ASSET AND SHARE PURCHASE AGREEMENT
BY AND BETWEEN
SELAS CORPORATION OF AMERICA,
SELAS S.A.S
ANDRITZ AG
and
ANDRITZ ACQUISITION S.A.S.
DATED AS OF OCTOBER 11, 2002
d
ASSET AND SHARE PURCHASE AGREEMENT
THIS ASSET AND SHARE PURCHASE AGREEMENT is made as of October 11, 2002 by and
between Andritz AG, an Austrian aktiengesellschaft ("Andritz"), Andritz
Acquisition S.A.S., a French societe par actions simplifiee (the "Buyer"),
Selas Corporation of America, a Pennsylvania corporation ("SCA"), Selas
S.A.S., a French societe par actions simplifiee ("SAS" and together with SCA,
the "Sellers").
WHEREAS,
SAS is engaged, through its own operation and those of Selas
Engineering UK Ltd., an English company ('Selas UK) in the Business (as
hereinafter defined);
SCA owns, uses or licenses the SCA Intellectual Property, which is
more fully described in Schedule A attached hereto.
The Sellers desires to sell to Buyer and Buyer (through one or more
of its affiliates) desires to purchase: (i) from SAS certain of its
assets and liabilities relating to the Business and (ii) all of the
issued and outstanding shares (the "Selas UK Shares") of Selas UK; and
(ii) from SCA, the SCA Intellectual Property for the consideration and
on the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, it is hereby agreed that:
1. INTERPRETATION
1.1 Certain Definitions
When used in this Agreement or the Schedules hereto, the terms set forth
below shall the respective meanings.
Accounting Policies The Accounting Policies of the Seller, set
forth in Schedule H attached hereto.
Accounts Receivable The meaning set forth in Section 3.8.
Acte de Cession The Acte de cession de fonds de commerce in
substantially the form set forth in Exhibit 4.
Advance Payment Guarantees The advance payment guarantees set forth
in Schedule K
Affiliate With respect to any Person, any other Person
directly or indirectly Controlling, Controlled
by or under common Control with such other
Person.
Agreement This Asset and Share Purchase Agreement,
together with the Schedules and Exhibits
attached hereto, the Disclosure Schedule and
the Purchased Shares Agreements.
Ancillary Agreements Each of the Lease, the Andritz License, and the
Selas Name License.
Andritz License The license of certain Intellectual Property
rights relating to the Business from Buyer to
SCA in the form set forth in Exhibit 2 attached
hereto.
Applicable Contract Any Contract (a) under which SAS (in connection
with the Business) or Selas UK has or may
acquire any rights, (b) under which SAS (in
connection with the Business) or Selas UK has
or may become subject to any obligation or
liability, or (c) by which SAS (in connection
with the Business) or Selas UK or any of the
Assets may become bound.
Assets The meaning set forth in Section 2.1.
Assumed Liabilities The meaning set forth in Section 2.5
Balance Sheet The meaning set forth in Section 3.6.
Benefit Plan All employment, compensation, vacation, bonus,
deferred compensation, incentive compensation,
stock purchase, stock option, stock ownership
including investment credit or payroll stock
ownership), stock appreciation right or other
stock-based incentive, severance,
change-in-control, or termination pay,
hospitalization or other medical, disability,
life or other insurance, supplemental
unemployment benefits, profit- sharing, stock
bonus, cash bonus, thrift savings, vacation
plan pension or retirement plans, programs,
agreements, arrangements, or other employee
benefit plans.
Book Value For any asset or liability, that amount equal
to the recorded book value of the asset or
liability as set forth in the Balance Sheet.
Books and Records All books, records, files and data,
certificates and other documents of Selas UK or
related to the conduct of the Business or the
ownership of the Assets or the SCA Intellectual
Property, including but not limited to: all
sales and promotional literature , or copies
thereof, used or held for use in connection
with the conduct of the Business, personnel
records of all Transferred Employees, all
customer lists, supplier lists and price lists,
all customer order and engineering files and
databases and all manufacturing and cost
information; except that the Books and Records
shall not include any books, records, files and
other data of the Seller which relate
exclusively to (i) organizational proceedings
of any Seller, (ii) income Tax matters (other
than future Tax credits relating to any of the
Transferred Contracts) of any Seller, or (iii)
Excluded Assets or Excluded Liabilities.
Burner Intellectual Property The meaning set forth in Schedule A.
Business The worldwide business of engineering,
manufacturing, selling, marketing,
distributing, designing, sourcing, modernizing,
upgrading, servicing, rebuilding and repairing
the Products (including components thereof and
spare parts therefor) used in strip processing
lines for the steel and non-ferrous metal
industries.
Business Day Any day except a Saturday, Sunday or any day in
Paris, France or Graz, Austria which is a legal
holiday or a day on which banking institutions
are authorized or required to close.
Buyer The meaning set forth in the first paragraph of
this Agreement.
Buyer's Knowledge The actual knowledge as of immediately prior to
the Closing of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Ernst Zsifkovits, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇.
Closing The meaning set forth in Section 8.1.
Closing Date The date and time on which the Closing actually
occurs.
Commercially Reasonable Efforts The efforts a prudent business
person desirous of achieving a result would use
in similar circumstances to achieve the result
other than any obligation to make payments
(other than customary fees or expenses) or
incur material burdens.
Consent Any approval, consent, ratification, waiver, or
other authorization (including any Governmental
Authorization).
Contemplated Transactions All of the transactions contemplated by this
Agreement, including:
(a) The sale of the Assets and Assumed Liabilities
from SAS to the Buyer (or its Affiliate
purchasing the Assets and Assumed Liabilities);
(b) the sale of the Selas UK Shares by SAS to Buyer;
(c) the sale of the SCA Intellectual Property from
SCA to Buyer (or its Affiliate purchasing the SCA
Intellectual Property)
(d) the execution, delivery, and performance of
the Ancillary Agreements; and
(e) the performance by Buyer and Sellers of their
respective covenants and obligations under this
Agreement.
Contract Any agreement, contract, obligation, promise,
or undertaking (whether written or oral and
whether express or implied) that is legally
binding.
Control (including, with correlative meanings, the
terms "controlling", "controlled by" and "under
common control with"), as used with respect to
any Person, means the possession, directly or
indirectly, of the power to direct or cause the
direction of the management and policies of
such Person, whether through ownership of
voting securities, by contract or otherwise.
Disclosure Schedule The schedule attached hereto as Schedule D.
Encumbrance Any charge, claim, community property interest,
condition, equitable interest, lien, mortgage,
easement, right of way, servitude, option,
pledge, security interest, right of first
refusal or first offer, or restriction of any
kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any
other attribute of ownership other than in
respect of Assets identified in this Agreement
as being under lease or license, the rights of
the lessor or licensor.
Environment Soil, land surface or subsurface strata,
surface waters (including navigable waters,
ocean waters, streams, ponds, drainage basins,
and wetlands), groundwaters, drinking water
supply, stream sediments, ambient air
(including indoor air), plant and animal life.
Environmental Law Any Law in effect on or before the Closing Date
that requires or relates to:
(a) advising appropriate authorities,
employees, and the public of intended or actual
Releases of pollutants or hazardous substances
or materials, violations of discharge limits,
or other prohibitions and of the commencements
of activities, such as resource extraction or
construction, that could have significant
impact on the Environment;
(b) preventing or reducing to acceptable levels
the Release of pollutants or hazardous
substances or materials into the Environment;
(c) reducing the quantities, preventing the
Release, or minimizing the hazardous
characteristics of wastes that are generated;
(d) assuring that products are designed,
formulated, packaged, and used so that they do
not present unreasonable risks to human health
or the Environment when used or disposed of;
(e) protecting resources, species, or
ecological amenities;
(f) reducing to acceptable levels the risks
inherent in the transportation of hazardous
substances, pollutants, oil, or other
potentially harmful substances;
(g) cleaning up pollutants that have been
Released, preventing the Threat of Release, or
paying the costs of such clean up or
prevention; or
(h) making responsible parties pay private
parties, or groups of them, for damages done to
their health or the Environment, or permitting
self-appointed representatives of the public
interest to recover for injuries done to public
assets.
Environmental Liabilities Any cost, damages, expense, liability,
obligation, or other responsibility arising
from or under Environmental Law and consisting
of or relating to:
(a) any environmental, health, or safety
matters or conditions (including on-site or
off- site contamination, occupational safety
and health, and regulation of chemical
substances or products);
(b) fines, penalties, judgments, awards,
settlements, legal or administrative
proceedings, damages, losses, claims, demands
and response, investigative, remedial, or
inspection costs and expenses arising under
Environmental Law or Occupational Safety and
Health Law;
(c) financial responsibility under
Environmental Law for cleanup costs or
corrective action, including any investigation,
cleanup, removal, containment, or other
remediation or response actions ("Cleanup")
required by applicable Environmental Law
(whether or not such Cleanup has been required
or requested by any Governmental Body or any
other Person) and for any natural resource
damages; or
(d) any other compliance, corrective,
investigative, or remedial measures required
under Environmental Law.
Excluded Assets the meaning set forth in the Section 2.2.
Excluded Liabilities the meaning set forth in the Section 2.6.
US GAAP Accounting principles generally accepted in the
United States, applied on a basis consistent
with the basis on which the Balance Sheet and
the other financial statements referred to in
Section 3.6 were prepared.
Governmental Authorization Any approval, Consent, license, permit,
waiver, or other authorization issued, granted,
given, or otherwise made available by or under
the authority of any Governmental Body or
pursuant to any Law.
Governmental Body Any:
(a) nation, state, county, city, town, village,
district, or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign,
or other government;
(c) governmental or quasi-governmental
authority of any nature (including any
governmental agency, branch, department,
official, or entity and any court or other
tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise,
any administrative, executive, judicial,
legislative, police, regulatory, or taxing
authority or power of any nature.
Hazardous Activity The distribution, generation, handling,
importing, management, manufacturing,
processing, production, refinement, Release,
storage, transfer, transportation, treatment,
or use (including any withdrawal or other use
of groundwater) of Hazardous Materials into the
Environment, and any other act, business,
operation, or thing that increases the danger,
or risk of danger, or poses an unreasonable
risk of harm to persons or property.
Hazardous Materials Any waste or other substance that is listed,
defined, designated, or classified as, or
otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a
contaminant under or pursuant to any
Environmental Law, including any admixture or
solution thereof, and specifically including
petroleum and all derivatives thereof or
synthetic substitutes therefore and asbestos or
asbestos-containing materials.
Intellectual Property (i) all fictional business names, trading
names, registered and unregistered trademarks,
service marks, and applications (collectively,
"Marks");
(ii) all patents and patent applications
(collectively, "Patents");
(iii) all copyrights in both published works
and unpublished works (collectively,
"Copyrights");
(iv) all computer software, including master
codes and source codes; and
(v) all know-how, trade secrets and
confidential information and inventions and
discoveries that may be patentable (including
but not limited to techniques, business and
service concepts, research and development
information, drawings, specifications, designs,
technical data, process technology, pricing and
cost information, and customer and supplier
lists and information), (collectively,
"Know-How").
Interest Rate A rate equal to 2 per cent. above the three
month $ LIBOR applicable from time to time.
Law Any federal, national, state, provincial,
local, municipal, foreign, international,
multinational, or other administrative order,
constitution, law, treaty, statute, ordinance,
or principle of common law in any country or
jurisdiction, and the regulations and orders
promulgated thereunder.
Lease The lease between SAS and Buyer in
substantially the form set forth as Exhibit 1.
Legal Proceeding Any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether
civil, criminal, administrative, investigative,
or informal) commenced, brought, conducted, or
heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
Material Adverse Effect Any change, effect, or circumstance that is or
could reasonably be expected to be materially
adverse to the financial condition, results of
operation or prospects of the Business, or the
value of the Assets, the Selas UK Shares and
the SCA Intellectual Property taken as a whole;
provided however, that the following shall not
be taken into account in determining whether
there has been a Material Adverse Effect: (i)
any change, effect, or circumstance relating to
general economic or industry-wide conditions,
(ii) any change, effect, or circumstance
resulting from an action required by this
Agreement or (iii) any change, effect, or
circumstance caused by the effect or pendency
of this Agreement or the Contemplated
Transactions.
Material Contract Each of the following Applicable Contracts:
(a) each Applicable Contract that involves
performance of services or delivery of goods or
materials by SAS or Selas UK of an amount or
value in excess of $100,000 (or the equivalent
in another currency);
(b) each Applicable Contract that involves
performance of services or delivery of goods or
materials to SAS or Selas UK of an amount or
value in excess of $100,000 (or the equivalent
in another currency);
(c) each Applicable Contract that was not
entered into in the Ordinary Course of Business
and that involves expenditures or receipts by
SAS or Selas UK in excess of $25,000 (or the
equivalent in another currency);
(d) each lease, rental or occupancy agreement,
license, installment and conditional sale
agreement, and other Applicable Contract
affecting the ownership of, leasing of, title
to, use of, or any leasehold or other interest
in, any real or personal property (except
personal property leases and installment and
conditional sales agreements having a value per
item or aggregate payments of less than $10,000
(or the equivalent in another currency) and
with terms of less than one year);
(e) each licensing agreement, confidentiality
agreement, research and development agreements,
development agreement or other Applicable
Contract with respect to Intellectual Property
Rights, including agreements with current or
former employees, consultants, or contractors
regarding the appropriation or the
non-disclosure of any of the Selas Intellectual
Property;
(f) each collective bargaining agreement and
other Applicable Contract to or with any labor
union or other employee representative of a
group of employees;
(g) each joint venture, partnership, consortium
and other Applicable Contract (however named)
involving a sharing of profits, losses, costs,
or liabilities by SAS or Selas UK with any
other Person;
(h) each Applicable Contract containing
covenants that in any way purport to restrict
the business activity of SAS or Selas UK or
limit the freedom of SAS or Selas UK to engage
in any line of business or to compete with any
Person;
(i) each power of attorney that is currently
effective and outstanding;
(j) each Applicable Contract entered into other
than in the Ordinary Course of Business that
contains or provides for SAS or Selas UK to be
responsible for indirect or consequential
damages;
(k) each Applicable Contract for capital
expenditures in excess of $25,000 (or the
equivalent in another currency);
(l) each written warranty, guaranty, comfort
letter and or other similar undertaking with
respect to contractual performance extended by
SAS or Selas UK other than in the Ordinary
Course of Business;
(m) each guarantee in respect of indebtedness
of any Person (including Selas UK) or is a
mortgage, security agreement or other
collateral arrangement securing indebtedness of
any Person or entity (including Selas UK) and
creating Encumbrances on properties and assets
of SAS or Selas UK;
(n) each Applicable Contract relating to the
employment of any Transferred Employee by SAS
or Selas UK with a salary in excess of $50,000
or any bonus, deferred compensation, pension,
profit sharing, stock option, employee stock
purchase, retirement or other employee benefit
plan;
(o) each Contract pursuant to which any
officer, director of employee of SAS or Selas
UK receives compensation of any kind in
connection with any of the Contemplated
Transactions;
(p) each Applicable Contract which contains
restrictions with respect to the payment of
dividends or any other distribution in respect
of the capital stock of Selas UK;
(q) each Applicable Contract involving a loan
or advance to, or investment in, any Person in
excess of $10,000 (or the equivalent in another
currency);
(r) each Applicable Contract involving the
provision to SAS or Selas UK of management or
consulting services in excess of $25,000 (or
the equivalent in another currency);
(s) each Applicable Contract relating to
mergers, demergers, acquisitions and/or
disposals of a business or line of business
having been entered into since January 1, 1995;
(t) each Applicable Contract involving
marketing or distribution of the goods or
services or the appointment of a distributor,
sales representative or sales agent;
(u) each policy of insurance providing
insurance in respect of the Assets, the Assumed
Liabilities, the SCA Intellectual Property or
Selas UK; and
(v) each amendment, supplement, and
modification (whether oral or written) in
respect of any of the foregoing.
Net Asset Value The amount equal to the total Book Value of all
the Assets, the Assumed Liabilities and the net
equity of Selas UK, calculated on a
consolidated basis from the Value Date Balance
Sheet.
Order Any award, decision, injunction, judgment,
order, ruling, subpoena, or verdict entered,
issued, made, or rendered by any court,
administrative agency, or other Governmental
Body or by any arbitrator.
Ordinary Course of Business An action taken by a Person will be
deemed to have been taken in the "Ordinary
Course of Business" only if:
(a) such action is consistent with the past
practices of such Person and is taken in the
ordinary course of the normal day-to-day
operations of such Person; and
(b) such action is not required to be
authorized by the board of directors of such
Person (or by any Person or group of Persons
exercising similar authority) and is not
required to be specifically authorized by the
parent company (if any) of such Person;
Organizational Documents As applicable, (a) the articles or certificate
of incorporation and the bylaws of a
corporation; (b) the partnership agreement and
any statement of partnership of a general
partnership; (c) the limited partnership
agreement and the certificate of limited
partnership of a limited partnership; (d) any
charter or similar document adopted or filed in
connection with the creation, formation, or
organization of a Person; and (e) any amendment
to any of the foregoing.
Permitted Businesses The businesses of SCA and its Affiliates
described in Schedule L other than the Business
and the business conducted by Selas UK.
Person Any individual, corporation (including any
non-profit corporation), general or limited
partnership, limited liability company, joint
venture, estate, trust, association,
organization, labor union, or other entity or
Governmental Body.
Products All equipment and systems used in:
Hot dip metallic coating processes, including
including without limitation direct fired
furnaces (DFF) (including burners), furnaces
with heat cleaning, all radian tube furnaces
(including burners), in line annealing
furnaces, slow, medium and rapid jet cooling,
glavanealing furnaces, minispangle equipment,
equipment used in the galvalume process and
equipment used in final cooling after coating.
Continuous annealing processes, including
including without limitation ART or DFF/RT
furnaces and slow, mediumand rapid jet cooling.
Strip color coating including without
limitation ovens, incinerators and regenerators
Pickling lines, including without limitation
the preheater ahead of pickling tanks.
Purchase Price The meaning set forth in Section 2.7.
Release Any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or
other releasing into the Environment, whether
intentional or unintentional.
Required Consents Those consents identified as 'Required
Consents' in Part 3.2 of the Disclosure
Schedule.
Representative With respect to a particular Person, any
director, officer, employee, agent, consultant,
advisor, or other representative of such
Person, including legal counsel, accountants,
and financial advisors.
Retained Orders The order set forth on Schedule J.
SAS Goodwill Value $277,000.
SAS Intellectual PropertyAll right, title and interest of SAS in the
Intellectual Property owned, used, or licensed
by Selas UK or by SAS in connection with the
conduct of the Business, including without
limitation the Intellectual Property described
on Schedule B4.
SCA Intellectual PropertyAll right, title and interest of SCA in the
Intellectual Property owned, used, or licensed
by SCA in connection with the conduct of the
Business, including without limitation the
Intellectual Property described on Schedule A.
SCA Intellectual Property Price $277,000.
Selas Group License AgreementsThe Agreement date January 1, 1973
between SCA and Selas S.A. ( a predecessor in
interest to SAS), as amended (the 'Selas France
License Agreement'), the Agreement dated
September 14, 1981 between Selas S.A. (a
predecessor in interest to SAS) and Selas
Itialiana S.r.L (the ,Selas Italy License
Agreement') and the Agreement dated February
17, 1997 between Selas S.A. (a predecessor in
interest to SAS) and Selas UK (the 'Selas UK
License Agreement').
Selas Intellectual Property The SAS Intellectual Property and the SCA
Intellectual Property.
Selas Name License Agreement The license agreement between SCA and
Buyer and in the form set forth in Exhibit 3
attached hereto.
Selas UK Shares The meaning set forth in the third Whereas
clause.
Seller The meaning set forth in the first paragraph of
this Agreement.
Sellers' Knowledge The actual knowledge of immediately prior to
the execution of this Agreement of ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Baillart, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ after a
reasonable inquiry of the employees of Sellers
and SAS with responsibility for the matter
being represented and warranted..
Notwithstanding, the foregoing, with respect to
facts not relating to either Seller, Selas UK
or their respective conduct of the Business,
Seller's Knowledge shall be limited to the
actual knowledge of the individuals listed in
this definition.
Tax Any federal, state, provincial, municipal,
local and supra-national (of whatever country
or wherever located) income, employee
withholding, social security, unemployment,
capital gains, real property, payroll, personal
property, stamp, excise, sales, use, transfer
(except for the transfers contemplated by this
Agreement), value added, ad valorem, or other
similar taxes or charges, including any
interest, penalty or addition thereto.
Tax Return Any return (including any information return),
report, statement, schedule, notice, form, or
other document or information filed with or
submitted to, or required to be filed with or
submitted to, any Governmental Body in
connection with the determination, assessment,
collection, or payment of any Tax or in
connection with the administration,
implementation, or enforcement of or compliance
with any Law relating to any Tax.
Threat of Release A substantial likelihood of a Release that may
require action in order to prevent or mitigate
damage to the Environment that may result from
such Release.
Threatened A claim, Legal Proceeding, dispute, action, or
other matter will be deemed to have been
"Threatened" if any written demand or statement
has been made or any written notice has been
given, that indicates that such a claim, Legal
Proceeding, dispute, action, or other matter is
likely to be asserted, commenced, taken, or
otherwise pursued in the future.
Transferred Contract Each Contract set forth in Schedule B3, any
contract involving the sale of spare parts not
exceeding $20,000 per Contract, and all
contracts of Selas UK.
Transferred Employee Each employee set forth in Schedule I.
Transferred Order A Transferred Contract involving the
performance of services or delivery of goods or
materials by SAS or Selas UK.
Value Date In the event the conditions precedent set forth
in Sectionss 6 and 7 have been met or waived on
or before the 14th day of a calendar month, the
Value Date shall be the last day of the
immediately preceding calendar month. In the
event the conditions precedent set forth in
Sections 6 and 7 have been met or waived on or
after the 15th day of a calendar month, the
Value Date shall be the Closing Date.
1.2 Schedules and Exhibits
The following Schedules and Exhibits attached to this Agreement are
incorporated herein by reference and are deemed to be part of this
Agreement:
Schedule A - SCA Intellectual Property
Schedule BCertain Assets
Schedule B1 - Intentionally Omitted
Schedule B2 - Plant, Machinery, etc.
Schedule B3 - Transferred Contracts
Schedule B4 - SAS Intellectual Property
Schedule B5 - Accounts Receivable
Schedule B6 - Inventory
Schedule C - Determination of Certain Assets, Certain Excluded Assets,
Certain Assumed Liabilities and Certain Excluded Liabilities
Schedule D - Disclosure Schedule
Schedule E - Employee Benefit Obligations
Schedule F - Intentionally Omitted
Schedule G - Balance Sheet Matters
Schedule G1 - December 31, 2001 Pro Forma Balance Sheet
Schedule G2 - December 31, 2001 Pro Forma Income Statement
Schedule G3 - June 30, 2002 Pro Forma Balance Sheet
Schedule H - Accounting Policies
Schedule I - Transferred Employees
Schedule J - Retained Orders
Schedule K - Advance Payment Guarantees
Schedule L - Permitted Businesses
Schedule M - Trademarks - Excluded Assets
Exhibit 1 - Form of Lease
Exhibit 2 - Form of Andritz License
Exhibit 3 - Form of Selas Name License Agreement
Exhibit 4 - Form of Acte de cession de fonds de commerce
Exhibit 5 - Form of Escrow Agreement
1.3 Construction
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section
or Sections of this Agreement. All references to Schedules or Exhibits
are to the Schedules and Exhibits attached to this Agreement. All words
used in this Agreement will be construed to be of such gender or number
as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
2 PURCHASE AND SALE; PURCHASE PRICE
2.1 Purchase and Sale of Assets
Subject to the terms and conditions set forth in this Agreement, Buyer
agrees to purchase from SAS, and SAS agrees to sell, convey, transfer,
assign and deliver to Buyer, on the Closing Date, the Assets, free and
clear of any Encumbrances of any kind whatsoever.
The term "Assets" shall mean all of the rights, title and interests of
SAS in and to all assets which are now owned, leased or licensed by SAS
in connection with the conduct of the Business, together with any
replacements or additions made between the date hereof and the Closing
Date, in each case whether tangible or intangible, real, personal or
mixed, wheresoever situated and whether or not specifically referred to
herein or in any instrument of conveyance delivered pursuant hereto, and
whether or not any of such Assets have any value for accounting purposes
or are carried or reflected on or referred to in SAS's financial
statements, but excluding the Excluded Assets. The Assets shall consist
of the following assets owned, licensed, or leased, as the case may be,
by SAS in connection with the conduct of the Business:
(a) [intentionally omitted];
(b) Plant, machinery, equipment, tools, supplies, furniture,
furnishings, vehicles and other fixed assets owned, leased or used
by SAS or held for use in the conduct of the Business listed in
Schedule B2;
(c) All work-in-process owned by SAS and used or held for use in
connection with the any of the Transferred Orders as of the Value
Date (all the foregoing, the "Transferred Order Inventory" as well
as the raw material and finished goods inventory set forth in
Schedule B6;
(d) Subject to Section 2.10, the full benefit of all Transferred
Contracts;
(e) SAS's Books and Records;
(f) The goodwill of the Business;
(g) The SAS Intellectual Property, together with all of SAS's right,
title and interest in causes of action and oppositions relating to
the SAS Intellectual Property;
(h) The Accounts Receivable;
(i) Any rights of SAS pertaining to any counterclaims, set-offs or
defenses it may have with respect to any Assumed Liabilities;
(j) SAS's interest in all computers and related software used by the
Business owned or licensed by SAS;
(k) All prepaid claims, and other prepaid expense items and deferred
charges, credits, advance payments and other deposits, including
all VAT receivables and VAT payables relating to the Business made
by SAS to any other Person relating to the conduct of the Business;
(l) All jigs, fixtures, tooling and patterns for all products;
(m) All rights of SAS in and to any third-party indemnities relating to
any of the Assets or Assumed Liabilities;
(n) All Governmental Authorizations granted or issued to SAS in
connection with its conduct of the Business to the extent permitted
by applicable Law; and
(o) The rights of SAS in and to all letters of credit naming SAS as
beneficiary as payment for goods on any order which has not been
shipped to the customer.
2.2 Excluded Assets
Anything herein to the contrary notwithstanding, the Assets shall not
include any assets either: (i) owned, leased or license by SAS and not
used in connection with the Business; or (ii) any of the following,
whether owned, leased or licensed by, held by, used or held for use in
the conduct of the Business, or relating to SAS (collectively, the
"Excluded Assets"):
(a) Cash, cash equivalents, securities, money on deposit with banks,
certificates of deposit, and similar instruments;
(b) General books and records of account and books of original entry that
comprise SAS' permanent or tax records and books and records that
SAS is required to retain pursuant to any statute, rule or
regulation, (ii) books and records which relate exclusively to the
Excluded Liabilities and the Excluded Assets, and (iii) those
materials excluded from the definition of Books and Records by the
exception in the definition thereof;
(c) The assets set forth in Schedule C or otherwise identified as an
"Excluded Asset" in any of the Schedules;
(d) All raw materials, inventory, work-in-progress and claims against
insurers or third parties relating to orders other than the
Transferred Orders;
(e) All buildings and land;
(f) All rights in Applicable Contracts other than Transferred Contracts;
(g) All assets owned, leased, licensed or used exclusively in a business
other than the Business;
(h) The shares in any subsidiary of SAS other than the Selas UK Shares;
(i) Any claims against insurers or third parties relating to the Retained
Order with VASL (Job #1213)
(j) All rights in the "Selas" and "▇▇▇▇▇▇▇" Marks; and
(k) All furniture and fixtures owned by SAS.
(l) All castings, molds, drawings and other tangible property used in the
burner business ("Burner Tangible Property")
2.3 Purchase and Sale of Selas UK Shares
Subject to the terms and conditions set forth in this Agreement, at the
Closing, SAS will sell and transfer the Selas UK Shares to Buyer (or its
Affiliate purchasing Shares), and Buyer (or such Affiliate) will
purchase the Selas UK Shares from SAS. Buyer intends to assign its
right to purchase the Selas UK Shares to its Affiliate, Andritz Ltd., an
English company.
2.4 Purchase and Sale of SCA Intellectual Property
Subject to the terms and conditions set forth in this Agreement, Andritz
agrees to purchase from SCA, and SCA agrees to sell, convey, transfer,
assign and deliver to Andritz, on the Closing Date, the SCA Intellectual
Property, free and clear of any Encumbrances of any kind whatsoever.
2.5 Assumption of Liabilities
Upon the sale of the Assets by SAS, the Buyer shall assume and, subject
to Section 9.3, agree to pay, perform, discharge and hold Sellers
harmless therefrom, in a timely manner and in accordance with the terms
thereof, only the following obligations of SAS (the "Assumed
Liabilities"):
(a) Subject to Section 2.10, the obligations of SAS arising after the
Value Date in respect of the Transferred Contracts, including
without limitation all accounts payable on Transferred Orders of
SAS;
(b) Any obligation to continue to employ, and employee benefit obligations
of SAS (other than those involving stock or stock options in SCA)
in respect of the Transferred Employees including all accrued
employee obligations, and all obligations, Taxes and social charges
arising from the termination of any of the Transferred Employees,
in each case arising under applicable Law or as set forth in
Schedule E.
(c) Any liabilities indicated to be assumed liabilities in Schedule C.
2.6 Excluded Liabilities
Notwithstanding anything contained herein to the contrary, the Buyer
shall not assume or be deemed to have assumed any obligations or
liabilities of SAS, whether related to the Business or otherwise, other
than the Assumed Liabilities (such obligations and liabilities not
assumed hereunder the "Excluded Liabilities"). For the avoidance of
doubt, the Excluded Liabilities include without limitation all of the
Sellers' obligations in respect of all Contracts other than the
Transferred Orders and Transferred Contracts.
2.7 Purchase Price
The aggregate purchase price (the "Purchase Price") for the Selas UK
Shares, the Assets, the Assumed Liabilities and the SCA Intellectual
Property shall consist of: (a) the sum of the Adjusted Net Asset Value
as finally determined, the SCA Intellectual Property Price and the SAS
Goodwill Value (collectively, the "Cash Purchase Price") and (b) the
assumption of the Assumed Liabilities.
2.8 Payment of Cash Purchase Price
(a) Buyer shall pay the SAS Goodwill Value on the Closing Date to the
legal escrow agent appointed by SAS and Buyer according to the
terms and conditions of the Escrow Agreement (the "Escrow Agent").
(b) Buyer shall pay the Adjusted Net Asset Value to SAS within ten days
of the final determination of the Adjusted Net Asset Value pursuant
to Section 2.12.
(c) Buyer shall pay the SCA Intellectual Property Price to SCA on the
Closing Date by way of wire transfer of immediately available funds
to an account designated by SCA.
2.9 Escrow
The Escrow Agent shall receive, on the Closing Date, the SAS Goodwill
Value as deposit (the "Deposit").
The Escrow Agent shall transfer the Deposit to SAS at the end of the
Creditors' Claim Period defined in Section 5.6 of this Agreement,
subject to the proof that no creditors' claim to the payment of the
Purchase Price occurred during the Creditors' Claim Period.
In the event some creditors' claims occurred, the Escrow Agent shall use
the Deposit in order to pay off the creditors.
The Escrow Agent is authorized, from now, without the necessary presence
of the Buyer, to transfer to SAS all or part of the Deposit that would
remain available after the payment of the creditors.
The duties of the Escrow Agent are defined in the escrow agreement
attached hereto as Exhibit 5.
2.10 Nonassignable Contracts and Orders
In the case of each Transferred Contract that is not by its terms
assignable, SAS agrees to use its Commercially Reasonable Efforts to
promptly obtain, or cause to be obtained, any written Consents necessary
to convey to the Buyer the benefit and burden thereof. The Buyer shall
cooperate with the Seller, in such manner as may be reasonably
requested, in connection therewith, including without limitation active
participation with Sellers in visits to and meetings, discussions and
negotiations with all Persons with the authority to grant or withhold
Consent. Nothing in this Agreement shall be construed as an attempt or
an agreement to assign or cause the assignment of any Transferred
Contract: (i) which is by Law or contract nonassignable without the
Consent of the other party or parties thereto, unless such Consent shall
have been given, or (ii) as to which all the remedies for the
enforcement thereof enjoyed by SAS would not, as a matter of Law, pass
to the Buyer as an incident of the assignments provided by this
Agreement. If the Buyer is unable to obtain Consent to transfer or is
prevented by Law from transferring any Transferred Contract, then, for
the remaining term of such Transferred Contract, the Buyer shall act as
SAS's agent in the performance of all obligations and liabilities under
such Transferred Contract and SAS shall act as the Buyer's agent in the
receipt of any benefits, rights or interests which inure to SAS under
such Transferred Contract.
2.11 Instruments of Transfer and Conveyance
(a) The sale, conveyance, transfer, assignment and delivery of the
Assets shall be effected by delivery at the Closing by (a) SAS to
the Buyer of such deeds, transfers in registrable form, bills of
sale, endorsements, assurances, conveyances, releases, discharges,
assignments, certificates, drafts, checks or other instruments of
transfer and conveyance, duly executed by SCA as the Buyer
reasonably deems necessary to vest in the Buyer good and marketable
title to such Assets, free and clear of any Encumbrance, and such
other documents as the Buyer may reasonably request to demonstrate
satisfaction of the conditions and compliance with this Agreement
by the Sellers, and (b) the Buyer to SAS of assumption agreements
providing for the full assumption of the Assumed Liabilities in
form and substance reasonably satisfactory to SAS, and such other
documents as SAS, as the case may be, may reasonably request to
demonstrate satisfaction of the conditions and compliance with this
Agreement by the Buyer.
(b) The sale, conveyance, transfer, assignment and delivery of the SCA
Intellectual Property shall be effected by delivery at the Closing
by SCA to the Buyer of such deeds, transfers in registrable form,
bills of sale, endorsements, assurances, conveyances, releases,
discharges, assignments, certificates, drafts, checks or other
instruments of transfer and conveyance, duly executed by SCA as the
Buyer reasonably deems necessary to vest in the Buyer good and
marketable title to the SCA Intellectual Property free and clear of
any Encumbrance, and such other documents as the Buyer may
reasonably request to demonstrate satisfaction of the conditions
and compliance with this Agreement by SCA.
2.12 Determination of Adjusted Net Asset Value
(a) Within sixty (60) days after the Value Date, Seller shall cause to
be prepared from the books and records of SAS and Selas UK and
delivered to Buyer (i) a consolidated balance sheet for the Assets,
the Assumed Liabilities and Selas UK as of the Value Date (the
"Value Date Balance Sheet") which shall be prepared in accordance
with US GAAP applied on a basis consistent with the Balance Sheet ,
together with a schedule setting forth the calculation of Net Asset
Value (as hereinafter defined) as of the Value Date and (ii) if
the Value Date is not the Closing Date, the Post-Value Date Cash
Flow Statement (as defined below). Notwithstanding the foregoing,
the Value Date Balance Sheet shall contain the following
adjustments: (i) the warranty provision for the Transferred Orders
with Thyssen shall be increased to the sum of 2% of the Thyssen
contract price net of any warranty cost incurred from and after the
date hereof on the Transferred Orders with Thyssen and an
appropriate reserve for the claim of LOI described in Part 3.23 of
the Disclosure Schedule; (ii) the unbilled receivables on the
Transferred Orders with Voest Alpine CGL#3 shall be reduced by the
amount of $762,000 (commission to VAI allocated to this projects)
multiplied by the result of 100% minus the percentage of completion
for this project as of the Value Date; and (iii) the ILVA
Receivables will be valued at 85% of their book value.
The Post Value Date Cash Flow Statement means a cash flow statement
prepared in accordance with US GAAP showing the difference between
(i) cash received by SAS after the Value Date and on or before the
Closing Date relating to any asset on the Value Date Balance Sheet
and (ii) cash paid by SAS after the Value Date and on or before the
Closing Date in respect of any liability on the Value Date Balance
Sheet, such difference being referred to herein as the "Net Cash
Flow Amount.")
(b) Buyer and Buyer's Accountants shall have the right to review all
documents and procedures used to prepare the Value Date Balance
Sheet and the computation of Net Asset Value as of the Closing Date
and, if applicable, the Post Value Date Cash Flow Statement and the
calculation of the Net Cash Flow Amount . As used herein, the term
"Net Asset Value" shall mean the difference between (x) total
Assets, as set forth in the Value Date Balance Sheet as finally
determined, and (y) total Assumed Liabilities, as set forth in the
Value Date Balance Sheet as finally determined. For the avoidance
of doubt the assets and liabilities of Selas UK are reflected in
one line as intercompany investments which shall be equal to the
stockholder equity of Selas UK. As used herein the term "Adjusted
Net Asset Value" shall mean the Net Asset Value minus the Net Cash
Flow Amount, as finally determined.
(c) Buyer shall notify Sellers in writing within thirty (30) days after
receipt of (i) the Value Date Balance Sheet, and, if applicable the
Post Value Date Cash Flow Statement and (ii) the availability of
the documents and procedures used to prepare the Value Date Balance
Sheet and, if applicable the Post Value Date Cash Flow Statement,
of any objections thereto. A notice under this Section 2.12(c)
shall specify in reasonable detail the items in the Value Date
Balance Sheet and calculation of Net Asset Value , and if
applicable, the Post Value Date Cash Flow Statement and the
calculation of the Net Cash Flow Amount which are being disputed,
and a summary of the reasons for such dispute. In the event of any
such dispute, Seller shall not be permitted to take positions which
are different from positions taken in the Value Date Balance Sheet
and, if applicable, the Post Value Date Cash Flow Statement, as
submitted to Buyer by Sellers.
(d) At the request of either party, any dispute between the parties
relating to the Value Date Balance Sheet, the Post Value Date Cash
Flow Statement and the calculation of Adjusted Net Asset Value
which cannot be resolved by them within twenty (20) days after
receipt of notice of any objections to such Value Date Balance
Sheet, Post Value Date Cash Flow Statement or calculation of
Adjusted Net Asset Value shall be referred to the Disputes Auditor
for decision, which shall be final and binding on both parties.
The parties agree that they will require the Disputes Auditor to
render its decision within thirty (30) days after referral of the
dispute to the Disputes Auditor for decision pursuant hereto.
Before referring a matter to the Disputes Auditor, the parties
shall agree on procedures to be followed by the Disputes Auditor
(including procedures for presentation of evidence). If the
parties are unable to agree upon procedures before the end of
twenty (20) days after receipt of notice of any objections, the
Disputes Auditor shall establish procedures giving due regard to
the intention of the parties to resolve disputes as quickly,
efficiently and inexpensively as possible; the Disputes Auditor's
procedures may be, but need not be, those proposed by either
party. The parties shall, as promptly as practicable, submit
evidence in accordance with the procedures agreed upon or
established by the Disputes Auditor, and the Disputes Auditor shall
decide the dispute in accordance therewith as promptly as
practicable. The fee of the Disputes Auditor for, and relating to,
the making of any such decision shall be borne by the parties
equally. As used in this Agreement, the term "Disputes Auditor"
means PriceWaterhouseCoopers LLC.
(e) (i) In the event the Adjusted Net Asset Value as finally determined
is more than $0 then Buyer shall pay the Adjusted Net Asset Value
(with interest thereon at the Interest Rate, as in effect from time
to time, from the Closing Date through the date of payment) to SAS
by wire transfer of immediately available funds to the bank account
designated in writing.
(ii) In the event the Adjusted Net Asset Value as finally determined is
less than $0 then Sellers shall pay Buyer an amount equal to the
amount by which the Adjusted Net Asset Value is less than $0 (with
interest thereon at the Interest Rate, as in effect from time to
time, from the Closing Date through the date of payment) to Buyer
by wire transfer of immediately available funds to the bank account
designated by Buyer in writing..
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby jointly and severally represent and warrant to the
Buyer and Andritz as of the date hereof and at each of the Value Date
and as of the Closing Date as though then made (except to the extent any
representation or warranty is made as of a specific date, or are
inaccurate due to actions contemplated hereby), as set forth in this
Section 3.
3.1 Organizational Matters
(a) Part 3.1 of the Disclosure Schedule attached hereto contains a
complete and accurate list for each Seller and Selas UK of its
name, its jurisdiction of incorporation, other jurisdictions in
which it is authorized to do business. Each Seller and Selas UK is
a corporation duly organized, validly existing, and in good
standing (where such concept is legally recognized) under the Laws
of its jurisdiction of incorporation, with full corporate power and
authority to conduct its Business as it is now being conducted, to
own or use the properties and assets that it purports to own or
use, and to perform all its obligations under Transferred
Contracts. Each Seller and Selas UK is duly qualified to do
business as a foreign corporation in. each country or other
jurisdiction in which the conduct of the Business requires such
qualification.
(b) The Sellers have delivered to Buyer true and complete copies of the
Organizational Documents of each Seller and Selas UK, as currently
in effect.
3.2 Authority; No Conflict
(a) This Agreement constitutes the legal, valid, and binding obligation
of each Seller, enforceable against the Sellers in accordance with
its terms. Upon the execution and delivery by each Seller of the
Ancillary Agreements to which it is a party, such Ancillary
Agreements will constitute the legal, valid, and binding
obligations of such Seller, enforceable against such Seller in
accordance with their respective terms except to the extent that
such enforceability may be limited or otherwise affected by
applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting creditors' rights generally from time to time
in effect or by general equitable principles. Each Seller has all
necessary right, power, authority, and capacity to execute and
deliver this Agreement and the Ancillary Agreements to which it is
a party and to perform its obligations under this Agreement and the
Ancillary Agreements.
(b) Except as set forth in Part 3.2 of the Disclosure Schedule and
except as contemplated by Sections 5.6 and Section 6.3, neither the
execution and delivery by either Seller of this Agreement and the
Ancillary Agreements nor the consummation or performance by either
Seller of any of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A) any
provision of the Organizational Documents of a Seller, or (B)
any resolution adopted by the board of directors or the
stockholders of a Seller;
(ii) to Seller's Knowledge, contravene, conflict with, or result in
a violation of, any Law or any Order to which any Seller or
Selas UK, or any of the assets owned or used by any Seller or
Selas UK or Selas UK, may be subject;
(iii)contravene, conflict with, or result in a violation of any of
the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate, or
modify, any Governmental Authorization that is held by any
Seller or Selas UK or that otherwise relates to the business
of, or any of the assets owned or used by, any Seller or Selas
UK;
(vi) contravene, conflict with, or result in a violation or breach
of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or
modify, any Transferred Contract; or
(vii)result in the imposition or creation of any Encumbrance upon
or with respect to any of the Assets, the SCA Intellectual
Property or the assets owned or used by Selas UK.
(c) Except as set forth in Part 3.2 of the Disclosure Schedule and
except as contemplated by Sections 5.6 and Section 6.3, neither any
Seller nor Selas UK is or will be required to give any notice to or
obtain any Consent from any Person in connection with the execution
and delivery of this Agreement or the Ancillary Agreements or the
consummation or performance of any of the Contemplated Transactions.
3.3 Capitalization
The authorized equity securities of Selas UK consist of 20,000 shares of
common stock, par value $1 per share, of which 20,000 shares are issued
and outstanding and constitute the Selas UK Shares. Seller is the record
and beneficial owner and holder of all the Selas UK Shares, free and
clear of all Encumbrances. No legend (other than applicable securities
law legends) or other reference to any purported Encumbrance appears
upon any certificate representing equity securities of Selas UK. All of
the outstanding equity securities of Selas UK have been duly authorized
and validly issued and are fully paid and nonassessable. There are no
Contracts relating to the issuance, sale, or transfer of any equity
securities or other securities of Selas UK. None of the outstanding
equity securities or other securities of Selas UK was issued in
violation of any Law. Selas UK does not own, or have any Contract to
acquire, any equity securities or other securities of any Person or any
direct or indirect equity or ownership interest in any other business.
Upon delivery of the certificates for the Selas UK Shares by the Seller,
the Buyer will acquire good and valid title to the Selas UK Shares free
and clear of any Encumbrances.
3.4 Title to Properties; Encumbrances
Except as set forth in Part 3.4 of the Disclosure Schedule, neither SAS
nor Selas UK owns any real property. Part 3.4 of the Disclosure
Schedule contains a complete and accurate list of all leaseholds owned
by SAS or Selas UK. SAS and Selas UK own with good title, subject only
to the matters permitted by the following sentence) all the properties
and assets (whether real, personal, or mixed and whether tangible or
intangible) reflected as owned in the Books and Records, including all
of the properties and assets reflected in the Balance Sheet (except for
personal property sold since the date of the Balance Sheet in the
Ordinary Course of Business), and all of the properties and assets
purchased or otherwise acquired by SAS or Selas UK since the date of the
Balance Sheet (except for personal property acquired and sold since the
date of the Balance Sheet in the Ordinary Course of Business and
consistent with past practice). Except as set forth in Part 3.4 of the
Disclosure Schedule, all material properties and assets reflected in the
Balance Sheet are free and clear of all Encumbrances.
3.5 Sufficiency of Assets
The assets of Selas UK, the Assets and the SCA Intellectual Property
constitute all of the assets used by Seller and their Affiliates in the
conduct of the Business as presently conducted by the Sellers and their
Affiliates other than the Excluded Assets.
3.6 Financial Statements
Sellers have delivered to Buyer: (a) consolidated balance sheets of SAS
and its Subsidiaries reflecting the Business as at December 31, 2001
attached hereto as Schedule G1 and the income statement of the Business
for the fiscal year ended December 31, 2001 (a copy of which is attached
as Schedule G2), (b) a consolidated balance sheet of the Assets, the
Assumed Liabilities and Selas UK as at June 30, 2002 (the "Balance
Sheet", a copy of which is attached as Schedule G3). Except as
disclosed in Part 3.6 of the Disclosure Schedule, such financial
statements fairly present the financial condition and the results of
operations, of the Business (other than in the case of the Balance
Sheet, certain of the Excluded Assets and the Excluded Liabilities) as
at the respective dates of and for the periods referred to in such
financial statements, all in accordance with US GAAP except as disclosed
in Part 3.6 of the Disclosure Schedule; the financial statements
referred to in this Section 3.6 reflect the consistent application of
such accounting principles throughout the periods involved. Except as
disclosed in the Balance Sheet or in Part 3.6 of the Disclosure Schedule
, there were no actual or contingent debts, liabilities or obligations
(other than in the case of the Balance Sheet, Excluded Liabilities) of
any Seller (in connection with the Business) or Selas UK , which were
required, in accordance with the Accounting Policies, to be disclosed
therein.
3.7 Books and Records
The Books and Records, all of which have been made available to Buyer,
are complete and correct in all material respects and have been
maintained in accordance with sound business practices, including the
maintenance of an adequate system of internal controls. The minute books
of Selas UK contain accurate and complete records of all material
meetings held of, and corporate action taken by, the stockholders, the
Boards of Directors, and committees of the Boards of Directors of Selas
UK,. At the Closing, all of the Books and Records will be in the
possession of Selas UK or transferred to Buyer.
3.8 Accounts Receivable
Part 3.8 of the Disclosure Schedule contains a complete and accurate
list of all Accounts Receivable as of the date of the Balance Sheet,
which list sets forth the aging of such Accounts Receivable. All
accounts receivable of SAS or Selas UK that are reflected on the Balance
Sheet or on the accounting records of SAS or Selas UK as of the Closing
Date (collectively, the "Accounts Receivable") represent valid
obligations arising from sales actually made or services actually
performed in the Ordinary Course of Business. Unless paid prior to the
Closing Date, and except as set forth in Part 3.8 of the Disclosure
Schedule the Accounts Receivable are or will be as of the Closing Date
current and to Seller's Knowledge there is no reason to believe that
such receivables will not be collectible net of the respective reserves
shown on the Value Date Balance Sheet. Except as disclosed in Part 3.8
of the Disclosure Schedule, no contest, claim, or right of set-off has
been made or asserted by the obligor , other than returns in the
Ordinary Course of Business, under any Contract with any such obligor of
an Accounts Receivable relating to the amount or validity of such
Accounts Receivable.
3.9 Inventory
All inventory of SAS relating to the Business (taken as a whole) and of
Selas UK (taken as a whole) consists of a quality and quantity usable
and salable in the Ordinary Course of Business, except for obsolete
items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Balance Sheet
in accordance with the Accounting Policies.
3.10 No Undisclosed Liabilities
Except as set forth in Part 3.10 of the Disclosure Schedule, neither
Seller (in connection with the Business) nor Selas UK has any
liabilities or obligations of any nature (whether known or unknown and
whether absolute, accrued, contingent, or otherwise) except for: (i)
liabilities or obligations reflected or reserved against in the Balance
Sheet; (ii) liabilities not required to be disclosed pursuant to US
GAAP; and (iii) current liabilities incurred in the Ordinary Course of
Business since the date of the Balance Sheet..
3.11 No Material Adverse Effect
Since the date of the Balance Sheet, there has not been any Material
Adverse Effect.
3.12 No Violation of Law
Except as set forth in Part 3.12 of the Disclosure Schedule:
(a) to Seller's Knowledge, each Seller and Selas UK is, and at all
times since January 1, 1999 has been, in full compliance with each
Law that is or was applicable to it or in connection with the
conduct of the Business or the ownership or use of any of its
assets;
(b) to Sellers' Knowledge, no event has occurred or circumstance exists
that (with or without notice or lapse of time) (i) may constitute
or result in a violation by any Seller or Selas UK of, or a failure
on the part of any Seller or Selas UK to comply with, any Law, or
(ii) may give rise to any obligation on the part of any Seller or
Selas UK to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature; and
(c) Neither Seller (in connection with the Business or Assets) nor
Selas UK has received any written notice or to Sellers' Knowledge
other communication from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or potential violation
of, or failure to comply with, any Law, or (B) any actual, alleged,
possible, or potential obligation on the part of any Seller or
Selas UK to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature under applicable Law.
3.13 Governmental Authorizations
(a) Part 3.13 of the Disclosure Schedule contains a complete and
accurate list of each Governmental Authorization that is held by
any Seller or Selas UK or that otherwise relates to the Business
of, or to any of the assets owned or used by SAS (in connection
with the Business) or Selas UK. Each Governmental Authorization
listed or required to be listed in Part 3.13 of the Disclosure
Schedule is valid and in full force and effect.
(b) Except as set forth in Part 3.13 of the Disclosure Schedule:
(i) each Seller (in connection with the Business or Assets) and
Selas UK is, and at all times since January 1, 1999 has been,
in full compliance with all of the terms and requirements of
each Governmental Authorization identified or required to be
identified in Part 3.13 of the Disclosure Schedule;
(ii) to Seller's Knowledge, no event has occurred or circumstance
exists that may (with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a violation of
or a failure to comply with any term or requirement of any
Governmental Authorization listed or required to be listed in
Part 3.13 of the Disclosure Schedule, or (B) result directly
or indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification to, any
Governmental Authorization listed or required to be listed in
Part 3.13 of the Disclosure Schedule;
(iii)neither Seller (in connection with the Business or Assets) nor
Selas UK has received any written notice or other written
communication from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or potential
violation of or failure to comply with any term or requirement
of any Governmental Authorization, or (B) any actual,
proposed, possible, or potential revocation, withdrawal,
suspension, cancellation, termination of, or modification to
any Governmental Authorization; and
(iv) all applications required to have been filed for the renewal
of the Governmental Authorizations listed or required to be
listed in Part 3.13 of the Disclosure Schedule have been duly
filed on a timely basis with the appropriate Governmental
Bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly
made on a timely basis with the appropriate Governmental
Bodies.
(c) The Governmental Authorizations listed in Part 3.13 of the
Disclosure Schedule collectively constitute all of the Governmental
Authorizations necessary to permit the Sellers and Selas UK to
lawfully conduct and operate the Business in the manner they
currently conduct and operate such Businesses and to permit them to
own and use their assets in the manner in which they currently own
and use such assets.
(d) For purposes of this Section 3.13, the term "Governmental
Authorization" shall not include any filing or registration made
with any Governmental Body with respect to any Intellectual
Property.
3.14 Taxes
(a) SAS and Selas UK have filed or caused to be filed (on a timely
basis) all Tax Returns that are or were required to be filed by or
with respect to any of them for any period ending after December
31, 1999, either separately or as a member of a group of
corporations, pursuant to applicable Laws. Seller has delivered or
made available to Buyer copies of, and Part 3.14 of the Disclosure
Schedule contains a complete and accurate list of, all such Tax
Returns.
(b) SAS and Selas UK have paid, or made provision for the payment of,
all Taxes that have or may have become due pursuant to those Tax
Returns or otherwise, or pursuant to any assessment received by SAS
or Selas UK, except such Taxes, if any, as are listed in Part 3.14
of the Disclosure Schedule and are being contested in good faith
and as to which adequate reserves (determined in accordance with US
GAAP) have been provided in the Balance Sheet or as otherwise
disclosed in Part 3.14 of the Disclosure Schedule.
(c) Except as described in Part 3.14 of the Disclosure Schedule none of
the income Tax Returns of SAS or Selas UK have been the subject of
any review or audit by a Governmental Body which is pending or
relates to any period for which the applicable statute of
limitations has not expired. Part 3.14 of the Disclosure Schedule
contains a complete and accurate list of all such audits or
reviews, including a reasonably detailed description of the nature
and outcome of each audit or review. All deficiencies proposed as a
result of such audits or reviews have been paid, reserved against,
settled, or, as described in Part 3.14 of the Disclosure Schedule,
are being contested in good faith by appropriate proceedings.
(d) Except as described in Part 3.14 of the Disclosure Schedule,
neither SAS nor Selas UK has given or been requested to give
waivers or extensions (or is or would be subject to a waiver or
extension given by any other Person) of any statute of limitations
relating to the payment of Taxes of SAS or Selas UK or for which
SAS or Selas UK may be liable.
(e) Except as described in Part 3.14 of the Disclosure Schedule, the
charges, accruals, and reserves with respect to Taxes on the
respective books of SAS and Selas UK are adequate (determined in
accordance with US GAAP). There exists no proposed tax assessment
against SAS or Selas UK except as disclosed in the Balance Sheet or
in Part 3.14 of the Disclosure Schedule.
(f) All Tax Returns filed by (or that include on a consolidated basis)
SAS or Selas UK are true, correct, and complete. There is no tax
sharing agreement that will require any payment by SAS or Selas UK
after the date of this Agreement.
(g) Except as described in Part 3.14 of the Disclosure Schedule, all
Taxes relating to the income, properties or operations/of the
business of SAS or Selas UK which SAS or Selas UK is required by
law to withhold or collect have been duly withheld or collected,
and have been timely paid over to the proper Governmental Body or
other Person to the extent due and payable.
(h) Neither SAS nor Selas UK is bound to any obligation to indemnify a
third party with respects of tax obligations in relation with the
Business, Assets or Assumed Liabilities, or to succeed it in such
obligation.
3.15 Legal Proceedings; Orders
(a) Except as set forth in Part 3.15 of the Disclosure Schedule, there
is no pending Legal Proceeding:
(i) that has been commenced by or against any Seller or Selas UK
or that otherwise relates to or may affect the Business, the
Assets, the SCA Intellectual Property, the Assumed
Liabilities, or any of the assets owned or used by, any Seller
or Selas UK; or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any
of the Contemplated Transactions.
To Sellers' Knowledge, (1) no such Legal Proceeding has been
Threatened, and (2) no event has occurred or circumstance exists
that may reasonably be expected to give rise to or serve as a basis
for the commencement of any such Legal Proceeding. Sellers have
delivered to Buyer copies of all pleadings, correspondence, and
other documents relating to each Legal Proceeding listed in Part
3.15 of the Disclosure Schedule. To Seller's Knowledge, the Legal
Proceedings listed in Part 3.15 of the Disclosure Schedule will not
have a Material Adverse Effect.
(b) There is no Order to which any Seller (in respect of the Business)
or Selas UK is subject.
3.16 Absence of Certain Changes
Except as set forth in Part 3.16 of the Disclosure Schedule and as
contemplated by this Agreement, since August 31, 2002, SAS and Selas UK
have conducted their businesses only in the Ordinary Course of Business
and there has not been any:
(a) change in Selas UK's authorized or issued capital stock; grant of
any stock option or right to purchase shares of capital stock of
Selas UK; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption,
retirement, or other acquisition by Selas UK of any shares of any
such capital stock; or declaration or payment of any dividend or
other distribution or payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of Selas UK;
(c) payment or increase by SAS or Selas UK of any bonuses, salaries, or
other compensation to any Transferred Employee or entry into any
employment, severance, or similar Contract with any such
Transferred Employee;
(d) adoption of, or increase in the payments to or benefits under, any
Benefit Plan for or with any Transferred Employee;
(e) damage to or destruction or loss of any asset or property of Selas
UK or any Asset, whether or not covered by insurance, materially
and adversely affecting the properties, assets, Business, financial
condition, or prospects of the Business;
(f) entry into, termination of, or receipt of notice of termination of
(i) any license, distributorship, dealer, sales representative,
joint venture, credit, or similar agreement, or (ii) any Contract
or transaction involving a total remaining commitment by or to any
Seller (relating to the Business) or Selas UK of at least $50,000;
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any Asset, SCA
Intellectual Property or asset or property of Selas UK;
(h) change in the Accounting Policies used by any Seller or Selas UK; or
(i) agreement, whether oral or written, by any Seller or Selas UK to do
any of the foregoing.
3.17 Material Contracts; Defaults
(a) Part 3.17(a) of the Disclosure Schedule contains a complete and
accurate list of each Material Contract, and Sellers have delivered
to Buyer true and complete copies of each Transferred Contract.
(b) Except as set forth in Part 3.17(b) of the Disclosure Schedule, to
Seller's Knowledge, each Material Contract is in full force and
effect and is valid and enforceable in accordance with its terms.
(c) Except as set forth in Part 3.17(c) of the Disclosure Schedule:
(i) SAS and Selas UK is in compliance with all applicable terms
and requirements of each Material Contract;
(ii) to Sellers' Knowledge, each Person party to a Material
Contract other than SAS and Selas UK is in full compliance
with all applicable terms and requirements of such Material
Contract;
(iii)to Sellers' Knowledge, no event has occurred or circumstance
exists that (with or without notice or lapse of time) would
contravene, conflict with, or result in a violation or breach
of, or give SAS or Selas UK or other Person the right to
declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Material Contract; and
(iv) neither SAS nor Selas UK has given to or received from any
other Person any written notice regarding any actual, alleged,
possible, or potential violation or breach of, or default
under, any Applicable Contract.
(d) There are no renegotiations of, or outstanding rights to
renegotiate any material amounts paid or payable to SAS or Selas UK
under current or completed Material Contracts with any Person and
no such Person has made written demand for such renegotiation.
(e) To Seller's Knowledge, the Contracts relating to the sale, design,
manufacture, or provision of products or services by SAS (in
connection with the Business) and Selas UK have been entered into
in the Ordinary Course of Business and have been entered into
without the commission of any act alone or in concert with any
other Person, or any consideration having been paid or promised,
that is in violation of any Law.
3.18 Insurance
Part 3.18 of the Disclosure Schedule sets forth a complete and accurate
list of all insurance policies covering SAS with respect to the Business
or Selas UK, including details as to limits of insurance, deductibles or
self insured retentions, applicable exclusions, renewal dates and each
claims relating to the Business made by SAS or Selas UK under any
insurance policy within the past five years in excess of $25,000 per
claim. Neither Seller nor Selas UK have received at any time in the
past five years any refusal of coverage or any notice that a defense
will be afforded with reservation of rights, or any notice of
cancellation or any other indication that any insurance policy is no
longer in full force or effect or will not be renewed or that the issuer
of any policy is not willing or able to perform its obligations
thereunder.
3.19 Environmental Matters
Except as set forth in Part 3.19 of the Disclosure Schedule:
(a) To Sellers' Knowledge, SAS and Selas UK are, and at all times has
been, in compliance with, and have not been and are not in
violation of or liable under, any Environmental Law. Neither SAS
nor Selas UK has received, or to Seller's Knowledge, is there any
basis to expect, any actual or Threatened Order, notice, or other
communication from any Governmental Body or Person of any actual or
potential violation or failure to comply with any Environmental
Law, or of any actual or Threatened obligation to undertake or bear
the cost of any Environmental Liabilities.
(b) Neither SAS nor Selas UK has received, or to Seller's Knowledge, is
there any basis to expect, any citation, directive, inquiry,
notice, Order, summons, warning, or other communication that
relates to Hazardous Activity, Hazardous Materials, or any alleged,
actual, or potential violation or failure to comply with any
Environmental Law, or of any alleged, actual, or potential
obligation to undertake or bear the cost of any Environmental
Liabilities.
(d) To Seller's Knowledge, there are no Hazardous Materials present on
or in the Environment at the properties owned or leased by SAS or
Selas UK (the "Facilities") that could give cause or result in any
Environmental Liability on the part of SAS or Selas UK, including
any Hazardous Materials contained in barrels, above or underground
storage tanks, landfills, land deposits, dumps, equipment (whether
moveable or fixed) or other containers, either temporary or
permanent, and deposited or located in land, water, sumps, or any
other part of the Facilities, or incorporated into any structure
therein or thereon. To Seller's Knowledge, neither SAS nor Selas UK
nor any other Person, has permitted or conducted, or is aware of,
any Hazardous Activity conducted with respect to the Facilities or
any other properties or assets in which SAS or Selas UK has or had
an interest except in full compliance with all applicable
Environmental Laws.
(e) To Seller's Knowledge, there has been no Release or Threat of
Release, of any Hazardous Materials at or from the Facilities or in
connection with the conduct of the Business that could give rise to
any Environmental Liability on the part of SAS or Selas UK.
(f) There are no reports, studies, analyses, tests, or monitoring
possessed or initiated by any Seller or Selas UK pertaining to
Hazardous Materials or Hazardous Activities in, on, or under the
Facilities, or concerning compliance by any Seller or Selas UK.
3.20 Employees and Employee Benefits
(a) Part 3.20 of the Disclosure Schedule contains a complete and
accurate list of the following information for each Transferred
Employee: (i) employer; (ii) employee name; (iii) job title; (iv)
current compensation paid or payable; and (v) employment dates. To
Sellers' Knowledge, each Benefit Plan has been established and
administered where required in material compliance with its terms
and the applicable provisions of all applicable Laws. Except as
disclosed in Part 3.20 of the Disclosure Schedule, the Transferred
Employees are not entitled to any severance or retirement benefits
other than those provided by applicable Law without specific
applicability to SAS. Except as disclosed in Part 3.20 of the
Disclosure Schedule, the Transferred Employees participate in no
Benefit Plans other than those provided by applicable Law without
specific applicability to SAS or Selas UK.
(b) No Transferred Employee is a party to, or is otherwise bound by,
any agreement or arrangement with SAS or Selas UK, including any
confidentiality, noncompetition, or proprietary rights agreement,
between such Transferred Employee and any other Person
("Proprietary Rights Agreement") that in any way adversely affects
or will affect (i) the performance of his duties as an employee of
Buyer or Selas UK, or (ii) the ability of the Buyer or Selas UK to
conduct the Business. To Sellers' Knowledge, since January 1, 2002
no Transferred Employee has given or received written notice of the
termination of his or her employment or intends to terminate his
employment with SAS or Selas UK.
(c) SAS and Selas UK have each complied in all respects with all Laws
relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, workers compensation, unemployment, redundancy,
termination, the payment of social security and similar taxes
(including the withholding thereof), occupational safety and
health, and plant closing. Neither SAS nor Selas UK is liable for
the payment of any compensation, damages, taxes, fines, penalties,
or other amounts, however designated, for failure to comply with
any of the foregoing Laws.
(d) The Balance Sheet includes proper reserves against any and all
obligations in relation to the past services or benefits of any
present or former director, employee, salesman, consultant or agent.
(e) Except as set forth in Part 3.20 of the Disclosure Schedule,
neither SAS nor Selas UK is a party with any groups of employees or
individual employees or former employees to any unfunded or
uninsured welfare or Benefit Plan or other employee welfare or
benefit arrangements.
(f) Except as set forth in Part 3.20 of the Disclosure Schedule, there
are no Applicable Contracts with present or former directors,
employees, salesmen, consultants or agents of SAS or Selas UK that
are not in the Ordinary Course of Business. There are no present
or former directors, employees, salesmen, consultants or agents who
owes SAS (in connection with the Business) or Selas UK any amount
with regard to outstanding loans and advances to such Person other
than for reimbursement of advances made in connection with
traveling expenses.
(g) There are no incentives or Contracts with any employees or officers
of SAS or Selas UK relating to or triggered by the execution of
this Agreement or the occurrence of any of the Contemplated
Transactions.
3.21 Labor Relations
Except as set forth in Part 3.21 of the Disclosure Schedule, neither SAS
(in connection with the Business) nor Selas UK is a party to any
collective bargaining or other labor Contract, nor are any being
negotiated as of the date hereof. No Consent of any union (or similar
group or organization) is required in connection with the consummation
of the Contemplated Transactions. Since December 31, 2001, there has not
been, there is not presently pending or existing, and to Sellers'
Knowledge there is not Threatened, (a) any strike, slowdown, picketing,
work stoppage, or activity under any formal employee grievance process,
(b) any Legal Proceeding against or affecting SAS or Selas UK relating
to the alleged violation of any Law pertaining to labor relations or
employment matters, including any charge or complaint filed by an
employee or union any Governmental Body, organizational activity, or
other labor or employment dispute against or affecting either SAS or
Selas UK or their premises, or (c) any application for certification of
a collective bargaining agent. To Sellers' Knowledge, no event has
occurred or circumstance exists that could reasonably provide the basis
for any work stoppage or other labor dispute.
3.22 Intellectual Property Rights
(a) Selas Intellectual Property - Part 3.22(a) of the Disclosure
Schedule contains a complete and accurate list and summary description
of all SAS Intellectual Property and all SCA Intellectual Property,
including in each case all Patents, Marks, Copyrights, and computer
software (other than commercially available software that has not been
customized for the Business.
(b) Part 3.22(b) of the Disclosure Schedule contains a complete and
accurate list and summary description, including any royalties
payable or receivable by any Seller or Selas UK, of all Contracts
relating to the Selas Intellectual Property to which any Seller or
Selas UK is a party or by which any Seller or Selas UK is bound,
except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software
programs less than $10,000 under which a Seller or Selas UK is the
licensee. There are no outstanding and, to Sellers' Knowledge, no
Threatened disputes or disagreements with respect to any such
agreement.
(c) Sufficiency of Selas Intellectual Property
Except as set forth in Part 3.22(c) of the Disclosure Schedule, the
Selas Intellectual Property constitutes all the Intellectual
Property used by either Seller or any of their respective
Affiliates under their control in the operation of the Business as
it is currently conducted. SCA is the owner of all right, title,
and interest in and to all of SCA Intellectual Property, free and
clear of all Encumbrances, and except as set forth in Part 3.22(c)
of the Disclosure Schedule, has the right to use without payment to
a third party all of the SCA Intellectual Property. SAS or Selas
UK is the owner of all right, title, and interest in and to all of
SAS Intellectual Property, free and clear of all Encumbrances, and
except as set forth in Part 3.22(c) of the Disclosure Schedule, has
the right to use without payment to a third party all of the SAS
Intellectual Property.
(d) Patents
(i) Part 3.22(a) of the Disclosure Schedule contains a complete
and accurate list and summary description of all Patents
comprising part of the Selas Intellectual Property (the "Selas
Patents").
(ii) All of the issued Selas Patents are currently in compliance
with applicable formal Laws (including payment of filing,
examination, and maintenance fees and proofs of working or
use), and are not subject to any maintenance fees or Taxes or
actions falling due on or before December 31, 2002 and, to
Seller's Knowledge, are otherwise valid and enforceable,.
(iii)No Selas Patent has been within the last five years or is now
involved in any interference, reissue, reexamination, or
opposition proceeding. To Sellers' Knowledge, there is no
potentially interfering Patent of any third party.
(iv) To Sellers' Knowledge, no Selas Patent is infringed or, to Sellers'
Knowledge, has been challenged or Threatened in writing in any
way within the last five years..
(v) To Sellers' Knowledge, none of the products manufactured and sold, nor
any process or know-how used, by any Seller or Selas UK
infringes or is alleged to infringe any Patent or other
proprietary right of any other Person.
(v) All products made, used, or sold under the Selas Patents by
either Seller have been marked with a proper patent notice.
(e) Trademarks
(i) Part 3.22(a) of Disclosure Schedule contains a complete and
accurate list and summary description of all Marks comprising
part of the Selas Intellectual Property (the "▇▇▇▇▇ ▇▇▇▇▇").
(ii) All ▇▇▇▇▇ ▇▇▇▇▇ are currently in compliance with all
applicable formal Laws (including the timely post-registration
filing of affidavits of use and incontestability and renewal
applications), , and are not subject to any maintenance fees
or Taxes or actions falling due on or before December 31, 2002
and, to Seller's Knowledge, are otherwise valid and
enforceable. .
(iii)No ▇▇▇▇▇ ▇▇▇▇ has been within the last five years or is now
involved in any opposition, invalidation, or cancellation
proceeding and, to Sellers' Knowledge, no such action is
Threatened with the respect to any of the ▇▇▇▇▇ ▇▇▇▇▇.
(iv) To Sellers' Knowledge, there is no infringing trademark of
any third party.
(v) To Sellers' Knowledge, no ▇▇▇▇▇ ▇▇▇▇ is being infringed or has
been Threatened in any way. To Sellers Knowledge, none of the
▇▇▇▇▇ ▇▇▇▇▇ infringes or is alleged to infringe any ▇▇▇▇ of
any third party.
(f) Know-How
(i) Except as described in Part 3.22(f) of the Disclosure
Schedule, Sellers have taken all reasonable precautions to
protect the secrecy and confidentiality of the Selas Know-How.
(ii) To Seller's Knowledge, the Selas Know-How are not part of the
public knowledge or literature, and, to Sellers' Knowledge,
have not been used, divulged, or appropriated either for the
benefit of any Person or to the detriment of either Seller or
Selas UK. To seller's Knowledge, no Selas Trade Secret is
subject to any adverse claim or has been challenged or
Threatened in writing in any way in the past five years.
3.23 Order Backlog
(a) To Sellers' Knowledge , each Transferred Order is the valid and
binding obligation of such customer enforceable against such
customer in accordance with its terms, subject to bankruptcy and
other Laws, regulations and principles generally affecting
creditor's rights.
To Seller's Knowledge as of the date hereof, except as disclosed in Part
3.23 of the Disclosure Schedule, in respect of each Transferred Order
there is no reasonable basis for any Seller or Selas UK to believe or
anticipate, based upon all information presently known by them after due
inquiry in respect of the same, including without limitation any
internal cost estimates, technological risk assessments, projections or
forecasts, manufacturing and/or construction schedules, projections or
forecasts prepared or developed by any Seller or Selas UK in respect
thereto, that (excluding the effects of the consummation of the
Contemplated Transactions):
(i) the final Gross Margin on such Transferred Order will be less
than the Gross Margin indicated in Part 3.23 of the Disclosure
Schedule it being understood that the Gross Margins set forth
in Part 3.23 of the Disclosure Schedule represent Sellers'
best and not its most conservative estimate;
(ii) any material delay in the completion of performance of such
Transferred Order or order within the time specified for
performance on the part of SAS or Selas UK is anticipated;
(iii)the Transferred Order will be cancelled or terminated on the
part of the customer.
(c) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Direct Costs" shall mean the sum of (1) Standard Direct
Costs, (2) Sales Order Engineering, (3) Warranty Expense, (4)
Contingencies (5) Other Expenses, in each case calculated
based on the assumption that the relevant company has
performed no more than the obligations required under the
applicable order;
(ii) "Standard Direct Cost" shall mean, with respect to any
Contract, standard values for raw material, purchased items,
services, labor, and overhead at January 1, 2002 planned rates
as called for by the ▇▇▇▇ of materials for the equipment
content of the contract as applied in accordance with the
relevant company's customary procedures on the date hereof;
(iii)"Sales Order Engineering" shall mean, with respect to any
Contract, specific engineering activities performed to execute
the Contract and directly charged to the specific contract at
a rate per hour intended to cover direct compensation and
benefits as well as related engineering overheads as applied
in accordance with the relevant companys customary
procedures on the date hereof;
(iv) "Warranty Expense" shall mean, with respect to any Contract,
the normal provision for warranty costs in accordance with the
relevant company's established procedures on the date hereof;
(v) "Contingencies" shall mean with respect to any Contract, the
amount to cover the risks of such Contract including risks to
meet the performance guarantees, financial and contractual
risks and risks for delays;
(vi) "Other Expense" shall mean with respect to any Contract, any
finance charges, banking or letter of credit fees, sales or
other commissions, license costs, transportation or packaging
or other out-of-pocket transaction costs incurred by any
Seller in connection with such Contract; and
(vi) "Gross Margin" shall mean the absolute amount or the fraction,
expressed as a percentage where the numerator is the sales
price of such Contract or Contracts in question less the
Direct Costs incurred in connection with such Contract or
Contracts and the denominator is the sales price of such
Contract or Contracts.
(d) Except as set forth in Part 3.23 of the Disclosure Schedule, all
Transferred Orders other than the ones with Voest Alpine for CGL#3
and the ones with Thyssen contain provisions which with respect to
SAS or Selas UK's liability thereunder which: (i) exclude all
liability for lost profits and other types of consequential
damages, (2) limit aggregate liability to the relevant contract
price, and (3) to the extent such Transferred Order provides for
liquidated damages, limit the aggregate liability for liquidated
damages to no more than 20% of the relevant contract price.
(e) For purposes only of this Section 3.23, Seller's Knowledge shall
include the actual knowledge of each project manager of a
Transferred Order in addition to the knowledge of the individuals
listed in the definition of Seller's Knowledge.
3.24 Suppliers and Consortium Partners
To Sellers' Knowledge, none of SAS or Selas UK's suppliers,
sub-suppliers, consortial partners, joint venturers or other parties
with whom it shares joint and several liabilities:
(i) is in breach of any material contract obligations applicable to it;
(ii) has committed an act of bankruptcy, is insolvent, has proposed a
compromise or arrangement to its creditors generally, has had any
petition for a receiving order in bankruptcy filed against it, has
made a voluntary assignment in bankruptcy, has taken any proceeding
with respect to a compromise or arrangement, has taken any
proceeding to have itself declared bankrupt or wound-up, nor has it
taken any proceeding to have a receiver appointed of all or any
part of its assets; or
(iii)is incapable of performing any of its obligations with respect to
which SAS or Selas UK has assumed joint and several liability.
3.25 Relationships with Related Persons
Except as set forth in Part 3.25 of the Disclosure Schedule, no officer
or director of either Seller or of Selas UK possesses, directly or
indirectly, any financial interest in, or is a director, officer or
employee of, any corporation, firm, association or business organization
which (a) is a client, supplier, customer, lessor or lessee of any SAS
or Selas UK (other than those with which SAS or Selas UK have transacted
business exclusively on an arms length basis) or (b) is engaged in
competition with any Seller or Selas UK with respect to any line of the
products or services comprising part of the Business except for less
than one percent of the outstanding capital stock of any corporation or
other entity that is publicly traded on any recognized exchange or in
the over-the-counter market.
3.26 Brokers or Finders
Sellers and its agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement.
3.27 Disclosure
(a) No representation or warranty of Sellers in this Agreement and no
statement in the Disclosure Schedule or certificated delivered
under this Agreement omits to state a material fact necessary to
make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
(b) Neither Seller has made, and shall not be deemed to have made, any
representations or warranties, express or implied, including
without limitation any warranty of merchantability or fitness for a
particular purpose, other than those set forth in this Agreement,
including the Schedules and Exhibits hereto.
3.28 Banks, Powers of Attorney
Set forth in Part 3.28 of the Disclosure Schedule is an accurate and
complete list showing (a) the name and address of each bank in which
Selas UK has an account or safe deposit box, the number of any such
account or any such box and the names of all persons authorized to draw
thereon or to have access thereto, and (b) the names of all persons, if
any, holding powers of attorney from Selas UK and a summary statement of
the terms thereof.
3.29 Warranty Claims
As of the date hereof, there are no pending or, to Sellers' Knowledge,
Threatened, warranty claims against any Seller relating to the Business
or Selas UK with a value in excess of Ten Thousand (10,000) Euros (or
its equivalent in another currency) other than those set forth in Part
3.29 of the Disclosure Schedule. As used herein, the phrase "Warranty
Claims" means claims by third parties for defects in products sold by
Seller or any Seller or Selas UK which the customer claims do not meet a
product warranty or performance guarantee made by Seller or any Seller
or Selas UK.
3.30 Solvency
Except as disclosed in Part 3.30 of the Disclosure Schedule: (a) SAS is
not in a state of suspension of payments according to the definition set
forth in Article L 621-1 of the French Commercial Code; (b) SCA is not
insolvent, as defined in Section 101(32)(A) of the United States
Bankruptcy Code, 11 U.S.C. Section 101, et seq.; and (c) neither Seller
has filed or had filed against it a bankruptcy petition under applicable
law, has proposed a compromise or arrangement to its creditors
generally, has had any petition for a receiving order in bankruptcy
filed against it, has made a voluntary assignment in bankruptcy, has
taken any proceeding with respect to a compromise or arrangement
generally, has taken any proceeding to have itself declared bankrupt or
wound-up, nor has it taken any proceeding to have a receiver appointed
of all or any part of its assets. The consummation of the Contemplated
Transactions will not render: (a)SAS in a state of suspension of
payments according to the definition set forth in Article L 621-1 of the
French Commercial Code and (b) SCA insolvent, as defined in Section
101(32)(A) of the United States Bankruptcy Code, 11 U.S.C. Section 101,
et seq.; . To Seller's Knowledge, neither Seller has any reason to
expect that: (a) SAS will be in a state of suspension of payments
according to the definition set forth in Article L 621-1 of the French
Commercial Code and (b) SCA will be insolvent, as defined in Section
101(32)(A) of the United States Bankruptcy Code, 11 U.S.C. Section 101,
et seq.;in either case at any time between the date hereof and 18
months following the Closing Date.
3.31 Asbestos
Except as set forth in Part 3.31 of the Disclosure Schedule, to Seller's
Knowledge, neither SAS nor Selas UK has ever designed, manufactured,
sold or distributed a product containing asbestos.
3.32 Reasonable Investigation
The individuals listed in the definition of Seller's Knowledge
(including those referred to in Section 3.23) have conducted a
reasonable inquiry of the employees with responsibility as to the
matters being represented and warranted in Section 3 of this Agreement.
3.33 Duferco
As used in this Agreement, the term "Duferco Order" means the orders for
Duferco referred in SAS's Books and Records as Job 1226 and Job 1230.
The Duferco Order is not a Contract, no Contract exists that relates to
the Duferco Order and no such Contract may be created by the mere
passage of time, the occurrence of any event or satisfaction of
condition precedent or otherwise without the express consent of Buyer.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer and Andritz hereby jointly and severally represent and warrant to
the Sellers as of the date hereof and at and as of the Closing Date as
though then made (except to the extent any representation or warranty is
made as of a specific date, or are inaccurate due to actions
contemplated hereby), as set forth in this Section 4.
4.1 Organization
Andritz is an aktiengeselchaft duly and validly organized and existing
under the laws of Austria and Buyer is a societe par actions simplifiee
duly and validly organized and existing under the laws of France.
4.2 Authority; No Conflict
(a) This Agreement constitutes the legal, valid, and binding obligation
of each of Andritz and Buyer, enforceable against Andritz and Buyer
in accordance with its terms. Upon the execution and delivery by
Andritz and Buyer of the Ancillary Agreements to which they are a
party, such Ancillary Agreements will constitute the legal, valid,
and binding obligations of Andritz and Buyer (as the case may be),
enforceable against Andritz and Buyer (as the case may be) in
accordance with their respective terms except to the extent that
such enforceability may be limited or otherwise affected by
applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting creditors' rights generally from time to time
in effect or by general equitable principles. Each of Andritz and
Buyer has the full right, power, and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it is
a party and to perform its obligations under this Agreement and
such Ancillary Agreements.
(b) Except for consents required under any Transferred Contract and
except as contemplated by Sections 5.6 or 6.3, neither the
execution and delivery of this Agreement by Andritz or Buyer nor
the consummation or performance of any of the Contemplated
Transactions by Andritz and Buyer will conflict with, result in a
violation of or give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated Transactions
pursuant to:
(i) any provision of Andritz's or Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Andritz or Buyer;
(iii)any Law or Order to which Andritz or Buyer may be subject; or
(iv) any Contract to which Andritz or Buyer is a party or by which
Andritz or Buyer may be bound.
(c) Except for consents required under any Transferred Contract and
except as contemplated by Sections 5.6 or 6.3, neither Andritz nor
Buyer is not and will not be required to obtain any Consent from
any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the
Contemplated Transactions other than consents required under
Transferred Contracts.
4.3 Certain Legal Proceedings
There is no pending Legal Proceeding that has been commenced against
Andritz or Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any
of the Contemplated Transactions. To Buyer's Knowledge, no such Legal
Proceeding has been Threatened.
4.4 Brokers or Finders
Neither Andritz nor Buyer nor their respective officers and agents have
incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar
payment in connection with this Agreement and will indemnify and hold
Sellers harmless from any such payment alleged to be due by or through
Andritz or Buyer as a result of the action of Andritz or Buyer or their
respective officers or agents.
5. COVENANTS
5.1 Certain Covenants of the Seller
(a) Access and Information
Between the date of this Agreement and the Closing Date, Sellers
will, and will cause Selas UK and their respective Representatives
to, (a) afford Buyer and its Representatives full and free access
during normal business hours to SAS and Selas UK's personnel,
properties (including subsurface testing), Contracts, books and
records, and other documents and data, (b) furnish Buyer and its
Representatives with copies of all such Contracts, books and
records, and other existing documents and data as Buyer may
reasonably request, and (c) furnish Buyer and its Representatives
with such additional financial, operating, and other data and
information as Buyer may reasonably request. Such review and
investigation shall be conducted by Buyer so as not to unreasonably
interfere with the Business of SAS or Selas UK.
(b) Operation of the Business of the Acquired Companies
Between the date of this Agreement and the Closing Date, Sellers
will, and will cause Selas UK to:
(i) conduct the Business only in the Ordinary Course of Business,
including without limitation the recognition of sales and the
release of reserves in a manner consistent with past practice;
(ii) use their Commercially Reasonable Efforts to preserve intact the current
business organization of each of SAS and Selas UK, keep
available the services of the current officers, employees, and
agents of SAS and Selas UK, and maintain the relations and
good will with suppliers, including specifically paying such
suppliers in a manner so as not to materially delay the
process of work on any Transferred Contract, customers,
landlords, creditors, employees, agents, and others having
business relationships with SAS and Selas UK;
(iii) comply in all material respects with all applicable Laws;
(iv) confer with Buyer concerning operational matters of a material nature;
and
(v) otherwise report periodically to Buyer concerning the status of the
Business and the , operations and finances of each of SAS and
Selas UK.
(c) Negative Covenant
Except as otherwise expressly permitted by this Agreement, between
the date of this Agreement and the Closing Date, neither Seller nor
Selas UK will, without the prior consent of Buyer, (i) take any
affirmative action, or fail to take any reasonable action within
their or its Control, as a result of which any of the changes or
events listed in Section 3.16 is likely to occur; (ii) enter into
any Contract with an expected Gross Margin of less than 15%; (iii)
reverse any reserves applicable to any Transferred Order; (iv) use
any reserves applicable to any Transferred Order except in the
Ordinary Course of Business (in which case Sellers shall notify
Buyer in writing of such use); (v) recognize income on any
Transferred Order in excess of the percentages set forth in
Schedule 5; or (vi) except as required by applicable Law, modify
any of the wages or benefits of any Transferred Employee or modify
any Contract with or covering any Transferred Employee.
(d) Required Approvals
As promptly as practicable after the date of this Agreement,
Sellers will use their Commercially Reasonable Efforts to obtain
the consents listed in Part 3.2 of the Disclosure Schedule.
Between the date of this Agreement and the Closing Date, Sellers
will, and will cause Selas UK to, (a) cooperate with Buyer with
respect to all filings that Buyer elects to make or is required by
Laws to make in connection with the Contemplated Transactions, and
(b) cooperate with Buyer in obtaining all consents identified in
Section 6.3.
(e) Notification
Between the date of this Agreement and the Closing Date, Sellers
will promptly notify Buyer in writing if either Seller or Selas UK
becomes aware of any fact or condition that causes or constitutes a
breach of any of Sellers' representations and warranties as of the
date of this Agreement. Should any such fact or condition require
any change in the Disclosure Schedule Seller will promptly deliver
to Buyer a supplement to the Disclosure Schedule specifying such
change. During the same period, Seller will promptly notify Buyer
of the occurrence of any breach of any covenant of Sellers in this
Section 5 or of the occurrence of any event that may make the
satisfaction of the conditions in Section 6 impossible or unlikely.
(f) Payment of Indebtedness by Affiliates
Except as expressly provided in this Agreement, Seller will cause
all indebtedness, including trade payables, owed to Selas UK by SCA
or any of its Affiliates to be paid in full prior to Closing.
(g) Exclusive Dealing
Except as required by Law applicable to the procedures described in
Section 5.6, until such time, if any, as this Agreement is
terminated pursuant to Section 10.10, Sellers will not, and will
cause Selas UK and each of its Representatives not to, directly or
indirectly solicit, initiate, or encourage any inquiries or
proposals from, discuss or negotiate with, provide any non-public
information to any Person (other than Buyer) relating to any
transaction involving the sale of the Business, the Assets, the SCA
Intellectual Property or the Selas UK Shares.
5.2 Certain Covenants of the Buyer
(a) Approvals of Governmental Bodies
As promptly as practicable after the date of this Agreement, Buyer
will, and will cause each of its Affiliates to, make all filings
required by Laws to be made by them to consummate the Contemplated
Transactions (including without limitation all filings under the
Austrian Cartel Act of 1998, as amended). Between the date of this
Agreement and the Closing Date, Buyer will, and will cause its
Affiliates to, cooperate with Seller with respect to all filings
that Seller is required by Laws to make in connection with the
Contemplated Transactions, and (ii) cooperate with Seller in
obtaining all consents identified in Part 3.2 of the Disclosure
Schedule; provided that this Agreement will not require Buyer to
dispose of or make any change in any portion of its business or to
incur any other burden to obtain a Governmental Authorization.
(b) Buyer's Obligations with respect to Retained Orders
From and after the Closing Date, Buyer shall provide to the Seller
all goods and services the Seller reasonably requests in connection
with the Retained Orders at a price equal to 115% of the sum of
Buyer's Direct Costs, at the Buyer's then current overhead and
labour rates (which rates have not been significantly increased in
the preceding twelve months) incurred in providing such goods and
services.
5.3 Covenant not to Compete
(a) As an inducement to Buyer to enter into this Agreement, Sellers
agree that from the Closing Date for a period terminating three
years from the Closing Date, neither Seller nor any of their
Affiliates under either of their Control shall anywhere in the
world either individually or jointly with any Person or Persons
own, control, manage or operate or grant any right to use the Selas
name in, any business which is competitive with the Business.
(b) Each provision of this Section 5.3 is declared to constitute a
separate and distinct covenant and to be severable from all other
such separate and distinct covenants. If any such provision or
covenant is determined to be void or unenforceable in whole or in
part, it shall not be deemed to affect or impair the enforceability
or validity of the remaining provisions or covenants.
(c) Seller acknowledges that the restrictions contained in this Section
5.3 are necessary and fundamental to the protection of the Business
to be carried on by Buyer or any of its Affiliates and are
reasonable as to duration and territory, and all defenses to the
strict enforcement thereof by Buyer or any of its Affiliates are
hereby waived.
(d) Seller acknowledge that a breach of any of the provisions of this
Section 5.3 would result in damages to Buyer (or its Affiliates
purchasing Assets) and that Buyer (or such Affiliate) could not
adequately be compensated for such damages by monetary award.
Accordingly, Seller agrees that in the event of any such breach, in
addition to all of the remedies otherwise available to Buyer (or
such Affiliates) at law, Buyer (or such Affiliates) shall be
entitled as a matter of right to apply to a court of competent
jurisdiction for such relief by way of restraining order,
injunction, decree or otherwise, as may be appropriate to ensure
compliance with the provisions of this Section 5.3.
(e) The purchase by any Seller or any of their Affiliates of publicly
listed shares or any other publicly listed financial instruments
shall not constitute a breach of Section 5.3 provided the aggregate
number of shares or financial instruments do not constitute more
than ten per cent (10%) of the total number of outstanding shares
or face value of financial instruments.
(f) The use by SCA (or any of its Affiliates under its Control) of
rights granted pursuant to the terms of the Andritz License shall
not be deemed a breach of this Section 5.3.
(g) Any activities of SCA or its Affiliates under its Control pursuant
to the terms of the Andritz License shall not be deemed a "business
competitive with the Business" for the purpose of this Section 5.3.
(h) Nothing in this Agreement shall be deemed to prohibit the sale,
lease or other disposition by any Seller or their Affiliates of any
asset of any of them to any person or entity, including without
limitation to any competitor of the Business except that the
Sellers may not (i) the grant any right to use the Selas name in
any business which is competitive with the Business and (ii)
transfer any Intellectual Property licensed under the Andritz
License except as provided in the Andritz License.
(i) The continued conduct by SCA and its Affiliates under its Control
of the Permitted Businesses in the manner currently conducted shall
not be considered a breach of the provisions of this Section 5.3.;
provided such conduct does not involve the use of any of the SAS
Intellectual Property or the SCA Intellectual Property other than
the Burner Intellectual Property.
5.4 Andritz License
Other than as set forth in the Andritz License, all of SCA's rights to
use any of the SCA Intellectual Property shall cease on the Closing
Date.
5.5 Duferco
In the event Duferco or one of its Affiliates under its control places
an order for a continuous galvanizing line using the Selas Technology
with Buyer (on terms acceptable to Buyer) within one year from the
Closing Date, then Buyer shall purchase SAS's work in progress for
$429,000. Neither Seller nor SAS shall accept such an order from
Duferco without the prior written consent of Buyer and (b) Buyer and
Andritz shall keep Sellers informed as to the status of any negotiations
with Duferco. It is the intent of the parties that any future order
with Duferco be taken by Buyer.
5.6 French Registration and Public Formalities
(a) Publication: The Buyer in accordance with French law shall have
duly published notice of the sale of the Assets. In this respect,
the Buyer shall:
(i) within fifteen (15)-days of the signature of the Acte de
cessionpublish notice of the sale of the Assets by way of
legal announcement in the legal gazette at the location of the
Assets; and
(ii) within three (3) days of such publication, lodge an extract
summarizing the terms of the Acte de cession with the Clerk of
the Registry of the competent commercial court, who will
ensure publication thereof on the Bulletin Officiel des
Annonces Civiles et Commerciales (BODACC).
(b) Creditors' claims ("Opposition des creanciers"): Within ten (10)
days of the last publication in the BODACC (the "Creditors' Claim
Period"), the Seller's creditors may claim against the Purchase
Price, in accordance with the French applicable law. For the
purpose of receiving creditors' claims, election of domicile is
hereby made at the registered office of the Escrow Agent.
(c) Tax formalities: the Acte de cession shall be notified by:
(i) SAS and the Buyer within sixty (60) days of the first of the
above publication to their respective tax office for Corporate
Income tax, in compliance with Articles 201, 221-5 and 1684 of
the French tax code;
(ii) SAS and the Buyer within thirty (30) days of the first of the
above publication to their respective tax office for VAT, in
compliance with Article 286-1 of the French tax code and with
Articles R.243-7 and R.243-14 of Appendix IV of the French tax
code; and
(iii)SAS within sixty (60) days of the second of the first of the
above publication to the URSSAF for social security, in
compliance with Articles R.243-7 and R.243-14 of French social
security code.
5.7 Certain Tax Matters
In compliance with the provisions of Article 210 and 215 of the Annexe
II of the French tax code, the Buyer undertakes to submit any future
transfer of the Assets to VAT, and to make any payments which may be
necessary as if SAS had continued to carry on the business. In addition,
the Buyer undertakes to send to its local tax office, as soon as
possible, two copies of a declaration setting forth the terms of this
undertaking.
5.8 Bank Guarantees
The Buyer and Andritz agrees to arrange by the Closing Date for the (i)
assumption of SAS's reimbursement obligation under the Advance Payment
Guarantees or (ii) replacement of the Advance Payment Guarantees with
alternative guarantees arranged by Andritz, in each case with the aim of
enabling SAS (and its relevant Affiliates) to be released from their
reimbursement obligation under the Advance Payment Guarantees.
5.9 Commercially Reasonable Efforts
Between the date of this Agreement and the Closing Date, each Party
shall use its Commercially Reasonable Efforts to cause the conditions in
Sections 6 and 7 to be satisfied promptly. Each of the Parties hereto
will furnish to the other Party hereto such necessary information and
reasonable assistance as such other Party may reasonably request in
connection with its preparation of necessary filings or submissions to
the Austrian Cartel Court or other wise required under Austrian Law.
Each Party shall take all specific action reasonably required by the
Austrian Minister of Competition as a precondition for giving clearance
to the transactions contemplated herein. Neither Party shall, however,
be under the obligation to take any such actions which would have an
adverse effect on the business of such Party or would require the
divestiture of any business or assets or would otherwise fundamentally
alter the agreements between the Parties set forth in this Agreement.
The Buyer and Sellers hereto agrees to file as soon as practicable and
in a co-ordinated manner any information required in order to file a
pre-merger or a merger notification, as the case may be, necessary under
the Austrian Cartel Act, as amended or other applicable Austrian Law.
5.10 Intercompany Accounts
Before the Closing Date, Sellers shall cause all intercompany accounts
between Selas UK and either Seller or any of their Affiliates to be paid
in full.
5.11 Transferred Employees
Prior to the Closing Date, Sellers shall provide Buyer with a schedule
showing the accrued vacation of the Transferred employees as of
September 30, 2002.
On the Closing Date, Buyer shall continue to employ all of the
Transferred Employees for the positions and at the wages and benefits
which they were receiving from SAS immediately prior to the Closing.
Buyer agrees to recognize the service of each Transferred Employee with
SAS for purpose of determining their years of service with Buyer for
purposes of determining their eligibility for and level of participation
in any Benefit Plan. The foregoing obligation shall not be deemed to be
an obligation to continue such employment for any period of time and
shall be subject in all respects to Buyer's rights to terminate such
employment under applicable Law.
Buyer shall assume SAS' obligations with respect to such Transferred
Employees under any Benefit Plan in respect of periods commencing after
the Closing Date. It is expressly understood between SAS and Buyer that
(i) after the Closing Date, Buyer shall bear all of the consequences of
whatsoever nature which may arise from the breach of the Assumed
Liabilities in respect of such employees, and/or from the payment of all
sums and costs due to any Transferred Employee of SAS, which first arise
out of events or actions occurring after the Closing Date, and (ii)
Buyer shall bear all of the consequences of whatsoever nature which may
arise from the termination of the employment of any Transferred Employee
after the Closing (whether by way of redundancy or otherwise) including
any such consequences relating to the period of service of such employee
prior to the Closing Date.
No Transferred Employee shall be considered a third party beneficiary of
this Section 5.11 or any other provision of this Agreement.
5.12 ILVA
As used in this Agreement, the term "ILVA Order" means the orders for
Ilva referred in SAS's Books and Records as Job 1218 and Job 1588 in
connection with which SAS has signed a consortium agreement dated
October 5, 1999, between Kvaerner Metals Clecim, Selas SAS, and Ansaldo
Sistemi Industriali regarding the supply of electrical and
instrumentation equipment, and all related assets and liabilities.
Notwithstanding any provision in this Agreement to the contrary, Buyer
shall at least 3 Business days prior to Closing, notify Seller in
writing of its election to either (a) purchase all receivable (billed
and unbilled) relating to the ILVA Order (the "ILVA Receivables"), in
which case the ILVA receivables will be an Asset, all other assets
relating to the ILVA Order shall be Excluded Assets, all liabilities
relating to the ILVA Order shall be excluded Liabilities and the ILVA
Order shall be a Retained Order, or (b) have the ILVA Order treated as a
Transferred Contract, in which case the ILVA Receivables and all other
assets relating to the ILVA Order shall be Assets and all liabilities
relating to the ILVA Order shall be Assumed Liabilities. The ILVA
Receivables shall be valued on the Value Date Balance Sheet at 85% of
their book value as of the Value Date Date. In the event Buyer elects
under clause (a) above, to purchase the ILVA Receivables, Sellers shall
assist Buyer in taking steps to make such receivables enforceable and
shall repurchase the ILVA Receivables from Buyer to the extent they
remain unpaid 180 days from the Closing Date, such payment to be made
within 10 days of receipt of notice from Buyer that such ILVA
Receivables remain unpaid. The purchase price to be paid by Seller for
the repurchase of the ILVA Receivables shall be an amount equal to the
value of the ILVA Receivable on the Value Date Balance Sheet less cash
received on such receivable after the Closing Date. In the event Buyer
elects to have the ILVA Order treated as a Transferred Contract, Sellers
shall indemnify Buyer for any costs, damages, expenses, liabilities or
losses Buyer suffers in respect of the ILVA Order other than those
reserved in the Value Date Balance Sheet other than to the extent such
cost, damage, expense, liability or loss is caused by the negligence or
willful misconduct of Buyer after the Closing Date. To the extent Buyer
receives payments on the ILVA Receivable equaling more than 85% of the
book value of the ILVA Receivable as of the Value Date, Buyer shall pay
over such excess to Seller within 10 days of receipt thereof by Buyer.
5.13 Burner Tangible Property
SCA shall allow and cooperate with Buyer in providing Buyer copies or
duplicates of any Burner Tangible Property that Buyer requests. Buyer
shall reimburse SCA for any out-of-pocket expenses SCA incurs in
providing such copies or duplicates.
5.14 Post Closing Date Cash
Provided the Closing actually occurs, all cash collected on or after the
Closing Date from or relating to Assets on the Value Date Balance Sheet
shall belong to, and if received by either Seller, shall be received for
the benefit and the account of, the Buyer and the Sellers shall, on the
Closing Date and thereafter on a weekly basis, transfer and remit to the
Buyer all such amounts received by or paid to either Seller on or after
the Closing Date, together with any Interest accrued since their receipt.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's and Andritz's obligations to purchase the Assets, the Assumed
Liabilities, the Selas UK Shares and the SCA Intellectual Property and
to take the other actions required to be taken by Buyer and Andritz at
the Closing is subject to the satisfaction, at or prior to the Closing,
of each of the following conditions (any of which may be waived by Buyer
and Andritz, in whole or in part):
6.1 Accuracy of Representations
Each of the representations and warranties in section 3 (considered
individually), must have been accurate in all material respects as of
the date of this Agreement, and must be accurate in all material
respects as of each of the Value date and the Closing Date as if made on
the Value Date and the Closing Date (other than representations and
warranties made as of a specific date which must be accurate as of such
date), without giving effect to any supplement to the Disclosure
Schedule; provided, however, that any inaccuracies with respect to such
representations and warranties shall be disregarded solely for the
purposes of this Section 6.1 if the circumstances giving rise to all
such inaccuracies (considered collectively) do not constitute, and would
not reasonably be expected to give rise to claims for indemnity under
Section 9.2(a) in excess of $100,000 in the aggregate.
The representations and warranties of Sellers set forth in Section 3.3
(Capitalization; ownership), and 3.4 (Title to Properties;
Encumbrances), shall be accurate at and as of the Closing Date as though
such representations and warranties were made at and as of such time, in
each case without giving any effect to any supplement to the Disclosure
Schedule.
6.2 Sellers' Performance
(a) Each of the covenants and obligations that Sellers are required to
perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been duly performed and complied with in all
material respects.
(b) Each document required to be delivered pursuant to Section 8.2(a)
must have been delivered,
6.3 Governmental Authorization and Consents
The Parties hereto shall have obtained all: (a) Governmental
Authorizations (including the expiration of applicable waiting periods)
from, and made all material filings with and notifications to the
Austrian Minister of Competition and any other Governmental Body
required for the lawful and valid consummation of the Contemplated
Transactions; and (b) each of the Required Consents set forth in Part
3.2 of the Disclosure Schedule, and each such Governmental Authorization
and Required Consent shall be in full force and effect..
6.4 Additional Documents
Each of the following documents must have been executed and delivered to
Buyer:
such other documents as Buyer may reasonably request for the purpose of
(i) evidencing the accuracy of any of Sellers' representations and
warranties, (ii) evidencing the performance by Seller of, or the
compliance by Seller with, any covenant or obligation required to be
performed or complied with by such Seller, (iii) evidencing the
satisfaction of any condition referred to in this Section 6, or (v)
otherwise facilitating the consummation or performance of any of the
Contemplated Transactions.
6.5 No Proceedings or Prohibition
Since the date of this Agreement, there must not have been commenced or
Threatened against Buyer, or against any Person affiliated with Buyer,
any Legal Proceeding (a) involving any challenge to, or seeking damages
or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with any of the Contemplated
Transactions. Neither the consummation nor the performance of any of
the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time), materially contravene, or conflict
with, or result in a material violation of, or cause Buyer or any Person
affiliated with Buyer to suffer any material adverse consequence under,
(a) any applicable Law or Order, or (b) any Law or Order that has been
published, introduced, or otherwise formally proposed by or before any
Governmental Body.
6.6 Termination of Selas Group License Agreements
Each of the Selas Group License Agreements shall have been terminated by
all parties thereto effective as of the Closing Date on terms reasonably
satisfactory to Buyer.
6.7 Modification of Certain Transferred Orders
Within fourteen days from the date hereof, the Transferred Orders with
Voest Alpine, and Thyssen shall have been modified on terms acceptable
to Buyer in its sole discretion by 14 days from the date hereof. Buyer
and Andritz's right to not proceed with the Contemplated Transactions
for failure of the condition precedent set forth in this Section 6.7
shall expire 17 days from the date hereof.
6.8 Transferred Orders
Work shall not have been suspended on any of the Transferred Orders or
the other Transferred Contracts relating thereto as of the Value Date or
the Closing Date.
7. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Sellers' obligation to sell the Assets, the Assumed Liabilities, the
Selas UK Shares and the SCA Intellectual Property and to take the other
actions required to be taken by Seller at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Sellers, in whole or in part):
7.1 Accuracy of Representations
All of Buyer's and Andritz's representations and warranties in this
Agreement (considered collectively), and each of these representations
and warranties (considered individually), must have been accurate in all
material respects as of the date of this Agreement and must be accurate
in all material respects as of the Closing Date as if made on the
Closing Date.
7.2 Buyer's Performance
(a) All of the covenants and obligations that Buyer or Andritz is
required to perform or to comply with pursuant to this Agreement at
or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), must
have been performed and complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 8.2 and must have made the
cash payments required to be made by Buyer pursuant to Section 8.2.
7.3 Consents
The Parties hereto shall have obtained all: (a) Governmental
Authorizations (including the expiration of applicable waiting periods)
from, and made all material filings with and notifications to the
Austrian Minister of Competition and any other Governmental Body
required for the lawful and valid consummation of the Contemplated
Transactions; and (b) each of the Required Consents set forth in Part
3.2 of the Disclosure Schedule (other than those of Voest Alpine and
Thyssen), and each such Governmental Authorization and such Required
Consent shall be in full force and effect. Voest Alpine and Tysen.
7.4 No Proceedings or Prohibition
Since the date of this Agreement, there must not have been commenced or
Threatened against any Seller, or against any Person affiliated with any
Seller, any Legal Proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with any of the Contemplated
Transactions. Neither the consummation nor the performance of any of
the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time), materially contravene, or conflict
with, or result in a material violation of, or cause any Seller or any
Person affiliated with any Seller to suffer any material adverse
consequence under, (a) any applicable Law or Order, or (b) any Law or
Order that has been published, introduced, or otherwise formally
proposed by or before any Governmental Body.
7.5 Advance Payment Guarantees
SAS (and its Affiliates) must be released from their obligations under
the Advance Payment Guarantees as contemplated by Section 5.8.
8. CLOSING
8.1 The Closing
The purchase and sale (the "Closing") provided for in this Agreement
will take place at the offices of Sellers French counsel, Salans
▇▇▇▇▇▇▇▇▇ Heilbronn at 10:00 a.m. (local time) on the date that is two
Business Days following the satisfaction or waiver of the conditions
precedent set forth in Sections 6 and 7, provided that if the
satisfaction or waiver of such closing conditions occurs on or after the
15th day of a calendar month, the Closing shall occur on the last
Business Day of such calendar month or at such other time and place as
the parties may in writing agree. Subject to the provisions of Section
8, failure to consummate the purchase and sale provided for in this
Agreement on the date and time and at the place determined pursuant to
this Section 8.1 will not result in the termination of this Agreement
and will not relieve any party of any obligation under this Agreement.
8.2 Transactions at the Closing
(a) At the Closing, the Seller will deliver to the Buyer, the following
(i) the instruments of transfer and conveyance described in
Section 2.11 and the Acte de cession, duly executed by SAS;
(ii) stock certificates representing the Selas UK Shares, in each
case endorsed in blank or with an executed stock power
attached with all necessary transfer tax and other revenue
stamps, affixed and canceled;
(iii)the Lease duly executed by SAS;
(iv) the Andritz License and Selas Name License duly executed by SCA
(v) resignations of each of the directors and officers of Selas
UK;
(vi) a certificate executed by Seller representing and warranting
to Buyer that each of Sellers' representations and warranties
in this Agreement was accurate in all respects as of the date
of this Agreement and is accurate in all respects as of the
Closing Date as if made on the Closing Date; and
(vii) such other documents as Buyer may reasonably request for
the purpose of (i) evidencing the accuracy of any of Sellers'
representations and warranties, (ii) evidencing the
performance by Seller of, or the compliance by Seller with,
any covenant or obligation required to be performed or
complied with by such Seller, (iii) otherwise facilitating the
consummation or performance of any of the Contemplated
Transactions..
(b) At the Closing, the Buyer will pay the Purchase Price pursuant to
Section 2.8. and will deliver to the Seller the following:
(i) a certificate executed by Buyer to the effect that, except as otherwise
stated in such certificate, each of Buyer's representations
and warranties in this Agreement was accurate in all respects
as of the date of this Agreement and is accurate in all
respects as of the each of the Value Date and the Closing Date
as if made on the Value date and the Closing Date; and
(ii) the Acte de cession, duly executed by Buyer;
(iii) Instruments of Assumption of the Assumed Liabilities in form reasonably
acceptable to Sellers;
(iv) the Lease duly executed by Buyer;
(v) the Andritz License duly executed by Andritz Inc;
(vi) the Selas Name License duly executed by Andritz and Buyer; and
(vii) such other documents as Sellers may reasonably request for the purpose
of (i) evidencing the accuracy of any of Buyer's and Andritz's
representations and warranties, (ii) evidencing the
performance by Buyer and Andritz of, or the compliance by
Buyer and Andritz with, any covenant or obligation required to
be performed or complied with by either of them, (iii)
otherwise facilitating the consummation or performance of any
of the Contemplated Transactions.
9. INDEMNIFICATION; REMEDIES
9.1 Survival; Right to Indemnification Not Affected by Knowledge
All representations, warranties, covenants, and obligations in this
Agreement, the Disclosure Schedule, the supplements to the Disclosure
Schedule, the certificate delivered pursuant to Section 8.2(a)(vi), and
any other certificate delivered pursuant to this Agreement will survive
the Closing. The right to indemnification and payment of Losses based on
such representations, warranties, covenants, and obligations will not be
affected by any investigation conducted with respect to, or any
Knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the
Closing Date, with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant, or
obligation. The waiver of any condition to Closing based on the accuracy
of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Losses, or other remedy based on such
representations, warranties, covenants, and obligations.
9.2 Indemnification and Payment of Losses by Seller
Sellers will jointly and severally indemnify and hold harmless Buyer,
Andritz, Subsidiaries of Andritz owning the Shares, and their respective
Representatives, stockholders, and affiliates (each a "Buyer
Indemnitee") for, and will pay to the Buyer Indemnitees the amount of,
any loss, liability, claim, damage, expense (including costs of
investigation and defense and reasonable attorneys' fees, and in the
case of Environmental Liabilities: costs of cleanup, containment, or
other remediation), loss or diminution of value, whether or not
involving a third- party claim (collectively, "Losses"), arising,
directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Seller in this
Agreement (without giving effect to any supplement to the
Disclosure Schedule), including the Disclosure Schedule, the
supplements to the Disclosure Schedule, or any other certificate
delivered by Seller pursuant to this Agreement;
(b) any breach by any Seller of any covenant or obligation of a Seller in
this Agreement;
(c) any Excluded Liability.
(d) any Taxes imposed on SAS or Selas UK relating to the period prior
to the Closing Date, including without limitation any obligations
for corporate income tax or training tax ("taxe d'apprentissage"
imposed on Buyer pursuant to Article 1684-1 of the French tax code;
(e) any Legal Proceeding pending against SAS or Selas UK on the Closing
Date (for the avoidance of doubt, sellers shall not be required to
indemnify Buyer Indemnities under this Section 9.2(e) with respect
to the Intellectual Property disputes described in Part 3.22 of the
Disclosure Schedule;
(f) any Environmental Liabilities of SAS or Selas UK arising out of or
relating to its ownership of assets or conduct of business on or
prior to the Closing Date;
(g) any claim arising in connection with deaths, personal injuries,
other injuries to Persons, property damages or losses or
deprivation of rights, (including in all cases claims arising from
exposure to asbestos or claims involving asbestos related injuries,
deaths or deprivation of rights) resulting from any goods or
services supplied by either Seller or SAS prior to the Closing
Date; and
(h) any actions, suits, proceedings, claims, liabilities, judgments,
assessments and costs (including reasonable legal fees), incident
to any of the foregoing or such indemnification;
9.3 Indemnification and Payment of Losses by Buyer
Buyer and Andritz jointly and severally will indemnify and hold harmless
Sellers and their Representatives, stockholders and Affiliates (each a
"Seller Indemnitee") and will pay to Seller Indemnitees the amount of
any Losses arising, directly or indirectly, from or in connection with
(a) any breach of any representation or warranty made by Buyer or
Andritz in this Agreement or in any certificate delivered by Buyer or
Andritz pursuant to this Agreement, (b) any breach by Buyer or Andritz
of any covenant or obligation of Buyer or Andritz in this Agreement, ,
(c) the failure of Buyer to perform any Assumed Liability; (d) any claim
arising in connection with deaths, personal injuries, other injuries to
Persons, property damages or losses or deprivation of rights, (including
in all cases claims arising from exposure to asbestos or claims
involving asbestos related injuries, deaths or deprivation of rights)
resulting from any goods or services supplied by Buyer or Selas UK after
the Closing Date other than pursuant to a Transferred Order (except,
with respect to any claims relating to a Transferred Order, to the
extent such claim arises out of Buyer's or Selas UK's negligent act or
omission occurring after the Closing Date); and (d) any actions, suits,
proceedings, claims, liabilities, judgments, assessments and costs
(including reasonable legal fees), incident to any of the foregoing or
such indemnification.
9.4 Limitations on Sellers' Liability
If the Closing occurs, the Sellers' liability shall be limited as set
forth in this Section 9.4.
(a) Sellers shall have no liability with respect to any claim arising
under Section 9.2(a) (other than a claim relating to the
representation made by the Seller in Section 3.2(a), in Section 3.3
or in Section 3.14) or under Section 9.2(b), unless and only to the
extent such claim has been made in writing to Seller on of before
the date which is eighteen months after the Closing Date.
(b) Sellers shall have no liability with respect to any claim arising
under Section 9.2(a) unless the aggregate amount of all such claims
exceeds $250,000 (or its equivalent in another currency); provided
that if the aggregate amount of all such claims equals or exceeds
$250,000 (or its equivalent in another currency) then the full
amount of such claims shall be payable; provided, however, this
Section 9.4(b) will not apply to any fraudulent breach of any of
Seller' representations and warranties, and Seller will be liable
for all Losses with respect to such breaches.
(c) Sellers shall have no liability with respect to any individual
claim arising under Section 9.2(a), which is less than $10,000 (or
its equivalent in another currency); provided that if the amount of
such individual claim equals or exceeds $10,000 (or its equivalent
in another currency) then the full amount of such claim shall be
payable. For purposes of calculating the size of a claim, multiple
claims arising out of the same facts and circumstances shall be
considered one claim.
(d) Sellers shall have no liability with respect to any claim arising
under Sections 9.2(c), 9.2(d), 9.2(e) 9.2(f) or 9.2(g) unless the
aggregate amount of all such claims exceeds $25,000 (or its
equivalent in another currency); provided that if the aggregate
amount of all such claims equals or exceeds $25,000 (or its
equivalent in another currency) then the full amount of such claims
shall be payable.
(e) Sellers shall have no liability with respect to any claim arising
under Section 9.2(a)(other than a claim relating to the
representation made by Seller in Section 3.2(a), Section 3.3 or
Section 3.14), to the extent the aggregate of all such claims
exceeds the Purchase Price.
(f) Buyer, shall not be entitled to make any claim pursuant to Section
9.2 to the extent that a specific reserve, provision, allowance or
account for the particular Loss has been made in the Balance Sheet
or the Value Date Balance Sheet (as finally determined).
(g) Any payments made by Seller under Section 9.2 other than Section
9.2(g), shall be net of any insurance proceeds actually received by
the relevant Buyer Indemnitee (net of any additional costs incurred
by reason of such recovery).
(h) SCA's aggregate liability under this Agreement (other than the
liability to pay the Adjusted Net Asset Value and interest thereon
or liabilities under Section 5.12) shall not exceed $2,500,000.
(i) Neither Seller shall have any liability hereunder for any loss of
profits, loss of revenue or loss of opportunity or other
consequential damages suffered by Andritz or Buyer or for any
special or punitive damages of any nature. The provisions of this
Section 9.4(i) shall not apply to Sellers' obligation to defend and
indemnify against third party claims and Losses resulting there
from.
9.5 Limitations on Buyer's Liability
If the Closing occurs, Buyer's and Andritz's liability shall be limited
as set forth in this Section 9.5.
(a) Neither Andritz nor Buyer shall have any liability with respect to
any claim arising under Section 9.3(a) or under Section 9.3(b),
unless and only to the extent such claim has been made in writing
to Seller on of before the date which is eighteen months after the
Closing Date.
(b) Neither Andritz nor Buyer shall have any liability with respect to
any claim arising under Section 9.3(a), unless the aggregate amount
of all such claims exceeds $250,000 (or its equivalent in another
currency); provided that if the aggregate amount of all such claims
equals or exceeds $250,000 (or its equivalent in another currency)
then the full amount of such claims shall be payable; provided,
however, this Section 9.5(b) will not apply to any fraudulent
breach of any of Andritz's or Buyer's representations and
warranties, and Andritz or Buyer will be liable for all Losses with
respect to such breaches.
(c) Neither Andritz nor Buyer shall have any liability with respect to
any individual claim arising under Section 9.3(a), which is less
than $0,000 (or its equivalent in another currency); provided that
if the amount of such individual claim equals or exceeds $10,000
(or its equivalent in another currency) then the full amount of
such claim shall be payable. For purposes of calculating the size
of a claim, multiple claims arising out of the same facts and
circumstances shall be considered one claim.
(d) Any payments made by Buyer under Section 9.3 other than Section
9.3(d) , shall be net of any insurance proceeds actually received
by the relevant Seller Indemnitee (net of any additional costs
incurred by reason of such recovery).
(e) The aggregate liability of Andritz under this Agreement (other than
the liability to pay the adjusted Net Asset Value and interest
thereon) shall not exceed $2,500,000.
(f) Neither Andritz nor Buyer shall have any liability hereunder for
any loss of profits, loss of revenue or loss of opportunity or
other consequential damages suffered by either Seller or for any
special or punitive damages of any nature. The provisions of this
Section 9.5(f) shall not apply to Andritz and Buyer's obligation to
defend and indemnify against third party claims and Losses
resulting there from.
9.6 Procedure For Indemnification--Third Party Claims
(a) Promptly after receipt by a Buyer Indemnitee or a Seller Indemnitee
(each an "Indemnified Person") of notice of the commencement of any
Legal Proceeding against it, such Indemnified Person will, if a
claim is to be made against an indemnifying party under Section 9.1
or 9.2, as applicable, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any
liability that it may have to any Indemnified Person, except to the
extent that the indemnifying party demonstrates that the defense of
such action is prejudiced by the Indemnified Person's failure to
give such notice.
(b) If any Legal Proceeding referred to in Section 9.6(a) is brought
against an Indemnified Person and it gives notice to the
indemnifying party of the commencement of such Legal Proceeding,
the indemnifying party will, unless the claim involves Taxes, be
entitled to participate in such Legal Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party
to such Legal Proceeding and counsel to the Indemnified Person
advises the Indemnified Person in good faith that joint
representation would be inappropriate under applicable legal
ethical codes, or (ii) the indemnifying party fails to provide
reasonable assurance to the Indemnified Person of its financial
capacity to defend such Legal Proceeding and provide
indemnification with respect to such Legal Proceeding), to assume
the defense of such Legal Proceeding with counsel reasonably
satisfactory to the Indemnified Person and, after notice from the
indemnifying party to the Indemnified Person of its election to
assume the defense of such Legal Proceeding, the indemnifying party
will not, as long as it diligently conducts such defense, be liable
to the Indemnified Person under this Section 9 for any fees of
other counsel or any other expenses with respect to the defense of
such Legal Proceeding, in each case subsequently incurred by the
Indemnified Person in connection with the defense of such Legal
Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Legal Proceeding, (i)
no compromise or settlement of such claims may be effected by the
indemnifying party without the Indemnified Person's consent unless
(A) there is no finding or admission of any violation of Laws or
any violation of the rights of any Person and no effect on any
other claims that may be made against the Indemnified Person, and
(B) the sole relief provided is monetary damages that are paid in
full by the indemnifying party; and (ii) the Indemnified Person
will have no liability with respect to any compromise or settlement
of such claims effected without its consent. If notice is given to
an indemnifying party of the commencement of any Legal Proceeding
and the indemnifying party does not, within twenty days after the
Indemnified Person's notice is given, give notice to the
Indemnified Person of its election to assume the defense of such
Legal Proceeding, the indemnifying party will be bound by any
determination made in such Legal Proceeding or any compromise or
settlement effected by the Indemnified Person, but the Indemnified
Person will not compromise or settle such matter without the
indemnifying party's consent, which shall not be unreasonably
withheld..
(c) Notwithstanding the foregoing, if an Indemnified Person determines
in good faith that there is a reasonable probability that a Legal
Proceeding may adversely affect it or its Affiliates other than as
a result of monetary damages for which it would be entitled to
indemnification under this Agreement, the Indemnified Person may,
by notice to the indemnifying party, assume the exclusive right to
defend, compromise, or settle such Legal Proceeding, but the
indemnifying party will not be bound by any determination of a
Legal Proceeding so defended or any compromise or settlement
effected without its consent (which may not be unreasonably
withheld).
9.7 Procedure For Indemnification--Other Claims
A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification
is sought.
9.8 Sole Remedy
The indemnification provisions set forth in Section 9 shall be the sole
and exclusive remedy, at law or in equity, of the Seller Indemnitees or
the Buyer Indemnitees with respect to any claims or actions resulting or
arising from the matters referred to in this Section 9 or resulting or
arising from any of the representations, warranties or covenants set
forth in this Agreement and the Seller Indemnitees or the Buyer
Indemnitees waive all other remedies available at law or equity with
respect thereto including the remedy of rescission; provided, however,
that this Section 9.8 shall not apply to: (a) breaches of Section 5.3
and 10.3 (it being understood and agreed by the parties that in the
event of any breach by the Sellers of any of the provisions of Sections
5.3 or 10.3, Buyer shall have the right to seek injunctive relief under
Section 5.3 or to exercise any other right or remedy at law or in equity
against such breaching party but not against any other party which is
not in breach) (b) any party seeking specific performance or injunctive
relief.
9.9 Failure to Obtain Consents
From and after the Closing Date, Buyer and Andritz hereby waive and
release any claims it may have had against either Seller and their
successors and assigns and each Seller hereby waives and releases any
claims it may have had against Andritz or Buyer and their successors and
assigns, for the failure to obtain any of the Consent to assignments of
any Transferred Contracts which require such consents under the terms of
such Transferred Contract or under applicable Law.
10. GENERAL PROVISIONS
10.1 Expenses
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection
with the preparation, execution, and performance of this Agreement and
the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. Buyer will pay (a)
any stamp, documentary or transfer taxes payable in connection with the
execution and delivery of this Agreement and the consummation of the
Contemplated Transactions; and (b) any filing fee made in connection
with the obtaining of any Governmental Authorization relating to
pre-merger notification necessary in connection with the consummation of
the Contemplated Transactions, including but not limited clearance from
the Austrian Cartel Court. Buyer pay filing or transfer fees of
registering any SCA Intellectual Property or SAS Intellectual Property
in the name of Buyer or Andritz. Buyer and Andritz shall be responsible
for the preparation of any necessary transfer documents and Sellers
shall cooperate with Andritz and Buyer in effecting such transfer. Each
Party shall bear any expenses it occurs in connection with such
transfers, including the fees and expenses f its advisors (other than
filing or transfer fees paid to any Governmental Body). Sellers shall
cause Selas UK not to incur any out-of-pocket expenses in connection
with this Agreement. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any
rights of such party arising from a breach of this Agreement by another
party.
10.2 Public Announcements
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at
such time and in such manner as Buyer and Sellers mutually determine..
Sellers and Buyer will consult with each other concerning the means by
which SAS and Selas UK's employees, customers, and suppliers and others
having dealings with SAS or Selas UK will be informed of the
Contemplated Transactions, and Buyer will have the right to be present
for any such communication. With respect to any announcement that any
of the parties is required by Law or stock exchange to issue, such party
shall, to the extent possible under the circumstances, review the
necessity for and the contents of the announcement with the other
parties before issuing the announcement.
10.3 Confidentiality
From and after the date of this Agreement, Buyer and Sellers will
maintain in confidence, and will cause the directors, officers,
employees, agents, and advisors of Buyer, Sellers and Selas UK to
maintain in confidence, any written, oral, or other information obtained
in confidence from another party or Selas UK in connection with this
Agreement or the Contemplated Transactions, unless (a) it is necessary
or appropriate in making any filing or obtaining any consent or approval
required such information is already known to such party or to others
not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use of such
information for the consummation of the Contemplated Transactions, or
(c) the furnishing or use of such information is required by or
necessary or appropriate in connection with Legal Proceedings.
Effective from the Closing Date, the terms of this agreement supercede
and replace the terms of the Confidentiality Agreement executed in
January , 2002 between Seller and Buyer. Nothing in this Section 10.3
shall prohibit Buyer and Andritz from disclosing information regarding
the Business after the Closing Date as they see fit.
If the Contemplated Transactions are not consummated, each party will
return or destroy all of such written information.
10.4 Notices
All notices, Consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand, (b) sent by telecopier (with written
confirmation of receipt), or (c) when received by the addressee, if sent
by a governmental postal service or internationally recognized delivery
service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other
parties):
If to either or both Sellers:
Selas Corporation of America
Arden hills ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chief Financial Officer
Tel: ▇▇ ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇ ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Blank Rome LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: ▇▇ ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇ ▇▇▇-▇▇▇-▇▇▇▇
If to either or both Buyer or Andritz
Andritz AG
Statteggerstrasse ▇-▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer
Tel: ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇
With a copy to:
Andritz (USA) inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Group General Counsel
Tel: ▇▇ ▇▇▇-▇▇▇-▇▇▇▇
Fax: +1 770-640-2598l
10.5 Entire Agreement; Amendment; Waiver
This Agreement and the documents referred to in this Agreement
constitute the entire agreement among the parties pertaining to the
subject matter of this Agreement, and supersede all prior agreements,
understandings, negotiations and discussions of the parties, whether
oral or written, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter of
this Agreement, except as specifically set forth in this Agreement. No
amendment, supplement, modification, waiver or termination of this
Agreement or such other documents shall be binding unless executed in
writing by the Buyer and the Sellers. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any
other provision of this Agreement, whether or not similar, nor shall
such waiver constitute a continuing waiver unless otherwise expressly
provided. In the event of any conflict between the terms of this
Agreement and the terms of the "Acte de cession de fonds de commerce",
as between the parties hereto, the terms of this Agreement shall prevail.
10.6 Further Assurances
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents,
and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement. During the
period beginning on the date hereof and ending 12 months after the Closing
Date: (a) if Buyer determines that Intellectual Property that otherwise
constitutes Selas Intellectual Property was not transferred to Buyer pursuant
to this Agreement or (b) if Sellers determine that Intellectual Property that
is Selas Intellectual Property that is used in the Permitted Businesses was
not licensed to SCA pursuant to the Andritz License Agreement, then the
Parties shall meet and discuss in good faith and provided agreement is
reached, take such actions and execute such documents as shall give effect to
the proper treatment of such Intellectual Property so as to give effect to
the original intent of the Parties.
10.7 Disclosure Schedule
The disclosures in the Disclosure Schedule, and those in any supplement
thereto, relate only to the representations and warranties in the
Section of the Agreement to which they expressly relate and not to any
other representation or warranty in this Agreement. In the event of any
inconsistency between the statements in the body of this Agreement and
those in the Disclosure Schedule (other than an exception expressly set
forth as such in the Disclosure Schedule with respect to a specifically
identified representation or warranty), the statements in the body of
this Agreement will control.
10.8 Assignments, Successors, And No Third-Party Rights
Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties except that Buyer may assign,
wholly or in part, any of its rights under this Agreement to any
Subsidiary of Buyer; provided that Buyer shall remain liable for all of
its obligations hereunder. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to
the benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or
equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
10.9 Severability
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this
Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.
10.10 Termination
(a) This Agreement may, by notice given prior to or at the Closing, be
terminated:
(i) by either Buyer or Seller if a material breach of any
provision of this Agreement has been committed by the other
party and such breach has not been cured within 30 days of
such notice or waived;
(ii) by Buyer if any of the conditions in Section 6 has not been
satisfied as of the Closing Date (or with respect to the
condition set forth in Section 6.7 if such condition has not
been satisfied within 14 days from the date hereof) or if
satisfaction of such a condition is or becomes impossible
(other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived
such condition on or before the Closing Date;
(iii)by Seller, if any of the conditions in Section 7 has not been
satisfied of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the
failure of Seller to comply with its obligations under this
Agreement) and Seller have not waived such condition on or
before the Closing Date;
(iv) by mutual consent of Buyer and Seller;
(v) by either Buyer or Seller if the Closing has not occurred
(other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations
under this Agreement) on or before December 31, 2002, or such
later date as the parties may agree upon.
(b) Each party's right of termination under Section 10.10 is in addition to
any other rights it may have under this Agreement or otherwise, and
the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section
10.10, all further obligations of the parties under this Agreement
will terminate, except that the obligations in Sections 10.1 and
10.3 will survive; provided, however, that if this Agreement is
terminated by a party because of the breach of the Agreement by the
other party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not
satisfied as a result of the other party's failure to comply with
its obligations under this Agreement, the terminating party's right
to pursue all legal remedies will survive such termination
unimpaired.
10.11 Governing Law; Jurisdiction
This Agreement will be governed by the Laws of the state of New York
without regard to conflicts of laws principles. Each of Buyer and
Sellers hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of the state and federal courts located in the State of New
York, for any actions, suits, or proceedings arising out of or relating
to this Agreement and the transactions contemplated hereby (and each of
Buyer and Sellers agrees not to commence any action, suit or proceeding
relating thereto except in such courts), and further agrees that service
of any process, summons, notice or document by registered mail to
Buyer's address or any Seller's address, as the case may be, set forth
above shall be effective service of process of any action, suit or
proceeding brought against Buyer or either Seller, as the case may be,
in any such court. Each of Buyer and the Seller hereby irrevocably and
unconditionally waives any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby, in such state or federal courts as
aforesaid and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an
inconvenient forum.
10.12 Counterparts
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the
same agreement.
10.13 Transition Services
The Seller shall provide the Buyer such accounting, tax, treasury,
information services, computer, and human resources services relating to
the Companies as the Buyer shall reasonably require for a period of one
hundred and eighty (180) days, at SAS's cost plus 15%.
10.14 Discharge of Directors' and Officers' Liabilities
At a meeting of shareholders of Selas UK to be held within sixty (60)
days following the Closing Date, the Buyer shall, unless specifically
objected to by the auditors of Selas UK, cause to be adopted resolutions
releasing all former directors and officers of the Companies not
employed by the Buyer or its subsidiaries after the Closing Date from
any liability (other than liability arising out of willful misconduct)
to the particular Company in respect of the individual's capacity as an
officer or director.
10.15 Joint and Several Obligations
Subject to Section 9.4(h), the obligations of Sellers in this agreement
are joint and several. Subject to Section 9.5(e), the obligations of
Andritz and Buyer in this Agreement are joint and several.
IN WITNESS WHEREOF, the parties have caused this Asset and Share Purchase
Agreement to be duly executed as of the day and year first above written.
SELAS S.A.S.
By ________________________________________
Name:
Title:
SELAS CORPORATION OF AMERICA
By ________________________________________
Name:
Title:
ANDRITZ AG
By ________________________________________
Name:
Title:
By ________________________________________
Name:
Title:
ANDRITZ ACQUISITION S.A.S.
By ________________________________________
Name:
Title:
By ________________________________________
Name:
Title: