA SCHIENE's right
to update the Schedules hereto for changes of fact occurring between
the Signing Date and the Closing Date as follows:
9.1.1 VA SCHIENE's Good Standing and Authorization
(i) VA SCHIENE is a limited partnership, duly organized, validly
existing and in good standing under the laws of the Republic
of Austria and is duly registered in the commercial register
of the Higher Court of Leoben under the registration number
165399 i. No Bankruptcy Action has been initiated against VA
SCHIENE. VA SCHIENE owns directly all the outstanding equity
interests in the TARGET COMPANIES, free and clear of all Liens
and all such interests have been validly
15
-15-
issued and are fully paid and non-assessable. The Limited
Partnership Interest and the Shares are freely transferable
(or any necessary consent of third persons has been obtained)
and will be transferred to GRANT free of any rights of third
persons.
(ii) VA SCHIENE has the requisite partnership power and authority
to enter into this Investment Agreement and to consummate the
transactions contemplated hereby. The execution and delivery
of this Investment Agreement by VA SCHIENE and the
consummation by VA SCHIENE of the transactions contemplated
hereby have been duly authorized by all necessary partnership
action on the part of VA SCHIENE. This Investment Agreement
has been duly and validly executed and delivered by VA SCHIENE
and constitutes a valid and binding obligation of VA SCHIENE,
enforceable against VA SCHIENE in accordance with its terms,
except that
(A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar
laws or judicial decisions now or hereafter in effect
relating to creditor's rights generally; and
(B) the remedy of specific performance and injunctive
relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding
therefor may be brought.
(iii) The execution and delivery of this Investment Agreement by VA
SCHIENE do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof
will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation
or to loss of a material benefit under, or result in the
creation of any Lien, upon any of the properties or assets of
the TARGET COMPANIES under, any provision of
(A) the limited partnership agreement, by-laws or other
organizational documents of VA SCHIENE;
(B) any loan or credit agreement, note, bond, mortgage,
indenture, lease, or other agreement, instrument,
permit, concession, franchise or license applicable to
VA SCHIENE or any of its respective properties or
assets; or
16
-16-
(C) subject to the governmental filings and other matters
referred to in Section 9.1.1.iv below, any judgment,
order, decree, statute, law, ordinance, rule or
regulation or arbitration award applicable to VA
SCHIENE or its respective properties or assets.
(iv) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental
Authority is required by or with respect to VA SCHIENE in
connection with the execution and delivery of this Investment
Agreement by VA SCHIENE or the consummation by VA SCHIENE of
the transactions contemplated hereby, except as has already
been obtained and except for the filing of premerger
notification information with the competent competition
authorities.
(v) No administrative, civil or arbitral proceeding which could
hinder or prevent the execution and delivery of this
Investment Agreement by VA SCHIENE or the consummation by VA
SCHIENE of the transactions contemplated hereby are pending
or, to the best knowledge of VA SCHIENE, threatened.
9.1.2 Financial Statements
(i) VA SCHIENE has delivered to GRANT the following financial
statements (the "VASK Financial Statements") which are
attached as Schedule 9.1.2.i hereto: the audited financial
statements of VASK GmbH & Co KG and its legal predecessor at
March 31, 1998, March 31, 1997 and December 31, 1996, each
together with the report on the economic position, and the
unaudited financial statements of VASK GmbH of March 31, 1998
and will deliver as promptly as practicable after the Signing
Date the audited financial statements of VASK GmbH & Co KG at
March 31, 1999 and the unaudited financial statements of VASK
GmbH at March 31, 1999.
(ii) The VASK Financial Statements, including the balance sheet and
the related statement of income and cash flows have been
prepared in accordance with generally accepted Austrian
accounting principles consistently applied (except for the
financial statements at March 31, 1999 which have been
prepared in accordance with the IAS), and fairly present the
financial position, results of operations, assets and
liabilities of the TARGET COMPANIES as of the date and for the
fiscal period covered thereby.
17
-17-
(iii) There are no liabilities or obligations of any nature, whether
known or unknown, fixed or unfixed, xxxxxx or inchoate,
liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise, whether or not of a kind
required by the generally accepted Austrian accounting
principles to be accrued or disclosed in a financial
statement, which are not disclosed as such on the VASK
Financial Statements at the accounting date, except for those
which were incurred after such date in the ordinary course of
business of the TARGET COMPANIES.
(iv) Except for the adoption of the IAS for the VASK Financial
Statements at March 31, 1999 the bases and policies of
accounting of the TARGET COMPANIES (including depreciation)
adopted for the purpose of preparing the VASK Financial
Statements are the same as those adopted for the purpose of
preparing the audited accounts of the TARGET COMPANIES for
each of the three (3) preceding accounting periods.
(v) Depreciation of the fixed assets of the TARGET COMPANIES have
been made at a rate sufficient to write down the value of such
assets to nil not later than the end of their useful working
lives.
(vi) The TARGET COMPANIES' work in progress has been valued by the
TARGET COMPANIES on a basis in all material respects
consistent with that adopted for the purpose of the TARGET
COMPANIES' audited accounts in respect of the beginning and
end of each of the three preceding accounting periods.
(vii) The VASK Financial Statements disclose and make proper
provision or reserve for or note all contingent liabilities,
capital or burdensome commitments.
(viii) The profits and losses of the TARGET COMPANIES shown by the
VASK Financial Statements have not in any material respect
been affected by any unusual or exceptional item or by any
other matter which has rendered such profits or losses
unusually high or low, other than disclosed in the auditors'
reports to VASK Financial Statements.
(ix) The book debts shown in the VASK Financial Statements have
realized or have in aggregate realized the nominal amount
thereof less any reserve for bad or doubtful debts included in
the VASK Financial Statements and none of the same has been
released or settled for an amount less than that shown in the
VASK Financial Statements.
18
-18-
(x) The commercial books of account, records, documents of the
TARGET COMPANIES, including those that have be kept due to
existing contracts are up to date, are in the custody of the
TARGET COMPANIES and are complete and correct in accordance
with the law and accepted Austrian accounting principles or
IAS.
9.1.3 Subsidiaries and Representative Offices
The TARGET COMPANIES have no Subsidiaries or Representative Offices
with the exception of such Subsidiaries and Representative Offices
which are listed in Schedule 9.1.3 hereto. All Subsidiaries and
Representative Offices are duly organized, validly existing and in
good standing under the law of its jurisdiction of organization and
are directly owned by TARGET COMPANIES in the percentage indicated in
Schedule 9.1.3 hereto. The shares of such Subsidiaries have been
properly issued and are fully paid-up and the Representative Offices
have been properly registered with the competent Governmental
Authority under the law of its jurisdiction of organization. The
Subsidiaries are not insolvent or party in a Bankruptcy Action.
9.1.4 Options
There are no outstanding or authorized securities, options, warrants,
calls, rights, commitments, preemptive rights, agreements,
arrangements or undertakings of any kind to which any of the TARGET
COMPANIES ENTITIES are a party, or by which it is bound, obligating
(A) any of the TARGET COMPANIES ENTITIES to issue, deliver or
sell, or cause to be issued, delivered or sold, any shares of
capital stock or other equity or voting securities of, or
other ownership interests in that entity; or
(B) any of the TARGET COMPANIES ENTITIES to issue, grant, extend
or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking.
9.1.5 Title to Properties
Other than immaterial Liens that do not affect value or use,
(i) All assets exist and the TARGET COMPANIES ENTITIES hold good
and valid title to and actual power of control of them. All
assets are free and clear of all Liens and
19
-19-
there are no obligations of the TARGET COMPANIES ENTITIES to
grant such rights. Machines and stocks were not pledged and
accounts receivables were not assigned, other than disclosed
in Schedule 9.1.5.i. Encumbrances due to statutory provisions,
such as pledges for taxes, carriers, lessors or similar
persons that concern claims that are either not due yet or
that are contested in good faith are excluded from these
representations. The TARGET COMPANIES ENTITIES are not party
to a lease agreement (notwithstanding if as lessee or lessor),
other than disclosed in Schedule 9.1.5.i.
(ii) Each item of TARGET COMPANIES ENTITIES' plant and equipment:
(A) is licensed, registered or approved for use (if
required to be licensed, registered or approved for
use);
(B) is in good repair and taking into account normal wear
and tear is in satisfactory working condition and
capable of doing the work for which it is designed;
(C) is not the subject of any notice, order or requirement
from any competent Governmental Authority having
control or jurisdiction over its use or ownership; and
(D) is erected or positioned in accordance with all
applicable laws and is operated by the TARGET COMPANIES
ENTITIES without contravening any laws or industrial
health and safety regulations in any material aspect.
(iii) To the best knowledge of VA SCHIENE, there is no claim
outstanding against any supplier of the plant and equipment of
any of the TARGET COMPANIES ENTITIES or of maintenance
services for that plant and equipment in connection with any
defect in that plant and equipment.
(iv) Each item of plant and equipment is in the physical possession
of the TARGET COMPANIES ENTITIES as indicated in the TARGET
COMPANIES ENTITIES' asset register, if any.
(v) To the best knowledge of VA SCHIENE, the TARGET COMPANIES
ENTITIES have not supplied goods or have agreed on the supply
of them that are or shall become defect or that do not or will
not correspond to the provisions of the respective purchase
agreement, other than shown in the VASK Financial Statements
20
-20-
and other than those listed in Schedule 9.1.5.v. In
particular, there have been no recall actions and no guarantee
claims with respect to goods that were manufactured and
supplied until the Signing Date that exceed the average level
of guarantee repairs of the last 5 years.
(vi) The TARGET COMPANIES ENTITIES have less than USD 15,000,000 in
assets in the United States and the revenues of the TARGET
COMPANIES ENTITIES from sales in the United States for the
business year ended March 31, 1999 were less than USD
25,000,000.
9.1.6 Business Premises
(i) Schedule 9.1.6.i accurately describes all the business
premises owned, leased and/or occupied by the TARGET COMPANIES
ENTITIES (the "Business Premises"). The list and the attached
abstracts from the land register are complete and correct and
comprise
(A) all real property assets (land with or without
buildings, condominium or floor property and similar
rights) of the TARGET COMPANIES ENTITIES structured by
owner, space, location, zoning plan and register
number; and
(B) all branches, offices and any other business sites of
the TARGET COMPANIES ENTITIES.
(ii) The respective company of the TARGET COMPANIES ENTITIES owns
the real property as set forth in the land register, has
exclusive occupation and possession of occupied but not owned
Business Premises, as the case might be, free from any third
party encumbrance, tenancy or right of occupation,
reservation, easement, quasi-easement or privilege in favor of
any third party, other than registered in the land register or
disclosed in Schedule 9.1.6.ii and there are appurtenant to
the Business Premises all rights and easements necessary for
their use and enjoyment on terms which do not entitle any
person to terminate them other than disclosed in Schedule
9.1.6.ii. As far as motions, statements or filings of
documents are required with the respective land registry, to
the best knowledge of VA SCHIENE, such requirements have been
duly fulfilled.
(iii) To the best knowledge of VA SCHIENE, there are no
restrictions, stipulations or outgoings affecting the Business
Premises which are of an onerous or unusual nature
21
-21-
or conflict with the present use. The use of the Business
Premises by the TARGET COMPANIES ENTITIES does not constitute
a material breach of any applicable law.
(iv) To the best knowledge of VA SCHIENE, no development,
alterations or works have been carried out in relation to the
Business Premises which would require any permission or
consent under any law which has not been obtained and all
conditions attaching to any such permission or consent have
been fully complied with.
(v) To the best knowledge of VA SCHIENE, there are no proposals by
any competent authority or other person which would have a
Material Adverse Effect on the Business Premises.
(vi) To the best knowledge of VA SCHIENE, each of the buildings and
other erections on the Business Premises:
(A) is in such condition and repair as to be substantially
fit for the purpose for which it is presently used; and
(B) is approved and materially complies with applicable
laws and industrial health and safety regulations.
(vii) The connections to power and waste disposal services existing
in the buildings and other erections on the Business Premises
are approved and materially comply with applicable laws.
Neither the TARGET COMPANIES ENTITIES nor VA SCHIENE are, to
VA SCHIENE's best knowledge, aware of any imminent or likely
interruption to those services.
(viii) There are no current disputes relating to any of the Business
Premises or their use.
9.1.7 Tax Matters
(i) All Tax Returns of or with respect to any Tax that are
required to be filed on or before the Signing Date by or with
respect to the TARGET COMPANIES ENTITIES have been duly and
timely filed in accordance with all applicable statutes, rules
and regulations.
22
-22-
(ii) All items of income, gain, loss, deduction and credit or other
items required to be included in each such Tax Return have
been so included and all information provided in each such Tax
Return is true, correct and complete in all material respects.
(iii) All Taxes which have become due with respect to the period
covered by each such Tax Return whether or not reflected on
the Tax Returns have been timely paid in full.
(iv) To the best knowledge of VA SCHIENE, there is no claim from
any Governmental Authority with respect to the TARGET
COMPANIES ENTITIES for any Taxes, and no assessment,
deficiency or adjustment has been asserted or proposed by any
Governmental Authority with respect to any Tax Return of or
with respect to the TARGET COMPANIES ENTITIES.
(v) There is not in force any extension of time with respect to
the due date for the filing of any Tax Return of or with
respect to the TARGET COMPANIES ENTITIES or any waiver or
agreement for any extension of time for the assessment or
payment of any Tax of or with respect to the TARGET COMPANIES
ENTITIES.
(vi) Schedule 0.0.0.xx attached hereto contains a true and complete
list of each written Tax allocation or sharing agreement and a
true and complete description of each unwritten Tax allocation
or sharing arrangement affecting the TARGET COMPANIES
ENTITIES.
(vii) Except for any requirements due to the adoption of the IAS for
the VASK Financial Statements at March 31, 1999, the TARGET
COMPANIES ENTITIES will not be required to include any amount
in income for any taxable period beginning after the Signing
Date as a result of a change in accounting method for any
taxable period ending on or before the Signing Date or
pursuant to any agreement with any Tax authority with respect
to any such taxable period.
(viii) No Liens (whether filed or arising by operation of law) have
been imposed upon or asserted against the TARGET COMPANIES
ENTITIES as a result of or in connection with the failure, or
alleged failure to pay any tax.
(ix) All amounts of or in relation to Tax required to be collected
or withheld by the TARGET COMPANIES ENTITIES have been duly
collected or withheld and any
23
-23-
such amounts that are required to be remitted to any
Governmental Authority have been duly remitted.
(x) No extension of time within which to file any Tax Returns has
been requested nor has any tax return not been filed and no
penalty, interest or, to the best knowledge of VA SCHIENE,
other charge is due with respect to the late filing of any
such Tax Return or late payment of any such Tax.
9.1.8 Litigation
(i) The TARGET COMPANIES ENTITIES are not engaged in any legal
(civil or criminal), administrative or arbitration proceedings
other than those disclosed in Schedule 9.1.8.i. There are no
investigations or proceedings pending or, to the best
knowledge of VA SCHIENE, threatened against or affecting the
TARGET COMPANIES ENTITIES which might involve any liability
not fully covered by insurance or provided for in the VASK
Financial Statements nor, to the best knowledge of VA SCHIENE,
is there any basis for such legal action, proceeding or
investigation.
(ii) No claim has been made against the TARGET COMPANIES ENTITIES
in the three (3) year period prior to the Signing Date, in
connection with any product liability, other than disclosed in
Schedule 9.1.8.ii. To the best knowledge of VA SCHIENE, there
are no facts likely to give rise to any such claim and the
TARGET COMPANIES ENTITIES or its legal predecessors have
maintained adequate insurance against any such claim.
(iii) No claim has been made against TARGET COMPANIES ENTITIES by
any former or current employee and/or contractors in
connection with occupational health and safety matters, other
than those disclosed in Schedule 9.1.8.iii.
(iv) None of the operations of the TARGET COMPANIES ENTITIES are
subject to any unsatisfied judgment or any order, award or
decision handed down in any litigation, arbitration or
enforcement proceedings (civil or criminal), other than
disclosed in Schedule 9.1.8.iv.
(v) Other than listed in Schedule 9.1.8.v none of the TARGET
COMPANIES ENTITIES have received a query or questionnaire due
to applicable cartel law, antitrust law or anti-dumping laws
or other laws or regulations by court or a
24
-24-
governmental authority (including the Austrian Cartel Court or
any other cartel authority, the European Merger Task Force, or
the EFTA-Controlling Authority, the U.S. Trade Commission). To
the best knowledge of VA SCHIENE, there are no other
circumstances that could lead to such investigations. VA
SCHIENE has, however, disclosed to GRANT prior importations of
goods by or on behalf of TARGET COMPANIES ENTITIES and
VOEST-ALPINE TUBULAR Corporation into the United States. Any
liability regarding these importations shall not be covered by
the representations and warranties made herein, but shall be
exclusively dealt with in the Supply Agreement.
9.1.9 Environmental Matters
(i) Schedule 9.1.9.i shows a list of the Austrian and European
Environmental Laws applicable for the business and plant of
the TARGET COMPANIES ENTITIES identified by the environmental
audit company ARP GmbH-Aufbereitung, Recycling, Pruftechnik,
Xxxxxx-Xxxxx Xxxxx 00-00, X-0000 Xxxxxx ("Environmental
Laws"). The TARGET COMPANIES ENTITIES have been and are
materially in compliance with all Environmental Laws and, to
the best knowledge of VA SCHIENE, there are no conditions
existing on or resulting from the operation of the businesses
or properties of the TARGET COMPANIES ENTITIES that may give
rise to any on-site or off-site remedial obligations under any
Environmental Laws.
(ii) The TARGET COMPANIES ENTITIES and their properties are not
subject to any existing, pending or, to the best knowledge of
VA SCHIENE, threatened action, suit, investigation, inquiry or
proceeding by or before any Governmental Authority under any
Environmental Laws.
(iii) All notices, permits, licenses or similar authorizations, if
any, required to be obtained or filed by the TARGET COMPANIES
ENTITIES under any Environmental Laws, including without
limitation those relating to the treatment, storage, disposal
or release of any substance, material or waste regulated under
Environmental Laws into the environment, have been duly
obtained or filed, and will not be terminated or cease to have
effect as a consequence of the change in ownership of the
Shares and/or Limited Partnership Interest and the TARGET
COMPANIES ENTITIES are materially in compliance with the terms
and conditions of all such permits and authorizations and no
actions or appeals are pending or, to the best knowledge of VA
SCHIENE, threatened, to revoke or materially alter the terms
and conditions of such material permits.
25
-25-
(iv) Since the effective date of the relevant requirements of the
Austrian Waste Disposal Act ("Abfallwirtschaftsgesetz") or
other comparable Environmental Laws, all substances, materials
or wastes regulated under Austrian Waste Disposal Act
("Abfallwirtschaftsgesetz") or another comparable
Environmental Law that are generated by the TARGET COMPANIES
ENTITIES or at any properties of the TARGET COMPANIES ENTITIES
and require disposal or treatment have been transported only
by carriers, that to the best knowledge of VA SCHIENE,
maintaining valid authorizations under Austrian Waste Disposal
Act ("Abfallwirtschaftsgesetz") and any other comparable
Environmental Laws and treated and disposed of only at
treatment, storage and disposal facilities, that to the best
knowledge of VA SCHIENE, maintain valid authorizations under
Austrian Waste Disposal Act ("Abfallwirtschaftsgesetz") and
any other comparable Environmental Law, and, to the knowledge
of VA SCHIENE, such carriers and facilities have been and are
operating in compliance with such authorizations and are not
the subject of any existing, pending or threatened action,
investigation or inquiry by any Governmental Authority in
connection with any Environmental Laws.
(v) There are no asbestos-containing materials or naturally
occurring radioactive materials on or in any of the properties
of the TARGET COMPANIES ENTITIES that are required to be
removed, remediated or abated under Environmental Laws, and,
to the best knowledge of VA SCHIENE, there are no storage
tanks, open or closed pits, sumps, or other containers on or
under any of the properties of the TARGET COMPANIES ENTITIES
from which any substances, materials or wastes regulated under
Environmental Laws have been released into the surrounding
environment.
(vi) Without limiting the foregoing, there is no liability to any
non-governmental third party under Environmental Laws or under
common law tort, trespass and nuisance in connection with any
release or, to the best knowledge of VA SCHIENE, threatened
release of any substances, materials or wastes regulated under
Environmental Laws into the environment as a result of or with
respect to the properties or businesses of the TARGET
COMPANIES ENTITIES. None of the TARGET COMPANIES ENTITIES has
received a regulatory notification or complaints of third
parties, including neighbors, that concern the industrial
procedures and the business activity of the TARGET COMPANIES
ENTITIES, air water pollution, the disposal of waste or noise
emission caused by these plants and it is not known to VA
SCHIENE that such notifications or complaints are intended.
26
-26-
(vii) There are no substances in the ground, ground water, or in the
air of business plants, including those coming from
neighboring premises, that have to be removed or restored due
to the Austrian Waste Disposal Act ("Abfallwirtschaftsgesetz")
or any other Environmental Laws. Until the Signing Date there
were and are no disposals or emptying or any distribution of
polluting, dangerous or toxic substances, or waste on the
surface or in the ground of the Business Premises. All such
substances were duly disposed and are not stored on the
Business Premises.
(viii) If the TARGET COMPANIES ENTITIES are obliged to restore or to
dispose waste that was transported until the Closing Date to
waste disposal sites these costs are borne by or the TARGET
COMPANIES ENTITIES. All sewage that is emitted by the TARGET
COMPANIES ENTITIES is treated in a way that the sewage and the
pollution of rivers and ground water are in accordance with
statutory provisions, regulations, regulatory conditions and
permits. Also the level of emissions arising from the
industrial procedures of the TARGET COMPANIES ENTITIES,
including the operation of the Power Plant with regard to all
steams, waste, gases, any other air polluting, noxious or
odorous substances are in material accordance with the
statutes, regulations, and regulatory provisions and
conditions, including all provisions concerning employee
protection.
9.1.10 Labor Matters
(i) Set forth on Schedule 9.1.10.i attached hereto is a list of
each of the following that is, as of the Signing Date,
sponsored, maintained or contributed to by TARGET COMPANIES
ENTITIES for the benefit of its employees :
(A) each employee benefit plan;
(B) each stock option plan, collective bargaining
agreement, bonus plan or arrangement, incentive award
plan or arrangement, severance pay plan, policy or
agreement, deferred compensation agreement or
arrangement, executive compensation or supplemental
income arrangement, consulting and employment
agreement, including without limitation those covering
employees outside of Austria.
27
-27-
(ii) The TARGET COMPANIES ENTITIES have no outstanding liability
other than accrued as a current liability on its balance sheet
as of March 31, 1999 with respect to any of the items
described in clauses (A) and (B) above that are not currently
sponsored, maintained or contributed to by TARGET COMPANIES
ENTITIES, but were so sponsored, maintained or contributed to
by the TARGET COMPANIES ENTITIES within the past six years.
(iii) A complete and accurate list of current employees and managers
of TARGET COMPANIES ENTITIES, as of the Signing Date, entitled
to an annual compensation in excess of ATS 1,000,000 is
attached hereto as Schedule 9.1.10.iii and contains
information on names, commencement of employment, gross annual
salary, other fringe benefits, including pension commitments,
shares in profiteering arrangements, severance pays, accrued
vacation, periods of notice and dates of notice, applicable
national collective agreements. Except as set forth in
Schedule 9.1.10.iii no loans or other advances have been made
to such managers or employees of the TARGET COMPANIES
ENTITIES. Except as set forth in Schedule 9.1.10.iii there are
no pension, provident, superannuation or retirement benefit
funds, schemes or arrangements under which the TARGET
COMPANIES ENTITIES are contractually obliged to provide to
such managers or employees or former managers or employees or
any spouse or other dependent of any of the same, retirement
benefits of any kind (which expression shall include benefits
payable upon retirement, leaving service, death, disablement
and any other benefits which are commonly provided for under
provident or retirement schemes) apart from local statutory
schemes in Austria. All payments made to such local statutory
schemes have been fully paid when due and payable.
(iv) All wages and salaries and other remunerations to employees
and managing directors of the TARGET COMPANIES ENTITIES were
paid in full, if due, up to and including the Signing Date.
The TARGET COMPANIES ENTITIES have withheld all amounts
required by law or by contract to be withheld from the wages
or salaries of all employees of the TARGET COMPANIES ENTITIES
and the TARGET COMPANIES ENTITIES are not liable for any
arrears of wages or any taxes or penalties for failure to
comply with any of the foregoing. In particular, but not
limited, VA SCHIENE represents and warrants to GRANT that all
social security contributions (Sozialversicherungsbeitrage)
have been regularly paid.
(v) Except as set forth on Schedule 9.1.10.v attached hereto,
there are, to the best knowledge of VA SCHIENE, no collective
bargaining agreements, collective plant
28
-28-
agreements (Betriebsvereinbarungen), social or retirement
plans or other labor union agreements or understandings to
which the TARGET COMPANIES ENTITIES are a party or by which
any of them is bound, nor are the TARGET COMPANIES ENTITIES
the subject of any proceeding asserting that it has committed
an unfair labor practice or seeking to compel it to bargain
with any labor organization as to wages or conditions. Except
as set forth on Schedule 9.1.10.v, there is no union
organization activity involving any of the employees of the
TARGET COMPANIES ENTITIES, pending or, to the best knowledge
of VA SCHIENE, threatened. There is no picketing, strikes, or
any material slowdowns, work stoppages, other job actions,
lockouts, arbitrations, grievances or other labor disputes, in
particular an unfair dismissal claim involving any of the
employees of the TARGET COMPANIES ENTITIES, pending or, to the
best knowledge of VA SCHIENE, threatened other than set forth
in Schedule 9.1.10.v. The TARGET COMPANIES ENTITIES are in
material compliance with all laws, regulations and orders
relating to the employment of labor, including but not limited
to all such laws, regulations and orders relating to wages,
hours, collective bargaining, discrimination, civil rights,
safety and health, workers' compensation and the collection
and payment of withholding and/or social security taxes and
any similar tax. Except as set forth on Schedule 9.1.10.v
there has been no mass layoff with respect to the TARGET
COMPANIES ENTITIES within the twenty-four (24) months prior to
Signing Date.
(vi) No outstanding liability has been incurred by the TARGET
COMPANIES ENTITIES for breach of any contract, compensation
for wrongful dismissal or unfair dismissal or for failure to
comply with any order for the reinstatement or re-engagement
of any employee or for any other liability arising from the
termination of any contract of employment or for services.
(vii) The TARGET COMPANIES ENTITIES have not entered into any
arrangements regarding any future variation in any contract of
employment in respect of any of their employees or any
agreement imposing an obligation on the TARGET COMPANIES
ENTITIES to increase the basis and/or rates of remuneration
and/or the provision of other benefits in kind to or on behalf
of any of their employees at any future date other than as
contemplated by the applicable collective bargaining
agreement.
(viii) There are no provisions in the employment contracts of board
members, managing directors, or employees of the TARGET
COMPANIES ENTITIES on a basis of
29
-29-
which a person receives payments or other contributions as a
result of the contemplated share sale or by which their rights
would be altered therefore.
(ix) The TARGET COMPANIES ENTITIES are not party of an agreement or
other transaction deemed to be as a transfer of an undertaking
within the sense of the directive 77/187/EWG of the European
Union.
9.1.11 Inventory
(i) The stocks of finished goods of the TARGET COMPANIES ENTITIES,
including their packaging, are of merchantable quality and fit
for the purpose for which they are ordinarily acquired.
(ii) The packaging and labeling of the stocks of finished goods is
not false or misleading or deceptive and does not materially
contravene any applicable law.
9.1.12 Intellectual Property
(i) Subject to the agreements to be concluded pursuant to Section
6.1.a, the TARGET COMPANIES ENTITIES own or are licensed or
otherwise have the right to use, all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights,
service marks, service xxxx rights, copyrights, technology,
know-how, processes and other proprietary intellectual
property rights and computer programs which are material to
the condition (financial or otherwise) or conduct of the
business and operations of the TARGET COMPANIES ENTITIES taken
as a whole. The use of such patents, patent rights,
trademarks, trademark rights, service marks, service xxxx
rights, trade names, copyrights, technology, know-how,
processes and other proprietary intellectual property rights
and computer programs by the TARGET COMPANIES ENTITIES do not
infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, give rise to
any liability on the part of the TARGET COMPANIES ENTITIES.
(ii) Except for the agreements set forth in Schedule 9.1.12.ii
neither the TARGET COMPANIES ENTITIES nor VA SCHIENE is
subject to an agreement concerning confidentiality or any
other agreement restricting the free use and disclosure of
information concerning business activities of the TARGET
COMPANIES ENTITIES.
30
-30-
9.1.13 Insurance
(i) Schedule 9.1.13.i attached hereto sets forth information as of
the Signing Date hereof with respect to each insurance policy
(including policies providing property, casualty, liability,
and workers' compensation coverage, and bond and surety
arrangements) to which the TARGET COMPANIES ENTITIES are a
party, a named insured, or otherwise a named beneficiary of
coverage. With respect to each such insurance policy:
(A) the policy is in full force and effect;
(B) the TARGET COMPANIES ENTITIES are not in material
breach or default (including with respect to the
payment of premiums nor the giving of notices), and no
event has occurred which, with notice or the lapse of
time, would constitute such a material breach or
default, or permit termination, modification, or
acceleration under the policy;
(C) the policy will not be terminated or cease to have
effect as a consequence of the change in ownership of
the TARGET COMPANIES ENTITIES;
(D) no party to the policy has repudiated any provision
thereof; and
(E) the TARGET COMPANIES ENTITIES have not reached or
exceeded the policy limits for any insurance policies
in effect at any time during the past five years.
(ii) The TARGET COMPANIES ENTITIES have insurance in such amount
and covering such risks as is customary for businesses of
similar size in the business sector of the TARGET COMPANIES
ENTITIES.
9.1.14 Compliance with Laws
The TARGET COMPANIES ENTITIES hold all material required, necessary
or applicable permits, licenses, variances, exemptions, orders,
franchises and approvals of all Governmental Entities ("TARGET
COMPANIES ENTITIES' Permits"). The TARGET COMPANIES ENTITIES are in
material compliance with the terms of the TARGET COMPANIES ENTITIES'
Permits. The TARGET COMPANIES ENTITIES have
31
-31-
materially not violated or failed to comply with any statute, law,
ordinance, regulation, rule, permit or order of any federal, state or
local government, domestic or foreign, or any Governmental Authority,
any arbitration award or any judgment, decree or order of any court
or other Governmental Authority, applicable to the TARGET COMPANIES
ENTITIES or their businesses, assets or operations. Neither the
TARGET COMPANIES ENTITIES nor VA SCHIENE are aware of any reason why
any of the TARGET COMPANIES ENTITIES' Permits should be or may be
revoked or amended.
9.1.15 Brokers
No broker, investment banker or other Person is entitled to receive
from the TARGET COMPANIES ENTITIES, VA SCHIENE or the VA-Group any
investment banking, broker's, finder's or similar fee or commission
in connection with this Investment Agreement or the transactions
contemplated hereby.
9.1.16 Material Contracts and Agreements
(i) Schedule 9.1.16.i attached hereto lists the following
contracts and other agreements (written or oral) to which the
TARGET COMPANIES ENTITIES or any of its assets is a party or
subject to:
(A) Any agreement (or group of related agreements) for the
purchase or sale of raw materials, steel billets or
other goods and services in an amount in excess of ATS
20,000,000;
(B) any lease or rental of real property or personal
property providing for payments in excess of ATS 1.3
million per year to or from any Person other than
disclosed on Schedule 9.1.5.i;
(C) any agreement concerning a partnership or joint venture
or distribution or agency relationship;
(D) any agreement (or group of related agreements)
involving the creation, incurrence, assumption or
guarantee of any indebtedness for borrowed money, any
capital lease obligation or any sale and lease back
obligation in an amount in excess of ATS 10,000,000 or
which a security interest for any such obligations has
been granted;
32
-32-
(E) any material agreement concerning non-competition;
(F) any separate employment agreement providing for annual
compensation in excess of ATS 1,000,000 or providing
severance benefits outside the TARGET COMPANIES
ENTITIES' customary severance policy;
(G) any agreement under which the TARGET COMPANIES ENTITIES
have advanced or loaned any amount of money to its
directors, officers or employees outside the ordinary
course of business;
(H) any agreement not made in the ordinary course of
business not otherwise disclosed herein and that could
reasonably be expected to have a material adverse
effect on the TARGET COMPANIES ENTITIES;
(ii) All material contracts of the TARGET COMPANIES ENTITIES have
been made available to GRANT. For purposes of this provision,
material contracts shall be deemed to be all contracts of
unusual and extraordinary nature and are outside the ordinary
course of business or that should be disclosed to a
contracting party that intends to purchase a significant
participation in the TARGET COMPANIES due to their nature or
importance of the obligation.
(iii) Except as set forth on Schedule 9.1.16.iii there are no
agreements (or group of related agreements), notwithstanding
orally or written, concluded by the TARGET COMPANIES ENTITIES
with an Affiliate of the VA-Group.
(iv) Except as set forth on Schedule 9.1.16.iv there are no
material agreements which will be or are capable of being
terminated on a change of ownership of the TARGET COMPANIES.
9.1.17 Undisclosed Liabilities
Except as set forth on Schedule 9.1.17 attached hereto or as set
forth in the VASK Financial Statements, at the date of the most
recent audited financial statements of the TARGET COMPANIES, the
TARGET COMPANIES had not, and since such date the TARGET COMPANIES
have not, incurred (except in the ordinary course of business), any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise), which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on the
TARGET COMPANIES ENTITIES taken as a whole.
33
-33-
9.1.18 Year 2000 Compliance
(i) The TARGET COMPANIES ENTITIESVA SCHIENE has made all
reasonable efforts to render all of the Products and Services
of the TARGET COMPANIES ENTITIES Year 2000 Compliant. If any
of the TARGET COMPANIES ENTITIES is obligated to repair or
replace Products or Services previously provided thereby that
are not Year 2000 Compliant in order to meet its contractual
obligations, to avoid personal injury or other liability, to
avoid misrepresentation claims, or to satisfy any other
obligations or requirements, such entity of the TARGET
COMPANIES ENTITIES have repaired or replaced those Products
and Services to make them Year 2000 Compliant. TARGET
COMPANIES ENTITIES have furnished GRANT with true, correct and
complete copies of any customer agreements and other materials
and correspondence in which the TARGET COMPANIES ENTITIES have
furnished (or could be deemed to have furnished) assurances as
to the year 2000 Compliance of the Products or Services of the
TARGET COMPANIES ENTITIES.
(ii) THE TARGET COMPANIES ENTITIESVA SCHIENE has made all
reasonable efforts to render all of the Internal MIS Systems
and Facilities of the TARGET COMPANIES ENTITIES Year 2000
Compliant.
(iii) To the actual knowledge of the TARGET COMPANIES ENTITIES the
vendors of products or services to the TARGET COMPANIES
ENTITIES will continue to furnish its products or services to
the TARGET COMPANIES ENTITIES, without interruption or
material delay, on and after January 1, 2000.
(iv) The TARGET COMPANIES ENTITIES have furnished GRANT with a
true, correct and complete copy of any internal
investigations, memoranda, budget plans, forecasts or reports
concerning the Year 2000 Compliance of the products, services,
operations, systems, supplies, and facilities of the TARGET
COMPANIES ENTITIES. A list of these investigations and reports
is attached hereto as Schedule 9.1.18.iv.
9.1.19 Forced Labor
There are claims based on forced labor and related class actions
threatened against the VA-Group. VA SCHIENE hereby represents,
covenants and warrants to hold harmless and
34
-34-
indemnify GRANT, its Affiliates, successors and assigns for any
Indemnity Losses from or arising out of any such claims asserted
against the TARGET COMPANIES ENTITIES or GRANT.
9.1.20 Information
(i) All information contained in this Investment Agreement
(including the recitals) is true and accurate.
(ii) No representation, warranty or covenant contained in this
Investment Agreement and no statement contained in the
Schedules or in any Annex, certificate or other instrument
furnished or to be furnished to GRANT pursuant hereto or in
connection with the transactions contemplated hereby, contains
or will contain any untrue statement of fact, or omits or will
omit to state a fact which is necessary in order to make the
statements contained herein or therein not misleading.
(iii) All written information given to GRANT and/or its professional
advisers by VA SCHIENE, TARGET COMPANIES ENTITIES, officers
and employees and/or VA SCHIENE's professional advisers during
the negotiations prior to the Signing Date of this Investment
Agreement was when given true and accurate and there is, to
the best knowledge of VA SCHIENE, no fact, matter or
circumstance which has not been disclosed in writing to GRANT
or its professional advisers which renders any such
information untrue, inaccurate or misleading or which might
reasonably affect the willingness of GRANT to proceed with the
purchase of the Shares and/or the Limited Partnership Interest
on the terms of this Investment Agreement.
9.2 GRANT represents, covenants and warrants to VA SCHIENE as of the
Signing Date and again as of the Closing Date as follows:
9.2.1 GRANT's Good Standing and Authorization
(i) GRANT is a corporation, duly organized, validly existing and
in good standing under the laws of Delaware. No Bankruptcy
Action has been initiated against GRANT.
(ii) GRANT has the requisite corporate power and authority to enter
into this Investment Agreement and to consummate the
transactions contemplated hereby. The execution and delivery
of this Investment Agreement by GRANT and the consummation by
35
-35-
GRANT of the transactions contemplated hereby have been duly
authorized by all necessary partnership action on the part of
GRANT. This Investment Agreement has been duly and validly
executed and delivered by GRANT and constitutes a valid and
binding obligation of GRANT, enforceable against GRANT in
accordance with its terms, except that
(A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar
laws or judicial decisions now or hereafter in effect
relating to creditor's rights generally; and
(B) the remedy of specific performance and injunctive
relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding
therefor may be brought.
(iii) The execution and delivery of this Investment Agreement by
GRANT do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof
will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both)
under any provision of
(A) the certificates of incorporation, by-laws or other
organizational documents of GRANT;
(B) subject to the governmental filings and other matters
referred to in Section 9.2.1.iv below, any judgment,
order, decree, statute, law, ordinance, rule or
regulation or arbitration award applicable to GRANT.
(iv) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental
Authority is required by or with respect to GRANT in
connection with the execution and delivery of this Investment
Agreement by GRANT or the consummation by GRANT of the
transactions contemplated hereby, except as have already been
obtained and except for the filing of premerger notification
information with the competent competition authorities.
(v) No administrative, civil or arbitral proceeding which could
hinder or prevent the execution and delivery of this
Investment Agreement by GRANT or the consummation by GRANT of
the transactions contemplated hereby are pending or, to the
best knowledge of GRANT, threatened.
36
-36-
9.2.2 Information
(i) All information contained in this Investment Agreement
(including the recitals) is true and accurate.
(ii) No representation, warranty or covenant contained in this
Investment Agreement and no statement contained in the
Schedules or in any Annex, certificate or other instrument
furnished or to be furnished to VA SCHIENE pursuant hereto or
in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of fact, or
omits or will omit to state a fact which is necessary in order
to make the statements contained herein or therein not
misleading.
(iii) All written information given to VA SCHIENE and/or its
professional advisers by GRANT, officers and employees and/or
GRANT's professional advisers during the negotiations prior to
the Signing Date of this Investment Agreement was when given
true and accurate and there is, to the best knowledge of
GRANT, no fact, matter or circumstance which has not been
disclosed in writing to VA SCHIENE or its professional
advisers which renders any such information untrue, inaccurate
or misleading or which might reasonably affect the willingness
of VA SCHIENE to proceed with the sale of the Shares and/or
the Limited Partnership Interest on the terms of this
Investment Agreement.
10. INDEMNIFICATION
10.1 Either Party shall indemnify and hold harmless the other Party, its
Affiliates, successors and assigns (each an "Indemnity Party"), from
and against and in respect of any and all losses, liabilities,
claims, damages, costs and expenses of defense thereof (including
without limitation expenses of investigation, legal or other fees or
expenses reasonably incurred in connection with and any amount paid
in settlement of or as a judgment relating to, any action, claim,
legal, administrative, governmental or other proceeding, suit,
investigation, inquiry, complaint, notice of violation or any similar
process, judgment, injunction order, directive or restrictions)
(collectively, "Indemnity Losses") to which an Indemnity Party may
become subject, from or arising out of any breach of or inaccuracy in
any of the representation, covenants, warranties or agreements set
forth herein and any failure to perform any obligations under this
Investment Agreement.
37
-37-
10.2 An Indemnity Party shall give prompt written notice to the other
Party of any claim, demand or action of a third party of which it has
knowledge and as to which an Indemnity Party may seek indemnification
hereunder; provided however, that omission to so notify the other
Party shall not relieve the other Party of the obligation to
indemnify such Indemnity Party except to the extent that such failure
to so notify shall have impaired the other Party's ability to defend
such claim or action. Upon receipt of notice of any action relating
to Indemnity Losses, both Parties shall, at their own expense,
consult on the defense of such actions.
10.3 Except for claims from the representations, covenants and warranties
set forth in Sections 9.1.1, 9.1.4, 9.1.5(i), 9.1.15, 9.1.19 and
9.2.1 of this Investment Agreement, which may be asserted without
limitation notwithstanding any otherwise applicable statute of
limitations, all claims from the representations, covenants and
warranties contained in or made pursuant to this Investment Agreement
shall survive Closing and may only be asserted in writing including a
brief statement of facts and an estimate of the Indemnity Losses
incurred within three years from the Closing Date. Claims from the
representations, covenants and warranties set forth in Section 9.1.7
of this Investment Agreement shall be precluded after a period of 6
months as of the definite final assessment or determination of the
Taxes concerned.
10.4 Claims from the representations, covenants and warranties set forth
in Section 9 of this Investment Agreement may only be asserted if
they exceed in the aggregate the total amount of ATS 5,000,000; in
case this threshold is exceeded, however, the full amounts may be
asserted. Individual claims that do not exceed the amount of ATS
100,000 may not be asserted at all and shall not be taken into
account when determining the threshold of aggregate claims as
provided above.
10.5 This Section 10 contains all remedies of the Parties with respect to
the representations, covenants and warranties set forth in Section 9
of this Investment Agreement. Withdrawal from this Investment
Agreement (Rucktritt), recession (Wandlung) and the challenge of this
Investment Agreement due to error (Irrtumsanfechtung) shall be
excluded, subject to the following provisions:
A Party's statutory claims based on fraudulent misrepresentation or
deceit or force exercised by the other Party shall not be restricted
by this Investment Agreement.
38
-38-
GRANT shall be entitled to withdraw from this Investment Agreement in
the time period between the Signing Date and the Closing Date if
GRANT's actual Indemnity Losses exceed the amount of ATS 200,000,000.
10.6 VA SCHIENE shall indemnify and hold harmless each other Indemnity
Party from any and all Indemnity Losses suffered by them or allocated
to the Limited Partnership Interest arising
(i) from the claims threatened against TARGET COMPANIES by
Vallourec Mannesmann Oil & Gas France in 1998 due to alleged
unfair competition;
(ii) from the bankruptcy proceedings of INKOM Bank and APM Alloy
Pipe & Metal GmbH;
(iii) from the allocation of the loss carry forwards to VA SCHIENE
during the reorganization process, and from a letter issued by
VOEST-ALPINE SCHIENEN GmbH to the works council of VASK GmbH
in connection with an extra dividend payment in the amount of
ATS 600 million and promising to financially support
investments and programs of VASK GmbH;
from the resizing of the TARGET COMPANIES in 1999 and any related
lay-offs, in particular, but not limited to, costs for social plans;
to the extent such claims have not been provided for in the VASK
Financial Statements as of March 31, 1999.
11. MISCELLANEOUS
11.1 This Investment Agreement shall be governed by, and construed in
accordance with, the laws of Austria, without reference to or
application of any conflicts of laws.
11.2 From time to time (whether before, at or after Closing) at the
reasonable request of GRANT and without further consideration, VA
SCHIENE will execute and deliver to GRANT such other documents, and
take such other action, as GRANT may reasonably request in order to
consummate more effectively the transactions contemplated by this
Investment Agreement.
11.3 This Investment Agreement may not be assigned by any Party without
the prior written consent of the other Party. Notwithstanding the
foregoing VA SCHIENE agrees that
39
-39-
GRANT may nominate and assign its obligations and rights arising from
this Investment Agreement to any Affiliate of GRANT up until the
Closing Date and any time thereafter, provided that GRANT will be
jointly and severally liable for all obligations provided for herein.
11.4 Subject to Section 11.3, this Investment Agreement shall be binding
upon and inure to the benefit of the Parties and their respective
successors, executors, administrators and permitted assigns.
11.5 Whether or not the transactions contemplated by this Investment
Agreement are consummated, all costs and expenses incurred in
connection with this Investment Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such
expenses, except
(i) transfer taxes and stamp duties that may be incurred in the
transfer of the Limited Partnership Interest and/or the
Shares; and
(ii) the notarial fees to be paid in connection with the execution
of an agreement in the form of a notarial deed with respect to
the transfer of the Shares; and
(iii) the costs arising in connection with the notification of this
Investment Agreement and the transactions contemplated hereby
to the competent Austrian commercial courts for entry into the
commercial register
shall be borne 50 % by GRANT and 50 % by VA SCHIENE.
11.6 All Parties have agreed to sign this Investment Agreement outside of
Austria. The Party breaching this obligation shall pay the amount of
stock exchange turnover tax arising from that breach.
11.7 All disputes arising out of this Investment Agreement or related to
its violation, termination or nullity shall be finally settled under
the Rules of Arbitration and Conciliation of the International
Arbitral Centre of the Austrian Federal Economic Chamber in Vienna
(Vienna Rules) by one or more arbitrators appointed in accordance
with these rules. The number of arbitrators shall be three; the
substantive law of Austria shall be applicable; the language to be
used in the arbitral proceedings shall be English.
40
-40-
11.8 This Investment Agreement may not be amended or modified, except in
writing duly and validly executed by both Parties. The compliance
with any condition or covenant set forth herein may not be waived,
except in writing duly and validly executed by GRANT and/or VA
SCHIENE.
11.9 In case any one or more of the provisions contained in this
Investment Agreement shall be invalid, illegal, or unenforceable in
any respect, the validity, legality or enforceability of the
remaining provisions contained herein shall not in any ways be
affected or impaired thereby.
11.10 This Investment Agreement, including the Annexes and Schedules
hereto, constitutes the entire agreement between the parties with
respect to the subject matter hereof. Except as expressly provided
herein, all prior agreements or understandings, if any, between the
Parties with respect to the subject matter hereof shall, upon the
execution of this Investment Agreement, be null and void.
11.11 The section headings in this Investment Agreement have been inserted
for convenience of reference only and are not, and shall not be
deemed to be a substantive portion of this Investment Agreement.
11.12 All notices, requests, demands and other communications which are
required or may be given under this Investment Agreement shall be in
writing and shall be sufficient in all respects
(i) if delivered personally or by facsimile transmission to the
telecopier number set forth below, when so delivered; or
(ii) if given by DHL or equivalent air courier service, four (4)
days after the date delivered to such courier, delivery
charges prepaid, in each case addressed as follows:
If to GRANT, to:
Grant Prideco, Inc.
0000 Xxxx Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xx XXX 00000
41
-41-
Attention: Xxxx X. Xxxxx and Xxxxxx X. Xxxx
Telephone: (000) 000 0000
Telecopier: (000) 000 0000 and (000) 000 0000
With a copy to:
Bruckhaus Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxx
Attention: Xxxxx W.T. Power
Telephone: (++43 1) 51515 Ext. 210 or 310
Telecopier: (++43 1) 512 63 94
If to VA SCHIENE to:
VA Schiene GmbH
Xxxxxxxxxxxxxx 000
0000 Xxxxxx
XXXXXXX
att.:Xxxxxxxxx Xxxxxxx
Telephone: (++43) 3842/000 0000
Telecopy: (++43) 3842/202 2444
With a copy to:
VOEST-ALPINE XXXXX XX
Xxxxx-Xxxxxx-Xxxxxxx 0
0000 Xxxx
XXXXXXX
att: Xxxxxx Xxxxxxxxx
Telephone: (++43/70/0000-0000)
Telecopy: (++43/70/6980-5581)
42
-42-
11.13 This Investment Agreement may be executed in two counterparts, one
for each Party, each of which shall be an original, but all of which
together shall constitute one and the same Investment Agreement.
11.14 No announcement or other public disclosure shall be made by a Party
without the prior written consent and approval of the other parties.
IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Investment Agreement as of the date first above written
/s/ [ILLEGIBLE]
-----------------------------------
GRANT PRIDECO, Inc.
/s/ [ILLEGIBLE]
-----------------------------------
VOEST-ALPINE SCHIENEN GmbH & Co KG
43
-43-
ANNEX 1
"Affiliate" shall mean, with respect to any specified Person, any other Person
that, directly or indirectly, is in control of, is controlled by, controls or is
under common control with such first Person or is an officer, director, general
partner, managing member or trustee of such Person or Affiliate of such Person.
For purposes of this definition, control shall include the ownership of 50% or
more of the legal or beneficial interest in any Person or the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise;
"Austrian Waste Disposal Act" shall mean Abfallwirtschaftsgesetz, BGBl 1990/325
as amended.
"Bankruptcy Action" shall mean:
(a) Taking any action that might cause a legal entity to become insolvent; or
(b) (i) Commencing any case, proceeding or other action by or on behalf of
a legal entity under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of
debtors;
(ii) Instituting proceedings to have a legal entity adjudicated a
bankrupt or insolvent;
(iii) Consenting to, or acquiescing in, the institution of bankruptcy,
insolvency or reorganization proceedings against a legal entity;
(iv) Filing a petition or consent to a petition seeking reorganization,
arrangement, adjustment or other relief on behalf of a legal entity
of its debts under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency or reorganization;
(v) Seeking or consenting to the appointment of a receiver, liquidator,
conservator, assignee, trustee, sequestrator, custodian or any
similar official
44
-44-
for a legal entity or a substantial portion of the assets or
properties of a legal entity;
(vi) Making any assignment for the benefit of a legal entity's
creditors; or
(vii) Taking any action or causing a legal entity to take any action in
furtherance of any of the foregoing.
"Business Premises" shall have the meaning assigned to such term in Section
9.1.6.i.
"Closing" shall have the meaning assigned to such term in Section 6.4 of the
Investment Agreement.
"Closing Date" shall mean 7 (seven) days after the date on which the
transactions contemplated by this Investment Agreement have been officially
cleared by the cartel Authorities, or such other date as all Parties shall agree
to in writing.
"Conditions Precedent" shall have the meaning assigned to such term in Section
6.1 of the Investment Agreement.
"Conditions Precedent II" shall have the meaning assigned to such term in
Section 6.2 of the Investment Agreement.
"Deposit" shall have the meaning assigned to such term in Section 3.6 of the
Investment Agreement.
"Dividend" shall mean the distributions or dividends, as the case may be,
attributable to GRANT'S Limited Partnership Interest in VASK GmbH & Co KG and
VASK GmbH.
"Environmental Laws" shall mean any and all applicable Laws pertaining to or
otherwise regulating the environment, natural resources or human health and
safety currently in effect.
"ERP-Funds" shall mean European Regional Project Funds.
"EURIBOR" shall mean the rate per annum calculated daily under the auspices of
the European Banking Federation ("EBF") and the European Central Bank ("ECB") on
the basis of quotes from the 57 banks selected by EBF and/or ECB (or such other
number of banks as may from time to
45
-45-
time be determined by EBF and/or ECB) and published by the information vendor
determined by EBF and/or ECB and/or selected by the bank for deposits in EURO
for a period equal to or closest to the interest period for which an interest
rate is to be determined at or about 11:00 a.m. (Frankfurt Time) expected to be
shown on Telerate page 247 on the second Business Day in Vienna before the first
day of such interest period.
"EURO" shall mean the currency as and when established pursuant to the provision
of article 109 l (4) of the Treaty establishing the European Community as
amended by the Treaty on the European Union.
"Governmental Authority" shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"GRANT" shall mean Grant Prideco, Inc. a Delaware corporation with its business
address at 0000 Xxxx Xxxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx 00000.
"Indemnity Party" shall have the meaning as assigned to such term in Section
10.2.
"Installment I" shall have the meaning assigned to such term in Section 3.2 of
the Investment Agreement.
"Installment II" shall have the meaning assigned to such term in Section 3.2 of
the Investment Agreement.
"Installment III" shall have the meaning assigned to such term in Section 3.2 of
the Investment Agreement.
"Installment IV" shall have the meaning assigned to such term in Section 3.2 of
the Investment Agreement.
"Internal MIS Systems" shall mean, with reference to any TARGET COMPANY Entity
any computer software and systems (including hardware, firmware, operating
system software, utilities, and applications software) used in the ordinary
course of business by or on behalf of such TARGET COMPANY Entity, as the case
may be, including payroll, accounting, billing/receivables, inventory, asset
tracking, customer service, human resources, and e-mail systems.
46
-46-
"IVM Industrieversicherungsmakler GmbH" shall mean an Austrian limited liability
company, with its principal place of business in Linz and business address
XXXXX-XXXXXX-Xxxxxxx 0, X-0000 Xxxx, registered in the commercial register of
the Higher Court of Linz under the registration number 89391 i.
"Limited Partnership Interest" shall mean 50.01% of VA SCHIENE's limited
partnership interest in VASK GmbH & Co KG, corresponding to a limited
partnership interest of ATS 123,774,750 (in words: Austrian Shillings one
hundred twenty three million and seven hundred seventy four thousand seven
hundred fifty).
"Laws" shall mean, collectively, federal, foreign, state, provincial, municipal
and local laws (including common law), statutes, ordinances, rules, regulations,
orders, determinations or other legal requirements.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or other), charge,
claim, rights of third parties or preference, priority or other pledge agreement
or preferential arrangement of any kind or nature whatsoever, including without
limitation any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing.
"Material Adverse Effect" or "material adverse change" shall mean, when used in
connection with any Person or the TARGET COMPANY Entities, any change or effect
(or any development that, insofar as can reasonably be foreseen, is likely to
result in any change or effect) that is materially adverse to the business,
properties, assets, condition (financial or otherwise) or results of operations
of that Person and its subsidiaries, taken as a whole, or of the TARGET COMPANY
Entities, as the case may be; provided, however, a Material Adverse Effect or
material adverse change with respect to the TARGET COMPANY Entities shall not
include (i) any effect or change relating to or affecting the oil and gas
service industry as a whole, (ii) changes in national or international economic
conditions or industry conditions generally, or (iii) the loss of employees,
customers or suppliers thereby as a direct or indirect consequence of any
announcement or expectation of the transactions contemplated hereby.
"Operating Agreement" shall mean an agreement between GRANT and VA SCHIENE
defining the general rights and obligations of the shareholders of VASK GmbH and
the partners of VASK GmbH & Co KG.
"Owned" shall mean, with respect to any Person, those assets, properties,
rights, titles, interests, contracts, claims and estates owned, leased, licensed
or otherwise held by such Person, but if jointly
47
-47-
owned, leased, licensed or held with another Person, then in each such case only
to the extent of the ownership interest of the Person identified in the
Formation Agreement as the owner.
"Parties" shall mean, collectively, all parties to the Investment Agreement, and
"Party" shall mean, individually, any one of the Parties.
"Person" shall mean an individual, partnership, corporation, business trust,
limited liability company, limited liability partnership, joint stock company,
trust, unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Pledge Agreement" shall have the meaning assigned to such term in Section 3.5
of the Investment Agreement.
"Power Plant" shall mean the power plant situated on the property of VASK GmbH &
Co KG and maintained by GEP Gesellschaft fur Energie und Umwelttechnische
Projekte Kleinkraftwerke und Mobilienleasing KG an Austrian limited liability
partnership.
"Products" shall mean any products offered or furnished by the TARGET COMPANY
Entities, as the case may be, or any predecessor in interest thereof, currently
or at any time in the past and any and all enhancements, upgrades,
customizations, modifications, and maintenance thereto.
"Purchase Price" shall mean ATS 400,000,000 (in words: Austrian shillings four
hundred million"), the entire compensation for the purchase and assignment of
the Limited Partnership Interest and the Shares from VA SCHIENE to GRANT.
"Purchase Price I" shall have the meaning assigned to such term in Section 3.1
of the Investment Agreement.
"Purchase Price II" shall have the meaning assigned to such term in Section 3.1
of the Investment Agreement.
"Shares" shall mean a 50% interest in VASK GmbH, corresponding to a fully paid
up nominal capital of ATS 250,000 (in words: Austrian Shillings two hundred
fifty thousand).
"Services" shall mean any services offered or furnished by the TARGET COMPANIES
Entities, as the case may be, or any predecessor in interest thereof, currently
or at any time in the past.
"Signing Date" shall mean the day the Investment Agreement is duly executed by
all Parties.
48
-48-
"Subsidiary" of a Person means any corporation, partnership or other legal
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are directly or indirectly owned by such first mentioned
Person.
"Supply Agreement" shall mean an agreement between GRANT and VASK GmbH & Co KG
defining the terms and conditions for the purchase of green pipes on a long term
basis.
"TARGET COMPANIES" shall mean, collectively, VASK GmbH & Co KG and VASK GmbH.
"TARGET COMPANIES ENTITIES" shall mean, collectively the TARGET COMPANIES and
all of their Subsidiaries and representative offices or, individually, any
thereof, as interpretation may require.
"TARGET COMPANY Entities' Permits" shall have the meaning assigned to such term
in Section 9.1.14.
"Target Equity" shall have the meaning assigned to such term in Section 4.1.
"Tax" or "Taxes" shall mean all federal, state, local or foreign taxes,
assessments, duties, levies or similar charges of any kind, including, without
limitation, social security contributions and those on or measured by or
referred to as income, gross receipt, sales, use, ad valorem, franchise,
profits, license, withholding, payroll, employment, estimated, excise,
severance, stamp, occupation, premium, value added, property or windfall profits
taxes, customs, duties or similar fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any Governmental Authority, domestic or foreign,
whether disputed or not.
"Tax Return" shall mean any return, report, declaration, statement, claim for
refund or information return or statement required to be filed with any
Governmental Authority with respect to Taxes, or any amendment thereto,
including any schedule or attachment thereto.
"Transaction Documents" shall mean, collectively, the Investment Agreement, the
Supply Agreement and the Operating Agreement.
"VA-Group" shall mean one or more of the Affiliates of VOEST-ALPINE.
49
-49-
"VASK Financial Statements" shall have the meaning assigned to such term in
Section 9.1.2.i.
"VASK GmbH & Co KG" shall mean VOEST-ALPINE STAHLROHR KINDBERG GmbH & Co KG, an
Austrian limited partnership, with its principal place of business in Kindberg
and business address Xxxxxx Xxxxxxx 00, 0000 Xxxxxxxx-Xxxxxx, Xxxxxxx,
registered in the commercial register of the Higher Court of Leoben under the
registration number 165400 k.
"VASK GmbH" shall mean VOEST-ALPINE STAHLROHR KINDBERG GmbH, an Austrian limited
liability company, with its principal place of business in Linz and business
address XXXXX-Xxxxxx-Xxxxxxx 0, 0000 Xxxx, Xxxxxxx, registered in the commercial
register of the Higher Court of Linz under the registration number 106933 f.
"VA SCHIENE" shall mean VOEST-ALPINE SCHIENEN GmbH & Co KG, an Austrian limited
partnership, with its principal place of business in Leoben-Donawitz and
business address at Xxxxxxxxxxxxxx 000, registered in the commercial register of
the Higher Court of Leoben under the registration number 165399 i.
"VA SCHIENE's Bank Account" shall mean the bank account number in the name of
VA-SCHIENE notified from time to time in writing by VA SCHIENE.
"VOEST-ALPINE" shall mean VOEST-ALPINE XXXXX XX, an Austrian stock corporation,
with its principal place of business in Linz and business address
XXXXX-XXXXXX-Xxxxxxx 0, 0000 Xxxx, Xxxxxxx, registered in the commercial
register of the Higher Court of Linz under the registration number 662097.
"VOEST-ALPINE TUBULAR Corporation" shall mean a Texas limited liability company
bearing said name, with its principal place of business at 00000 Xxxxxxxxxx,
Xxxxx 000 Xxxxxxx, Xxxxx 00000.
"Year 2000 Compliant" shall mean, with respect to any Person, that (1) the
products, services, or other item(s) at issue accurately process, provide and/or
receive all date/time data (including calculating, comparing, sequencing,
processing, and outputting) within, from, into, and between centuries (including
the twentieth and twenty-first centuries and the years 1999 and 2000), including
leap year calculations, and (2) neither the performance nor the functionality
nor provision by such Person of the products, services, and other item(s) at
issue will be affected by any dates/times prior to, on, after, or spanning
January 1, 2000. The design of the products, services, and other item(s) at
issue to ensure compliance with the foregoing warranties and representations
includes proper date/time data century recognition and recognition of 1999 and
2000, calculations
50
-50-
that accommodate single century and multi-century formulae and date/time values
before, on, after, and spanning January 1, 2000, and date/time data interface
values that reflect the century, 1999, and 2000. In particular, but without
limitation, (i) no value for current date/time will cause any error,
interruption, or decreased performance in or for such product(s), service(s),
and other item(s), (ii) all manipulations of date and time related data
(including calculating, comparing, sequencing, processing, and outputting) will
produce correct results for all valid dates and times when used independently or
in combination with other products, services, and/or items, (iii) date/time
elements in interfaces and data storage will specify the century to eliminate
date ambiguity without human intervention, including leap year calculations,
(iv) where any date/time element is represented without a century, the correct
century will be unambiguous for all manipulations involving that element, (v)
authorization codes, passwords, and zaps (purge functions) will function
normally and in the same manner during, prior to, on, and after January 1, 2000,
including the manner in which they function with respect to expiration dates and
CPU serial numbers, and (vi) such Person's supply of the product(s), service(s),
and other item(s) will not be interrupted, delayed, decreased, or otherwise
affected by the advent of the year 2000.
