AGREEMENT
This Agreement is made the 2nd day of July 1999 and incorporates amendments made
this 7th day of July 1999 by and between:
(1) L'Air Liquide, S.A., a limited liability corporation organised under
the laws of France (hereinafter referred to as "A"); and
(2) Air Products and Chemicals, Inc., a corporation organised under the
laws of Delaware, USA (hereinafter referred to as "B").
(A) WHEREAS, A and B, at the invitation of the Board of Directors of C,
have separately submitted several proposals to acquire all of the
outstanding shares of C, which proposals have been rejected, and A and
B have independently determined that each of them cannot justify
further increasing their respective last rejected proposals, for
financial and other business reasons, including the raising of
necessary funds and the risks attendant thereto.
(B) WHEREAS, A and B believe that the only way in which they may be in a
position to raise the price proposed for the shares of C, as desired by
the Board of Directors of C, is by jointly developing a proposal to the
Board of Directors of C, since various portions of the businesses of C
are more valuable to one party than to the other, and that such a
jointly developed proposal will reduce regulatory concerns (e.g., on a
"fix it first" basis), since most adjustments likely to be required by
Regulatory Authorities will have been provided for between the parties.
(C) WHEREAS, A and B intend jointly to develop a proposal for the Proposed
Acquisition and desire to set forth the general terms and conditions
upon which they will jointly negotiate the Proposed Acquisition, as
well as the terms and principles upon which the Proposed Acquisition
would be implemented and the assets and businesses of C would be
allocated to each of A and B, recognising that various asset
divestitures may be required by the antitrust authorities of certain
jurisdictions in order for the parties to consummate the Proposed
Acquisition.
(D) WHEREAS, given the timetable mandated by applicable takeover
requirements, the parties wish to have as much of a proposed divestment
programme in place and ready for administrative review as is possible
in order to achieve required regulatory approvals as expeditiously as
possible and have determined that this Agreement will enable the
parties to develop such a programme.
(E) WHEREAS, in connection with the foregoing, A and B have entered into
Acquisition Agreement One.
NOW, THEREFORE, the parties agree as follows:
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*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
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1. PURPOSE AND INTERPRETATION
1.1 The purpose of this Agreement is solely to set forth the basis agreed to by
the parties upon which an Offer may be made and C Shares acquired
thereunder and, in such event, the intentions of the parties concerning the
manner in which the Reconstruction would be effected by the parties in
order to give effect to an appropriate allocation of the assets and
businesses of C as between A and B, together with such dispositions to
third parties as may be commercially desirable or reasonably required by
applicable Regulatory Authorities.
1.2 In this Agreement:
"A Business" means the assets and businesses of C to be allocated to A
pursuant to the Reconstruction as set out in schedules 1 and 2 as such
schedules may be amended by the Committee pursuant to clause 7, and shall
include A's interest in such assets and businesses of C to be jointly
owned by A and B as determined by the Committee;
"Acquisition Agreement One" means the agreement entered into between the
parties dated 14 June 1999;
"Actual Aggregate Purchase Price" means the sum of:
(a) the purchase price paid to acquire the C Shares pursuant to the Offer
and any Compulsory Acquisition or otherwise;
(b) any funds expended to acquire or cancel outstanding options to
acquire C Shares to the extent not included in (a) above; and
(c) the aggregate amount of outstanding consolidated indebtedness for
borrowed money of the C Group taken as a whole on the Control Date;
"Affiliate" means, with respect to any person, any other person directly or
indirectly controlling, controlled by, or under common control with such
other person;
"A Liabilities" means all of the liabilities (including in respect of
intra-group loans and Tax on trading and other activities ) arising out of
or referable to the A Business whether prior to or after the Control Date
but, for the avoidance of doubt, shall exclude any liability referred to in
clause 14, including for Tax;
"B Business" means the assets and businesses of C to be allocated to B
pursuant to the Reconstruction as set out in schedules 1 and 2 as such
schedules may be amended by the Committee pursuant to clause 7, and shall
include B's interest in such assets and businesses of C to be jointly owned
by A and B as determined by the Committee;
"Bidco" means a new company to be organised in the UK for the purpose of
making the Offer;
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"B Liabilities" means all of the liabilities (including in respect of
intra-group loans and Tax on trading and other activities ) arising out of
or referable to the B Business whether prior to or after the Control Date
but, for the avoidance of doubt, shall exclude any liability referred to in
clause 14, including for Tax;
"C" means The BOC Group plc;
"C Group" means C and its Affiliates;
"City Code" means The City Code on Takeovers and Mergers;
"Committee" means the special committee to be formed by A and B in
accordance with clause 2.1;
"Companies Act" means the Companies Xxx 0000, as amended;
"Completion" means completion of the Reconstruction;
"Completion Date" means the day on which Completion takes place;
"Compulsory Acquisition" means the compulsory acquisition of any C Shares
not acquired in the Offer, in accordance with sections 428 to 430F of the
Companies Act;
"Control Date" means the date on which the Offer becomes or is declared
unconditional in all respects or such later date on which Bidco obtains
control of the board of directors of C;
"C Share" means an ordinary share of 25p in C now in issue and any ordinary
share of 25p in C which is unconditionally allotted or issued whilst the
Offer remains open for acceptance (or such earlier date as the parties may
determine) and "C Shares" means all of them;
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, in the United States;
"ICC" means the Geneva, Switzerland office of the International Chamber of
Commerce;
"Intellectual Property" means the patents, patent applications, technology,
know-how (including operational know-how), trade secrets, copyrights,
software, trademarks, tradenames and other intellectual property owned by C
or its Affiliates;
"London Stock Exchange" means the London Stock Exchange Limited;
"Modified Aggregate Purchase Price" means the Actual Aggregate Purchase
Price less the value of the [ * ] of C as set forth in schedule 1;
"Offer" means (unless the context requires otherwise) any of an
announcement of an intention to make an offer (whether or not subject to
any pre-conditions) or the making of
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*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
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an offer for all of the C Shares under the relevant laws and regulations of
England and, if the Committee so determines, the United States and any
variation thereof and any new offer made following the lapse or withdrawal
of an initial offer;
"Panel" means The Panel on Takeovers and Mergers;
"Proposal Letter" means the letter referred to in clause 3.1;
"Proposed Acquisition" means the possible acquisition of all the
outstanding C Shares by Bidco;
"Regulatory Authorities" means applicable anti-trust regulatory authorities
and "Regulatory Authority" means any one of them;
"Reconstruction" means the reconstruction of the C Group to give effect to
the allocation of the assets and businesses of C between A and B in
accordance with clause 7 by separating the business of the C Group into the
A Business and the B Business and any subsequent transfers necessary to
effect ownership (whether directly or indirectly) of the A Business by A
and the B Business by B;
"SEC" means the U.S. Securities and Exchange Commission;
"Tax" means any form of taxation, levy, duty, charge, contribution or
impost of whatever nature (including any related fine, penalty, surcharge
or interest) imposed by a Tax Authority; and
"Tax Authority" means any local, municipal, governmental, state, federal or
other fiscal, revenue, customs or excise authority, body or official
anywhere in the world.
1.3 In this Agreement, a reference to:
1.3.1 a document in the "agreed form" is a reference to a document in
a form approved and for the purposes of identification signed by
or on behalf of each party;
1.3.2 a statutory provision includes a reference to the statutory
provision as modified or re-enacted or both from time to time
before the date of this Agreement and any subordinate
legislation made under the statutory provision before the date
of this Agreement;
1.3.3 a person includes a reference to a body corporate,
association, limited liability company or partnership;
1.3.4 a person includes a reference to that person's legal personal
representatives, successors and assigns;
1.3.5 a clause or schedule, unless the context otherwise requires,
is a reference to a clause of or schedule to this Agreement;
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1.3.6 a document is a reference to that document as from time to time
supplemented or varied;
1.3.7 sharing or allocating equally (or any similar such phrase) is
a reference to the ratio of sharing between the parties, in
each case as applied in the context in which such term is
used, being sharing or allocating in equal proportions between
the parties; and
1.3.8 "including" is a reference to "including without limitation."
1.4 The headings in this Agreement do not affect its interpretation.
2. FORMATION AND FUNCTIONS OF SPECIAL COMMITTEE
2.1 A and B each hereby designate the following representatives who shall
constitute the Committee that will be responsible for supervising and
directing all negotiations, meetings and other contacts with C by
either party in connection with the Proposed Acquisition and the
Reconstruction and shall have the rights and duties set out below. A
and B agree that they shall each implement the decisions of the
Committee promptly and in full.
A B
- -
Xxxxxx Xxxx Xxxx X. Xxxxx, III
Xxxxxx Xxxxxx Xxxxxx X. Xxxxxxxx
Xxxx-Xxxxxx Xxxxx Xxx X. Xxxxx
X. X. Xxxxxxxxxx or Xxxxxxx Xxxxxxxxxx) W. Xxxxxxx Xxxxx (or attorney designee)
Each party may replace its own representatives and appoint successor
representatives so that the total number of Committee representatives
always totals eight (8). Any member of the Committee may appoint an
alternate to act for him generally or specifically in relation to any
meeting of the Committee. The alternate shall have the same powers and
discretions that he would have if he were a member of the Committee. An
appointment of an alternate shall be in writing and shall be valid if
notice of it is given to any member of the Committee appointed by B (in
the case of the appointment of an alternate to act for a member of the
Committee appointed by A) and vice versa.
2.2 The Committee shall at all times conduct itself in accordance with
applicable requirements of Regulatory Authorities and to that end shall
have counsel available as may be required for the purpose of ensuring
compliance therewith. The Committee's objective and overall purpose is
solely to effect the transactions contemplated by this Agreement and to
that end it shall not engage in the day-to-day business or commercial
operations of the assets and businesses covered by this Agreement and
shall employ or utilise independent third parties to review and analyse
any competitively sensitive information or data should such review or
analysis be required to effect its assigned responsibilities hereunder.
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2.3 The Committee shall be authorised to act upon the unanimous consent or
approval of the members of the Committee or their alternates deciding
such issue provided that any consent or approval shall be given by two
or more representatives (whether in writing or orally), which consent
or approval includes at least one of the representatives appointed by
each party. In the event the Committee cannot agree upon any matter,
such matter shall be referred to the Chairman of A, Xxxxx Xxxx, in the
case of A, and the Chairman of B, Xxxxxx X. Xxxxxx, in the case of B,
who shall confer together and shall mutually agree on an appropriate
resolution of the matter. In the event that the Chairmen are unable to
resolve within ten (10) days of referral to them any matter which
relates to the transfer of the assets and businesses of C to be
effected pursuant to the terms of this Agreement (whensoever the
dispute arises), or any matter which arises after the Offer becomes or
is declared unconditional in all respects, such matter shall be
resolved as provided below:
2.3.1 the parties shall submit the matter for resolution in
accordance with clause 2.3.3 by an Expert (the "Expert")
selected in accordance with clause 2.3.2;
2.3.2 the Expert shall be selected by mutual agreement of the
parties. If, within twenty (20) days of referral of the matter
to the Chairmen, the parties are unable to agree upon the
Expert, the parties shall request the ICC to select a person
with experience in international business matters to act as
the Expert;
2.3.3 upon selection of the Expert, A and B shall each present
promptly to the Expert a statement of their final position on
the matter in dispute and the Expert, acting as an expert and
not as an arbitrator, shall choose either A's statement or B's
statement as the resolution to the dispute in question, such
statement, in the absence of fraud or manifest error, being
final and binding on each party.
2.4 The Committee shall be responsible for making all decisions in respect
of, and supervising all other matters relating to, the Proposed
Acquisition (including the conduct of the Offer), the Reconstruction
and the implementation of all other provisions of this Agreement. The
Committee shall form a tax working group to be responsible for ensuring
that the Reconstruction and all other provisions of this Agreement are
planned and implemented in a tax efficient manner and the Committee may
form such other working groups to report to it as it may determine and
may rely on such representatives, advisors and other experts as it may
deem appropriate.
2.5 The Committee shall continue in existence throughout the implementation
of the matters provided for in this Agreement, including the period
during which the parties are jointly operating any assets or businesses
of C acquired in the Proposed Acquisition and the Reconstruction. The
Committee shall in all matters observe the pre-eminent principle that
the parties cannot anticipate all of the issues that will arise in
making the Proposed Acquisition and implementing the Reconstruction in
accordance with the terms of this Agreement, and, therefore, the
Committee is intended to resolve all questions with a spirit of
fairness and understanding of each party's needs, attempting to avoid
minor matters, in order to enable the parties to acquire their
respective portions of such assets and businesses in accordance with
the principles of this Agreement.
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2.6 Without attempting to limit the functions of the Committee, it shall
have the following duties:
2.6.1 settling (a) whether any person other than A or B should have
any equity or debt investment in Bidco, (b) the terms and
conditions, including any preconditions, of the Offer,
including price and other offer terms, (c) the conduct of the
Offer and any agreements entered into with C or other parties
relating thereto, including any market purchases of C Shares,
and (d) in the event of the Offer lapsing, all such matters as
are required to make one or more further offers for the C Shares;
2.6.2 ensuring that in connection with the Offer the parties comply
with all applicable legal and regulatory provisions (in all
applicable jurisdictions) including, without limitation, the
Companies Act, the Financial Services Xxx 0000, the City Code,
the Rules Governing Substantial Acquisitions of Shares, the
Listing Rules of the London Stock Exchange, the U.S.
Securities Exchange Act of 1934, the rules and regulations of
the SEC and applicable requirements of Regulatory Authorities;
2.6.3 approving the press announcement, the offer document and any
other documents to be issued in accordance with the City Code,
the U.S. Securities Exchange Act of 1934 or any other
applicable rules or legislation in connection with the Offer;
2.6.4 approving any revision, amendment, modification or waiver of
any precondition, term or condition of the Offer (including an
increase in price) or the withdrawal or lapsing of the Offer;
2.6.5 approving the declaration of the Offer going unconditional as to
acceptances;
2.6.6 approving the declaration of the Offer going unconditional in all
respects;
2.6.7 supervising and controlling the Compulsory Acquisition;
2.6.8 determining, implementing and supervising the Reconstruction
and the allocation of the assets and businesses of C between
the parties in accordance with the principles set forth herein
and the process of determining the final ownership of such
assets and businesses;
2.6.9 settling the terms and conditions of appropriate joint venture or
other agreements between A and B covering the conduct of those
portions of the assets and businesses of C in those limited
situations where, pursuant to the allocation procedures set forth
in clause 7.5 and subject to any restrictions imposed by any
relevant Regulatory Authority, they may be owned and operated on
a joint ownership basis by the parties following consummation of
the Proposed Acquisition, as well as settling the terms and
conditions of appropriate arrangements to ensure the independent
operation, following the consummation of the Proposed Acquisition
and the Reconstruction, of any assets and businesses of C which
may be required to be divested by the Regulatory Authorities;
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2.6.10 supervising and controlling the various filings and submissions
with governmental bodies and agencies (including the filings
referred to in clauses 6.1 and 7.4.5), in order to obtain all
necessary statutory, governmental and regulatory approvals
for the Proposed Acquisition and the Reconstruction;
2.6.11 determining the basis upon which, following the Control Date, the
parties will supervise the management of the C Group, including
assigning between the parties the principal responsibility for
such supervision of the component assets and businesses of the
C Group based on the likely allocation thereof into the
A Business and the B Business as the Committee shall determine,
giving appropriate recognition to regulatory considerations
affecting the allocation, timing or nature of such management
responsibility (it being understood that upon any final
allocation to a party then not managing the assets so allocated,
such party shall immediately assume management of such assets);
and
2.6.12 developing and implementing appropriate procedures, activities,
financial informational reviews and valuations, operational
transitions and/or allocations of operational or transitional
responsibility, with respect to such matters as may be
commercially desirable or legally advisable in order to maintain
the A Business and the B Business as viable business operations,
to effect the Reconstruction contemplated hereby and to achieve
the transition and full integration of the operations of C into A
or B, as the case may be, at the earliest possible time,
consistent with the principles set forth in this Agreement and
such requirements as may be applicable or reasonably required by
the Regulatory Authorities.
3. PROPOSAL LETTER AND PRESENTATION OF PROPOSAL
3.1 A and B will agree upon the form of the Proposal Letter to be delivered
to C, the final form of which shall be approved by the Committee.
3.2 The Committee shall be responsible for determining the manner, timing
and method by which the Proposal Letter will be presented to and
negotiated with C and for establishing and co-ordinating the procedures
for responding to any requests for information or comment from, or
otherwise communicating with, the press or other media, the Panel and
the SEC, as well as determining the content of any such responses or
communications.
3.3 For the avoidance of doubt, the parties shall, for so long as this
Agreement remains in place, work together in good faith to acquire the
C Shares on the basis set out in this Agreement, including by meeting
their obligations under clause 6 and by making further offers in such
form as may be approved by the Committee following the lapsing or
withdrawal of an offer.
4. FINANCING.
4.1 Each party covenants and agrees that it has or will have sufficient
funds available, whether in the form of borrowings, equity or any
combination thereof, so as to enable it
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to proceed with the terms of the Proposal Letter on the basis set out in
this Agreement and to conclude its portion of the Proposed Acquisition
and the Reconstruction in accordance with the obligations undertaken
herein and therein.
4.2 The parties shall jointly organise and finance Bidco and shall provide
equity and/or debt financing to Bidco in equal shares in an amount
equal in the aggregate to the cash portion of the Actual Aggregate
Purchase Price. For the avoidance of doubt, upon the provision of the
equity and/or debt financing to Bidco in equal shares as described
hereunder, A and B shall each own an equal share of the capital of
Bidco. Save as agreed by the Committee, neither party shall transfer,
dispose of or otherwise deal in its equity or debt interest in Bidco.
All decisions at the board and shareholder levels shall be taken by the
unanimous consent of all the directors and shareholders (as the case
may be) unless the parties determine otherwise.
4.3 The parties recognise that the financing arrangements which each of
them may enter into to provide finance for Bidco will contain
restrictions and obligations. Certain of those restrictions and
obligations may extend to or affect:
4.3.1 the conduct and terms of the Offer;
4.3.2 the operations, following the Control Date, of C and the C Group;
4.3.3 the disposal of assets by the C Group to the parties or to third
parties; and
4.3.4 the provision of credit support by the C Group or parts
thereof to such financiers.
While the parties shall each remain responsible for their own financing
arrangements, and their respective costs and expenses in relation
thereto, the parties undertake and agree to inform one another, to the
extent that confidentiality agreements are not thereby breached, of the
terms and conditions of such financing arrangements and to consult with
one another with respect thereto. Each party further undertakes and
agrees that it will use its commercially reasonable efforts to ensure
that such party, Bidco and, following the Control Date, the C Group
will take all such actions as are necessary to ensure compliance with
the terms of such financings.
4.4 The parties shall ensure that Bidco does not incur any indebtedness or
grant any security interests without the prior approval of the
Committee.
5. STRUCTURE OF PROPOSED ACQUISITION
5.1 The parties intend that the Proposed Acquisition would be effected
(following the satisfaction of any preconditions) through the Offer
followed by the Compulsory Acquisition, to the extent permitted by the
Companies Act. The Offer would be made, and the Compulsory Acquisition
implemented, by Bidco. Following the Offer and the Compulsory
Acquisition, the parties intend to allocate the assets and businesses
acquired through the Proposed Acquisition as provided in this
Agreement.
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5.2 The parties acknowledge that the effect of this Agreement may be that A
and B may be "associates" and/or "acting in concert" for the purpose of
the City Code and the U.S. Securities Exchange Act of 1934, and which
may lead to Companies Act or other disclosure obligations. Accordingly
A and B shall individually each supply promptly to the other any
information which the other may require in order to comply with the
provisions of the City Code, the U.S. Securities Exchange Act of 1934,
the Companies Act or the requirements of the Panel or the SEC
applicable to persons having such a relationship.
5.3 The parties agree that they shall not, and shall use all reasonable
endeavours to procure that the persons acting in concert with them
shall not, acquire any C Shares (or any interest therein) otherwise
than through Bidco. Save as disclosed to each other prior to the date
hereof, neither party owns, directly or indirectly, any interest in any
C Shares.
6. REGULATORY APPROVALS
6.1 The parties acknowledge that the Proposed Acquisition, the
Reconstruction and matters related thereto will be subject to review by
the Regulatory Authorities. In this connection, the parties and/or
Bidco will be making such filings as may be required under the EC
Merger Regulation and the HSR Act, as well as taking appropriate action
in other applicable jurisdictions.
6.2 A and B each agrees to use all reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things
necessary or advisable (taking into account the tax effects of such
efforts, actions and things as determined by the tax working group) to
complete as promptly as reasonably practicable the Proposed
Acquisition, the Reconstruction and the matters related thereto and to
co-operate with each other in connection with the foregoing. In
furtherance of the foregoing, A and B shall use all reasonable efforts
to resolve such objections, if any, as may be asserted with respect to
the Proposed Acquisition, the Reconstruction or matters related thereto
under any applicable law or regulation to enable the Proposed
Acquisition, the Reconstruction and the matters related thereto to be
completed in an expeditious manner.
6.3 Each of the parties shall promptly inform the other of any material
communication (written or oral) to or from any Regulatory Authority
regarding the Proposed Acquisition, the Reconstruction or matters
related thereto to the fullest extent permitted by law and applicable
regulations and having due regard for the need to maintain their
competitive independence. If either party or any Affiliate thereof
receives a request for additional information or documentary material
from any such Regulatory Authority with respect to the Proposed
Acquisition, the Reconstruction or matters related thereto, then such
party will endeavour in good faith to make, or cause to be made, as
soon as reasonably practicable, an appropriate response in compliance
with such request.
6.4 Without limiting the general nature of the parties' obligations set
forth in clause 6.2, the parties will make such divestitures or other
commitments as approved by the Committee, if any, as may be reasonably
required by the Regulatory Authorities to enable the Proposed
Acquisition, the Reconstruction and the matters related thereto to be
completed
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in an expeditious manner. Any divested assets may be sold to either A or
B, if allowed by the relevant antitrust Regulatory Authority, in
accordance with clause 7.7.
6.5 It is the parties' intent, to the extent reasonably practicable (taking
into account the tax implications of all relevant matters), to complete
the Proposed Acquisition, the Reconstruction and the matters related
thereto at such time as all regulatory approvals have been received
from the Regulatory Authorities of the European Union, the United
States and such other jurisdictions as the Committee may determine
appropriate.
6.6 The parties agree that they will use all reasonable efforts to exhaust
all legal remedies in an effort to obtain any necessary approvals not
previously obtained, including but not limited to appeals to the
highest appellate court, tribunal or other body having jurisdiction
over the matter in dispute, seeking rehearings where necessary and
continuing with the approval processes until final determinations have
been received, in each case to enable the Proposed Acquisition, the
Reconstruction and the matters related thereto to be effected.
7. OFFER PRICE AND ALLOCATION OF ASSETS AND BUSINESSES
7.1 Offer Price
The price to be offered by Bidco in the Proposed Acquisition shall be
determined by the Committee and set forth in the Proposal Letter.
7.2 General Allocation Principles
Schedule 1 has been prepared by A and B to reflect the initial values
which the parties attribute to the assets and business of C in each
country or region set forth thereon. Schedule 2 designates the party
which will have the primary right (a "primary party") to be allocated
the assets and businesses of C in certain countries or regions outside
the UK, Ireland, the United States, Australia and New Zealand (or, in
those cases indicated in such schedule, the asset sharing in such
countries or regions between the parties) in accordance with the
procedures hereinafter set forth.
7.3 Allocation for UK, Ireland,the United States, Australia and New Zealand
7.3.1 The parties agree that the assets and businesses of C located in
the UK and Ireland shall have an agreed value equal to
approximately [*] of the Modified Aggregate Purchase Price and
that the aggregate values of the assets and businesses of C
located in the UK and Ireland and the United States shall equal
approximately [*] of the Modified Aggregate Purchase Price, and
[*] of the Modified Aggregate Purchase Price when the agreed
values of Australia and New Zealand are added. The actual
allocation of the specific assets and businesses of C located in
the United States between the parties will be finally determined
by the Committee prior to the Control Date, having taken into
account any requirements of Regulatory Authorities (it being the
intention of the parties to obtain the approval of the relevant
Regulatory Authorities in a manner which will
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
11
prevent the Offer from lapsing under Rule 12 of the City Code
and in a manner which will allow the Offer to become
unconditional in all respects in time to effect the Compulsory
Acquisition under the Companies Act, to the extent
practicable) and shall, if necessary, be adjusted immediately
prior to effecting the Reconstruction in such manner as is
determined by the Committee to reflect the principles
contained herein in the light of the facts and circumstances
(including as to divestments required by Regulatory
Authorities and the information referred to in clause 7.3.2)
known to the parties immediately prior to effecting the
Reconstruction.
7.3.2 The parties acknowledge that the percentages of value of the
Modified Aggregate Purchase Price allocated to (i) the UK
and Ireland, (ii) the United States and (iii) Australia and
New Zealand in schedule 1 are based on the parties' agreed
upon estimates of the recurring EBITs of the UK and Irish
operations, the United States operations and the Australian
and New Zealand operations of C for C's fiscal year ended
September 30, 1998. Accordingly, should the Committee, based
upon its review of the recurring EBITs of the UK and Irish
operations, the United States operations and the Australian
and New Zealand operations of C for the twelve month period
ending June 30, 1999 (or such later period as may be
appropriate) when the underlying financial information becomes
available to the parties, determine (using the same
methodology as used in the estimates above) that the EBITs of
any of (i) the UK and Irish operations, (ii) the United States
operations and/or (iii) the Australian and New Zealand
operations have changed in a sustainable manner, whether
positive or negative, by more than [*] from the applicable
fiscal 1998 estimate, the above percentage of value to be
attributed to the relevant operations in any such case shall
be revised to reflect the EBIT for the twelve month period
ending June 30, 1999 (or such later period as may be
appropriate), any such revision in no event to exceed [*],
whether positive or negative, and appropriate corresponding
adjustments shall be made to the schedule 1 values for
countries or regions other than the UK and Ireland, the
United States and/or Australia and New Zealand, as applicable.
In the event that the Committee determines that actual EBIT
for the twelve month period ending June 30, 1999 (or such
later period as may be appropriate) is not comparable to that
for the fiscal year ended September 30, 1998 due to the
effect of new investments made, variations in intercompany
charges or other non-recurring causes during either of such
periods, the Committee will make appropriate adjustments to
the relevant EBIT to appropriately mitigate such effect. In
the event more than a [*] adjustment, positive or negative,
is indicated, the Committee shall in good faith meet to review
the amount in excess of the [*] adjustment and the asset
allocations to each in such country with a view to making an
agreement (which may take effect after Completion) which
with regulatory consent will appropriately adjust the amount
in excess of [*] to the other party.
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
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7.4 Process for Allocating Countries and Regions other than the UK and
Ireland, the United States and Australia and New Zealand following the
Control Date
7.4.1 As soon as practicable following the Control Date, the Committee
will determine the allocation between the parties of the assets
and businesses located outside of the UK and Ireland, the United
States and Australia and New Zealand on the country or region
basis as set out in schedule 1 in accordance with the procedure
hereinafter set forth taking into account any requirements of
Regulatory Authorities in accordance with the intention expressed
in clause 7.2. Such allocation shall, if necessary, be adjusted
immediately prior to effecting the Reconstruction in such manner
as is determined by the Committee to reflect the principles
contained herein in the light of the facts and circumstances
(including as to divestments required by Regulatory Authorities
and financial information about the C Group then available to
them) known to the parties immediately prior to effecting the
Reconstruction.
7.4.2 With respect to each country or region other than the UK and
Ireland, the United States and Australia and New Zealand set out
in schedule 1, the primary party (pursuant to clause 7.2 and as
shown on schedule 2) shall give written notice to the other party
within 30 days after the Control Date of the value which the
primary party is willing to allocate to its proposed ownership of
the assets and business of C in such country or region, which
value may be more or less than the values referred to in schedule
1. In the case of any country or region other than the UK and
Ireland, the United States and Australia and New Zealand for
which no primary party is agreed, either party may become the
primary party for such country or region by providing to the
other party written notice within 30 days after the Control Date
of the value which such party is willing to allocate to such
country or region, which value may be more or less than the value
referred to in schedule 1; and in the event there is competition
between the parties, the party whose initial valuation is the
highest shall become the primary party.
7.4.3 The party receiving such written notice of the primary party's
value for the assets and business of C in a country or region
shall be entitled to give written notice to the primary party
within 10 days of receiving notice from the primary party in
accordance with clause 7.4.2 setting forth an increased value for
the assets and business of C in such country or region, provided
that such increased value exceeds the primary party's value by at
least [*]. If no such notice of an increased value is provided,
the primary party shall be the acquiror of the assets and
business of C located in such country or region at the value
notified by the primary party. If such notice of an increased
value is provided, the primary party may elect to accept such
increased value within ten (10) days of receipt of such notice,
in which case the primary party shall be the acquiror of the
assets and business of C located in such country or region at
such increased value, or to reject such increased value, in which
case the other party shall be the acquiror of such assets and
business at such increased value.
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
13
7.4.4 All countries or regions, other than the UK and Ireland, the
United States and Australia and New Zealand and other than
those countries or regions allocated between the parties
pursuant to clause 7.4.3, shall be divested in accordance with
clause 7.7.1 or 7.7.2 or shared between the parties on an
equal basis.
7.4.5 Notwithstanding the foregoing, in any jurisdiction covered by
clause 7.3 or this clause 7.4 where a Regulatory Authority may
require filing before the Control Date or other filing in advance
of the allocation process contemplated hereby, such filings
shall, unless otherwise determined by the Committee, reflect the
designations of primary party and/or asset allocation set forth
in Schedules 1, and 2 , which schedules reflect the parties'
current view of the ultimate ownership of the assets of C, with
the parties to co-operate and use their reasonable efforts to
preserve the flexibility to adjust or make any supplemental or
further filings as may be required to accomplish the ultimate
allocation contemplated by clause 7.3 or this clause 7.4.
7.5 Joint Operations
In certain limited situations the commercially desirable and most
efficient allocation of the businesses of C may require that certain
facilities or assets be owned or operated by the parties on a joint
basis. Pursuant to clause 2.6.9 the Committee shall be responsible for
settling the terms and conditions of appropriate agreements covering
such matters. In performing such function, the Committee is instructed
that the parties are strictly committed to the principle that any such
ownership or operation shall be conducted in accordance with all
applicable laws and such requirements as may be imposed by Regulatory
Authorities. To that end, in all cases, the Committee shall timely
confer with counsel to structure any proposed joint venture and secure
any necessary regulatory approvals prior to effecting any joint
ownership or operation arrangement.
7.6 Final Adjustment
It is intended that the allocation of the assets and businesses of C
ultimately attributed to each party pursuant to clause 7, and the equal
sharing of proceeds of any divestments under clauses 7.7.1 and 7.7.2,
will, as nearly as possible, result in each party obtaining equal
shares in the value of the assets and businesses of C and sharing
equally in the obligation to pay the Actual Aggregate Purchase Price.
If the procedure provided for in clauses 7.3 and 7.4 or the next
sentence results in an aggregate allocation to either party under
clause 7 of less than 50% but more than [*] of the value of the assets
and businesses of C, the difference shall be made up by an appropriate
adjustment for the benefit of the lower party as determined by the
Committee based on the values as finally determined in accordance with
clause 7. If such procedure results in such allocation to either party
being [*] or less, the Committee shall determine such adjustments as
are necessary to meet the above [*] test. Such adjustments shall be
made by giving the party having [*] or less the right to select one or
more countries or regions for which it was the primary party, and which
was allocated to the other party under the procedures set forth in
clause 7.4, at the value at which the selected countries or regions
were allocated to the other party in accordance with clause 7.4. Such
selection shall first be
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
14
made from available entire countries or regions and, if unavailable,
from portions of other countries, consistent with applicable regulatory
requirements. The parties agree that the United Kingdom, Ireland, the
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxx and Japan shall be
excluded for purposes of the foregoing selection process. Following
completion of the process set forth in this clause 7.6, the Committee
shall prepare a final schedule reflecting the allocation process in
accordance with clause 8.15. Schedule 3 provides an outline of the
allocation process timetable and schedule 4 provides, for illustrative
purposes only, an example of the bidding process contemplated by
clause 7.4.
7.7 Divestitures
7.7.1 As soon as practicable following the Control Date (or after the
Compulsory Acquisition, to the extent available), and as
economically justified in the opinion of the Committee, the
[*] of C (as such businesses are defined by the Committee),
together with such other assets of C as the Committee may
determine, will be either sold to unaffiliated third parties or
sold to or retained by A or B in accordance with such procedures
and utilising such advisors as the Committee may determine. The
net proceeds of such sales shall be shared equally between the
parties by such means as may be agreed by the Committee.
7.7.2 Other assets of C which must be sold to persons other than A
or B as required by Regulatory Authorities shall also be sold
in accordance with such procedures and utilising such advisors
as the Committee may determine, and the net proceeds of such
sales shall be shared equally between the parties by such
means as may be agreed by the Committee.
7.7.3 Notwithstanding the foregoing provisions of this clause 7.7, (i)
any sales of assets of C required by Regulatory Authorities to be
sold by A or B after the completion of the Reconstruction (and
which were not identified by the Committee prior to the
Reconstruction to be included under clause 7.7.2), (ii) any asset
dispositions required to be made by a party from its existing
business to secure the approval of a Regulatory Authority in any
jurisdiction, and (iii) any related consequences, including Tax,
shall be made solely for the account of A in respect of those
assets owned by A or its Affiliates, or by B in respect of those
assets owned by B or its Affiliates, in accordance with such
procedures as the party making such sale shall determine;
provided, however, that, so long as the sale of any such assets
to the other party (the "non-selling party") is permitted by the
relevant Regulatory Authorities, the non-selling party shall have
a right of first refusal, exercisable within 30 days following
the non-selling party's receipt of notice (which notice shall
identify the person offering to purchase such assets and shall
set forth the terms of such offer) from the party making any such
sale (the "selling party"), to acquire the relevant assets on the
terms set forth in such notice in respect of any offer for such
assets which the selling party has determined to accept. If the
non-selling party exercises its right of first refusal, the
parties shall consummate the purchase and sale of such assets as
soon as practicable following such acceptance.
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
15
If such right of first refusal is not exercised, the selling party
may consummate such sale on the terms set forth in such notice.
7.7.4 The parties agree that, if required by the relevant Regulatory
Authority, any assets of C required to be divested shall be
placed under independent management following the Control Date.
8. RECONSTRUCTION
8.1 The Reconstruction shall be effected in accordance with the principles
set out below unless the parties otherwise agree.
8.2 The parties shall co-operate and work together in good faith to
implement the Reconstruction as soon as reasonably practicable
following the Control Date (or after the Compulsory Acquisition, to the
extent available). If assets are used in or liabilities affect both the
A Business and the B Business, the parties shall negotiate in good
faith the division of such assets and liabilities between them, having
due regard to the extent of usage and the tax consequences of a
division or transfer.
8.3 Indebtedness for borrowed money of the C Group shall, to the extent
identifiable with and employed in connection with the A Business, be
included in the A Liabilities and, to the extent identifiable with and
employed in connection with the B Business, be included in the B
Liabilities. Such indebtedness shall include any intra-group loans,
which shall remain outstanding in accordance with their terms or as
otherwise determined by the Committee in the case of intra-group
indebtedness payable on demand. Any such indebtedness not so
identifiable or employed in connection with the A Business or the B
Business shall be borne by the parties on an equal basis. Any costs
associated with the replacement or continued maintenance of any such
indebtedness incurred as a result of the Offer or the Reconstruction,
including, without limitation, due to acceleration based on
change-of-control provisions or the like, shall be allocated to or
shared by the parties in accordance with the principles set forth in
this clause 8.3.
8.4 Other than as set forth in clause 8.3 or in clause 14, it is agreed
that the Reconstruction will be carried out so that all of the A
Liabilities will be liabilities which transfer with the A Business and
that all of the B Liabilities will be liabilities which transfer with
the B Business. Except to the extent caused by the negligent or willful
and wrongful acts or omissions of B, A undertakes to B (for itself and
as trustee and agent for each of its Affiliates) to indemnify and
defend B and its Affiliates and hold them harmless against any actions,
proceedings, losses, costs, claims, damages, liabilities and expenses
which any of them may suffer or incur in respect of any A Liability.
Except to the extent caused by the negligent or willful and wrongful
acts or omissions of A, B undertakes to A (for itself and as trustee
and agent for each of its Affiliates) to indemnify and defend A and its
Affiliates and hold them harmless against any actions, proceedings,
losses, costs, claims, damages, liabilities and expenses which any of
them may suffer or incur in respect of any B Liability.
16
8.5 A and B hereby agree to negotiate in good faith to enter into
satisfactory arrangements to enable the Reconstruction to be properly
effected as soon as reasonably possible such that by the Completion
Date the A Business owns all of the assets (including employees) and
rights and liabilities of the A Business and the B Business owns all of
the assets (including employees) and rights and liabilities of the B
Business and neither owns any material assets or liabilities not
forming part of such business carried on as at that date.
8.6 If after the Completion Date an A Business shall receive or be obliged
to make any payment which relates, in whole or in part, to the carrying
on of the B Business then (i) A shall procure that so much of that
payment as so relates shall be promptly paid to the relevant B Business
or to B, or (ii) B shall procure that so much of that payment as A was
obliged to make shall be paid to A.
8.7 If after the Completion Date any B Business shall receive or be obliged
to make any payment which relates, in whole or in part, to the carrying
on of the A Business then (i) B shall procure that so much of that
payment as so relates shall be promptly paid to the relevant A Business
or to A, or (ii) A shall procure that so much of that payment as B was
obliged to make shall be paid to B.
8.8 In the event that following Completion any assets forming part of and
used exclusively by the A Business remain legally owned by the B
Business, B shall transfer or procure to be transferred such assets to
A (or as it shall direct) for no net consideration and pending such
transfer shall, so far as legally possible, procure that such assets
are held on trust for A absolutely.
8.9 In the event that following Completion any assets forming part of and
used exclusively by the B Business remain legally owned by the A
Business, A shall transfer or procure to be transferred such assets to
B (or as it shall direct) for no net consideration and pending such
transfer shall, so far as legally possible, procure that such assets
are held on trust for B absolutely.
8.10 The adjustments provided for in clauses 8.6 to 8.9 shall be
appropriately modified to take account of any tax effects thereof and
of any adjustments which were included in the valuation by the parties
of the relevant portion of the A Business or the B Business, as the
case may be, and such adjustments shall be reflected in the final
accounting required pursuant to clause 8.15.
8.11 The parties agree that, prior to or immediately after Completion, they
will negotiate in good faith such separate contracts as are customary
in the industry and permitted by law, to be generally in effect for a
period of six months, in order to secure needed administrative services
and covering other matters such as trade product exchanges and
purchases and the sources of other products, in order to fulfil the
intention of the parties that each of them be placed in a position by
such contracts to successfully operate the assets and businesses
allocated to that party. The parties agree that all of the foregoing
arrangements shall be on a direct cost basis, which shall be subject to
verification by such party's outside auditors. If such initial
agreements are required for a term of longer than
17
six months, the parties will, after expiration of the initial
agreements, negotiate new agreements on such terms as may be mutually
agreed.
8.12 Following Completion, the parties shall use their reasonable endeavours
to afford to each other and their respective counsel and accountants,
during normal business hours, reasonable access to all books and
records held by them with respect to the A Business or the B Business
(as appropriate) prior to Completion to the extent that such access may
be reasonably required by such parties, in connection with:
8.12.1 the preparation of tax returns or in connection with any
audit, amended return, claim for refund or any proceeding with
respect thereto;
8.12.2 the preparation of financial statements;
8.12.3 the preparation of any regulatory filings; and
8.12.4 for any other reasonable purpose.
8.13 Provided, however, that to the extent a party (the "reviewing party")
pursuant to clause 8.12 may for such purposes request access to
information which properly should not be disclosed to it for regulatory
or competitive reasons, the reviewing party's access shall be
restricted with access to be allowed only by an appropriate and
competent independent third party designated by the reviewing party,
with such independent third party to maintain the details of such
information as confidential, disclosing to the reviewing party only
such general conclusions and verification as counsel to the parties may
advise is appropriate.
8.14 If a party which has the benefit of an indemnity under clause 8.4 (the
"Indemnified Party") becomes aware of a matter which would be likely to
give rise to a claim thereunder:
8.14.1 the Indemnified Party shall notify the indemnifying party (the
"Indemnifier") as soon as practicable of the matter (stating
in reasonable detail the nature of the matter and, if
practicable, the amount claimed) and consult with the
Indemnifier with respect to the matter and if the matter has
become the subject of proceedings the Indemnified Party shall,
so far as practicable, notify the Indemnifier within
sufficient time to enable the Indemnifier time to select
counsel and contest the proceedings before final judgement;
8.14.2 the Indemnified Party shall, subject to it being so indemnified:
(a) take any action, institute any proceedings, give any
information, and make available any persons and
documents as the Indemnifier may reasonably request
to:
(i) dispute, resist, appeal, compromise, defend, remedy or
mitigate the matter; or
18
(ii) enforce against a person (other than the
Indemnifier) the Indemnified Party's rights in
relation to the matter;
(b) only admit liability in respect of or settle the
matter if it has first obtained the Indemnifier's
written consent (not to be unreasonably withheld or
delayed).
8.15 The parties agree that, as soon as practicable following the Completion
(including the implementation of the provisions of clause 7.6), the
Committee shall prepare a final accounting in respect of the matters
covered by this Agreement in order to enable the parties to effect a
final reconciliation of the allocation process including the equal
sharing of any overfunding or underfunding of the Actual Aggregate
Purchase Price (including taking into consideration allocations,
disproportionate or otherwise, of liabilities and other items as the
Committee may deem appropriate) and the other provisions hereof
relating to the equal sharing of costs, benefits and other items
contemplated hereunder. The Committee shall have the responsibility to
develop, prior to the Control Date, the specific procedures to be
followed in the preparation and adoption of such final accounting by
the parties, including procedures for settling any final amounts and
resolving any disputes which may arise between the parties relating
thereto, failing which clause 2.3 shall apply.
9. INTELLECTUAL PROPERTY
9.1 The parties agree that the continued use of the Intellectual Property
after the Completion Date is vital to the successful operation of the A
Business and the B Business and that it is desirable that each party,
to the fullest extent permitted by law, have equal and independent
access to such Intellectual Property in order to maximise the benefits
and efficiencies of the transactions contemplated hereby and promote
competition to the fullest extent possible.
9.2 Because of the varying nature of the rights and obligations running
with Intellectual Property in each of the several jurisdictions
involved, it will be necessary, to insure the continued validity of
these rights worldwide, for the parties to develop ownership structures
that enable each party to obtain the benefits of the rights worldwide
and, with respect to trademarks and tradenames, in the jurisdictions in
which each party has acquired the assets and businesses.
9.3 In this connection, the parties will, prior to or as soon as
practicable following the Completion Date, enter into supplementary
agreements establishing appropriate mechanisms, whether through direct
joint ownership of the Intellectual Property, ownership through a
separate entity, direct ownership with licensing or otherwise, to
enable each party to continue fully and independently to use in its own
worldwide gases business (including the businesses acquired from C)
such Intellectual Property perpetually, subject to clause 9.6
concerning trademarks and tradenames, adopting the most suitable
mechanism to avoid the possibility of the abandonment of any such
Intellectual Property.
19
9.4 In those jurisdictions where ownership of the Intellectual Property can
be legally transferred in a tax efficient manner to and held by the
party (or its subsidiaries) acquiring assets and businesses located
there without risk of loss of the benefits of the Intellectual Property
to the other party (or its subsidiaries) in other jurisdictions, it is
the current intention of the parties that direct ownership will follow
the assets and businesses so acquired. In those jurisdictions where
ownership of the Intellectual Property cannot be legally transferred
without risk of loss, or where the ownership of the assets and
businesses is held jointly by the parties, the ownership will be held
in such a manner to benefit both parties.
9.5 To make certain that the rights in and to the Intellectual Property so
acquired are equally available to the parties, license and other
agreements will be given to the parties to enable each to conduct its
business on a worldwide basis. Any royalties, license fees or other
charges for use of the Intellectual Property will be agreed by the
parties. All rights shall be equally available to the parties.
9.6 In addition, the parties will agree upon such standards as may be
appropriate in order to avoid confusion from the use by the parties of
the trademarks and tradenames (including the possible definitive
transfer of ownership of certain trademarks or tradenames to A or B
without license to the other or such as a requirement, in connection
with any such use, to identify such trademark or tradename with the A
name or the B name, as the case may be). The agreement shall also cover
the basis upon which the parties may use such trademarks and
tradenames, including the C name, on a long-term basis.
9.7 Each party agrees that, for a reasonable period of time following the
Completion Date, it shall provide the other party with reasonable
access to those facilities owned by C and its Affiliates prior to
Completion and to relevant personnel in order to enable the other party
to become knowledgeable concerning the technology, copyrights, trade
secrets, software and know-how (including operational know-how)
included in the Intellectual Property. The parties acknowledge that the
provisions of this clause 9 are intended to apply only to the
Intellectual Property owned by C and its Affiliates prior to Completion
as such Intellectual Property exists at the Completion Date and that
any intellectual property developed by A or B after Completion, whether
or not based on the Intellectual Property owned by C and its Affiliates
prior to Completion, shall be the sole property of the party which
develops the same and without any obligation to grant a license to the
other party.
10. NO UNAUTHORISED DISCLOSURE OR USE OF CONFIDENTIAL INFORMATION
10.1 A may provide (or has, prior to the date hereof, provided) B with
confidential or proprietary information relating to itself and to the
Proposed Acquisition and the Reconstruction from time to time (the "A
Confidential Information"). B warrants that it has not, and undertakes
that it shall not, without the prior written consent of A, disclose
(other than to its directors, officers, agents, employees and advisers
who are directly concerned with its assessment of the Proposed
Acquisition and whose knowledge of the A Confidential Information is
essential for that purpose and who are bound (by acknowledgement or
otherwise) by confidentiality obligations as least as stringent as
20
those set forth herein) or use any A Confidential Information for any
purpose, other than with A in connection with the evaluation and
negotiation of the Proposed Acquisition and the making of the Offer.
10.2 B may also provide (or has, prior to the date hereof, provided) A with
confidential or proprietary information relating to itself and to the
Proposed Acquisition and the Reconstruction from time to time (the "B
Confidential Information"). A warrants that it has not, and undertakes
that it shall not, without the prior written consent of B, disclose
(other than to its directors, officers, agents, employees and advisers
who are directly concerned with its assessment of the Proposed
Acquisition and whose knowledge of the B Confidential Information is
essential for that purpose and who are bound (by acknowledgement or
otherwise) by confidentiality obligations as least as stringent as
those set forth herein) or use any B Confidential Information for any
purpose, other than with B in connection with the evaluation and
negotiation of the Proposed Acquisition and the making of the Offer.
10.3 Any information and analyses concerning C and the businesses of C
contained in this Agreement or provided by the parties shall be deemed
to be included within the A Confidential Information or the B
Confidential Information, as the case may be, it being acknowledged by
the parties, however, that all such information and analyses are
subject to confirmation by the parties through their own review and
examinations and that neither party is making any representation or
warranty to the other party as to the completeness or accuracy of such
information or analyses.
10.4 The foregoing restrictions shall not apply (i) to any information which
was in the public domain prior to disclosure to A or B, as the case may
be, (ii) to any information which becomes public knowledge after such
disclosure other than through breach of this Agreement by A or B, as
the case may be, (iii) to any information which A or B, as the case may
be, can show to have been in its possession independently prior to or
is developed independently after such disclosure, (iv) to any
information which A or B, as the case may be, can show that it received
after such disclosure in a legal way from other sources, (v) to the use
by A or its Affiliates or B or its Affiliates, as the case may be, of
its own Confidential Information internally in such party's or its
Affiliates' industrial gases business, or (vi) to the use by either
party or its Affiliates of the Confidential Information concerning C
referred to in clause 10.3 internally in their respective industrial
gas businesses.
10.5 A and B agree to preserve the confidentiality of the B Confidential
Information or the A Confidential Information, as the case may be, as
required by this Agreement for a period of three years from the date of
the termination of this Agreement, the Control Date or the final
transfer to either party of the assets and businesses of C in
accordance with the terms of this Agreement, whichever is later.
10.6 All written materials, schedules, documents and other writings which
are made available by or supplied by one party to the other as A
Confidential Information or B Confidential Information, as the case may
be, and all copies and reproductions thereof, shall at the request of
the supplying party, after the later of the date of the termination of
this
21
Agreement, the Control Date or the final transfer to either party of the
assets and businesses of C in accordance with the terms of this Agreement,
be returned to the supplying party or certified in writing by the other
party to having been destroyed unless required to be retained by the
relevant party for legal or regulatory purposes, in which case they may
be retained subject to such party's confidentiality obligations
hereunder. The foregoing shall not apply to any Confidential
Information concerning C which does not include analyses prepared by
the party to which the same would otherwise be delivered hereunder.
10.7 Save as provided in this clause 10.7, neither party shall make any
disclosure or public announcement concerning the Proposed Acquisition
or the existence of this Agreement without the prior written consent of
the other party. Where a party reasonably determines that an
announcement or disclosure concerning the Proposed Acquisition or A
Confidential Information or B Confidential Information is required by
law, by a rule of a stock exchange on which its shares are listed or
traded or by a governmental authority or other authority with relevant
powers, the announcement or disclosure shall be made after consultation
with the other party after taking into account the other party's
reasonable requirements as to its timing, consent and manner of making
or dispatch.
11. ASSIGNMENT
Neither party shall have the right to assign its rights or obligations
under this Agreement to any other person, except majority-owned
subsidiaries, without the prior written consent of the other party.
Such consent shall not be unreasonably withheld in the case where a
party desires to use a less than majority-owned entity to take title to
the assets and businesses located in a particular country.
Notwithstanding any assignment permitted under this clause 11, the
assigning party shall continue to be responsible for any obligations
under this Agreement so assigned by such party.
12. NOTICES
All notices, requests or other communications hereunder shall be in
writing, clearly marked "Confidential", and shall be deemed to have
been duly delivered if delivered personally or by telecopier or sent by
registered or certified mail, postage prepaid, return receipt
requested, to the parties at their respective addresses, as follows:
If to A: Xx. Xxxxx Xxxx
Chairman and Chief Executive Officer
L'Air Liquide, S.A.
00, Xxxx x'Xxxxx
00000 Xxxxx Cedex 07
France
With a copy to: Xx. Xxxxxxx Xxxxxxxxxx
Legal Manager
L'Air Liquide, S.A.
22
00 Xxxx x'Xxxxx
00000 Xxxxx Xxxxx 00
Xxxxxx
If to B Xx. Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
Air Products and Chemicals, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
X.X.X.
With a copy to: Mr. W. Xxxxxxx Xxxxx
Vice President and General Counsel
Air Products and Chemicals, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
X.X.X.
13. NO PARTNERSHIP OR AGENCY
Nothing in this Agreement shall be deemed to constitute a partnership
between the parties to it nor constitute any party the agent of another
party for any purpose.
14. EXPENSES
The parties agree to share equally between them the costs and expenses
incurred by each of them in relation to:
14.1 the Offer (to the extent that such costs and expenses are of the type
and at a rate customarily incurred in, and payable following
announcement of, a public takeover in the UK, including break fees
payable to C, if any), but excluding the costs and expenses referred to
in clause 4.3 and the fees of any external financial, legal or other
advisors and any internal costs or expenses incurred by the parties;
14.2 any costs or expenses resulting from any actions or proceedings by
third parties which may be threatened or commenced relating to the
Proposed Acquisition or the Reconstruction;
14.3 the process of allocating the assets and businesses of the C Group
(including any related costs, including Tax, incurred in the C Group or
Bidco as the result thereof); and
14.4 the Tax costs (net of any Tax benefits) arising directly or indirectly
in respect of, by reference to or in consequence of (i) the
Reconstruction and the transactions contemplated thereby (and for the
avoidance of doubt such costs and benefits shall not include any
arising to A or B individually), and (ii) any asset disposition
referred to in clauses 7.7.1 or 7.7.2.
23
15. TERMINATION
15.1 Except as provided in clause 15.2, this Agreement shall terminate on
[*] unless:
15.1.1 the Offer has become or been declared unconditional in all
respects on or before [*], in which case it shall not
terminate; or
15.1.2 the Offer has not lapsed or been withdrawn by such date in
which case this Agreement will terminate on such Offer lapsing
or being withdrawn after that date but shall not terminate if
the Offer becomes or is declared unconditional in all respects
after such date.
15.2 If, prior to [*] the Offer in any form has lapsed pursuant to
Rule 12 of the City Code (or as a result of any condition of the Offer
being invoked where there has been an occurrence falling within the
provisions of Rule 12) and at [*] the parties are awaiting any
decision of a Regulatory Authority in respect thereof before making a
new offer, this Agreement shall not terminate until the later of:
15.2.1 the expiry of the period allowed by the City Code for the
making of the new offer without such new offer being made; and
15.2.2 the date the new offer lapses or is withdrawn.
For the avoidance of any doubt, if the new offer becomes or is declared
unconditional in all respects this Agreement shall not terminate.
15.3 Termination of this Agreement shall not affect the parties' accrued
rights and obligations at the date of termination.
15.4 The provisions of clauses 1, 10, 12, 14, 15, 17, 18, 19 and 20 shall
survive any termination of this Agreement as shall the provisions of
Acquisition Agreement One.
16. FURTHER ASSURANCES
16.1 Subject to the provisions of the Agreement, A and B shall use their
reasonable endeavours (and taking into account the relevant tax
implications) to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under any
applicable law of a relevant jurisdiction to consummate the Proposed
Acquisition, the Reconstruction and the matters related thereto.
16.2 A and B agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other
actions as may be reasonably necessary or desirable in order to
consummate or implement expeditiously the Proposed Acquisition, the
Reconstruction and the matters related thereto and further agree to
discuss in good faith any matters arising in connection therewith.
16.3 With respect to A or B's home country Tax treatment of Bidco, C and any
C Group member, and the transactions contemplated hereunder (but, in
the case of each party, with
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
24
respect to the assets and businesses of C only to the extent that those
assets and businesses were allocated to such party), A shall be
entitled to make any and all necessary or appropriate Tax filings and
Tax elections in France, and B shall be entitled to make any and all
necessary or appropriate Tax filings and Tax elections in the United
States; and both parties will reasonably cooperate with each other in
making any such Tax filings or elections and neither party shall
unreasonably withhold any consents with respect thereto, it being the
intent hereunder that neither party will suffer any Tax costs due to
the Tax filings or elections made by the other in its home country or
if any such Tax costs are identified the parties shall reach a mutually
satisfactory agreement on how to proceed.
17. NO THIRD PARTY RIGHTS
This Agreement is intended solely for the benefit of A and B and their
respective Affiliates and is not intended to confer any benefits upon,
or create any rights in favour of, any other entity or person.
18. ENTIRE AGREEMENT; AMENDMENT
18.1 With the exception of Acquisition Agreement One, which shall remain in
full force and effect, and any agreement between the parties expressed
to be supplemental to this Agreement, this Agreement constitutes the
entire agreement between the parties with respect to the subject matter
of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect
to the subject matter of this Agreement.
18.2 This Agreement shall not be amended or modified unless such amendment
or modification is set forth in a writing duly executed by the parties'
respective authorised representatives.
19. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by the laws of England. In connection
with any action, suit or proceeding arising in connection with this
Agreement or any transaction contemplated hereby, A and B each: (i)
agree that either party may bring a suit, action or other legal
proceeding against the other party only in a court of record of
England; (ii) consent to the exclusive jurisdiction over it of any such
court in any such suit, action or proceeding, (iii) waive any
objections it may have to the venue of any such court in any such suit,
action or proceeding, and (iv) consent to service of process upon it by
any appropriate method under the laws or rules of the jurisdiction in
which such suit, action or proceeding is commenced.
25
20. INJUNCTION FOR BREACH
If either party shall breach any of its obligations hereunder,
including without limitation those relating to maintaining the
confidentiality of, or the use of, the A Confidential Information or
the B Confidential Information, as the case may be, in recognition of
the irreparable harm that would be incurred by the other party, such
other party shall, in addition to its claim for damages incurred or any
other legal remedies available to it, be entitled to an injunction
and/or specific performance with respect to any such breach.
IN WITNESS WHEREOF, the parties hereto by their duly authorised
representatives have executed this Agreement on the day and year first
above written.
L'AIR LIQUIDE, S.A.
By: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Chairman and Chief Executive Officer
AIR PRODUCTS AND CHEMICALS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
26
SCHEDULE 1
----------
[ * ] are sold at market value
This is deducted from the total price and the remainder is applicable to gases
business.
EXAMPLE
Total business value at [ * ] [ * ]
other incl options [ * ]
Debt [ * ]
[ * ]
[ * ] [ * ]
[ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
GBPMM C% Estimated EBIT Value
Ownership EBIT Multiple
--------------------- ---------------- -------------- ----------------- ----------------------
UK [ * ] [ * ]
--------------------- ---------------- ----------------- ----------------------
Ireland [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Subtotal [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
US [ * ] [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Australia Gases [ * ] [ * ] [ * ] [ * ]
--------------------- ---------------- ----------------- ----------------------
New Zealand [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
BP Project [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Subtotal [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
TOTAL [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Canada [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Other Americas:
Chile [ * ]
Colombia [ * ]
Venezuela [ * ]
Brazil [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Subtotal [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Other Europe:
Poland [ * ]
Russia [ * ]
Cyrostar [ * ]
Turkey [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Subtotal [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Africa [ * ] [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Japan [ * ] [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Asia & JV's
Singapore [ * ]
Hong Kong [ * ]
Malaysia [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Subtotal [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Taiwan [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Philippines [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Indonesia [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Korea [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Thailand [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
China 100%
--------------------- ---------------- -------------- ----------------- ----------------------
China 50%
--------------------- ---------------- -------------- ----------------- ----------------------
Subtotal [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Xxxxx [ * ] [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
India [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Pakistan [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Bangladesh [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Subtotal [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
TOTAL 2 [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
Unallocated 3 [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
GRAND TOTAL (1 + 2 + 3) [ * ] [ * ] [ * ]
--------------------- ---------------- -------------- ----------------- ----------------------
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
27
Schedule 2
----------
Designation of Primary Party
----------------------------
Businesses Primary party
---------- -------------
[*] [*]
[*] [*]
[*]
XXXXX Business [*]
Cryostar Business [*]
[*] [*]
[*] [*]
Geographies
-----------
UK & Ireland Allocated to A
United States [*]
Australia/N. Zealand
(including BP Project) Allocated to B
Canada [*]
S. America (excluding Brazil) [*]
Brazil [*]
Africa [*]
Poland, Russia & Turkey [*]
Singapore, Hong Kong,
Malaysia, JV's [*]
Pakistan/Bangladesh [*]
India [*]
Other Asia JV's, excluding
Thailand + China + Taiwan [*]
Taiwan [*]
Thailand [*]
China [*]
Japan [*]
The following projects are scheduled to be split 50/50: [*]
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
28
Schedule 3
Allocation Process Timetable
(clause 7 of Agreement)
Date Event
---- -----
1. Control Date ("CD") Process commenced to develop the
parties' respective valuations for
those countries or regions referred to
in clause 7.3
2. By: CD + 30 The primary party designated on
schedule 2 in respect of each country
or region delivers its value of each
such country or region to the other
party.
[Note 1] With respect to countries or regions
for which no primary party is agreed,
either party may become the primary
party by delivering its value for any
such country or region to the other
party by CD + 30 (if both parties
deliver a value in respect of the same
country or region, the party delivering
the highest value will be deemed the
primary party in respect thereof).
3. By: CD + 40* [Note 2] The other party may deliver to the
primary party a value primary party in
respect of any country or region.
4. By: CD + 50* [Note 3] If any notices are delivered under 3
above, the primary party in respect of
each country or region covered by such
notice has the right to accept or reject
the increased value set forth therein
for such country or region.
Note 1. If no values are provided for a country or region in respect
of which no primary party is agreed, such country or region
is divested or shared between the parties on an equal basis.
Note 2. If no notice of increased value is delivered, the country or
is allocated to the primary party at such party's valuation
delivered under paragraph 2.
Note 3. If a notice of increased value is delivered and the primary party
(i) accepts the increased value, the country or region is allocated
to the primary party at such increased value or (ii) rejects such
increased value, the country or region is allocated to the other
party at such increased value.
--------
* In each case, the additional 10 day notice period commences upon delivery
of the relevant notice referred to in the previous clause.
29
Schedule 4
Bidding Example
Primary
Party [ * ] Bid/Match [ * ] Bid/Match Total
----- ----- --------- ----- --------- -----
US & UK (1) [ * ] [ * ] [ * ] [ * ]
Australia, New Zealand (1) [ * ] [ * ] [ * ] [ * ]
Canada, South America (2) [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
JV's (3) [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
Poland, Russia, Turkey (3) [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
Japan (4) [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
Africa, India, Others (5) [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ]
[ * ] [ * ] [ * ]
(1) Not subject to bid process; reflects only a hypothetical allocation for
purposes of this schedule.
(2) [ * ] Bids [*]; [ * ] outbids by more than [*]; allocated to [ * ] because
[ * ] does not match.
(3) [ * ] Bids; [ * ] does not bid; allocated to [ * ].
(4) [ * ] Bids [*]; [ * ] outbids by more than [*]; [ * ] matches;
allocated to [ * ].
(5) purchase price [ * ] - US, UK & Group II Countries [ * ] = Africa,
India & Others [ * ].
(6) value is equalized in accordance with clause 7.6 at this stage.
-------------------
*This information has been omitted pursuant to a Request for Confidential
Treatment and such information has been filed separately with the Securities
and Exchange Commission.
30
