EXECUTION COPY
EXHIBIT 2.1
Note: Pursuant to a request submitted to the Securities and Exchange Commission
for confidential treatment, portions of the LOX/LIN/LAR Products Supply
Agreement included as Exhibit K and portions of the Gaseous Helium Supply
Agreement included as Exhibit M-1 to the Asset Purchase Agreement were omitted.
The omitted information is marked with brackets and asterisks [**]. The omitted
information has been filed separately with the Securities and Exchange
Commission.
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ASSET PURCHASE
AGREEMENT
BY AND BETWEEN
AIRGAS, INC.
AND
THE BOC GROUP, INC.
-----------------------------------
DATED AS OF MARCH 31, 2004
-----------------------------------
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS................................................................................ 1
SECTION 2. TRANSFER OF PURCHASED ASSETS; ASSUMPTION OF LIABILITIES.................................... 21
2.1 Purchased Assets........................................................................... 21
2.2 Excluded Assets............................................................................ 23
2.3 Assumed Liabilities........................................................................ 25
2.4 Excluded Liabilities....................................................................... 26
2.5 Container Deposits......................................................................... 28
2.6 Clarification Relating to Acquired Contracts............................................... 28
SECTION 3. PURCHASE PRICE; ADJUSTMENT................................................................. 28
3.1 Purchase Price............................................................................. 28
3.2 Post-Closing Payment....................................................................... 29
3.3 Allocation................................................................................. 31
SECTION 4. CLOSING.................................................................................... 32
4.1 Closing.................................................................................... 32
4.2 Certain Closing Deliveries by the Seller................................................... 33
4.3 Certain Closing Deliveries by the Purchaser................................................ 34
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLER............................................... 35
5.1 Corporate Organization..................................................................... 35
5.2 Corporate Authority and Binding Obligation................................................. 35
5.3 No Violation............................................................................... 36
5.4 Governmental Approvals..................................................................... 36
5.5 Financial Statements....................................................................... 36
5.6 No Business Material Adverse Change........................................................ 37
5.7 Conduct of the Packaged Gas Business....................................................... 37
5.8 [Intentionally Omitted].................................................................... 37
5.9 Purchased Assets........................................................................... 37
5.10 Litigation and Proceedings................................................................. 39
5.11 Accounts Receivable........................................................................ 39
5.12 Purchased Inventory........................................................................ 39
5.13 Intellectual Property...................................................................... 40
5.14 Real Property.............................................................................. 41
5.15 Permits.................................................................................... 42
5.16 Agreements................................................................................. 42
5.17 Customers.................................................................................. 43
5.18 Employees.................................................................................. 43
5.19 Compliance with Laws....................................................................... 44
5.20 Environmental.............................................................................. 44
5.21 Taxes...................................................................................... 45
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5.22 Full Disclosure............................................................................ 45
5.23 Disclaimer of Warranties................................................................... 45
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................................ 46
6.1 Corporate Organization..................................................................... 46
6.2 Corporate Authority........................................................................ 46
6.3 No Violation............................................................................... 46
6.4 Governmental Approvals..................................................................... 47
6.5 Financing.................................................................................. 47
6.6 Absence of Litigation...................................................................... 47
SECTION 7. FURTHER COVENANTS.......................................................................... 47
7.1 Access to Information and Documents; Post-Closing Cooperation.............................. 47
7.2 Transition................................................................................. 48
7.3 Definitionally Purchased and Excluded Assets............................................... 50
7.4 Assistance Relating to Warranty Rights..................................................... 50
7.5 Exercise of Rights of First Refusal........................................................ 50
7.6 Confidentiality Agreements................................................................. 50
7.7 Non-Competition............................................................................ 53
7.8 Non-Solicitation by the Seller of the Purchaser's Employees................................ 56
7.9 Consents and Approvals, etc................................................................ 56
7.10 Accounts Receivable; Collections and Payments.............................................. 58
7.11 Conduct of Packaged Gas Business Prior to the Closing Date................................. 59
7.12 Exclusivity................................................................................ 60
7.13 Agreements................................................................................. 60
7.14 Excluded Containers........................................................................ 61
7.15 Removal of Excluded Assets................................................................. 61
7.16 The Seller's Trademarks.................................................................... 61
7.17 Access and Cooperation..................................................................... 62
7.18 Tax Cooperation and Exchange of Information................................................ 63
7.19 Litigation................................................................................. 63
7.20 Acquisition Agreements..................................................................... 63
7.21 Closing Conditions......................................................................... 64
7.22 Instruments of Transfer.................................................................... 64
7.23 Assumption of Liabilities by the Purchaser................................................. 64
7.24 Title Commitments.......................................................................... 65
7.25 Joint Use Property......................................................................... 65
7.26 Shared Sites............................................................................... 65
7.27 Environmental Assessment Reports........................................................... 65
7.28 Schedules.................................................................................. 66
7.29 Financing.................................................................................. 66
7.30 Other Agreements Related to the Excluded Businesses........................................ 66
7.31 Interim Financial Statements............................................................... 66
7.32 Ticking Fee................................................................................ 66
7.33 Finalization of Certain Enabling Agreements................................................ 67
7.34 Duty to Notify............................................................................. 67
7.35 Additional Real Property Matters........................................................... 67
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SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER....................................... 67
8.1 Representations and Warranties............................................................. 67
8.2 Covenants and Agreements................................................................... 68
8.3 Compliance with Section 7.2................................................................ 68
8.4 No Business Material Adverse Effect........................................................ 68
8.5 Officer's Certificate...................................................................... 68
8.6 Litigation................................................................................. 68
8.7 Regulatory Consents........................................................................ 68
8.8 FIRPTA Affidavit........................................................................... 68
8.9 Environmental Transfer Laws................................................................ 68
8.10 Closing Deliverables....................................................................... 69
8.11 Interim Financial Statements............................................................... 69
8.12 Financing.................................................................................. 69
8.13 Key Transition Items....................................................................... 69
8.14 Readiness to Assume Operational Control.................................................... 69
SECTION 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER.......................................... 70
9.1 Representations and Warranties............................................................. 70
9.2 Covenants and Agreements................................................................... 70
9.3 Officer's Certificate...................................................................... 70
9.4 Litigation................................................................................. 70
9.5 Regulatory Consents........................................................................ 70
9.6 Environmental Transfer Laws................................................................ 70
9.7 Closing Deliverables....................................................................... 71
SECTION 10. EMPLOYEES.................................................................................. 71
10.1 Transfer of Employees...................................................................... 71
10.2 Transferred Employees...................................................................... 73
10.3 Employee Benefits.......................................................................... 74
10.4 COBRA...................................................................................... 75
10.5 Unemployment Insurance..................................................................... 75
10.6 Payroll Tax................................................................................ 75
10.7 Cooperation................................................................................ 76
10.8 WARN....................................................................................... 76
10.9 Collective Bargaining Arrangements......................................................... 76
SECTION 11. BROKERAGE.................................................................................. 77
SECTION 12. EXPENSES................................................................................... 77
SECTION 13. TRANSFER TAXES AND RECORDING EXPENSES...................................................... 77
13.1 Transfer and Recording Taxes............................................................... 77
13.2 Real and Personal Property Taxes........................................................... 78
13.3 Tax Returns................................................................................ 78
SECTION 14. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION............................................... 78
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14.1 Survival of Representations and Warranties................................................. 78
14.2 Indemnification of the Purchaser........................................................... 78
14.3 Duration of Indemnification of the Purchaser............................................... 79
14.4 Limitations on Indemnification of the Purchaser............................................ 80
14.5 Indemnification of the Seller by the Purchaser............................................. 82
14.6 Duration of Indemnification of the Seller.................................................. 83
14.7 Limitation on Indemnification of the Seller................................................ 83
14.8 Procedure for Indemnification.............................................................. 84
14.9 Payment Limitation......................................................................... 84
14.10 Exclusive Remedy........................................................................... 85
14.11 Exceptions................................................................................. 85
SECTION 15. TERMINATION OF AGREEMENT................................................................... 85
15.1 Events of Termination...................................................................... 85
15.2 Consequences of Termination................................................................ 86
SECTION 16. CONSENT TO JURISDICTION; SERVICE OF PROCESS; DISPUTE RESOLUTION; WAIVER OF JURY TRIAL...... 87
16.1 General Disputes........................................................................... 87
16.2 Factual Environmental Disputes............................................................. 88
SECTION 17. ENFORCEMENT OF CERTAIN PROVISIONS.......................................................... 89
SECTION 18. BULK SALES LAW............................................................................. 89
SECTION 19. PUBLIC ANNOUNCEMENTS....................................................................... 90
SECTION 20. NOTICES.................................................................................... 90
SECTION 21. CONSTRUCTION............................................................................... 91
SECTION 22. EXTENSIONS AND XXXXXXX..................................................................... 91
SECTION 23. ENTIRE AGREEMENT........................................................................... 92
SECTION 24. GOVERNING LAW.............................................................................. 92
SECTION 25. TRANSFERABILITY; NO THIRD PARTY BENEFICIARIES.............................................. 92
SECTION 26. SEVERABILITY............................................................................... 92
SECTION 27. COUNTERPARTS............................................................................... 92
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LIST OF SCHEDULES
Schedule Description
-------- ------------
DEF-1 Knowledge of the Purchaser
DEF-2 Knowledge of the Seller
DEF-3 Known Environmental Liabilities
DEF-4 Permitted Liens
DEF-5 Retained Real Property
DEF-6 Joint Use Property
DEF-7 CSC Employees
DEF-8 Sales Employees
DEF-9 Third Party Intellectual Property
2.1(c)(i) Purchased Motor Vehicles and Tractors (Excluding Cars and Forklifts)
2.1(c)(ii) Purchased Tube Trailers
2.1(c)(iii) Purchased Cars
2.1(c)(iv) Purchased Bulk Tanks
2.1(k) Excluded Accounts Receivable
2.2(b) Excluded Books and Records
2.2(e)(i) Certain Excluded Equipment
2.2(e)(ii) Retained Equipment
2.2(f)(i) Excluded Inventory
2.2(f)(ii) Retained Inventory
2.2(g) Excluded Software Applications
2.2(h) Excluded Contracts
2.2(i) Excluded Permits
2.2(p) Excluded Claims, Causes of Action and Guarantee Rights
2.2(u) Certain Excluded Assets
2.3(c) Assumed Tax Liabilities
5.3 Consents
5.4 Seller Governmental Approvals
5.5(a)(i) Financial Statements
5.5(a)(ii) Bulk Gas Volumes
5.6 No Business Material Adverse Change
5.7 Conduct of the Packaged Gas Business
5.9(a)(i) Material Purchased Equipment
5.9(a)(ii) Title Exceptions; Condition Exceptions
5.9(a)(iii) Assets Required to conduct the Packaged Gas Business
5.9(b)(i) Container Transfers
5.9(b)(ii) Possession of Containers
5.9(b)(iii) Aggregate Number of Containers
5.9(b)(iv) Net Write-Ons and Write-Offs in Aggregate Balance of Containers
5.10 Litigation and Proceedings
5.12 Purchased Inventory
5.13(a) Purchased Intellectual Property
5.13(b) IP Licenses
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Schedule Description
-------- ------------
5.13(d) Necessary Intellectual Property
5.14(a) Owned Real Property
5.14(b) Leased Real Property; Leased Real Property Exceptions
5.14(d) No Options
5.15 Permits
5.16(a) Certain Material Contracts
5.16(c) Material Contract Notices
5.17 Material Customers
5.18(a) Employee Benefit and Compensation Plans
5.18(b) Multiemployer Plans
5.18(d) Labor Relations
5.19 Compliance with Laws
5.20 Environmental
5.21 Taxes
6.4 Purchaser Governmental Approvals
7.2(d) Stable Environment
7.7(a) Seller Non-Compete Exclusions
7.7(b)(i) Acquired Competitors - Divestiture
7.7(b)(ii) Acquired Competitors - No Divestiture
7.11 Conduct of Packaged Gas Business Prior to Closing Date
7.11(c)(i) Ordinary Course of Business Collection Practices
7.11(c)(ii) Collection Practices Outside of the Ordinary Course of Business
7.16(a) Marks
7.26 Shared Sites
10.1(d) Employee Allocation Procedures
10.1(g)(iii) Severance Payment/Transition Payment Calculation Formulas
10.1(i) Employee Information
10.2 Approved Leave
10.9(b) Assumed Collective Bargaining Agreements
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LIST OF EXHIBITS
Exhibit A Form of Intellectual Property License
Exhibit B Form of Long-Term Cylinder Supply Agreement
Exhibit C Form of Bill of Sale (Purchaser Subsidiaries)
Exhibit D-1 Form of Purchaser Real Property Leases
Exhibit D-2 Term Sheet for Seller Real Property Lease (Miamiville, Ohio)
Exhibit E Form of Seller Parent Letter
Exhibit F Form of Real Property Lease Assignment
Exhibit G Financial Statements Carve-Out Methodology
Exhibit H Accounting Policies and Procedures
Exhibit I Form of Bill of Sale, Assignment and Assumption Agreement
Exhibit J-1 Form of Purchaser Real Property Sublease
Exhibit J-2 Form of Seller Real Property Sublease
Exhibit K Form of LOX/LIN/LAR Products Supply Agreement
Exhibit L [Intentionally Omitted]
Exhibit M-1 Form of Gaseous Helium Product Supply Agreement
Exhibit M-2 Form of Liquid Helium Product Supply Agreement
Exhibit N Term sheet for Hydrogen Chloride Product Supply Agreement
Exhibit O Term sheet for Rare Gas Supply and Tolling Agreement
Exhibit P Term sheet for Hydrogen Product Supply Agreement
Exhibit Q Post-Closing Payment Methodology
Exhibit R Transition Plan
Exhibit S Form of Helium Allocation Agreement
Exhibit T Form of Helium Supply Agreement Addendum
Exhibit U Form of Amendment to LOX/LIN/LAR Product Supply Agreement
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of March 31, 2004 (this
"Agreement"), by and between THE BOC GROUP, INC., a Delaware corporation (the
"Seller"), and AIRGAS, INC., a Delaware corporation (the "Purchaser").
WHEREAS, the Seller owns or leases all of the properties, assets and
goodwill used by the Seller in connection with the Packaged Gas Business (as
hereinafter defined);
WHEREAS, the Purchaser desires to purchase from the Seller, and the
Seller desires to sell to the Purchaser, the Purchased Assets (as hereinafter
defined), subject to the liabilities and obligations of the Packaged Gas
Business assumed by the Purchaser, upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, and intending to be legally bound hereby, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS
The terms defined in this Section 1 shall have the following meanings
for the purposes of this Agreement:
"Accounts Receivable" has the meaning set forth in Section 2.1(k)
hereof.
"Acquired Competitor" shall have the meaning set forth in Section
7.7(b) hereof.
"Acquired Contracts" has the meaning set forth in Section 2.1(h)
hereof.
"Acquiring Competitor" means a Third Party who, directly or indirectly,
engages in a Competing Business.
"Acquisition Proposal" has the meaning set forth in Section 7.12
hereof.
"Action" means any action, claim, suit, demand, complaint,
investigation or other proceeding (at law, in equity or admiralty or otherwise),
including any action, suit or demand for personal injury or property damage.
"Affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with such Person. For purposes of this definition, (i) the term
"controls," "is controlled by," or "is under common control with" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise and (ii) a joint
venture shall not be deemed an Affiliate of a Person to the extent such Person
does not possess, directly or indirectly, the power to appoint a majority of the
board (or equivalent body) of such joint venture or otherwise have the ability
to control such joint venture.
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"Agreed Allocation Schedule" has the meaning set forth in Section
3.3(c) hereof.
"Agreement" has the meaning set forth in the preamble hereto.
"Aligned Employees" means certain employees of the Seller who render
services with respect to the Packaged Gas Business and are set forth on Exhibit
A to the Employee Side Letter, which Exhibit A shall be updated by the Seller,
subject to Purchaser approval of any additions (other than employees hired to
fill an open position in the Ordinary Course of Business), at least thirty-five
(35) days prior to the Closing and periodically as the Purchaser may reasonably
request through the Closing to include deletion of any Aligned Employee whose
employment terminates prior to the Closing Date for any reason and to add, as
applicable, new hires, transferees and other persons designated as Aligned
Employees in accordance with this Agreement or as otherwise agreed between the
Seller and the Purchaser.
"Allocation Objection Notice" has the meaning set forth in Section
3.3(b) hereof.
"Amendment to LOX/LIN/LAR Product Supply Agreement" means the Amendment
to LOX/LIN/LAR Product Supply Agreement, substantially in the form attached as
Exhibit U hereto.
"Annualized Post-Integration EBITDA" means the amount equal to the
Purchaser's EBITDA for the six- (6-) month period ending September 30, 2005,
annualized on a billing day, calculated in accordance with the Post-Closing
Payment Methodology.
"Assumed Agreement" has the meaning set forth in Section 10.9(b)
hereof.
"Assumed Liabilities" has the meaning set forth in Section 2.3 hereof.
"Assuming Party" has the meaning set forth in Section 14.8 hereof.
"Benchmark Multiple" has the meaning set forth in Section 7.9(d)(ii)
hereof.
"Bill of Sale, Assignment and Assumption Agreement" has the meaning set
forth in Section 4.2(j) hereof.
"Bills of Sale" has the meaning set forth in Section 4.2(c) hereof.
"Binding Allocation Schedule" has the meaning set forth in Section
3.3(b) hereof.
"Bulk Gases Business" means the Seller's business of (a) manufacturing,
purchasing, preparing, purifying, transfilling, storing, packaging, marketing,
distributing, selling and/or supplying liquid industrial gases in liquid
tankers, and cryogenic storage and other related equipment and related services
(specifically excluding Microbulk and portable dewars), or onsite plants
(including gaseous product), including hydrogen, oxygen, nitrogen, argon, carbon
dioxide, and helium, and (b) supplying gaseous helium and hydrogen in tube
trailers.
"Business Day" means any day other than Saturday, Sunday, or a day on
which banks in the State of New York are authorized or obligated by Law or
executive Order to be closed.
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"Business Material Adverse Effect" means any event, circumstance, fact,
development, change or effect that is materially adverse to the Packaged Gas
Business and the Purchased Assets, taken as a whole; provided, however, that
none of the following shall be taken into account in determining whether there
has been a Business Material Adverse Effect: (i) a decline in the market price
of any of the products of the Packaged Gas Business, (ii) an increase in the
price of raw materials used in the Packaged Gas Business, (iii) general economic
conditions, (iv) conditions generally affecting the industry in which the
Packaged Gas Business operates, and not affecting the Packaged Gas Business in a
disproportionate manner, or, if affecting the Packaged Gas Business in a
disproportionate manner, taking into account only the impact of the
disproportionate effect, (v) any action required or permitted by this Agreement
or (vi) the announcement or pendency of this Agreement, the other Transaction
Documents or the transactions contemplated hereby or thereby. Subject to the
foregoing exclusions, for the purpose of determining whether a Business Material
Adverse Effect has occurred with respect to the Interim Financial Statements (as
if calculated on an annualized basis), or with respect to the financial
performance of the Packaged Gas Business for purposes of Section 8.1, a Business
Material Adverse Effect shall be deemed to have occurred if (x) the annual
revenues of the Packaged Gas Business are less than $240,000,000 or (y) the
annual EBITDA-PGB is less than $25,000,000 (such annual revenue and annual
EBITDA-PGB being calculated based on the Interim Financial Statements (as if
calculated on an annualized basis) and prepared in accordance with the Valuation
Principles). For the avoidance of doubt, nothing in the preceding sentence shall
be construed to be relevant to the determination of whether a Business Material
Adverse Effect has occurred for any reason except with respect to the Interim
Financial Statements (as if calculated on an annualized basis) or the financial
performance of the Packaged Gas Business for purposes of Section 8.1.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. 9601 et seq.), as amended, and any legally
enforceable rules, regulations and standards issued thereunder.
"Change of Control Transaction" means with respect to the Seller Parent
or the Purchaser, as the case may be, any of the following transactions (i) the
direct or indirect sale, lease, exchange or other transfer of all or
substantially all of the assets of the Seller Parent or the Purchaser, as the
case may be, to any Person or Group of Persons, (ii) the merger or consolidation
of the Seller Parent or the Purchaser, as the case may be, with or into another
Person with the effect that the then existing stockholders of the Seller Parent
or the Purchaser, as the case may be, hold fifty percent (50%) or less of the
combined voting power of the then outstanding securities ordinarily having the
right to vote in the election of directors or their equivalents of (A) the
surviving Person of such merger or (B) the Person resulting from any such
consolidation or its ultimate parent, (iii) the replacement of a majority of the
board of directors of the Seller Parent or the Purchaser, as the case may be,
over a two-year period, from the directors who constituted the board of
directors at the beginning of such period, and such replacement shall not have
been approved by the board of directors of the Seller Parent or the Purchaser,
as the case may be, as constituted at the beginning of such period, or (iv) a
Person or Group of Persons shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have become
the beneficial owner (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of securities of the Seller
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Parent or the Purchaser, as the case may be, representing fifty percent (50%) or
more of the combined voting power of the then outstanding securities of the
Seller Parent or the Purchaser, as the case may be, ordinarily having the right
to vote in the election of directors or (v) with respect to the Seller Parent
only, any transaction that is subject to the UK Takeover Code.
"Claim Notice" means the notice defined in Section 14.8 hereof.
"Closing" means the closing defined in Section 4.1 hereof.
"Closing Date" means the date of closing as provided in Section 4.1
hereof.
"Closing Date Payment" has the meaning set forth in Section 3.1(a)
hereof.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" means the Internal Revenue Code of 1986, as amended (including
any successor code), and the rules and regulations promulgated thereunder.
"Competing Business" means any business in the United States with
respect to (a) the preparing, transfilling, packaging, marketing, distribution,
sale and supply (and in the case of acetylene, also the manufacture) of
pressurized industrial gases and specialty gases in pressurized cylinders and
the Microbulk supply mode of gases, (b) the preparing, transfilling, packaging,
marketing, distribution, sale and supply of pressurized gas and liquid process
chemicals and (c) the distribution, marketing, sale and supply as a reseller,
distributor or lessor of equipment (including welding equipment) and materials
necessary for or related to the use of packaged gases. Notwithstanding the
foregoing, a Competing Business shall not include any Excluded Business.
"Competing Business Sale" has the meaning set forth in Section 7.7(d).
"Condition" means a condition that results in or otherwise relates to
an Environmental Liability.
"Consent" means any consent, approval, Order, ratification,
authorization or action of, or any filing, registration or declaration with, or
any notice to any Person.
"Container Deposits" has the meaning set forth in Section 2.2(t)
hereof.
"Containers" means cylinders, dewars, lecture bottles, bulk tanks and
all other containers for gases or liquids.
"Contracts" has the meaning set forth in Section 2.1(h) hereof.
"Copyrights" has the meaning set forth in the definition of
"Intellectual Property" contained in this Section 1.
"Covered Claim" has the meaning set forth in Section 14.8(a) hereof.
5
"Credit Agreement" means the Tenth Amended and Restated Credit
Agreement among Airgas, Inc., as borrower, Bank of America, N.A., as U.S. Agent,
Canadian Imperial Bank of Commerce, as Canadian Agent, and the other parties
thereto, dated as of July 30, 2001, as amended.
"CSC Employees" means certain employees of the Seller's Customer
Service Center who (i) render services with respect to the Packaged Gas
Business, (ii) are not Aligned Employees, Retained Employees, Sales Employees or
Unaligned Employees and (iii) are set forth on Schedule DEF-7 hereto.
"Current Fiscal Year" has the meaning set forth in Section 10.3(b)
hereof.
"Disposal" means any discharge, deposit, injection, dumping, spilling,
leaking or placing of any material into the environment.
"Dispute" has the meaning set forth in Section 16.1(a) hereof.
"Divestiture" has the meaning set forth in Section 7.9(c) hereof.
"DOJ" has the meaning set forth in Section 5.4 hereof.
"Dollar", "dollar" and "$" shall be references to United States
dollars.
"EBITDA" means, with respect to any Person, for any period, the sum of
(i) net income (or loss) of such Person and its consolidated subsidiaries for
such period, plus (ii) all interest expense of such Person and its consolidated
subsidiaries for such period, plus (iii) all charges against income of such
Person and its consolidated subsidiaries for such period for federal, state and
local taxes, plus (iv) all depreciation expense of such Person and its
consolidated subsidiaries for such period, plus (v) all amortization expense of
such Person and its consolidated subsidiaries for such period. For purposes of
this definition, all extraordinary items will be calculated in accordance with
the Post-Closing Payment Methodology.
"EBITDA-ARG" means, for any period, an amount equal to (i) revenues of
any assets and/or businesses of the Purchaser subject to a Divestiture for such
period, minus (ii) all cost of goods sold relating to such assets and/or
businesses for such period, minus (iii) all distribution expense of such assets
and/or businesses for such period, minus (iv) all field operating expense of
such assets and/or businesses for such period, adding back (v) all depreciation
expense of such assets and/or business for such period. For purposes of this
definition, all extraordinary items will be calculated in accordance with the
Post-Closing Payment Methodology.
"EBITDA-PGB" means, for any period, an amount equal to (i) revenues of
the Packaged Gas Business for such period, minus (ii) all cost of goods sold of
the Packaged Gas Business for such period, minus (iii) all distribution expense
of the Packaged Gas Business for such period, minus (iv) all field operating
expense of the Packaged Gas Business for such period, adding back (v) all
depreciation expense of the Packaged Gas Business for such period. For purposes
of this definition, all extraordinary items will be calculated in accordance
with the Post-Closing Payment Methodology.
6
"Electronics Business" means the Seller's business of manufacturing,
purchasing, storing, purifying, preparing, transfilling, packaging, marketing,
distributing, selling and/or supplying products (including the sale of
associated gases otherwise included in the Packaged Gas Business and related
equipment), in any physical state, where such products are sold for use to
manufacturers, assemblers, or testers of silicon wafers, semiconductor devices,
compound semiconductor wafers, compound semiconductor devices, photovoltaic
devices, photonic devices, SiGe devices, LCD's and LED's, optical fibers, fiber
optics, or any similar materials or devices.
"Employee" means any Aligned Employee or Unaligned Employee.
"Employee Benefit and Compensation Plans" means all employee benefit
plans, arrangements, policies or programs (whether or not an employee benefit
plan within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), including all pension and profit
sharing, stock based incentive compensation, commission, severance, vacation,
medical, dental, life, disability or other group insurance, welfare benefit,
death benefit and other benefit or compensation plans and all policies
concerning holidays and salary continuation during short absences for illness or
other reasons, in each case maintained by, or contributed to by, the Seller or
its Affiliates for the benefit of the Employees (including any maintained
pursuant to collective bargaining agreements).
"Employee Information" has the meaning set forth in Section 10.1(i)
hereof.
"Employee Side Letter" means the Employee Side Letter, dated as of the
date hereof, between the Seller and the Purchaser.
"Enabling Agreements" means the Rare Gas Supply and Tolling Agreement,
the LOX/LIN/LAR Products Supply Agreement, the Gaseous Helium Product Supply
Agreement, the Liquid Helium Product Supply Agreement, the Hydrogen Chloride
Product Supply Agreement, the Hydrogen Product Supply Agreement, the Long-Term
Cylinder Supply Agreement, the Helium Allocation Agreement, the Helium Supply
Agreement Addendum and the Amendment to LOX/LIN/LAR Products Supply Agreement.
"Encumbered Assets Side Letter" means the Encumbered Assets Side
Letter, dated as of the date hereof, between the Seller and the Purchaser.
"Environmental Laws" means all Laws, in effect as of the Closing, which
address or are related to the pollution or protection of the environment,
including animal and plant life and the protection of human health and safety as
they may be affected by exposure to Hazardous Substances.
"Environmental Liabilities" means all obligations or liabilities
(including obligations or liabilities arising out of legal notices, Actions or
other assertion of obligation or liability), resulting or arising from (a) any
Environmental Law, (b) any Release of, or potential Release of, or exposure to,
any Hazardous Substance, or (c) an enforceable Order issued or imposed under or
pursuant to an Environmental Law. Losses from "Environmental Liabilities"
include: (A) fines, penalties, judgments, awards, settlements, losses, damages,
punitive damages, costs, fees,
7
expenses and disbursements; (B) costs of defense and other responses to any
Action relating to the environment; and (C) financial responsibility for (I)
cleanup costs and injunctive relief, including any Remediation and natural
resource damages, and (II) other compliance or remedial measures.
"Environmental Permit" means any Permit that is authorized or required
pursuant to an Environmental Law.
"Environmental Remediation Liabilities" has the meaning set forth in
Section 14.2(c) hereof.
"ERISA" has the meaning set forth in the definition of "Employee
Benefit and Compensation Plans" contained in this Section 1.
"Excess Post-Integration EBITDA Amount" has the meaning set forth in
Section 3.2(b)(i) hereof.
"Excluded Assets" has the meaning set forth in Section 2.2 hereof.
"Excluded Businesses" means the Liquid Helium Business, the Electronics
Business, the Bulk Gases Business, the Medical Gases Business, the Hospitality
Business, the Rare Gases Business, the New Technology Business and the Wholesale
Welding Hard Goods Business.
"Excluded Containers" has the meaning set forth in Section 2.2(j)
hereof.
"Excluded Equipment" has the meaning set forth in Section 2.2(e)
hereof.
"Excluded Intellectual Property" means any Intellectual Property owned
by the Seller and not used exclusively by the Packaged Gas Business, including
Intellectual Property related to the Excluded Businesses and Intellectual
Property licensed to the Purchaser pursuant to the Intellectual Property
License.
"Excluded Inventory" has the meaning set forth in Section 2.2(f)
hereof.
"Excluded Liabilities" has the meaning set forth in Section 2.4 hereof.
"Expected Closing Date" has the meaning set forth in Section 8.12
hereof.
"Expected Transition Closing Date" has the meaning set forth in Section
8.14 hereof.
"Extension Financing Source Certificate" has the meaning set forth in
Section 8.12 hereof.
"Extension Officer's Certificate" has the meaning set forth in Section
8.12 hereof.
"Factual Environmental Dispute" has the meaning set forth in Section
16.2(a) hereof.
8
"FDA" has the meaning set forth in the definition of "Medical Gases
Business" contained in this Section 1.
"Final Excess Post-Integration EBITDA Amount" has the meaning set forth
in Section 3.2(f) hereof.
"Financial Market Non-Funding Condition" has the meaning set forth in
the definition of "Financial Extension Condition" contained in this Section 1.
"Financial Statements" has the meaning set forth in Section 5.5(a)
hereof.
"Financing Extension Condition" means the lenders under the Credit
Agreement will not fund, or shall not have funded, the purchase of the Purchased
Assets (i) due to any circumstance or condition generally affecting the
availability of bank financing in the United States (any such circumstance or
condition, a "Financial Market Non-Funding Condition") or (ii) for any other
reason that is not the result of any intentional act or omission by management
of the Purchaser (or management of any other Person that is designated by the
Purchaser to purchase the Purchased Assets on the Closing Date) that would be
reasonably expected to cause the lenders under the Credit Agreement not to fund
the purchase of the Purchased Assets (any such circumstance, event or condition,
an "Other Non-Funding Condition").
"FTC" has the meaning set forth in Section 5.4 hereof.
"Gaseous Helium Product Supply Agreement" means the Gaseous Helium
Product Supply Agreement, substantially in the form attached as Exhibit M-1
hereto.
"Governmental Body" means (a) any United States federal, state or local
or foreign government (or political subdivision thereof), (b) any agency or
instrumentality of any such government (or political subdivision thereof), (c)
any non-governmental regulatory or administrative authority, body or other
organization (to the extent that the rules, regulations, standards,
requirements, procedures and Orders of such authority, body or other
organization have the force of Law) and (d) any United States federal, state or
local or foreign court, tribunal, arbitrator or arbitration panel.
"Group of Persons" means any group of Persons acting in concert as a
partnership or other group.
"Hazardous Substance" has the meaning defined in Section 101(14) of
CERCLA, plus oil and petroleum (in any form or derivative), asbestos, PCBs, and
any other substance similarly defined or classified as hazardous or toxic or
potentially hazardous or toxic or a pollutant or contaminant under any
Environmental Law.
"Helium Allocation Agreement" means the Helium Allocation Agreement,
substantially in the form attached as Exhibit S hereto.
"Helium Supply Agreement Addendum" means the Helium Supply Agreement
Addendum, substantially in the form attached as Exhibit T hereto.
9
"Hospitality Business" means the Seller's business of manufacturing,
purifying, purchasing, preparing, transfilling, packaging, storing, marketing,
distributing, selling and/or supplying beverage dispense gases to installed
liquid gas containers, including Microbulk, or by delivery of filled pressurized
cylinders or containers with product in gaseous or liquid form, for beverage
dispensing applications, and any services and/or equipment associated with any
of the foregoing.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"HSR Filing" has the meaning set forth in Section 7.9(c) hereof.
"Hydrogen Chloride Product Supply Agreement" means the Hydrogen
Chloride Product Supply Agreement, on terms substantially similar to those set
forth in the term sheet attached as Exhibit N hereto.
"Hydrogen Product Supply Agreement" means the Hydrogen Product Supply
Agreement, on terms substantially similar to those set forth in the term sheet
attached as Exhibit P hereto.
"Imprinted Containers" has the meaning set forth in Section 7.16(a)
hereof.
"Improvements" has the meaning set forth in Section 5.14(c) hereof.
"Independent Accountant" means one of Deloitte & Touche or Ernst &
Xxxxx, which shall be jointly engaged by, and mutually agreeable to, the
Purchaser and the Seller and shall not be affiliated with the Purchaser or the
Seller.
"Information" has the meaning set forth in Section 7.6(a) hereof.
"Intellectual Property" means all rights in any and all of the
following:
(a) patents, patent applications and inventions, designs
and improvements described and claimed therein, patentable inventions and other
patent rights (including any divisions, continuations, continuations-in-part,
substitutions, or reissues thereof, whether or not patents are issued on any
such applications and whether or not any such applications are modified,
withdrawn, or resubmitted) ("Patents");
(b) trademarks, service marks, trade dress, trade names,
brand names, designs, logos, or corporate names, whether registered or
unregistered, and all registrations and applications for registration thereof,
including the goodwill of the business symbolized thereby or associated
therewith ("Trademarks");
(c) copyrights and mask works, including all renewals and
extensions thereof, copyright registrations and applications for registration
thereof, and non-registered copyrights ("Copyrights");
(d) trade secrets, confidential business information and
other proprietary information, concepts, ideas, designs, processes, procedures,
techniques, technical information,
10
specifications, operating and maintenance manuals, engineering drawings,
methods, know-how, technical data and databases, discoveries, inventions,
modifications, extensions, improvements, and other proprietary rights (whether
or not patentable or subject to copyright, mask work, or trade secret
protection) ("Trade Secrets");
(e) computer software programs, including all source
code, object code, and documentation related thereto ("Software"); and
(f) Internet addresses, domain names, web sites, web
pages and similar rights and items ("Internet Assets").
"Intellectual Property License" means the royalty-free license between
the Seller and the Purchaser, substantially in the form of Exhibit A hereto,
pursuant to which, from and after the Closing Date, the Seller shall license to
the Purchaser and its subsidiaries certain Intellectual Property not included in
the Purchased Intellectual Property.
"Interim Financial Statement Date" has the meaning set forth in Section
5.5(b) hereof.
"Interim Financial Statements" has the meaning set forth in Section
5.5(b) hereof.
"Internet Assets" has the meaning set forth in the definition of
"Intellectual Property" contained in this Section 1.
"IP Licenses" means all licenses, sublicenses and other agreements or
permissions related to the Purchased Intellectual Property.
"Joint Use Property" means all the tangible personal property owned,
leased, used or held for use by the Seller in both the Packaged Gas Business and
any Excluded Business and set forth on Schedule DEF-6.
"Key Transition Item" means each individual action item or group of
action items contained in the Transition Plan that is or are identified by
appropriate legend, mark or other notation as a "Key Item".
"Knowledge of the Purchaser" means the actual knowledge of those
individuals listed on Schedule DEF-1.
"Knowledge of the Seller" means the actual knowledge of those
individuals listed on Schedule DEF-2.
"Known Environmental Liabilities" means, collectively, those (i)
matters set forth on Schedule DEF-3 attached hereto, (ii) matters arising prior
to the Closing and relating to the Packaged Gas Business or the ownership or
operation of the Purchased Assets giving rise to Environmental Liabilities for
which Remediation is required by applicable Environmental Law of which the
Seller or its Affiliates have actual knowledge and (iii) matters arising prior
to the Closing and relating to the Packaged Gas Business or the ownership or
operation of the Purchased Assets giving rise to Environmental Liabilities for
which Remediation is required by
11
applicable Environmental Law that are expressly identified as actual areas of
contamination or areas of concern in any Phase I Report or Phase II Report
conducted pursuant to Section 7.27.
"Law" means any applicable federal, state, local or foreign law
(including principles of common law), statute, ordinance, rule, regulation,
standard, Order, code, holding, requirement or procedure enacted, promulgated,
adopted, enforced or applied by any Governmental Body, all as in effect on the
date hereof and on the Closing Date.
"Leased Real Property" means the land, buildings, structures, fixtures
and other improvements leased by the Seller and used in connection with the
Packaged Gas Business (other than the Retained Real Property), as listed on
Schedule 5.14(b).
"Licensed Intellectual Property" means the Intellectual Property
licensed to the Purchaser pursuant to the Intellectual Property License.
"Liens" means, with respect to any property or property interest
(fixed, personal, real or otherwise), any covenants recorded against the land,
pledges, liens, conditional sales contracts, mortgages, deeds of trust, charges,
encumbrances, transfer restrictions, security interests, leases, licenses,
restrictions, easements, declarations, rights-of-way, servitudes, encroachments,
survey defects, zoning restrictions, zoning resolutions, zoning lot descriptions
or declarations, development agreements, documents showing community property
interests, consents, mineral rights, slope, grade and drainage rights, landmark
designations and riparian rights, limitations and claims of any kind or of any
nature whatsoever relating to such property or property interest.
"Liquid Helium Business" means the Seller's business of manufacturing,
purchasing, transfilling, packaging, storing, marketing, distributing, selling
and/or supplying liquid helium in any form to any customer. The Liquid Helium
Business includes the associated sale of liquid nitrogen and specialty or
industrial gases to (a) manufacturers of, (b) service providers to operators of,
and (c) operators of, magnetic resonance imaging or nuclear magnetic resonance
equipment and related equipment.
"Liquid Helium Product Supply Agreement" means the Liquid Helium
Product Supply Agreement, substantially in the form attached as Exhibit M-2
hereto.
"Long-Term Cylinder Supply Agreement" means the Long-Term Cylinder
Supply Agreement, substantially in the form attached as Exhibit B hereto.
"Loss of Value" has the meaning set forth in Section 7.9(d)(ii) hereof.
"Losses" has the meaning set forth in Section 14.2 hereof.
"LOX/LIN/LAR Products Supply Agreement" means the LOX/LIN/LAR Products
Supply Agreement, substantially in the form attached as Exhibit K hereto.
"Marks" has the meaning set forth in Section 7.16(a) hereof.
"Material Contracts" means the Real Property Leases and the Acquired
Contracts listed on Sections (i) and (v) of Schedule 5.16(a) hereto.
12
"Material Customers" has the meaning set forth in Section 5.17 hereof.
"Material Permits" has the meaning set forth in Section 5.15 hereof.
"Maximum Amount" has the meaning set forth in Section 14.4(a) hereof.
"MCDA" has the meaning set forth in Section 7.1(a) hereof.
"Medical Gases Business" means the Seller's business of (a)
manufacturing, purchasing, storing, purifying, preparing, transfilling,
packaging, marketing, distributing, selling and/or supplying (i) helium/oxygen
mixtures in cylinders for therapeutic applications, and (ii) other gases or
mixture of gases in cylinders (A) for which the Seller or any Affiliate of the
Seller obtains a therapeutic indication or label claim from the Food and Drug
Administration ("FDA"), (B) in association with a medical device for which the
Seller or any Affiliate of the Seller obtains a medical device approval (510K)
from the FDA, or (C) in the course of, or for the purpose of, obtaining FDA
approval for a device or a therapeutic indication or label claim, and (b)
manufacturing, packaging, marketing, distributing, selling and/or supplying
medical devices.
"Microbulk" means liquid oxygen, nitrogen, argon or carbon dioxide
delivered to customers using `Orca' delivery units or similar units of a
different manufacturer.
"Minimum Amount" has the meaning set forth in Section 14.4(a) hereof.
"Multiemployer Plan" has the meaning set forth in Section 5.18(b)
hereof.
"New Technology Business" means new technologies and applications that
require the utilization of industrial gases and specialty gases in pressurized
cylinders that are currently under development by the Seller but not currently
commercialized by the Seller, including microcylinder technology.
"Non-Competition Period" has the meaning set forth in Section 7.7(a)
hereof.
"Non-PGB Customer" has the meaning set forth in Section 7.7(a) hereof.
"Non-Qualifying Offer" has the meaning set forth in Section 10.1(g)(i)
hereof.
"Notifying Party" has the meaning set forth in Section 14.8 hereof.
"Objection Notice" has the meaning set forth in Section 3.2(c) hereof.
"Order" means any legally enforceable orders, judgments, injunctions,
awards, decisions, decrees or writs or any executive, administrative,
legislative or judicial proclamation, in each case, of any Governmental Body.
"Ordinary Course of Business" means an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if that
action: (a) is in the ordinary course of business, (b) is not significantly
outside the scope of decisions, actions, measures, occurrences or other
incidents customary for the applicable business, (c) does not require
13
authorization by the Board of Directors or shareholders of such Person (or by
any Person or group of Persons exercising similar authority) and (d) is
substantially consistent with such Person's past practice, taking into account,
in each case, the transactions contemplated by the Transaction Documents.
"Other Non-Funding Condition" has the meaning set forth in the
definition of "Financing Extension Condition" contained in this Section 1.
"Owned Real Property" means the real property owned by the Seller and
used in connection with the Packaged Gas Business (other than the Retained Real
Property), including all of the buildings, structures, fixtures and other
improvements owned by Seller located thereon.
"Packaged Gas Business" means the Seller's business in the United
States with respect to (a) the preparing, transfilling, packaging, marketing,
distribution, sale and supply (and in the case of acetylene, also the
manufacture) of pressurized industrial gases and specialty gases in pressurized
cylinders and the Microbulk supply mode of gases, (b) the preparing,
transfilling, packaging, marketing, distribution, sale and supply of pressurized
gas and liquid process chemicals and (c) the distribution, marketing, sale and
supply as a reseller, distributor or lessor of equipment (including welding
equipment) and materials necessary for or related to the use of packaged gases,
in each case as currently conducted by the Seller. Notwithstanding the
foregoing, the Packaged Gas Business shall not include the Excluded Businesses.
"Patents" has the meaning set forth in the definition of "Intellectual
Property" contained in this Section 1.
"Permits" means all licenses, permits, authorizations, Orders,
registrations and approvals of any Governmental Body currently held or being
applied for by the Seller in connection with the Packaged Gas Business.
"Permitted Liens" means (a) mechanics', carriers', workers',
repairer's, purchase money security interest and other similar Liens arising or
incurred in the Ordinary Course of Business (i) related to obligations (A) as to
which there is no default on the part of the Seller, and the Seller has not
received written notice of the commencement of foreclosure actions with respect
thereto or (B) which are being contested in good faith, and (ii) that are not in
the aggregate substantial in amount (and in no event in an aggregate amount in
excess of $15,000), and for which adequate reserves have been established in
accordance with the Valuation Principles, (b) Liens listed in Schedule DEF-4
hereto, (c) Liens for Taxes (i) (A) that are not in default or delinquent or (B)
that are being contested in good faith by appropriate proceedings and (ii) that
are not in the aggregate substantial in amount and for which adequate reserves
have been established in accordance with the Valuation Principles, (d) Permitted
Owned Real Property Exceptions, and (e) any Liens related to those leased motor
vehicles and cars set forth on Schedules 2.1(c)(i), 2.1(c)(ii) and 2.1(c)(iii),
respectively, under the terms of the leases relating to such motor vehicles,
tube trailers and cars.
"Permitted Owned Real Property Exceptions" means such Liens that (a)
taken as a whole or individually do not (i) interfere in any material respect
with the use, occupancy or operation of the Owned Real Property, to which it
relates, as currently used, occupied and operated by the
14
Seller or (ii) materially reduce the fair market value of the Owned Real
Property, to which it relates, below the fair market value of such Owned Real
Property (as currently used, operated and occupied by the Seller) but for such
encumbrance or (b) are Permitted Liens (other than pursuant to subsection (d) of
the definition of Permitted Liens).
"Person" means an individual, a partnership, a joint venture, a limited
liability company, a corporation, a public limited company, a trust, a firm, an
association, an unincorporated organization, a Governmental Body and any other
entity whatsoever.
"Personal Information" means any information in the possession of the
Seller with respect to an identifiable individual, but excluding the Employee
Information and any other information relating to an Employee contained in a
Schedule to this Agreement.
"PGB Information" has the meaning set forth in Section 7.6(c) hereof.
"Phase I Completion Date" has the meaning set forth in Section 7.27(a)
hereof.
"Phase I Report" has the meaning set forth in Section 7.27(a) hereof.
"Phase II Report" has the meaning set forth in Section 7.27(b) hereof.
"Post-Closing Payment" has the meaning set forth in Section 3.2(b)
hereof.
"Post-Closing Payment Date" means the earlier of (i) November 15, 2005
and (ii) the date that is five (5) Business Days after the Purchaser has filed
with the Securities and Exchange Commission a Form 10-Q with respect to the
fiscal quarter ended September 30, 2005.
"Post-Closing Payment Methodology" means the methodology set forth on
Exhibit Q attached hereto.
"Post-Closing Payment Statement" has the meaning set forth in Section
3.2(a) hereof.
"Post-Closing Tax Period" shall mean (a) any Tax period beginning on or
after the Closing Date and (b) with respect to a Tax period that commences
before but ends after the Closing Date, the portion of such period beginning on
the Closing Date. In the case of (b), should it be necessary to determine a
proportionate share of any Tax, the Post-Closing Tax Period proportion shall be
the number of days in such Tax period from and after the Closing Date divided by
the total number of days in the Tax period.
"Post-Integration Deficit EBITDA Event" has the meaning set forth in
Section 3.2(b)(ii) hereof.
"Pre-Closing Tax Period" shall mean (a) any Tax period ending prior to
the Closing Date and (b) with respect to a Tax period that commences before but
ends after the Closing Date, the portion of such period up to (but not
including) the Closing Date. In the case of (b), should it be necessary to
determine a proportionate share of any Tax, the Pre-Closing Tax Period
proportion shall be the number of days in such Tax period up to (but not
including) the Closing Date divided by the total number of days in the Tax
period.
15
"Prepaid Expenses" has the meaning set forth in Section 2.1(f) hereof.
"Proposed Allocation Schedule" has the meaning set forth in Section
3.3(a) hereof.
"Purchase Price" has the meaning set forth in Section 3.1(a) hereof.
"Purchased Assets" has the meaning set forth in Section 2.1 hereof.
"Purchased Equipment" means all tangible personal property owned,
leased, used or held for use by the Seller primarily in connection with the
Packaged Gas Business, including all cylinders, dewars, lecture bottles, other
containers, furniture, appliances, fixtures, computer hardware, data and voice
telecommunications equipment, furnishings, tools, machinery, spare parts and
similar equipment and forklifts and motor vehicles (excluding cars owned or
leased by the Seller and provided by the Seller to Employees who are not
Transferred Employees), but excluding the Retained Equipment and the Excluded
Equipment.
"Purchased Intellectual Property" means the Intellectual Property owned
by the Seller and used exclusively by the Packaged Gas Business, including the
Intellectual Property set forth on Schedule 5.13(a). Purchased Intellectual
Property shall not include the Licensed Intellectual Property.
"Purchased Inventory" means all inventory, work-in-process, components,
finished goods, parts, supplies, raw materials and other similar items that are
owned, leased, used or held for use by the Seller in connection with the
Packaged Gas Business including $500,000 worth of inventory relating to the Rare
Gases Business and located at the Owned Real Property in Riverton, NJ, but
excluding the Retained Inventory and the Excluded Inventory.
"Purchaser" has the meaning set forth in the preamble hereto.
"Purchaser Indemnitees" has the meaning set forth in Section 14.2
hereof.
"Purchaser Information" has the meaning set forth in Section 7.6(d)
hereof.
"Purchaser Real Property Leases" means the lease agreements pursuant to
which, from and after the Closing Date, the Purchaser, as landlord, shall lease
space to the Seller, as tenant, for the operation by the Seller of the Excluded
Businesses, at each of the Owned Real Property sites known as Bessemer, Alabama
and Carol Stream, Illinois, to be substantially in the form attached hereto as
Exhibit D-1.
"Purchaser Real Property Sublease" means the sublease agreement
pursuant to which, from and after the Closing Date, the Purchaser, as
sub-landlord, shall sublease space to the Seller, as sub-tenant, for the
operation by the Seller of the Excluded Businesses, as the Leased Real Property
site known as Bound Brook, New Jersey, to be substantially in the form attached
hereto as Exhibit J-1; provided, however, that the Purchaser Real Property
Sublease shall, in lieu of any provision of the Exhibit J-1 to the contrary,
include the following terms: (A) the fixed rent due to the sublandlord shall be
50% of the fixed rent due from the sublandlord, as tenant, to the overlandlord,
as such fixed rent rate may be modified in accordance with such xxxxxxxxx;
16
(B) each of subtenant and sublandlord shall pay any and all maintenance and
utility with respect to their respective premises; (C) in the event that
sublandlord shall intend to exercise a renewal right under the xxxxxxxxx (1)
sublandlord shall notify subtenant of such intention, and (2) subtenant shall
notify sublandlord, within five (5) Business Days of receiving such notification
from sublandlord, of subtenant's intention to renew the Purchaser Real Property
Sublease in question for such renewal term; and (D) in the event that
sublandlord shall not intend to exercise a renewal right under the xxxxxxxxx (1)
sublandlord shall notify subtenant of such decision and offer to assign to
subtenant sublandlord's interest in the xxxxxxxxx, (2) subtenant shall notify
sublandlord, within five (5) Business Days of receiving such notification from
sublandlord, of subtenant's intention to assume the xxxxxxxxx and (3) if
sublandlord requests to be assigned sublandlord's interest in the xxxxxxxxx,
sublandlord shall use commercially reasonable efforts to facilitate the
assignment of the xxxxxxxxx to subtenant.
"Purchaser Severance Plan" has the meaning set forth in Section 10.3(a)
hereof.
"Purchaser Subsidiary" means any wholly-owned direct or indirect
subsidiary of the Purchaser and National Welders Supply Company, Inc.
"Qualifying Offer" has the meaning set forth in Section 10.1(g)(i)
hereof.
"Rare Gas Supply and Tolling Agreement" means the Rare Gas Supply and
Tolling Agreement, on terms substantially similar to those set forth in the term
sheet attached as Exhibit O hereto.
"Rare Gases Business" means the Seller's business of manufacturing,
purchasing, purifying, preparing, transfilling, packaging, storing, marketing,
distributing, selling and/or supplying rare gases, for export outside of the
United States, including krypton, xenon, neon and any mixtures containing some
or all of the same.
"RCRA" means the Resource Conservation and Recovery Act (42 U.S.C. 6901
et seq.), as amended, and any legally enforceable rules, regulations and
standards issued thereunder.
"Real Property" means the Owned Real Property and the Leased Real
Property.
"Real Property Leases" means the leases, subleases, licenses and other
agreements to which the Seller is a party or by which the Seller is otherwise
bound, including all amendments thereto, relating to the Leased Real Property.
"Real Property Rent Prepayments" means the rights in respects of all
prepayments of rents made by the Seller under the Real Property Leases (and for
which Buyer shall be entitled to receive the benefit of such rights but not any
cash payment from the Seller in respect thereof at the Closing).
"Release" means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
discarding or disposing into the environment.
17
"Remediation" means any removal, remedial and/or response actions, as
those activities are defined and used in CERCLA and other Environmental Laws and
all investigations, samplings and assessments incident thereto.
"Response Period" has the meaning set forth in Section 3.3(b).
"Restrictive Covenants" has the meaning set forth in Section 7.7(e)
hereof.
"Retained Employees" means certain employees of the Seller who render
services with respect to the Packaged Gas Business and are set forth on Exhibit
B to the Employee Side Letter, which Exhibit B shall be updated through the
Closing in accordance with this Agreement or as otherwise agreed between the
Seller and the Purchaser.
"Retained Equipment" means the tangible personal property set forth on
Schedule 2.2(e)(ii) that shall be retained by the Seller and shall therefore be
Excluded Assets notwithstanding that such tangible personal property is owned,
leased, used or held for use by the Seller primarily in connection with the
Packaged Gas Business.
"Retained Inventory" means the inventory, work-in-process, components,
finished goods, parts, supplies, raw materials and other similar items set forth
on Schedule 2.2(f)(ii) that shall be retained by the Seller and shall therefore
be Excluded Assets notwithstanding that such inventory, work-in-process,
components, finished goods, parts, supplies, raw materials and other similar
items are owned, leased, used or held for use by the Seller primarily in
connection with the Packaged Gas Business.
"Retained Real Property" means that real property used by the Seller
for filling packaged gas Containers prior to the Closing Date in both the
Packaged Gas Business and the Excluded Businesses that are not otherwise
included in Owned Real Property or Leased Real Property, as listed on Schedule
DEF-5.
"Sale Notice" has the meaning set forth in Section 7.7(d) hereof.
"Sales Employees" means certain sales employees of the Seller who (i)
render services with respect to the Packaged Gas Business, (ii) are not Aligned
Employees, CSC Employees, Retained Employees or Unaligned Employees and (iii)
are set forth on Schedule DEF-8 hereto.
"Seller" has the meaning set forth in the preamble hereto.
"Seller Indemnitees" has the meaning set forth in Section 14.5 hereof.
"Seller Limit" has the meaning set forth in Section 10.1(g)(iii)
hereof.
"Seller Parent" means The BOC Group plc.
"Seller Parent Letter" means the letter agreement between the Seller
Parent and the Purchaser, substantially in the form attached as Exhibit E
hereto.
18
"Seller Real Property Lease" means the lease agreement pursuant to
which, from and after the Closing Date, the Seller, as landlord, shall lease
space to the Purchaser, as tenant, for the operation by the Purchaser of the
Packaged Gas Business, at the Retained Real Property site known as Miamiville,
Ohio, containing the terms set forth on the term sheet attached hereto as
Exhibit D-2.
"Seller Real Property Sublease" means the sublease agreement pursuant
to which, from and after the Closing Date, the Seller, as sub-landlord, shall
sublease space to the Purchaser, as subtenant, for the operation by the
Purchaser of the Packaged Gas Business, at the Retained Real Property sites
known as Lima, Ohio; and Columbus (Grove City), Ohio, to be substantially in the
form attached hereto as Exhibit J-2.
"Seller Severance Plan" has the meaning set forth in Section
10.1(g)(iii) hereof.
"Seller's Auditors" has the meaning set forth in Section 3.2(h) hereof.
"Seller's Remediation" has the meaning set forth in Section 14.4(b)(i)
hereof.
"Severance Payment" has the meaning set forth in Section 10.1(g)(iii)
hereof.
"Shared Sites" means that Owned Real Property and Leased Real Property
being transferred to the Purchaser hereunder at and upon which the Seller shall
continue to maintain certain Excluded Businesses from and after the Closing Date
pursuant to a Purchaser Real Property Lease or Purchaser Real Property Sublease,
and that Retained Real Property at and upon which the Purchaser shall conduct
the Packaged Gas Business from and after the Closing Date pursuant to a Seller
Real Property Lease or Seller Real Property Sublease.
"Software" has the meaning set forth in the definition of "Intellectual
Property" contained in this Section 1.
"Special Contract Rights" has the meaning set forth in Section 2.1(m)
hereof.
"Subject Property" has the meaning set forth in Section 7.17 hereof.
"Targeted EBITDA" means, subject to adjustment pursuant to the next
succeeding sentence, an amount equal to the sum of (a) an amount equal to one
hundred five percent (105%) of Purchaser's EBITDA (stated on a pro forma basis
to reflect the impact of National Welders Supply, Inc. for the full fiscal year
as extracted from the Purchaser's Form 10-K for the fiscal year ended March 31,
2004 filed by the Purchaser with the Securities Exchange Commission) for the
fiscal year ending March 31, 2004 (which amount will be derived from the
information contained in the Purchaser's Form 10-K for the fiscal year ended
March 31, 2004 filed by the Purchaser with the Securities and Exchange
Commission) plus (b) $29,000,000. Purchaser's EBITDA for the fiscal year ending
March 31, 2004 will be adjusted to exclude the following unusual items which can
be extracted or derived from Purchaser's public releases or filings: (i)
extraordinary costs related to the fires at Purchaser's Tulsa and Sacramento
facilities (which amount is equal to $2.8 million); and (ii) any extraordinary
or one-time charges or gains in the
19
calendar quarter ending March 31, 2004 that are included in Purchaser's public
releases or filings for the fiscal quarter ending March 31, 2004.
"Tax" or "Taxes" means (i) any and all federal, state, provincial,
local, foreign and other taxes, levies, fees, imposts, duties, and similar
governmental charges (including any interest, fines, assessments, penalties or
additions to tax imposed in connection therewith or with respect thereto)
including (x) taxes imposed on, or measured by, income, franchise, profits or
gross receipts, and (y) ad valorem, value added, capital gains, sales, goods and
services, use, real or personal property, capital stock, license, branch,
payroll, estimated, withholding, employment, social security (or similar),
unemployment, compensation, utility, severance, production, excise, stamp,
occupation, premium, windfall profits, transfer and gains taxes, and customs
duties, and (ii) any transferee liability in respect of any items described in
clause (i) above.
"Tax Benefit" means a reduction after the Closing in the federal, state
or local or foreign Liability for Tax or any refund or credit of a prior
Liability for Tax attributable to adjustments to the income, deductions or
credits resulting from any event that is the basis for an indemnification claim
under Section 14.2 or 14.5 that is reasonably expected to be realized by the
Purchaser Indemnitee or Seller Indemnitee, as the case may be.
"Tax Returns" means any and all reports, returns, declarations, claims
for refund, disclosures, estimates, information reports or returns or statements
required to be supplied to a taxing authority in connection with Taxes,
including any schedule or attachment thereto or amendment thereof.
"Technical Expert" has the meaning set forth in Section 16.2(a)(A)
hereof.
"Termination Payment" has the meaning set forth in Section 15.2(c)
hereof.
"Third Party" means any Person other than (i) the parties to this
Agreement and (ii) their Affiliates, successors and assigns.
"Third Party Distributor" has the meaning set forth in Section 7.7(a)
hereof.
"Third Party Intellectual Property" means that Intellectual Property
set forth on Schedule DEF-9.
"Title Company" means LandAmerica Financial Group, Inc. or its agents.
"Trade Secrets" has the meaning set forth in the definition of
"Intellectual Property" contained in this Section 1.
"Trademarks" has the meaning set forth in the definition of
"Intellectual Property" contained in this Section 1.
"Transaction Documents" means this Agreement, the Bills of Sale, the
Bill of Sale, Assignment and Assumption Agreement, the Purchaser Real Property
Leases, the Seller Real Property Leases, the Purchaser Real Property Sublease,
the Seller Real Property Sublease, the deeds and other documentation relating to
the transfer of the Owned Real Property, the
20
assignments of the Real Property Leases, the Intellectual Property License, the
Employee Side Letter, the Encumbered Assets Side Letter and the Enabling
Agreements.
"Transfer Obligations" has the meaning set forth in Section 7.17
hereof.
"Transferred Employees" has the meaning set forth in Section 10.2
hereof.
"Transition Extension Event" means that the Purchaser has not completed
its internal arrangements to effect the assumption of full operational control
of the Packaged Gas Business in connection with the Closing.
"Transition Payment" has the meaning set forth in Section 10.1(g)(iii)
hereof.
"Transition Period" means the period beginning on the Closing Date
through the date on which the Transition Services Agreement shall terminate.
"Transition Plan" means the transition plan attached as Exhibit R
hereto.
"Transition Service(s)" has the meaning set forth in Section 7.2(a)
hereof.
"UK Takeover Code" means the United Kingdom City code on Takeovers and
Mergers (or any successor Law, principals and/or rules), as are in effect in the
United Kingdom from time to time.
"Unaligned Employees" means those employees of the Seller who are not
Aligned Employees or Retained Employees and who (i) are substantially involved
in the management or administration of the Packaged Gas Business, or (ii)
provide substantial information management support services in the United States
with respect to the Purchased Intellectual Property and Licensed Intellectual
Property, and, in either case, are listed on Exhibit C to the Employee Side
Letter, which Exhibit C shall be updated by the Seller at least thirty-five (35)
days prior to Closing and periodically prior thereto as the Purchaser may
reasonably request through the Closing Date to include deletion of any Unaligned
Employee whose employment terminates prior to the Closing Date for any reason
and to add, as applicable, new hires and transferees intended by the Seller to
replace such terminated Unaligned Employees, and other persons designated as
Unaligned Employees in accordance with this Agreement or as otherwise agreed
between the Seller and the Purchaser.
"Unauthorized Code" means any virus, trojan horse, worm or other
software routines or hardware components designed to permit unauthorized access,
or to disable, erase or otherwise harm any computer, systems or Software.
"Valuation Principles" has the meaning set forth in Section 5.5(a)
hereof.
"WARN" means, collectively, the Worker Adjustment Retraining and
Notification Act of 1988 and any applicable state or local equivalent.
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"Wholesale Welding Business" means the Seller's business wholesaling
its welding hardgoods products, gas equipment, safety equipment or medical
safety equipment (whether manufactured by the Seller or manufactured by a
third-party on the Seller's behalf).
SECTION 2. TRANSFER OF PURCHASED ASSETS; ASSUMPTION OF LIABILITIES
2.1 Purchased Assets. At the Closing, and upon the terms and
subject to the conditions set forth in this Agreement, the Seller shall sell,
transfer, convey, assign and deliver to the Purchaser, and the Purchaser shall
purchase and receive from the Seller, all of the Seller's right, title and
interest in and to all of the property, assets and rights owned, leased, used or
held for use by the Seller primarily (except as otherwise specifically provided
in any of Sections 2.1(a) through 2.1(q)) in connection with the Packaged Gas
Business (other than the Excluded Assets), of every kind, character and
description, whether tangible, intangible, personal or mixed and wheresoever
located, whether carried on the books of the Seller or not carried on the books
of the Seller, due to expense, full depreciation or otherwise (collectively, the
"Purchased Assets"), free and clear of all liabilities, obligations and Liens
(other than the Permitted Liens, the Assumed Liabilities and the rights of the
Seller with respect to Joint Use Property pursuant to Section 7.25), including
the following:
(a) (i) subject to Section 7.26 hereof, all of the
Seller's right, title and interest in the Owned Real Property as set forth on
Schedule 5.14(a) and, subject to obtaining the necessary Consents, the Real
Property Leases as set forth on Schedule 5.14(b), including the privileges,
appurtenances, rights, easements and hereditaments appurtenant to or for the
benefit of such Owned Real Property and Real Property Leases, and (ii) the Real
Property Rent Prepayments with respect to all periods from and after the Closing
Date;
(b) xxxxx and drawer cash on hand at any Owned Real
Property or Leased Real Property on the Closing Date;
(c) all of the Seller's right, title and interest in and
to the Purchased Equipment, including those (i) motor vehicles and tractors
(excluding, for purposes of Schedule 2.1(c)(i) only and not from the definition
of Purchased Equipment, cars and forklifts) set forth on Schedule 2.1(c)(i),
(ii) tube trailers set forth on Schedule 2.1(c)(ii), (iii) Seller-leased
vehicles used by Employees who become Transferred Employees (a list of all the
leases with respect to such vehicles used by the Employees is set forth on
Schedule 2.1(c)(iii), which Schedule shall be updated as of the Closing Date to
reflect only those leases for vehicles provided to Transferred Employees), and
(iv) bulk tanks set forth on Schedule 2.1(c)(iv) (but at all times subject to
the rights of the Seller with respect to Joint Use Property pursuant to Section
7.25), as well as all manufacturers' warranties associated with such Purchased
Equipment, to the extent such warranties are assignable and except to the extent
required by the Seller to pursue any claim the Seller may have under any such
warranty relating to the period prior to the Closing;
(d) all of the Seller's right, title and interest in and
to the Purchased Inventory, as well as all manufacturers' warranties associated
with such Purchased Inventory and all rights of the Seller against suppliers of
such Purchased Inventory, to the extent such warranties are
22
assignable and except to the extent required by the Seller to pursue any claim
the Seller may have under any such warranty or right relating to the period
prior to the Closing;
(e) all of the Seller's right, title and interest in and
to all Purchased Intellectual Property;
(f) all of the Seller's right, title and interest in and
to deposits and prepaid expenses to the extent such deposits and prepaid
expenses relate to the Packaged Gas Business or the Purchased Assets with
respect to all periods from and after the Closing Date (the "Prepaid Expenses");
(g) all of the Seller's right, title and interest in and
to all claims, causes of action and guarantee rights with respect to the
Purchased Assets, to the extent that they arise from and after the Closing Date,
excluding those referred in Section 2.2(p);
(h) subject to Section 7.9, all of the Seller's rights
under, and interest in, all agreements, arrangements, contracts, policies,
leases (including operating leases), conditional sales contracts, licenses,
franchises, understandings, commitments and other binding arrangements
(collectively, "Contracts") to which the Seller is a party or by or to which the
Purchased Assets are bound or subject to the extent relating to the Packaged Gas
Business (for the avoidance of doubt, with respect to any Contract that relates
to both the Packaged Gas Business and one or more Excluded Business, the
Purchaser shall only acquire all of the Seller's rights under, and interest in,
that portion of such Contract that relates to the Packaged Gas Business), but,
excluding all Contracts of the types described on Schedule 2.2(h) except such
specific Contracts of the types described in paragraphs 1, 2, 4, 5, 6 or 8 of
Schedule 2.2(h) as the Seller shall have specifically designated on such
Schedule as being available for designation, and as the Purchaser shall
designate in writing no later than ten (10) Business Days prior to the Closing
Date as a Contract to be acquired by the Purchaser (collectively, the "Acquired
Contracts");
(i) subject to Section 7.9, all of the Seller's right,
title and interest in and to all Permits, to the extent transferable, relating
exclusively to the Packaged Gas Business or the Purchased Assets, excluding the
Permits referred to in Section 2.2(i);
(j) all of the Seller's right, title and interest in and
to (i) all deliverables to be provided to the Purchaser pursuant to the
Transition Plan, (ii) all customer and inventory information to the extent
relating to the Packaged Gas Business or the Purchased Assets and reasonably
segregable (taking into account the limitations of reasonable practicability in
the context of a transaction of a kind contemplated by this Agreement) from
information that is not related to the Packaged Gas Business or the Purchased
Assets, and (iii) to the extent existing and maintained by the Seller, all
books, records and other documents (other than those books, records and other
documents described in the preceding clauses (i) and (ii)) (whether on paper,
computer diskette, tape, electronic or other storage media), that are (A)
located at any Owned Real Property or Leased Real Property that is not a Shared
Site and (B) located anywhere other than an Owned Real Property or Leased Real
Property that is not a Shared Site to the extent relating to the Packaged Gas
Business or the Purchased Assets and reasonably segregable (taking into account
the limitations of reasonable practicability in the context of a transaction of
a kind
23
contemplated by this Agreement) from information that is not related to the
Packaged Gas Business or the Purchased Assets, including in the case of this
clause (iii) property records, production records, purchase and sales records,
credit data, records relating to (A) the items listed on Schedule 5.18(d) and
(B) the Assumed Agreements set forth in Schedule 10.9(b), the Employee
Information and any other information relating to an Employee included in a
Schedule to this Agreement or provided to the Purchaser pursuant to Section
5.18(e), accounting records, financial reports, maintenance and production
records, environmental records and reports, fixed asset lists, customer lists,
customer records and information, supplier lists, parts lists, manuals,
technical and repair data, correspondence, files, blueprints, specifications,
maps, surveys, building and machinery diagrams, and any items that are similar
to any of the foregoing;
(k) all of the Seller's right, title and interest in and
to all accounts receivable (including any security, collateral and/or parented
credit balances for such accounts receivable, which parented credit balances
will not in the aggregate exceed $500,000) arising from the Packaged Gas
Business other than (i) inter-company receivables, including those set forth on
Schedule 2.1(k) and (ii) those accounts receivable set forth on Schedule 2.1(k)
(such receivables, the "Accounts Receivable");
(l) all of the Seller's right, title and interest in and
to all goodwill associated exclusively with the Packaged Gas Business or the
Purchased Assets (other than any goodwill associated with any Trademarks that
are not part of the Purchased Intellectual Property); and
(m) to the extent transferable, all of the Seller's
right, title and interest in and to (i) the benefit of and the right to enforce
covenants and warranties (including any covenants not to compete), if any, which
the Seller is entitled to enforce with respect to the Purchased Assets or the
Packaged Gas Business and (ii) any rights of first refusal, rights of first
option and similar rights relating to the Packaged Gas Business (all such rights
and benefits described in clauses (i) and (ii) above, collectively, "Special
Contract Rights").
2.2 Excluded Assets. Notwithstanding any other provision of this
Agreement, the Purchaser is purchasing only the Purchased Assets, and is not
purchasing any asset of the Seller or any of its Affiliates that is not included
in the Purchased Assets (all such assets not included in the Purchased Assets
being herein referred to as the "Excluded Assets" but are at all times subject
to the rights of the Purchaser with respect to Joint Use Property pursuant to
Section 7.25). The Excluded Assets shall include the following assets of the
Seller, none of which Excluded Assets shall be transferred, conveyed, set over,
delivered or assigned to the Purchaser:
(a) cash on hand or in banks, cash equivalents and notes
receivable relating to the operation of the Packaged Gas Business as of the
Closing Date, other than xxxxx and drawer cash on hand at any Owned Real
Property or Leased Real Property on the Closing Date;
(b) all books and records (i) that would otherwise
constitute Purchased Assets but for the fact that the Seller is required to
retain such books and records pursuant to applicable Laws (in which case copies
of such books and records shall be included in the Purchased Assets) or (ii)
listed on Schedule 2.2(b);
24
(c) all assets and reserves related to the Employee
Benefit and Compensation Plans;
(d) the Retained Real Property (other than the rights of
the Purchaser created under the Seller Real Property Leases and the Seller Real
Property Sublease);
(e) all tangible personal property (regardless of whether
such tangible personal property is used or held for use by the Seller in
connection with the Packaged Gas Business) owned, leased, used or held for use
by the Seller primarily in connection with any Excluded Business, including any
tangible personal property (i) owned, leased, used or held for use by the Seller
in connection with both the Packaged Gas Business and one or more Excluded
Business but that is owned, leased, used or held for use by the Seller primarily
in connection with one or more Excluded Business as set forth on Schedule
2.2(e)(i) and (ii) the Retained Equipment as set forth on Schedule 2.2(e)(ii)
(but at all times subject to the rights of the Purchaser with respect to Joint
Use Property pursuant to Section 7.25) (all of the foregoing, the "Excluded
Equipment");
(f) (i) the inventory listed on Schedule 2.2(f)(i) (the
"Excluded Inventory") and (ii) the Retained Inventory as set forth on Schedule
2.2(f)(ii);
(g) Excluded Intellectual Property (except to the extent
that certain rights of the Purchaser in the Excluded Intellectual Property are
created under the Intellectual Property License), including the excluded
software applications on Schedule 2.2(g);
(h) the Contracts listed on Schedule 2.2(h);
(i) the Permits listed on Schedule 2.2(i);
(j) any cylinders, dewars, lecture bottles or other
containers containing gases or liquids the identity of which cannot be readily
and accurately determined by a visual examination of such container or from the
Seller's books and records, and any such cylinders, dewars, lecture bottles or
other containers containing gases or liquids not sold in the Ordinary Course of
Business of the Packaged Gas Business (collectively, the "Excluded Containers");
provided, that the Seller's obligation to remove and dispose of any Excluded
Containers shall be subject to the limitations set forth in Section 7.14;
(k) all insurance policies of the Seller and the right to
receive the proceeds thereof and any prepaid insurance premiums;
(l) any rights to Tax refunds, credits or similar
benefits attributable to any Taxes with respect to the Packaged Gas Business or
the Purchased Assets for any Pre-Closing Tax Period;
(m) any originals or copies of Tax Returns of the Seller;
(n) all assets, properties, rights and goodwill of the
Seller and its Affiliates other than the Purchased Assets (subject at all times
to the rights of the Purchaser with respect to
25
the Joint Use Property pursuant to Section 7.25) and relating to their
operations and businesses other than the Packaged Gas Business, including the
Excluded Businesses;
(o) all rights of the Seller under the Transaction
Documents;
(p) all of the Seller's right, title and interest in and
to those claims, causes of action and guarantee rights set forth on Schedule
2.2(p);
(q) all personnel files, medical records and Personal
Information of the Employees except for the Employee Information or as otherwise
included in any Schedules to this Agreement;
(r) all of the Seller's right, title and interest in and
to all manufacturers' warranties associated with the Purchased Equipment to the
extent required by the Seller to pursue any claim the Seller may have under any
such warranty relating to the period prior to the Closing;
(s) all Prepaid Expenses with respect to all periods
prior to the Closing Date;
(t) all of the Seller's rights under, and interest in,
(i) all deposits of rents under Container leases to the extent such deposits
relate to the Packaged Gas Business or the Purchased Assets (collectively, the
"Container Deposits"), and (ii) all prepayments of rents under Container leases
to the extent such prepayments relate to the Packaged Gas Business or the
Purchased Assets;
(u) all assets listed on Schedule 2.2(u); and
(v) all intercompany receivables and those accounts
receivables set forth on Schedule 2.1(k).
2.3 Assumed Liabilities. At the Closing, and upon the terms and
subject to the conditions set forth in this Agreement, the Seller shall transfer
to the Purchaser, and the Purchaser shall assume only the following liabilities,
obligations and expenses of the Seller (collectively, the "Assumed
Liabilities"):
(a) all obligations for future performance under Acquired
Contracts that are due or become due on or after the Closing Date, including all
purchase orders issued by the Seller prior to the Closing Date in the Ordinary
Course of Business (other than liabilities, obligations and expenses arising out
of or relating to any breach or default by the Seller prior to the Closing Date
of any of its obligations under the Acquired Contracts);
(b) all obligations associated with customer orders
(including Container Deposits made by customers) received by the Seller under an
Acquired Contract prior to the Closing Date in the Ordinary Course of Business
that remain unfulfilled on and as of the Closing Date, except to the extent of
any breach or default by the Seller prior to the Closing Date of any of its
obligations under such customer orders, and all obligations associated with any
similar obligations received by the Seller under any Acquired Contract prior to
the Closing Date in the
26
Ordinary Course of Business that remain unfulfilled on and as of the Closing
Date, except to the extent of any breach or default by the Seller prior to the
Closing Date of any of its obligations relating thereto;
(c) any Taxes (i) with respect to the Purchased Assets or
the Packaged Gas Business for any Post-Closing Tax Period (including any
obligation, liability or expense pursuant to any tax sharing agreement, tax
indemnification or similar arrangement listed on Schedule 2.3(c)), or (ii)
allocated to the Purchaser pursuant to Section 13;
(d) all liabilities, obligations and expenses with
respect to Owned Real Property and Leased Real Property (other than
Environmental Liabilities arising out of events or conditions that first
occurred prior to the Closing Date to the extent such Environmental Liabilities
are not caused, increased or otherwise exacerbated by the Purchaser) arising
from and after the Closing Date;
(e) any obligation, liability or expense relating to or
arising out of the Purchased Assets with respect to (i) the manufacture, sale or
lease by the Purchaser (or any Affiliate thereof) of any defective product or
equipment, (ii) any failure by the Purchaser (or any Affiliate thereof) to warn
any Person with respect to any of its products or equipment or (iii) the breach
by the Purchaser (or any Affiliate thereof) of any express or implied warranty
made in connection with the manufacture, sale or lease of any products or
equipment, in each case, occurring from and after the Closing Date; and
(f) any obligation, liability or expense relating to or
arising out of the Joint Use Property from and after the Closing Date to the
extent related to the use or operation of such Joint Use Property by the
Purchaser.
2.4 Excluded Liabilities. Notwithstanding any other provision in
this Agreement, (a) the Purchaser is assuming only the Assumed Liabilities and
(b) the Purchaser is not assuming any other liability or obligation of the
Seller or any of its Affiliates of any nature or kind, known or unknown, fixed,
accrued, absolute or contingent, whether presently in existence or arising
hereafter (all such liabilities and obligations not being assumed being
hereinafter referred to as the "Excluded Liabilities"). Without limiting the
foregoing, the Purchaser shall not assume and the Seller shall retain the
following obligations and liabilities:
(a) any indebtedness for borrowed money (including
accrued interest) of the Seller or its Affiliates and Liens relating thereto;
(b) any obligation, liability or expense (including any
Environmental Liability) related to or arising out of any business or activity
of the Seller or any of its Affiliates (or any of their predecessors) other than
the Packaged Gas Business as presently conducted, including any Excluded
Business;
(c) any obligation, liability or expense related to or
arising out (i) of any Excluded Asset (except to the extent such Excluded Asset
is also Joint Use Property and such obligation, liability or expense arises from
or after the Closing Date and is related to the use or operation of such Joint
Use Property by the Purchaser), or (ii) any Joint Use Property from and
27
after the Closing Date to the extent related to the use or operation of such
Joint Use Property by the Seller;
(d) any obligation, liability or expense related to or
arising out of (i) any Contract or portion thereof not included in the Acquired
Contracts, (ii) any lease or sublease of real property other than the Real
Property Leases and (iii) except to the extent specifically described as an
Assumed Liability, any Acquired Contract or Real Property Lease to the extent
such obligation, liability or expense relates to or arises out of the time
period prior to the Closing Date;
(e) any obligation, liability or expense related to or
arising out of any Action pending as of the Closing Date against the Seller or
any of the Sellers' Affiliates;
(f) any obligation, liability or expense (including any
Environmental Liabilities and any future Actions) related to or arising out of
the Seller's conduct of the Packaged Gas Business or the ownership or operation
of the Purchased Assets, in each case, prior to the Closing Date;
(g) any obligation, liability or expense relating to or
arising out of the Purchased Assets with respect to (i) the manufacture, sale or
lease by the Seller (or any predecessor thereof) or any of its Affiliates of any
defective product or equipment, (ii) any failure by any of the Seller (or any
predecessor thereof) or any of its Affiliates to warn any Person with respect to
any of its products or equipment or (iii) the breach by any of the Seller (or
any predecessor thereof) or any of its Affiliates of any express or implied
warranty made in connection with the manufacture, sale or lease of any products
or equipment, in each case, occurring prior to the Closing Date;
(h) any obligation, liability or expense relating to
claims of any Third Parties alleging violation or infringement of any
Intellectual Property rights prior to the Closing;
(i) any obligation, liability or expense with respect to
any Employee of the Seller who is not a Transferred Employee, except for any
obligation, liability or expense assumed by the Purchaser under Section 10 in
respect of such Employee;
(j) any obligation, liability or expense related to or
arising out of any Employee Benefit and Compensation Plan, except for any such
obligation or liability assumed by the Purchaser under Section 10;
(k) any obligation, liability or expense related to or
arising out of any collective bargaining agreement to which the Seller or any of
its Affiliates is bound, except for any such obligation, liability or expense
assumed by the Purchaser under Section 10;
(l) any Taxes of the Seller or its Affiliates other than
Taxes (i) with respect to the Purchased Assets or the Packaged Gas Business for
any Post-Closing Tax Period (including any obligation, liability or expense
pursuant to any tax sharing agreement, tax indemnification or similar
arrangement) or (ii) allocated to the Purchaser pursuant to Section 13;
28
(m) all obligations, liabilities and expenses (including
for any accounting, legal, investment banking, brokerage or similar fees or
expenses) incurred by the Seller or its Affiliates in connection with the
negotiation and preparation of this Agreement and the consummation of the
transactions contemplated hereby;
(n) all obligations, liabilities and expenses for the
claims and causes of action listed on Schedule 2.2(p);
(o) all accounts payable of the Packaged Gas Business
with respect to all periods prior to the Closing Date; and
(p) any liability, obligation or expense of the Seller or
its Affiliates relating to or arising under any Multiemployer Plan with respect
to the time period prior to the Closing Date, including liabilities, obligations
and expenses with respect to contributions to or a withdrawal from any
Multiemployer Plan that occurs prior to the Closing Date or on the Closing Date
as a result of the transactions contemplated by this Agreement.
2.5 Container Deposits. For a period of one (1) year from the
Closing Date, to the extent that the Purchaser is required to refund to any
customers any Container Deposits collected by the Seller prior to the Closing
Date with respect to such customers, the Purchaser shall provide to the Seller
written notice thereof on a quarterly basis, together with copies of all deposit
slips returned by such customers which evidence that the Seller received such
Container Deposits. Within five days of the receipt of such written notice
together with such supporting documentation, the Seller shall pay to the
Purchaser an amount equal to the aggregate amount so refunded for such period.
2.6 Clarification Relating to Acquired Contracts. For the
avoidance of doubt, if any Governmental Body requires the Seller and/or the
Purchaser, in order to assign or novate any Acquired Contract to the Purchaser,
to enter into any agreement with terms, conditions, recitals or stipulations
that conflict with any provision of this Agreement, such agreement shall in no
way amend, supplement or otherwise modify any provision of this Agreement and
this Agreement shall control as between the Seller and the Purchaser.
SECTION 3. PURCHASE PRICE; ADJUSTMENT
3.1 Purchase Price.
(a) Closing Date Payment. The Purchaser agrees to pay to
the Seller on the Closing Date an amount equal to $175,000,000 (the "Closing
Date Payment") as payment for the Purchased Assets and to assume the Assumed
Liabilities pursuant to Section 2.3 hereof (the amount of the Closing Date
Payment, as increased, if at all, by the amount of the Post-Closing Payment
pursuant to Section 3.2, being referred to herein as the "Purchase Price"). The
Purchase Price shall be exclusive of all applicable sales, goods and services,
value added, transfer and similar Taxes incurred with respect to the transfer of
the Purchased Assets.
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(b) The Closing Date Payment shall be made by the
Purchaser to the Seller in immediately available funds by wire transfer to such
account as the Seller shall designate in writing at least three (3) Business
Days prior to the Closing Date.
3.2 Post-Closing Payment.
(a) Delivery of Post-Closing Payment Statement. On the
Post-Closing Payment Date, the Purchaser shall deliver to the Seller (i) the
Post-Closing Payment and (ii) a statement (the "Post-Closing Payment Statement")
setting forth its calculation of the amount of the Post-Closing Payment,
together with its determination of the amount of the Annualized Post-Integration
EBITDA and of the Targeted EBITDA. The Annualized Post-Integration EBITDA and
the Targeted EBITDA shall be calculated in accordance with the Post-Closing
Payment Methodology. The Post-Closing Payment shall be made by the Purchaser to
the Seller in immediately available funds by wire transfer to such account as
the Seller shall designate in writing at least three (3) Business Days prior to
the Post-Closing Payment Date.
(b) Post-Closing Payment. The amount of the post-closing
payment (the "Post-Closing Payment") shall be calculated as follows:
(i) in the event that the Annualized
Post-Integration EBITDA exceeds the Targeted EBITDA (as set forth in the
Post-Closing Payment Statement) (the amount of such excess, the "Excess
Post-Integration EBITDA Amount"), then the Post-Closing Payment shall be an
amount equal to the lesser of (I) the product of (x) the Excess Post-Integration
EBITDA Amount and (y) six (6) and (II) $25,000,000; and
(ii) in the event that the Annualized
Post-Integration EBITDA is less than or equal to the Targeted EBITDA (as set
forth in the Post-Closing Payment Statement) (a "Post-Integration Deficit EBITDA
Event"), then the Post-Closing Payment shall be equal to zero ($0).
(c) Objection to Post-Closing Payment Statement. The
Seller may dispute the amounts set forth on the Post-Closing Payment Statement,
but only on the basis that the Purchaser's determination of the amount of the
Annualized Post-Integration EBITDA or Targeted EBITDA was not calculated in a
manner substantially consistent with the Post-Closing Payment Methodology;
provided, that the Seller shall have notified the Purchaser in writing (the
"Objection Notice") within thirty (30) days after receiving the Post-Closing
Payment Statement, specifying the amount thereof in dispute and setting forth in
reasonable detail the basis for the dispute, including reasonable details of its
calculations.
(d) Resolution of Disputes. The Purchaser shall give the
Seller and its independent public accountants reasonable access to the
Purchaser's work papers used in the preparation of the Post-Closing Payment
Statement to enable the Seller to exercise its rights under this Section 3.2.
The Seller and the Purchaser shall attempt in good faith to resolve all of the
items in dispute set out in the Objection Notice within thirty (30) days of
receipt of the Objection Notice by the Purchaser. Any items in dispute not
resolved within such thirty (30) day period shall be referred as soon as
possible thereafter by the Seller and the Purchaser to the Independent
Accountant. The parties shall require the Independent Accountant (i) to act as
an
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expert and not as an arbitrator, (ii) to determine the items in dispute that
have been referred to it as soon as reasonably practicable but in any event not
later than thirty (30) days after the date of referral of the dispute to it, and
(iii) in making its determination, to consider only the issues in dispute placed
before it and to base its determination on the application of the Post-Closing
Adjustment Methodology. The Seller and the Purchaser shall provide or make
available all documents and information as are reasonably required by the
Independent Accountant to make its determination. The determination of the
Independent Accountant as to all items in the Post-Closing Payment Statement and
the resulting calculation of the Annualized Post-Integration EBITDA and the
Targeted EBITDA shall be final and binding on the parties.
(e) Independent Accountant Expenses. The fees and
expenses of the Independent Accountant in acting in accordance with this Section
3.2 shall be shared equally by the Purchaser and the Seller.
(f) Final Post-Closing Payment Statement. The
Post-Closing Payment Statement shall be deemed final and binding upon the
parties upon the earliest of: (i) the failure of the Seller to notify the
Purchaser of its objection within thirty (30) days after receiving the
Post-Closing Payment Statement, (ii) the resolution of all disputes that are the
subject of an Objection Notice by the parties, or (iii) the final determination
of the Independent Accountant. The amount, if any, by which the Annualized
Post-Integration EBITDA exceeds the Targeted EBITDA as set forth in the final
Post-Closing Payment Statement shall be deemed the "Final Excess
Post-Integration EBITDA Amount."
(g) Payment of Final Purchase Price Adjustment. Within
three (3) Business Days after the Post-Closing Payment Statement being deemed
final and binding on the parties in accordance with Section 3.2(f), if the Final
Excess Post-Integration EBITDA is greater than or less than the Excess
Post-Integration EBITDA, or if a Post-Integration Deficit EBITDA Event had
occurred but a Final Excess Post-Integration EBITDA Amount is determined, an
adjustment to the amount of the Post-Closing Payment shall be made as follows:
(i) in the event that the Final Excess
Post-Integration EBITDA Amount exceeds the Excess Post-Integration EBITDA
Amount, then the Post-Closing Payment shall be adjusted upward in an amount
equal to the lesser of (A) the product of (x) the excess of the Final Excess
Post-Integration EBITDA Amount over the Excess Post-Integration EBITDA Amount
and (y) six (6) and (B) the difference of (x) $25,000,000 less (y) the amount,
if any, previously paid to the Seller as the Post-Closing Payment pursuant to
Section 3.2(b), and the Purchaser shall pay to the Seller such amount in
immediately available funds by wire transfer to such account as the Seller shall
designate in writing to the Purchaser;
(ii) in the event that a Post-Integration Deficit
EBITDA Event had occurred and the initial Post-Closing Payment had been equal to
zero ($0), then the Post-Closing Payment shall be adjusted upward in an amount
equal to the lesser of (I) the product of (x) the Final Excess Post-Closing
Integration EBITDA Amount and (y) six (6) and (II) $25,000,000, and the
Purchaser shall pay to the Seller such amount in immediately available funds by
wire transfer to such account as the Seller shall designate in writing to the
Purchaser; and
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(iii) in the event that the Excess
Post-Integration EBITDA Amount exceeds the Final Excess Post-Integration EBITDA
Amount, then the amount of the Post-Closing Payment shall be adjusted downward
in an amount equal to the product of (x) the amount of such excess and (y) six
(6); provided, that such amount shall not exceed the amount, if any, paid to the
Seller as the Post-Closing Payment pursuant to Section 3.2(b), and the Seller
shall pay to the Purchaser such amount in immediately available funds by wire
transfer to such account as the Purchaser shall designate in writing to the
Seller.
(h) Notwithstanding anything to the contrary in this
Section 3.2, if at any time prior to the Post-Closing Payment Statement being
deemed final and binding in accordance with Section 3.2(f), a Change of Control
Transaction occurs with respect to the Purchaser pursuant to subsection (ii) of
the definition of Change of Control Transaction, then either (I) the acquiror in
such transaction shall agree in writing with the Seller (in form and substance
reasonably satisfactory to the Seller) to maintain the ability to track the
financial performance of the business of the Purchaser to allow such acquiror to
make the calculations that are required pursuant to this Section 3.2, in which
case the provisions of this Section 3.2 shall apply to the determination of the
amount of the Post-Closing Payment by any such acquiror; provided, that in
connection with the resolution of any dispute pursuant to Section 3.2(d), such
acquiror shall also give to the Seller, the Seller's independent public
accountants (the "Seller's Auditors") and the Seller's representatives such
reasonable access during normal business hours to the books and records of the
business of the Purchaser as the Seller and the Seller's Auditors shall
reasonably request in order to enable the Seller to exercise its rights under
this Section 3.2 or (II) in the event that such acquiror does not so agree in
writing with the Seller to maintain the ability to track the financial
performance of the business of the Purchaser to allow it to make the
calculations that are required pursuant to this Section 3.2, then on the
Post-Closing Payment Date such acquiror shall pay to the Seller an amount equal
to $25,000,000 in immediately available funds by wire transfer to such account
as the Seller shall designate in writing to the Purchaser.
3.3 Allocation.
(a) Within one hundred twenty (120) Business Days after
the Closing Date, the Purchaser shall prepare and deliver to the Seller a
schedule (a "Proposed Allocation Schedule") allocating the sum of the Purchase
Price and the Assumed Liabilities among the Purchased Assets and the
non-competition covenant provided for in Section 7.7, in such amounts reasonably
determined by the Purchaser to be consistent with Section 1060 of the Code and
the Treasury Regulations thereunder.
(b) The Seller shall have a period of twenty (20)
Business Days after the delivery of the Proposed Allocation Schedule (the
"Response Period") to present in writing to the Purchaser notice of any
objections the Seller may have to the allocations set forth therein (an
"Allocation Objection Notice"). Unless the Seller timely objects, such Proposed
Allocation Schedule shall be binding on the parties without further adjustment,
absent manifest error (the "Binding Allocation Schedule"). In the event that the
Purchaser does not deliver to the Seller the Proposed Allocation Schedule within
the time period specified in Section 3.3(a), the Seller shall be free to
allocate the Purchase Price and the Assumed Liabilities in such manner as the
Seller shall determine in its sole discretion.
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(c) If the Seller shall raise any objections within the
Response Period, the Purchaser and the Seller shall negotiate in good faith and
use their commercially reasonable efforts to resolve such dispute as soon as
practicable after the delivery of the Allocation Objection Notice in a manner
consistent with Section 1060 of the Code and the Treasury Regulations thereunder
(such resolution, the "Agreed Allocation Schedule"); provided, however, that if
the Purchaser and the Seller shall not have reached an agreement regarding the
Proposed Allocation Schedule by the twentieth (20th) Business Day following the
delivery of such Allocation Objection Notice, the parties shall be free to make
their respective allocations as each determines in its sole discretion.
(d) Any subsequent adjustments to the sum of the Purchase
Price and Assumed Liabilities shall be reflected in the Proposed Allocation
Schedule, the Binding Allocation Schedule, or the Agreed Allocation Schedule, as
the case may be, in a manner consistent with Section 1060 of the Code and the
Treasury Regulations thereunder.
(e) Each of the Seller and the Purchaser agrees to
cooperate with the other in preparing IRS Form 8594, and to furnish the other
with a copy of such form prepared in draft form within a reasonable period
before its filing due date.
(f) Subject to the provisions of Sections 3.3(b), (c),
(d) and (e), the Purchaser and the Seller each agree to (i) file any Tax Return
required to be filed pursuant to Section 1060 of the Code or the Treasury
Regulations thereunder, (ii) be bound by a Binding Allocation Schedule or an
Agreed Allocation Schedule, (iii) act in a manner consistent with a Binding
Allocation Schedule or an Agreed Allocation Schedule in the preparation of
financial statements and filing of all federal, state and local income Tax
Returns (including filing Form 8594 with their respective federal income Tax
Returns for the taxable year that includes the Closing Date) and in the course
of any Tax audit, Tax review or Tax litigation relating thereto, and (iv) take
no position and cause their Affiliates to take no position inconsistent with a
Binding Allocation Schedule or an Agreed Allocation Schedule for any Tax
purposes unless required by Law or determination of a Governmental Body.
(g) The Purchaser's employer identification number is
00-0000000. The Seller's employer identification number is 00-0000000.
SECTION 4. CLOSING
4.1 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Shearman & Sterling
LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. Eastern Standard
Time on the date that is the last Business Day of the month in which all of the
conditions to Closing set forth in Section 8 and Section 9 hereof are satisfied
or waived (other than those which by their nature are to be satisfied at the
Closing), or at such other time, place or date as the Purchaser and the Seller
may mutually agree in writing (the date upon which the Closing actually occurs
is referred to herein as the "Closing Date"); provided, however, that the
Closing shall not occur earlier than July 30, 2004. The Closing shall be
effective as of the closing of business on the Closing Date.
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4.2 Certain Closing Deliveries by the Seller. At the Closing, the
Seller shall deliver, or cause to be delivered, to the Purchaser the following:
(a) the officer's certificate required by Section 8.5;
(b) a receipt for the Closing Date Payment, duly executed
by an authorized representative of the Seller;
(c) one or more bills of sale, substantially in the form
attached hereto as Exhibit C (the "Bills of Sale"), which Bills of Sale shall be
executed by an authorized representative of the Seller and delivered by the
Seller to the Purchaser or one or more of the Purchaser Subsidiaries (as
designated in writing by the Purchaser no later than fifteen (15) days after the
date hereof);
(d) special warranty deeds (or the equivalent in the
applicable jurisdiction) for the Owned Real Property, in form and substance
reasonably satisfactory to the parties hereto, which deeds shall be prepared by
the Purchaser and duly executed by an authorized representative of the Seller
and delivered by the Seller to the Purchaser or one or more of the Purchaser
Subsidiaries (as designated in writing by the Purchaser no later than fifteen
(15) days after the date hereof);
(e) subject to obtaining the necessary Consents pursuant
to Section 7.9, assignments of the Real Property Leases, substantially in the
form attached hereto as Exhibit F, with such modifications as may be necessary
to conform to applicable Law, duly executed by an authorized representative of
the Seller delivered by the Seller to the Purchaser or one or more of the
Purchaser Subsidiaries (as designated in writing by the Purchaser no later than
fifteen (15) days after the date hereof);
(f) the Seller Real Property Lease, duly executed by an
authorized representative of the Seller delivered by the Seller to the Purchaser
or one or more of the Purchaser Subsidiaries (as designated in writing by the
Purchaser no later than fifteen (15) days after the date hereof);
(g) the Seller Real Property Subleases, duly executed by
an authorized representative of the Seller delivered by the Seller to the
Purchaser or one or more of the Purchaser Subsidiaries (as designated in writing
by the Purchaser no later than fifteen (15) days after the date hereof);
(h) the Purchaser Real Property Leases, duly executed by
an authorized representative of the Seller delivered by the Seller to the
Purchaser or one or more of the Purchaser Subsidiaries (as designated in writing
by the Purchaser no later than fifteen (15) days after the date hereof);
(i) the Purchaser Real Property Sublease, duly executed
by an authorized representative of the Seller delivered by the Seller to the
Purchaser or one or more of the Purchaser Subsidiaries (as designated in writing
by the Purchaser no later than fifteen (15) days after the date hereof);
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(j) a bill of sale, assignment and assumption agreement,
substantially in the form attached hereto as Exhibit I, duly executed by an
authorized representative of the Seller (the "Bill of Sale, Assignment and
Assumption Agreement");
(k) counterparts of each of the Enabling Agreements, each
duly executed by an authorized representative of the Seller;
(l) an officer's incumbency certificate of the Seller,
dated as of the Closing Date;
(m) the Interim Financial Statements;
(n) counterparts of the Seller Parent Letter, duly
executed by an authorized representative of the Seller Parent; and
(o) all other documents, instruments and writings
required to be delivered by the Seller at or prior to the Closing pursuant to
this Agreement.
4.3 Certain Closing Deliveries by the Purchaser. At the Closing,
the Purchaser shall deliver, or cause to be delivered, to the Seller the
following:
(a) the officer's certificate required by Section 9.3;
(b) payment of the Closing Date Payment;
(c) counterparts of the assignments of the Real Property
Leases, as set forth in Section 4.2(e), duly executed by an authorized
representative of the Purchaser or of one or more of the Purchaser Subsidiaries
(as designated in writing by the Purchaser no later than fifteen (15) days after
the date hereof);
(d) the Purchaser Real Property Leases, duly executed by
an authorized representative of the Purchaser or of one or more of the Purchaser
Subsidiaries (as designated in writing by the Purchaser no later than fifteen
(15) days after the date hereof);
(e) the Purchaser Real Property Sublease, duly executed
by an authorized representative of the Purchaser or of one or more of the
Purchaser Subsidiaries (as designated in writing by the Purchaser no later than
fifteen (15) days after the date hereof);
(f) the Seller Real Property Leases, duly executed by an
authorized representative of the Purchaser or of one or more of the Purchaser
Subsidiaries (as designated in writing by the Purchaser no later than fifteen
(15) days after the date hereof);
(g) the Seller Real Property Sublease, duly executed by
an authorized representative of the Purchaser or of one or more of the Purchaser
Subsidiaries (as designated in writing by the Purchaser no later than fifteen
(15) days after the date hereof);
(h) a counterpart of the Bill of Sale, Assignment and
Assumption Agreement, duly executed by an authorized representative of the
Purchaser;
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(i) counterparts of the Bills of Sale, duly executed by
an authorized representative of the Purchaser and the applicable Purchaser
Subsidiary; (j) counterparts of each of the Enabling Agreements, duly executed
by an authorized representative of the Purchaser;
(k) an officer's incumbency certificate of the Purchaser,
dated as of the Closing Date;
(l) counterparts of the Seller Parent Letter, duly
executed by an authorized representative of the Purchaser; and
(m) all other documents, instruments and writings
required to be delivered by the Purchaser at or prior to the Closing pursuant to
this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser as of the date
hereof as follows:
5.1 Corporate Organization. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power to own, lease and operate its
properties and the Purchased Assets and to carry on the Packaged Gas Business as
now being conducted. The Seller is duly qualified or licensed to do business as
a foreign corporation and is in good standing in every jurisdiction where the
ownership, leasing or operation of its properties and the Purchased Assets or
the conduct of the Packaged Gas Business require such qualification or licensing
other than jurisdictions where failure to be so qualified or licensed or in good
standing would not, individually or in the aggregate, have a Business Material
Adverse Effect.
5.2 Corporate Authority and Binding Obligation. The Seller has all
requisite corporate power and authority (a) to enter into, execute and deliver
the Transaction Documents, (b) to consummate the transactions contemplated by
the Transaction Documents and (c) to perform fully its obligations under the
Transaction Documents. All corporate acts and other proceedings required to be
taken by or on the part of the Seller and its stockholders to authorize,
execute, deliver and perform the Transaction Documents and the transactions
contemplated thereby have been duly and properly taken, and no other corporate
action by the Seller or its stockholders is required for the due execution,
delivery or performance of this Agreement or the other Transaction Documents.
This Agreement has been duly authorized, executed and delivered by the Seller
and constitutes, and each of the other Transaction Documents will be duly
authorized by the Seller and when duly executed and delivered by the Seller will
constitute, valid and binding obligations of the Seller enforceable against the
Seller in accordance with their respective terms, assuming due execution and
delivery hereof and thereof by the Purchaser, and except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
Laws affecting the rights of creditors generally or by general principles of
equity (regardless of whether such enforcement is considered in a proceeding at
law or in equity).
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5.3 No Violation. The execution and delivery by the Seller of the
Transaction Documents and the consummation of the transactions contemplated
thereby will not (a) violate the certificate of incorporation or bylaws of the
Seller, (b) subject to obtaining the Consents set forth on Schedule 5.4, and
making all filings and notifications set forth on Schedule 5.4, violate any Law
applicable to the Seller, (c) result in the creation of a Lien (other than a
Permitted Lien) on any of the Purchased Assets, (d) violate or result in the
revocation or suspension of any Permit, (e) subject to obtaining the Consents
set forth on Schedule 5.3, violate, conflict with or result in any breach of any
provision of, or constitute, whether after the giving of notice or lapse of time
or both, a default under any Material Contract to which the Seller or its
Affiliate is a party and relating to the Packaged Gas Business or by which any
of the Purchased Assets are bound or (f) subject to obtaining the Consents set
forth and noted accordingly on Schedule 5.3, give rise to a right of
termination, amendment, cancellation or acceleration of any right or obligation
of the Seller (including any right or obligation of the Seller under any of the
Acquired Contracts or Real Property Leases) excluding, in the case of the
foregoing clauses (b), (d), (e) and (f), violations, breaches and defaults
which, either individually or in the aggregate, would not have a Business
Material Adverse Effect.
5.4 Governmental Approvals. No Consent of any Governmental Body is
required in connection with the execution and delivery by the Seller of the
Transaction Documents or its consummation of the transactions contemplated
thereby or its performance of any of the provisions thereof on or after the
Closing Date, except (a) filing by the Seller with the Antitrust Division of the
Department of Justice ("DOJ") and the Federal Trade Commission ("FTC") pursuant
to the HSR Act, and the expiration or termination of all waiting periods
associated therewith, (b) where failure to obtain such consent would not,
individually or in the aggregate, have a Business Material Adverse Effect, (c)
as may be necessary as a result of any facts or circumstances relating solely to
the Purchaser or its Affiliates, and (d) those set forth in Schedule 5.4.
5.5 Financial Statements.
(a) Attached as Schedule 5.5(a)(i) are (i) the unaudited
statements of direct pro forma profit for the Packaged Gas Business for the
fiscal years ended September 30, 2002 and September 30, 2003, (ii) the unaudited
statements of direct pro forma net assets of the Packaged Gas Business as of
September 30, 2002 and September 30, 2003 (the information in clauses (i) and
(ii), collectively, the "Financial Statements"), and (iii) a report by
PricewaterhouseCoopers, addressed to the Purchaser and the Seller. The Financial
Statements were prepared in accordance with the carve-out methodology attached
hereto as Exhibit G and the Accounting Policies and Procedures attached as
Exhibit H (collectively, the "Valuation Principles"), and substantially reflect
the financial condition of the Packaged Gas Business as of the respective dates
and the results of operations of the Packaged Gas Business for such respective
periods, in each case in all material respects, subject to, and in accordance
with, the Valuation Principles. Attached as Schedule 5.5(a)(ii) is a schedule of
the bulk gas volumes by location (except for Helium and Hydrogen, which are
shown in the aggregate) for the fiscal year ended September 30, 2003. For the
fiscal year ended September 30, 2003, the costs and expenses relating to bulk
gas costs are substantially reflected in the Financial Statements for such
fiscal year in all material respects.
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(b) When delivered, the Interim Financial Statements
shall have been prepared in accordance with the Valuation Principles, shall be
accompanied by a report by PricewaterhouseCoopers, addressed to the Purchaser
and the Seller, with the same scope as, and using the same procedures used in
preparing, the Financial Statements and shall substantially reflect the
financial condition of the Packaged Gas Business as of the respective dates and
the results of operations of the Packaged Gas Business for such respective
periods, in each case in all material respects, subject to, and in accordance
with, the Valuation Principles. "Interim Financial Statements" shall mean (i)
the unaudited statement of direct pro forma profit for the period from October
1, 2003 through the date (the "Interim Financial Statement Date") that is at
least sixty (60) days but no more than ninety-three (93) days prior to the
Closing Date; provided, that the Seller shall use its commercially reasonable
efforts to utilize the date that is sixty (60) days prior to the Closing Date as
the Interim Financial Statement Date; and (ii) the unaudited statement of direct
pro forma net assets as of the Interim Financial Statement Date.
5.6 No Business Material Adverse Change. Since September 30, 2003
through the date hereof there has not been any Business Material Adverse Effect.
Except as set forth in Schedule 5.6, since September 30, 2003, the Seller has
not:
(a) except with respect to the disposition of Containers
(which is covered by Section 5.9(b)), sold, leased, abandoned or otherwise
transferred or disposed of (or contracted to sell, lease or otherwise transfer)
any assets or properties of the Packaged Gas Business except in the Ordinary
Course of Business;
(b) suffered or incurred any damage, destruction or other
casualty loss, individually in excess of $100,000 or in the aggregate in excess
of $500,000, to any of the Purchased Assets or Leased Real Property, normal wear
and tear excepted; or
(c) agreed, whether in writing or otherwise, to take an
action described in the foregoing clause (a).
5.7 Conduct of the Packaged Gas Business. Except as set forth on
Schedule 5.7, since September 30, 2003, the Seller has conducted the Packaged
Gas Business in the Ordinary Course of Business.
5.8 [Intentionally Omitted].
5.9 Purchased Assets.
(a) Set forth on Schedule 5.9(a)(i) is a list, which list
is true, correct and complete in all material respects, of all material items of
Purchased Equipment (which list describes which Purchased Equipment is owned by
the Seller and which Purchased Equipment is used by the Seller pursuant to a
lease or sub-lease). Except (a) as set forth on Schedule 5.9(a)(ii), (b) for any
Real Property, which is covered by the provisions of Section 5.14, (c) as would
not, individually or in the aggregate, have a Business Material Adverse Effect,
and (d) for Permitted Liens, the Seller has good title to all the properties and
assets comprising any part of the Purchased Assets, free and clear of all Liens,
or has a valid lease to use such properties and assets comprising any part of
the Purchased Assets for the benefit of the Packaged Gas Business.
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Except (x) as set forth on Schedule 5.9(a)(ii), (y) for any Real Property, which
is covered by the provisions of Section 5.14, or (z) as would not, individually
or in the aggregate, have a Business Material Adverse Effect, all property and
assets comprising any part of the Purchased Assets which are used, as opposed to
held for use, by the Seller are, in all respects, in good operating condition
and repair, normal wear and tear excepted. Except as set forth on Schedule
5.9(a)(iii), the Purchased Assets at the Closing Date, together with the rights
and services made available in the Transaction Documents, will constitute all of
the assets (personal, fixed, real or otherwise), Permits, Contracts, properties
and rights which are necessary for the continued conduct of the Packaged Gas
Business after the Closing in substantially the same manner as currently
conducted by the Seller on and since September 30, 2003. As of the Closing Date,
the Purchased Equipment will be all the tangible personal property, in
conjunction with the Joint Use Property, necessary to conduct the Packaged Gas
Business as conducted by the Seller on and since September 30, 2003. All of the
assets reflected in the Financial Statements are included in the Purchased
Assets. For purposes of Schedule 5.9(a)(i), any item of Purchased Equipment
shall be deemed "a material item of Purchased Equipment" if it has a net book
value as of the date hereof (in the case of owned property), or has a remaining
rental payment due (in the case of leased property), in excess of $100,000.
(b) The Containers included in the Purchased Assets will
be sufficient for the Purchaser to conduct and operate the Packaged Gas Business
at the Closing Date in substantially the same manner in which it was conducted
by the Seller on and since September 30, 2003. Except as set forth on Schedule
5.9(b)(i), since March 31, 2003, Seller has not, in one or a series of
transactions, conveyed or otherwise transferred title to more than 100
Containers used or held for use in the Packaged Gas Business to any one Third
Party or to any Affiliate of the Seller. Except as set forth on Schedule
5.9(b)(ii), all Containers that are included in the Purchased Assets are in the
possession of the Seller, or if in the possession of any Person other than the
Seller, are held pursuant to a binding agreement obligating such Person to
return to the Seller, or to reimburse the Seller for, such Containers. Schedule
5.9(b)(iii) is a list of the total number of Containers included in the
Purchased Assets as at September 30, 2003. Schedule 5.9(b)(iii) also specifies
the aggregate amount of Containers for industrial gases and specialty gases and
for liquids in dewars. The Seller owns at least 80% of the aggregate balance of
the Containers listed in Schedule 5.9(b)(iii), free and clear of all Liens.
Schedule 5.9(b)(iv) sets forth the net write-ons and write-offs (in the
aggregate) of Containers from September 30, 2003 to February 29, 2004. The
Seller's records relating to the Containers included in the Purchased Assets
have been kept and managed by the Seller to reflect (x) substantially all
transactions, conveyance, transfers, dispositions and shipment of the Containers
and the dates thereof and (y) to the Knowledge of Seller, any adjustment to
customer Container balances that the Seller has agreed to with any customer.
(c) Set forth on Schedules 2.1(c)(i) through (iv) is a
true, complete and correct list of all motor vehicles (excluding forklifts),
tractors, tube trailers, leases with respect to the Seller-leased vehicles of
the Employees, and bulk tanks currently primarily used by the Seller in the
Packaged Gas Business (together with a description of whether each such motor
vehicle, tube trailer, tractor or bulk tank is owned or leased by the Seller).
The Purchased Equipment (whether sold or otherwise transferred through the
assignment and assumption of equipment leases to the Purchaser) will include all
of the motor vehicles, tractors, tube trailers, cars (subject to update
39
mechanics set forth in Section 2.1(c)(iii)) and bulk tanks listed on Schedules
2.1(c)(i) through (iv).
(d) Other than the Retained Equipment and Retained
Inventory, each item of Excluded Equipment and Excluded Inventory is owned,
leased, used or held for use by the Seller primarily in connection with an
Excluded Business.
5.10 Litigation and Proceedings. Except (i) with respect to
Environmental Laws, Environmental Permits, Environmental Liabilities and any
other matters related thereto (which are covered exclusively by Section 5.20),
and (ii) as set forth in Schedule 5.10 hereto:
(a) the Seller is not a party to, or, to the Knowledge of
the Seller, threatened with, any Action by or before any Governmental Body
pertaining to the Packaged Gas Business, the Purchased Assets or the Leased Real
Property, in each case, that would be reasonably expected to result in (i) the
awarding of damages in excess of $1,000,000, or (ii) the granting of injunctive
relief that would have a Business Material Adverse Effect;
(b) there are no outstanding Orders relating to the
Packaged Gas Business, the Purchased Assets or the Leased Real Property, except
as would not, individually or in the aggregate, have a Business Material Adverse
Effect;
(c) the Seller is not in violation of any Order relating
to the Packaged Gas Business, the Purchased Assets or the Leased Real Property;
(d) to the Knowledge of the Seller, there are no
conditions, facts or circumstances relating to the Packaged Gas Business, the
Purchased Assets or the Leased Real Property that would reasonably be likely to
give rise to any Action that would, individually or in the aggregate, have a
Business Material Adverse Effect; and
(e) there are no Actions, and to the Knowledge of the
Seller there are no threatened Actions, against the Seller for defective parts,
equipment, services or other products purchased, manufactured, shipped or in the
course of operating the Packaged Gas Business except as would not, individually
or in the aggregate, have a Business Material Adverse Effect.
5.11 Accounts Receivable. All Accounts Receivable have been
computed in accordance with the Valuation Principles.
5.12 Purchased Inventory. Set forth on Schedule 5.12 is a
description of the material Purchased Inventory. The Purchased Inventory is
reflected in the Financial Statements in all material respects and has been
valued in accordance with the Valuation Principles. The Purchased Inventory has
been purchased or maintained by the Seller in the Ordinary Course of Business.
After taking into account the reserves on the Financial Statements, the
Purchased Inventory is usable or salable in the Ordinary Course of Business and
meets accepted industry standards for quality.
40
5.13 Intellectual Property.
(a) Schedule 5.13(a) sets forth a list of all domestic
filings and applications for Purchased Intellectual Property.
(b) Schedule 5.13(b) sets forth a list of all material IP
Licenses (other than agreements for off-the-shelf software).
(c) To the Knowledge of the Seller, all of the Purchased
Intellectual Property is valid and enforceable. To the Knowledge of the Seller,
the Seller has taken commercially reasonable actions to maintain and protect
each item of the Purchased Intellectual Property and has taken all commercially
reasonable precautions to protect the secrecy, confidentiality and value of any
Trade Secret that is an element of the Purchased Intellectual Property and the
proprietary nature and value of the Purchased Intellectual Property.
(d) Except as set forth on Schedule 5.13(d), the
Purchased Intellectual Property, the Marks and the Licensed Intellectual
Property constitute all of the Intellectual Property rights owned or licensed to
the Seller and necessary to operate the Packaged Gas Business as presently
conducted by the Seller.
(e) The Seller owns (or otherwise has the right to use
pursuant to a valid license, sublicense or other agreement) the Purchased
Intellectual Property, free and clear of all Liens, and has the right to use all
of the Purchased Intellectual Property in connection with the operation of the
Packaged Gas Business and to grant the licenses contained in the Intellectual
Property License.
(f) To the Knowledge of the Seller, the conduct of the
Packaged Gas Business, as currently conducted by the Seller, does not infringe
upon or otherwise violate the Intellectual Property rights of any Third Party.
(g) To the Knowledge of the Seller, no Person is
infringing upon or otherwise violating the rights of the Seller in the Purchased
Intellectual Property.
(h) No Action is pending and no written claim has been
made against the Seller, or, to the Knowledge of the Seller, is threatened,
contesting (i) the Seller's ownership of, (ii) the validity of the Seller's
rights in, or (iii) the Seller's rights to use, sell or license, the Purchased
Intellectual Property.
(i) No present or former employee or consultant of the
Seller, and no other Person, owns any proprietary, financial or other interest,
direct or indirect, in whole or in part, in the Purchased Intellectual Property.
(j) All Software that is an element of the Purchased
Intellectual Property performs in all material respects in accordance with its
documentation, is free from any material software defect and, to the Knowledge
of the Seller, does not contain any self-help mechanism or any Unauthorized
Code.
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(k) Upon the completion of the transactions contemplated
by this Agreement, Purchaser will have sole ownership of, and good and valid
title to, all of the Purchased Intellectual Property.
5.14 Real Property.
(a) Ownership of Premises. The Seller is the owner of fee
title to the Owned Real Property, free and clear of all Liens (other than
Permitted Owned Real Property Exceptions), and has not, during its period of
ownership of the Owned Real Property, created or permitted the creation of any
Liens that would render title to said Owned Real Property unmarketable. Except
for the Retained Real Property, the Owned Real Property and the Leased Real
Property constitute all of the real property used by the Seller on the date
hereof in the operation (as opposed to the managerial and administrative support
and customer service) of the Packaged Gas Business. Set forth on Schedule
5.14(a) is a true, correct and complete list of all of the Owned Real Property.
(b) Leased Properties. Set forth on Schedule 5.14(b) is a
true, correct and complete list of all of the Leased Real Property and all of
the Real Property Leases. The Seller has heretofore made available to the
Purchaser, true, correct and complete copies of all Real Property Leases
(including all modifications, amendments and supplements thereto). Except as set
forth on Schedule 5.14(b), each Real Property Lease is valid, binding and in
full force and effect, and all rent and other sums and charges due and payable
by the Seller as tenant thereunder are current or will be paid within the
applicable notice or grace period, if any, prior to Closing; the Seller has not
received any written notice of any default or termination under any Real
Property Lease; no termination event or condition or uncured default on the part
of the Seller or, to the Knowledge of the Seller, the landlord, exists under any
Real Property Lease; and, to the Knowledge of the Seller, no event has occurred
and no condition exists which, with the giving of notice or the lapse of time or
both, would constitute such a material default or termination event or
condition. The Seller has no ownership, financial or other interest in the
landlord under any Real Property Lease.
(c) Condition and Operation of Improvements. All
components of all buildings, structures and other improvements included within
Real Property (the "Improvements"), including, without limitation, to the roofs
and structural elements thereof and the heating, ventilation, air conditioning,
plumbing, electrical, mechanical, sewer, waste water, storm water, paving and
parking equipment, systems and facilities included therein, are satisfactory for
the conduct of the Packaged Gas Business substantially as it has been conducted
by the Seller in the twelve months prior to the date hereof. All hook-up fees
and associated charges relating to water, gas, electrical, steam, compressed
air, telecommunication, sanitary and storm sewage lines and systems and other
similar systems serving the Real Property have been fully paid.
(d) No Options. Except as set forth in Schedule 5.14(d)
and as set forth in the Real Property Leases, the Seller does not own or hold,
and is not obligated under or a party to, any option, right of first refusal or
other contractual right to purchase, acquire, sell or dispose of any of the Real
Property or any portion thereof or interest therein.
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(e) Condemnation. There are no pending, and the Seller
has not received written notice of any, and has no Knowledge of any threatened
or contemplated, taking or condemnation proceeding affecting any part of the
Real Property or of any sale or other disposition of any part of the Real
Property in lieu of condemnation.
(f) Casualty. No material portion of the Real Property
has suffered any material damage by fire or other casualty which has not been
repaired and substantially restored to its condition prior to such fire or other
casualty.
5.15 Permits. Schedule 5.15 includes a true, correct and complete
list of all Permits that are material or necessary to the operation of the
Packaged Gas Business as presently conducted or material to the Seller's current
use of the Purchased Assets (the "Material Permits"). Except as set forth in
Schedule 5.15, or as would not, individually or in the aggregate, have a
Business Material Adverse Effect, and except with respect to Environmental
Permits (which are covered exclusively by Section 5.20), the Seller has not
received written notice that any Material Permits are not in full force and
effect, and no claim of which the Seller has received written service is pending
or, to the Knowledge of the Seller, threatened to revoke or limit any such
Material Permit. To the Knowledge of the Seller, there are no conditions, facts
or circumstances that would reasonably be likely to cause any Material Permit to
be revoked or limited. Except as set forth on Schedule 5.15, or as would not,
individually or in the aggregate, have a Business Material Adverse Effect, all
of the Material Permits are transferable to the Purchaser. Except as would not,
individually or in the aggregate, have a Business Material Adverse Effect, the
Seller is in compliance with the terms of the Material Permits.
5.16 Agreements.
(a) Schedule 5.16(a) hereto lists all Acquired Contracts
in effect on the date hereof that (i) (w) in the case of Acquired Contracts with
customers of the Packaged Gas Business other than in Hawaii, involve obligations
in an amount greater than $284,000 in any year (calculated on the basis of
revenues for the six month period ended December 31, 2003 on an annualized
basis), (x) in the case of Acquired Contracts with customers of the Packaged Gas
Business located in Hawaii, involve obligations in an amount greater than
$360,000 in any year (calculated on the basis of revenues for the twelve-month
period ended September 30, 2003) and (y) other than with respect to any Acquired
Contracts with customers, involve obligations in an amount greater than $500,000
during the remaining non-cancelable term of such Acquired Contract, (ii) are
with Material Customers for the sharing of fees, the rebating of charges or
other similar arrangements, (iii) contain (A) covenants of the Seller not to
compete in any line of business or with any Person in any geographical area or
covenants of any other Person not to compete with the Seller in any line of
business or in any geographical area or (B) rights of first refusal, rights of
first option or any similar rights, in each case, in favor of any Third Party,
(iv) contain any "most favored nation" type provision, (v) contain any "take or
pay" type provision in favor of the Third Party, and (vi) contain any power of
attorney in favor of any Third Party. True, correct and complete copies, except
for redactions of customer and pricing information, of the Material Contracts,
in each case, as amended, supplemented or otherwise modified to date, have been
made available to the Purchaser.
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(b) Except as set forth on Schedule 5.3, the transfer and
assignment by the Seller of the Material Contracts pursuant to the Transaction
Documents does not require the Consent of any Person.
(c) Each of the Material Contracts contains the entire
agreement of the parties thereto with respect to the subject matter thereof and
constitutes the legal, valid and binding obligation of the Seller, is in full
force and effect, and is enforceable in accordance with its terms except as
enforcement may be limited by (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors' rights generally and (ii) general principles of equity. The Seller is
not in material default under any Material Contract; nor does any condition
exist that, with notice or lapse of time or both, would constitute a material
default by the Seller thereunder. To the Knowledge of the Seller, no other party
to any Material Contract is in material default thereunder, nor does any
condition exist that, with notice or lapse of time or both, would constitute a
material default thereunder. Except as set forth on Schedule 5.16(c), the Seller
has not received written notice that any Person intends to terminate (whether
for cause or convenience) or default under any Material Contract before its
stated term, if any.
5.17 Customers. Schedule 5.17 lists, (i) for the six-month period
ended December 31, 2003, each of top one hundred (100) customers of the Packaged
Gas Business located other than in Hawaii (based on revenues for such six-month
period) during such period and (ii) for the twelve-month period ended September
30, 2003, each of the top ten (10) customers of the Packaged Gas Business
located in Hawaii (based on revenues for such twelve-month period) during such
period (the customers described in clauses (i) and (ii), collectively, the
"Material Customers"). The relationships of the Seller with its suppliers and
Material Customers are good commercial working relationships. The Seller has not
engaged in any forward selling with respect to the Packaged Gas Business or
granted any unusual sales or terms to any customer that are currently
applicable.
5.18 Employees.
(a) Schedule 5.18(a) hereto lists all Employee Benefit
and Compensation Plans.
(b) Set forth in Schedule 5.18(b) is each of the Employee
Benefit and Compensation Plans that is a "multiemployer plan" within the meaning
of Section 3(37) or 4001(a)(3) of ERISA (each, a "Multiemployer Plan").
(c) Neither the Seller nor any Affiliate has terminated
an "employee benefit pension plan" (within the meaning of Section 3(2) of ERISA)
or taken any other action with respect to any Employee Benefit and Compensation
Plan that could result in a Lien on any of the Purchased Assets under Title IV
of ERISA.
(d) With respect to the Employees and the Packaged Gas
Business, except as set forth on Schedule 5.18(d): (i) no collective bargaining
or other agreement exists between the Seller and any labor organization, and no
employment agreement exists between the Seller and any Employee; (ii) the Seller
has not received written notice that any labor representation
44
question presently exists, and no petition concerning representation under the
National Labor Relations Act, as amended, is pending or, to the Knowledge of the
Seller, threatened; (iii) no unfair labor practice charge or complaint is
pending or, to the Knowledge of the Seller, threatened, before the National
Labor Relations Board; (iv) no labor dispute, strike, picketing, work slowdown,
work stoppage, or, to the Knowledge of the Seller, handbilling, is pending or,
to the Knowledge of the Seller, threatened; and (v) since January 1, 2001, no
material Order has been rendered or issued, and no material settlement or
agreement has been entered into or executed, regarding any matter set forth in
this Section 5.18(d).
(e) The Seller has provided the Purchaser with (i) the
name, date of hire, title, salary or hourly rate of pay, current bonus target
and work location for each Aligned Employee, CSC Employee, Sales Employee and
Unaligned Employee and (ii) a list of each Aligned Employee and Sales Employee
who has a Seller-leased vehicle. Since September 30, 2003, no salary changes or
promotions have been implemented by the Seller with respect to any Aligned
Employee, Sales Employee, CSC Employee or Unaligned Employee except for salary
increases and promotions made in the Ordinary Course of Business.
(f) Each Transferred Employee who is participating in any
retirement plan of Seller or any of its Affiliates that is intended to be
qualified under Section 401(a) of the Code immediately prior to the Closing Date
and who has accrued a benefit, and/or who has an account balance, under any such
plan as of the Closing Date shall be fully vested in such benefit, and/or such
account, as of the Closing Date.
5.19 Compliance with Laws. Except as set forth in Schedule 5.19 and
except with respect to Environmental Laws, Environmental Permits, Environmental
Liabilities and any other matters related thereto (which are covered exclusively
by Section 5.20), the Seller is in compliance with all Laws pertaining to the
Packaged Gas Business, the Purchased Assets or the Leased Real Property, except
where the failure to so comply would not, individually or in the aggregate, have
a Business Material Adverse Effect. The Seller has no notice of, or been charged
with, any material violation of any material Law pertaining to the Packaged Gas
Business, the Purchased Assets or the Leased Real Property.
5.20 Environmental. Except as set forth in Schedule 5.20 or as
would not reasonably be expected to have, individually or in the aggregate, a
Business Material Adverse Effect:
(a) the Packaged Gas Business, the Purchased Assets and,
to the Knowledge of Seller, the Leased Real Property are in compliance with all
Environmental Laws, and there are no pending Actions of which the Seller has
received notice, or to the Knowledge of the Seller, threatened Actions pursuant
to an Environmental Law;
(b) there are no outstanding Orders pursuant to any
Environmental Law where the potential liability could be reasonably expected to
exceed $25,000 and the Seller is not in violation of any Order pursuant to an
Environmental Law;
(c) the Seller has obtained and is in compliance with all
Environmental Permits necessary for the operation of the Packaged Gas Business
and the Purchased Assets as currently conducted by the Seller and there are no
pending Actions of which the Seller has
45
received notice, or to the Knowledge of the Seller, threatened Actions to revoke
or limit any Environmental Permits;
(d) to the Knowledge of the Seller, there is no Condition
on, under or about the Owned Real Property, the Leased Real Property or the real
property that is subject to the Real Property Leases (to the extent related to
the Purchased Assets) for which there is a legal obligation to perform any
Remediation; and
(e) to the Knowledge of the Seller, all material
environmental investigation and/or assessment reports relating to the Owned Real
Property, the Leased Real Property or real property that is subject to the Real
Property Leases (to the extent related to the Purchased Assets) have been made
available either to the Purchaser or to the environmental consultants preparing
the Phase I Reports.
5.21 Taxes. Except as set forth in Schedule 5.21:
(a) The Seller has not received written notice of any
claim from any Governmental Body in a jurisdiction where the Seller does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction
by reason of the operation of the Packaged Gas Business;
(b) No Tax deficiencies (including penalties and
interest) of any kind have been assessed against the Seller with respect to the
Purchased Assets other than deficiencies that have been satisfied by payment or
settlement, or withdrawn;
(c) None of the Purchased Assets constitutes "tax exempt
use property" within the meaning of Section 168(h)(1) of the Code; and
(d) None of the Purchased Assets is property required to
be treated as being owned by another person pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, and in
effect immediately prior to the enactment of the Tax Reform Act of 1986.
5.22 Full Disclosure. To the Knowledge of the Seller, no
representation or warranty contained in this Section 5 (including the Schedules
hereto) omits to state a material fact necessary to make the statements
contained herein not misleading.
5.23 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THE
TRANSACTION DOCUMENTS (INCLUDING THE SCHEDULES AND EXHIBITS THERETO), NEITHER
THE SELLER NOR ANY OF ITS AFFILIATES OFFICERS, DIRECTORS, EMPLOYEES, AGENTS NOR
REPRESENTATIVES MAKES OR SHALL BE DEEMED TO MAKE ANY WARRANTY OR REPRESENTATION,
WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, CONCERNING THE
PURCHASED ASSETS OR THE PACKAGED GAS BUSINESS, OR THE MERCHANTABILITY OR FITNESS
THEREOF FOR ANY PURPOSE.
46
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as of the date
hereof as follows:
6.1 Corporate Organization. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. It has all requisite corporate power to own, lease and operate its
properties, to carry on its business as now being conducted, to assume the
Assumed Liabilities and to accept the Bill of Sale, Assignment and Assumption
Agreement. The Purchaser is duly qualified or licensed to do business as a
foreign corporation and is in good standing in every jurisdiction where the
ownership, leasing or operation of its properties or the conduct of its business
require such qualification or licensing, other than jurisdictions where failure
to be so qualified or licensed would not have a material adverse effect on the
Purchaser's ability to consummate the transactions contemplated by the
Transaction Documents.
6.2 Corporate Authority. The Purchaser has all requisite corporate
power and authority (a) to enter into, execute and deliver the Transaction
Documents to which it is or shall be a party, (b) to consummate the transactions
contemplated by the Transaction Documents to which it is or shall be a party,
and (c) to perform fully its obligations under the Transaction Documents to
which it is or shall be a party. All corporate acts and other proceedings
required to be taken by or on the part of the Purchaser and its stockholders to
authorize, execute, deliver and perform the Transaction Documents to which it is
or shall be a party and the transactions contemplated thereby have been duly and
properly taken, and no other corporate action by the Purchaser or its
stockholders is required for the due execution, delivery or performance of this
Agreement or the other Transaction Documents to which it is or shall be a party.
This Agreement has been duly authorized, executed and delivered by the Purchaser
and constitutes, and each of the other Transaction Documents to which it is or
shall be a party has been duly authorized by the Purchaser and when duly
executed and delivered by the Purchaser will constitute, valid and binding
obligations of the Purchaser, enforceable against the Purchaser in accordance
with their respective terms, assuming due execution and delivery hereof and
thereof by the Seller, and except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws, now or hereafter
in effect, relating to, or affecting the rights of creditors or creditors'
rights generally or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding at law or in equity).
6.3 No Violation. Except for the Consents to be obtained under
Section 5.3 and making all filings and notifications set forth in Schedule 6.4,
the execution and delivery by the Purchaser of the Transaction Documents and the
consummation of the transactions contemplated thereby will not (a) violate the
certificate of incorporation or bylaws of the Purchaser, (b) violate any Law
applicable to the Purchaser, (c) violate or result in the revocation or
suspension of any Permit, or (d) violate, conflict with or result in any breach
of any provision of, or constitute, whether after the giving of notice or lapse
of time or both, a default under any Contract to which the Purchaser is a party,
excluding, in the case of the foregoing clauses (b), (c) and (d), violations,
breaches and defaults which, either individually or in the aggregate, would not
have a material adverse effect on the Purchaser's ability to consummate the
transactions contemplated by the Transaction Documents to which it is or shall
be a party.
47
6.4 Governmental Approvals. No Consent of any Governmental Body is
required in connection with the execution and delivery by the Purchaser of the
Transaction Documents or its consummation of the transactions contemplated
thereby or its performance of any of the provisions thereof on or after the
Closing Date, except (a) filing by the Purchaser with the DOJ and the FTC
pursuant to the HSR Act, and the expiration or termination of all waiting
periods associated therewith, (b) where failure to obtain such Consent would not
have a material adverse effect on the Purchaser's ability to consummate the
transactions contemplated by the Transaction Documents to which it is or shall
be a party, (c) as may be necessary as a result of any facts or circumstances
relating solely to the Seller or its Affiliates, or (d) those set forth in
Schedule 6.4.
6.5 Financing. As of the date hereof, the Purchaser has obtained
any approvals required from the lenders under the Credit Agreement to effect the
purchase of the Purchased Assets, on the terms and subject to the conditions
contained in the Credit Agreement. The Purchaser is not in default under the
Credit Agreement, nor, to the Knowledge of the Purchaser, does any condition
exist that, with notice or lapse of time or both, would constitute a default by
the Purchaser thereunder or would impair the Purchaser's ability to borrow under
the Credit Agreement.
6.6 Absence of Litigation. No Litigation is pending or, to the
Knowledge of the Purchaser, threatened which seeks to delay or prevent the
consummation of the transactions contemplated hereby or which is reasonably
likely to materially and adversely affect or restrict the Purchaser's ability to
consummate the transactions contemplated in this Agreement.
SECTION 7. FURTHER COVENANTS
The parties hereto hereby further covenant and agree as follows:
7.1 Access to Information and Documents; Post-Closing Cooperation.
(a) From and after the date hereof until the Closing,
solely for purposes of facilitating the orderly, future transfer of the
Purchased Assets from the Seller to the Purchaser (but, subject to the terms of
the MCDA and this Agreement, the Purchaser shall not be limited in its use of
any information learned by it in connection therewith), the Seller shall give
the officers, employees, representatives, financing sources, accountants and
other designees of the Purchaser reasonable access, during reasonable business
hours following reasonable prior written notice, under the supervision of a
representative of, and subject in all instances to the reasonable approval of,
the Seller, to the offices, production facilities, plants, properties, written
Acquired Contracts and other assets, books and records, officers, employees,
representatives and accountants of the Packaged Gas Business and shall cause
their respective Affiliates, officers, employees, representatives and
accountants promptly to furnish to the Purchaser and its aforesaid
representatives such financial, technical, operating and other information
pertaining to the Packaged Gas Business and the Purchased Assets as the
Purchaser shall from time to time reasonably request, subject in all instances
to the approval of the Seller, and to discuss such information with such
representatives; provided, however, that (i) such investigation shall not
unreasonably interfere with any of the businesses or operations of the Seller or
its Affiliates, and (ii) each such officer, employee, representative, financing
source, accountant or other designee of the Purchaser shall be subject to a duty
to maintain the confidentiality of any information so
48
received in accordance with the terms of the Mutual Confidential Non-Disclosure
Agreement between the Purchaser and the Seller, dated as of July 17, 2002, as
amended by the Amendment to Mutual Confidential Disclosure Agreement, dated as
of January 16, 2004, the Letter Agreement Addendum to the Mutual Confidential
Disclosure Agreement - Site Visits, dated February 4, 2004, and the Letter
Agreement Addendum to the Mutual Confidential Disclosure Agreement -
Confidential Information, dated March 24, 2004, as amended on March 30, 2004
(collectively, the "MCDA"). No investigation by the Purchaser shall diminish or
obviate any of the representations, warranties, covenants or agreements of the
Seller contained in this Agreement.
(b) From and after the Closing Date, the Seller shall
provide the officers, employees, representatives and accountants of the
Purchaser and the Purchaser shall provide the officers, employees,
representatives and accountants of the Seller, reasonable access, during
reasonable business hours following reasonable prior notice, to any books and
records relating to the Packaged Gas Business and the Purchased Assets and to
discuss the information contained in such books and records, as the other party
may reasonably request. The Purchaser shall cause to be preserved and kept all
records relating to the Purchased Assets that are included in the assets
transferred to the Purchaser for such period from and after the Closing as may
be required by or needed for compliance with applicable Law. The Seller shall
cause to be preserved and kept all records retained by it relating to the
Purchased Assets for such period from and after the Closing as may be required
by or needed for compliance with applicable Law.
7.2 Transition.
(a) Transition Services. Each of the Seller and the
Purchaser shall, and Purchaser shall cause any applicable Purchaser Subsidiary
designated by the Purchaser and party to a Bill of Sale to, use commercially
reasonable efforts to complete the Key Transition Items and all other functions
and services described in the Transition Plan, and to complete the Key
Transition Items and all other functions and services described in the
Transition Plan without any unscheduled disruption or degradation of the quality
or continuity of the Packaged Gas Business or the Excluded Businesses (each such
task description in the Transition Plan, a "Transition Service" and
collectively, the "Transition Services"). The Seller shall provide access to the
Purchaser and the Purchaser's officers, employees, representatives and other
designees (which, in the case of National Welders Supply Company, Inc., shall
act through the Purchaser) in accordance with, and subject to, the provisions of
Section 7.1(a). Without limiting the generality of the foregoing, the Seller and
the Purchaser shall use the highest degree of cooperation in completing the
Transition Plan and shall initiate immediate communication for facilitating the
fastest interactive deliveries. Prior to the Closing, the parties shall
cooperate in good faith to address unanticipated situations relating to the
completion of the Transition Plan (for example, delays caused by Third Parties),
including by amending the Transition Plan in accordance with Section 7.2(b).
Each of the Seller and the Purchaser shall use commercially reasonable efforts
to (i) cause their respective agents, suppliers and service providers to
cooperate in good faith with the other party to enable the orderly transition,
and (ii) successfully implement each Transition Service by the start date set
forth in the Transition Plan (where applicable) and complete each Transition
Service on or before the deadline for such Transition Service set forth in the
Transition Plan (including both Key Transition Items and all other Transition
Services), or as
49
otherwise agreed upon by the parties. If any services, functions or
responsibilities not specifically described in the Transition Plan are
identified as being required to allow Purchaser to assume full operational
control of the Packaged Gas Business and the Purchased Assets at the Closing,
the parties shall modify or update the Transition Plan in accordance with the
provisions of Section 7.2(b). Except as set forth in Section 7.32, and as
otherwise agreed by the parties, each of the parties hereto shall bear its own
costs and expenses incurred in connection with this Section 7.2.
(b) Transition Plan. The Transition Plan identifies (i)
the Transition Services to be performed by the Seller and Purchaser, (ii) the
start date (where applicable) for implementation of a Transition Service by the
Seller and Purchaser, and (iii) the completion date by which each such
Transition Service is to be completed. The Transition Plan shall be modified and
updated by written agreement of the parties during the Transition Period and
neither party shall unreasonably withhold its consent to such modification or
updating. Each party shall promptly notify the other party of any delay or
anticipated delay in meeting any deadline set forth in the Transition Plan as
such notifying party becomes aware of any such delay or anticipated delay.
(c) Transition Managers, Dedication of Resources. As part
of the Seller's obligations under this Agreement, the Seller shall designate an
individual for each category of Transition Services as set forth in the
Transition Plan. Such individuals shall be responsible for managing and
implementing the Transition Services. The Purchaser shall designate an
individual for each category of Transition Service to interface with the Sellers
designees described in the two preceding sentences. Each of the Seller and the
Purchaser acknowledges that the Transition Services are necessary to permit a
smooth transition of the Packaged Gas Business to the Purchaser and to preserve
the goodwill associated with the Packaged Gas Business and the Excluded
Businesses. Each of the Seller and the Purchaser shall dedicate the resources it
deems necessary to assure the accomplishment of its obligations under the
Transition Plan.
(d) Stable Environment. Except as set forth on Schedule
7.2(d), Until the Closing Date, the Seller shall not make any material changes
to the information technology infrastructure that would adversely impact the
Purchaser or the transition of the Packaged Gas Business (including the
Purchaser's ability to extract, download or convert data), without the
Purchaser's prior written consent.
(e) Delays/Difficulties. Each party shall promptly notify
the other party in writing of any delays or difficulties in implementing the
Transition Services as each party becomes aware of such delays or difficulties.
(f) Post-Closing Services. If and to the extent that the
Transition Plan is not complete prior to the Closing for any reason, (i) the
Purchaser shall deliver to the Seller, as early as practicable following the
Closing, a list setting forth those items under the Transition Plan that have
not been completed and (ii) the Seller shall, at the Purchaser's request and at
Seller's own expense, use its commercially reasonable efforts to complete the
Transition Plan as soon as practicable following the Closing, but in no event
later than sixty (60) days after the Closing Date.
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7.3 Definitionally Purchased and Excluded Assets. If at any time
after the Closing the parties determine that certain assets (including the
Excluded Assets) were definitionally excluded from or included within (as the
case may be) the Purchased Assets to be transferred hereunder or the Joint Use
Property to be jointly used in accordance with Section 7.25, but such assets
were nonetheless intended to be included in, or made available to the Purchaser
or its Affiliates in their operation of, the Purchased Assets, or excluded from
the Purchased Assets and retained by the Seller and its Affiliates in their
operation of the Excluded Assets, or intended to be included as Joint Use
Property, and such assets are necessary to the operation of the Purchased Assets
by the Purchaser or its Affiliates or the operations of the Seller or its
Affiliates with respect to the Excluded Assets, as the case may be, the Seller
and the Purchaser shall cooperate in good faith to determine a mutually
acceptable method for providing the Purchaser or the Seller, and their
respective Affiliates, as the case may be, with timely access to such assets,
taking into account the continued need by the Seller or the Purchaser or their
respective Affiliates for the use of such assets, including by making such
assets Joint Use Property and subject to the provisions of Section 7.25.
7.4 Assistance Relating to Warranty Rights. Each of the parties
shall use its commercially reasonable efforts to cooperate with the other party
as such other party may reasonably request in connection with any claim that
such other party may desire to make against a Third Party under any warranty or
other right relating to any of the Purchased Assets.
7.5 Exercise of Rights of First Refusal. In the event that the
Seller has the right to exercise any right of first refusal relating to the
Packaged Gas Business that is not included in the Purchased Assets, and the
Seller has determined that it does not wish to exercise such right, the Seller
shall consult with the Purchaser. If the Purchaser shall so request, the Seller
shall use its commercially reasonable efforts to cooperate with the Purchaser to
exercise such right for the benefit of the Purchaser.
7.6 Confidentiality Agreements.
(a) Unless and until the Purchaser shall have purchased
the Purchased Assets, for a period of five (5) years from the date hereof, the
Purchaser shall not use for its own purposes or advantages (other than in
connection with the Purchaser's due diligence review and in preparation for the
orderly transition of operational control of the Purchased Assets to the
Purchaser) or publish or disclose to any Third Party (other than legal and
financial consultants of the Purchaser who are subject to a duty to maintain the
confidentiality of the Information) any confidential or proprietary information,
know-how, technology information, analysis, compilations, studies, formulae,
trade secret or other documents prepared by or obtained from the Seller
(including legal and other professional advisors, accountants, consultants and
financial advisors) in connection with the negotiation and consummation of the
transactions contemplated by this Agreement, including business and financial
information, no matter how obtained (orally, in writing or observed), or any
analysis, compilations, studies and other records and documents prepared by the
Purchaser (including legal and other professional advisors, accountants,
consultants and financial advisors) which contain or otherwise reflect such
information (collectively, "Information"), unless and until such Information (i)
is or becomes a matter of public knowledge through no breach by the Purchaser,
(ii) is lawfully acquired from a Third
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Party without restrictions of confidentiality or was already known to the
Purchaser prior to the disclosure by the Seller, (iii) is subsequently
transferred, assigned, conveyed, or licensed to the Purchaser with the right to
use, disclose or license, as applicable, or (iv) the Purchaser is required to
disclose such Information by Law or is required to disclose such Information in
order to enforce the terms of this Agreement; provided, that, in case of any
potential disclosure under this subclause (iv), the Purchaser shall provide the
Seller with prompt notice of any request or Order, including copies of subpoenas
or Orders requesting or requiring such Information, cooperate reasonably with
the Seller in resisting the disclosure of such Information via a protective
Order or other appropriate legal action, and shall not make disclosure pursuant
thereto until the Seller has had a reasonable opportunity to resist such
disclosure, unless the Purchaser is required to make such disclosure by Law. If
the Purchaser does not purchase the Purchased Assets, as contemplated by this
Agreement, the Purchaser shall not keep or take, and shall promptly return or
destroy, any and all Information, and shall not keep or take, and shall promptly
return or destroy, any document or other thing embodying any such Information.
With respect to any Information that the Purchaser destroys pursuant to the
foregoing sentence, the Purchaser shall promptly provide the Seller with a
certificate, signed by an appropriate officer of the Purchaser, certifying the
destruction of such Information.
(b) Regardless of whether the Purchaser shall purchase
the Purchased Assets, for a period of five (5) years from the date hereof, the
Purchaser shall not use for its own purposes or advantages or publish or
disclose to any Third Party (other than its legal and financial consultants who
are subject to a duty to maintain the confidentiality of the Information) any
Information to the extent relating to any part of the business of the Seller
other than the Packaged Gas Business and obtained in connection with the
negotiation and consummation of the transactions contemplated by this Agreement,
unless and until such Information (i) is or becomes a matter of public knowledge
through no breach by the Purchaser, (ii) is lawfully acquired from a Third Party
without restrictions of confidentiality, or was already known to the Purchaser
prior to disclosure by the Seller, or (iii) is subsequently transferred,
assigned, conveyed, or licensed to the Purchaser with the right to use, disclose
or license, as applicable, or (iv) the Purchaser is required to disclose such
Information by Law or is required to disclose such Information in order to
enforce the terms of this Agreement; provided, that, in case of any potential
disclosure under this subclause (iv), the Purchaser shall provide the Seller
with prompt notice of such request or Order, including copies of subpoenas or
Orders requesting or requiring such Information, cooperate reasonably with the
Seller in resisting the disclosure of such Information via a protective Order or
other appropriate legal action, and shall not make disclosure pursuant thereto
until the Seller has had a reasonable opportunity to resist such disclosure,
unless the Purchaser is required to make such disclosure by Law.
(c) For a period of five (5) years from the Closing Date,
the Seller shall keep, and shall cause its Affiliates and their respective
employees to keep, any and all confidential and proprietary information relating
to the Packaged Gas Business or the Purchased Assets (including customer lists
and related information) (collectively, "PGB Information") confidential, shall
not disclose any PGB Information to any Person and shall not use any PGB
Information for its own purposes or advantages unless and until such information
(i) is or becomes a matter of public knowledge through no breach by the Seller,
(ii) is lawfully acquired from a Third Party without restrictions of
confidentiality, or (iii) the Seller is required to disclose
52
such Information by Law or is required to disclose such Information in order to
enforce the terms of this Agreement; provided, that, in case of any potential
disclosure under this subclause (iii), the Seller shall provide the Purchaser
with prompt notice of such request or Order, including copies of subpoenas or
Orders requesting or ordering such Information, cooperate reasonably with the
Purchaser in resisting the disclosure of such Information via a protective Order
or other appropriate legal action, and shall not make disclosure pursuant
thereto until the Purchaser has had a reasonable opportunity to resist such
disclosure, unless the Seller is required to make such disclosure by Law.
(d) For a period of five (5) years from the date hereof,
the Seller shall not, and shall cause its Affiliates and their respective
employees not to, use for its or their own purposes or advantages (other than in
preparation for the orderly transition of operational control of the Purchased
Assets to the Purchaser) or publish or disclose to any Third Party (other than
legal and financial consultants of the Seller who are subject to a duty to
maintain the confidentiality of the Information) any confidential or proprietary
information, know-how, technology information, analysis, compilations, studies,
formulae, trade secret or other documents prepared by or obtained from the
Purchaser (including legal and other professional advisors, accountants,
consultants and financial advisors) in connection with the negotiation and
consummation of the transactions contemplated by this Agreement, including
business and financial information, no matter how obtained (orally, in writing
or observed), or any analysis, compilations, studies and other records and
documents prepared by the Seller (including legal and other professional
advisors, accountants, consultants and financial advisors) which contain or
otherwise reflect such information (collectively, "Purchaser Information"),
unless and until such Purchaser Information (i) is or becomes a matter of public
knowledge through no breach by the Seller, its Affiliates or their respective
employees (ii) is lawfully acquired from a Third Party without restrictions of
confidentiality, or (iii) the Seller is required to disclose such Purchaser
Information by Law or is required to disclose such Purchaser Information in
order to enforce the terms of this Agreement; provided, that, in case of any
potential disclosure under this subclause (iii), the Seller shall provide the
Purchaser with prompt notice of any request or Order, including copies of
subpoenas or Orders requesting or requiring such Purchaser Information,
cooperate reasonably with the Purchaser in resisting the disclosure of such
Information via a protective Order or other appropriate legal action, and shall
not make disclosure pursuant thereto until the Purchaser has had a reasonable
opportunity to resist such disclosure, unless the Seller is required to make
such disclosure by Law. If the Purchaser (x) does not purchase the Purchased
Assets, as contemplated by this Agreement, or (y) following the Closing Date and
the expiration of the Transition Period, the Seller shall not keep or take, and
shall promptly return or destroy, any and all Purchaser Information, and shall
not keep or take, and shall promptly return or destroy, any document or other
thing embodying any such Purchaser Information. With respect to any Purchaser
Information that the Seller destroys pursuant to the foregoing sentence, the
Seller shall promptly provide the Purchaser with a certificate, signed by an
appropriate officer of the Seller, certifying the destruction of such Purchaser
Information.
(e) The provisions of this Section 7.6 shall be in
addition to, and not in substitution of, the provisions of the MCDA.
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7.7 Non-Competition.
(a) Covenant not to Compete. In order that the Purchaser
may have and enjoy the full benefit of the Packaged Gas Business and the
Purchased Assets and as an inducement to the Purchaser to enter into this
Agreement (without which inducement the Purchaser would not have entered into
this Agreement), the Seller hereby agrees that, except as otherwise provided or
contemplated in any of the Transaction Documents, the Seller shall not, and the
Seller shall cause its Affiliates not to, directly or indirectly, engage or
otherwise participate in the Packaged Gas Business in the United States for a
period of five (5) years from the Closing Date (such five-year period, the
"Non-Competition Period"). Notwithstanding the foregoing, the Seller and its
Affiliates shall have the right at any time to (i) engage in any of the Excluded
Businesses, (ii) engage in the Packaged Gas Business outside of the United
States, (iii) acquire, directly or indirectly, securities listed on any national
securities exchange or traded actively in the national over-the-counter market
of any Person that provides the Competing Business in the United States,
provided the Seller, together with its Affiliates and any member of a group in
which the Seller or its Affiliates are a party, do not own more than ten (10%)
percent of the outstanding voting power of such Person (other than with respect
to the Persons set forth on Schedule 7.7(a) for which there shall be no
limitation on the ownership of outstanding voting power; provided, however, that
from and after such time as any such Person becomes an Affiliate of Seller,
Seller Parent or any of their Affiliates, it or they shall be subject to the
terms of this Section 7.7); (iv) subject to Section 7.7(b), acquire (by
acquisition, merger, consolidation, joint venture or otherwise) a company or
business whose operations include a Competing Business, (v) make sales calls or
joint sales calls with a Third Party Distributor (defined below) in relation to
the sale of products of the Excluded Businesses; provided, however, that the
Seller shall not, and shall cause its Affiliates not to, (A) make any sales
calls or any joint sales calls with any Third Party Distributor involving the
supply of packaged gases or (B) make any sales calls or any joint sales calls
with any Third Party Distributor to any customers of the Packaged Gas Business
as of the date hereof or as of the Closing Date, except for joint sales calls
where a Third Party Distributor currently supplies bulk to any such customer and
the making of joint sales calls was the past practice with respect to such
customer prior to the date hereof (past practice to be determined on an
account-by-account basis), (vi) advise any customer, other than a customer of
the Packaged Gas Business as of the date hereof or as of the Closing Date (each
a "Non-PGB Customer"), of the identity of such Persons' Third Party
Distributors, and provide the details thereof, and make recommendations and
referrals to Non-PGB Customers or potential Non-PGB Customers seeking packaged
gas products of any of such Persons' Third Party Distributors; provided, that
the Seller or any such Affiliate shall treat the Purchaser on equal terms with
such Persons' Third Party Distributors when providing such recommendations or
referrals, (vii) publicize generally in literature, on such Persons' website, or
via other media the identity of such Persons' Third Party Distributors, and
provide the details thereof, and (viii) offer non-account-specific services to
such Persons' Third Party Distributors based on such Persons' global experience
in packaged gases, provided, that, as a condition to providing such services
which relate to the Packaged Gas Business to any such Third Party Distributors,
the Seller shall, or shall cause its Affiliates to, offer such services which
relate to the Packaged Gas Business to the Purchaser on such terms as shall be
mutually agreeable to the Seller and the Purchaser for a term of fifteen (15)
years, unless the applicable Enabling Agreement shall have been terminated and
the Seller shall no longer be providing the Purchaser with the products covered
by such Enabling Agreement. The Purchaser
54
hereby acknowledges that none of the Seller or any of its Affiliates has any
right or obligation to prevent any Third Party Distributor from offering on its
own behalf and for its own account packaged gases and related products and
services to any Person. For purposes of this Section 7.7(a), "Third Party
Distributor" shall mean any Third Party which purchases bulk gas from any of the
Seller or its Affiliates for re-packaging and/or resale. For purposes of
clarification, the Seller will not produce or sell dry ice to any customers of
the Packaged Gas Business as of the date hereof, but shall retain the right to
sell dry ice to any other Person.
(b) Acquisitions by any of the Seller and/or its
Affiliates. Notwithstanding anything to the contrary contained in Section
7.7(a), during the Non-Competition Period, the Seller and/or its Affiliates may
acquire any Person who is, directly or indirectly, engaged in a Competing
Business (such Person acquired, being referred to as an "Acquired Competitor")
by means of (i) any merger, consolidation, joint venture or other business
combination pursuant to which the business of an Acquired Competitor is combined
with the business of the Seller and/or its Affiliates, (ii) the acquisition by
any of the Seller and/or its Affiliates, directly or indirectly, of the capital
stock of an Acquired Competitor, by way of tender or exchange offer, negotiated
purchase or other means or (iii) the acquisition by any of the Seller and/or its
Affiliates, directly or indirectly, of the assets, properties or business of an
Acquired Competitor, by way of a direct or indirect purchase, exchange, joint
venture or other means; provided that (A) prior to the date of such acquisition,
such Acquired Competitor shall have already been engaged in a Competing Business
and (B) on the date that the definitive agreements for such acquisition are
executed, the revenues of such Acquired Competitor's Competing Business shall
not exceed fifty percent (50%) of such Acquired Competitor's total revenues for
the preceding twelve (12) month period, other than with respect to the Persons
set forth on Schedule 7.7(b)(i), for which this proviso shall not apply; and
provided, further that, immediately upon the consummation of such acquisition,
(I) if the annual revenues of such Acquired Competitor relating to and arising
from the Competing Business are less than $100,000,000, the Seller shall cause,
and, if applicable, the Seller shall cause its Affiliates to cause, the
divestiture of such Competing Business as promptly as practicable and in any
event not later than eighteen (18) months thereafter, and the Purchaser shall
have a right of first negotiation with respect to such Competing Business
pursuant to Section 7.7(d) or (II) if the annual revenues of the Acquired
Competitor relating to or arising from the Competing Business are greater than
or equal to $100,000,000, the Seller and/or its Affiliates shall not be required
to divest the Competing Business; provided, that such Acquired Competitor shall
have agreed to be bound by Sections 7.6 and 7.8 of this Agreement as an
Affiliate of the Seller. Notwithstanding anything to the contrary contained in
this Section 7.7(b), the Persons listed on Schedule 7.7(b)(i) shall be deemed to
be Acquired Competitors and upon the acquisition of any such Acquired Competitor
during the Non-Competition Period by any of the Seller and/or its Affiliates,
such acquiring party shall be required to divest the Competing Business of such
Acquired Competitor and the Purchaser shall have a right of first negotiation
with respect to such Competing Business pursuant to Section 7.7(d).
Notwithstanding anything to the contrary in this Agreement, Seller or any of its
Affiliates, on the one hand, and any person listed on Schedule 7.7(b)(ii) on the
other, may (i) enter into any merger, consolidation, joint venture or other
business combination, (ii) make any tender or exchange offer or stock purchase
or (iii) acquire assets, properties or business by way of a direct purchase,
exchange, joint venture or other means, without any obligation pursuant to this
Section 7.7 (including any obligation to divest any Competing Business).
55
(c) Certain Acquisitions. Notwithstanding anything to the
contrary contained in Section 7.7(a), in the event that a Change of Control
Transaction with an Acquiring Competitor occurs with the Seller Parent within
the Non-Competition Period, then the provisions of Section 7.7(a) shall
terminate and be of no further force or effect immediately upon the
effectiveness of such Change of Control Transaction; provided, however, that in
the event of a Change of Control Transaction with respect to the Seller Parent
pursuant to which the Acquiring Competitor would not otherwise be bound by the
terms of this Agreement, Section 7.7(a) shall not terminate unless such
Acquiring Competitor shall have agreed with the Purchaser that such Acquiring
Competitor, the Seller and, in each case, any successor entity thereof continues
to be bound by Sections 7.6 and 7.8 of this Agreement.
(d) Right of First Negotiation. In the event that, at any
time during the Non-Competition Period, any of the Seller and/or its Affiliates
(i) is required to divest the assets of any Competing Business pursuant to
Section 7.7(b), or (ii) chooses to divest all or any portion of any Competing
Business or any interest therein (whether by stock sale or exchange, asset sale
or exchange, merger, consolidation, joint venture or otherwise) other than
pursuant to 7.7(b) (any transaction described in clauses (i) or (ii), a
"Competing Business Sale"), then the Seller shall, prior to it and/or its
Affiliate entering into any formal negotiation or agreement with any Third Party
relating to such Competing Business Sale, give notice (a "Sale Notice") of such
Competing Business Sale to the Purchaser. Upon the giving of such Sale Notice,
the Seller shall thereafter negotiate and, if applicable, cause its Affiliates
to negotiate, in good faith with the Purchaser for the disposition of such
Competing Business to the Purchaser, it being understood that the Seller may at
any time after the giving of the Sale Notice negotiate and/or agree with any
Person with respect to a Competing Business Sale. A Sale Notice shall contain a
full and complete description of the Competing Business to be sold, which shall
include all information provided to any Third Party. To the extent applicable,
the Seller shall cause its Affiliates not to take any actions that would be
inconsistent with the Seller's obligations pursuant to this Section 7.7(d).
(e) Restrictive Covenants. In the event of a breach of
any of the provisions of Sections 7.7(a), 7.7(b), 7.7(c) or 7.7(d) (together,
the "Restrictive Covenants") by any of the Seller and/or its Affiliates, the
Non-Competition Period shall be extended by a period equal to the duration of
such breach.
(f) Blue-Penciling. It is the desire and intent of the
parties that the Restrictive Covenants will be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any Restrictive Covenant shall be
adjudicated to be invalid or unenforceable, such Restrictive Covenant shall be
deemed amended to the extent necessary in order that such provision be valid and
enforceable, such amendment to apply only with respect to the operation of such
Restrictive Covenant in the particular jurisdiction in which such adjudication
is made.
(g) Severability of Restrictive Covenants. The Seller
acknowledges and agrees that the Restrictive Covenants are reasonable and valid
in geographical and temporal scope and in all other respects. If any court of
competent jurisdiction determines that any of the Restrictive Covenants, or any
part thereof, is invalid or unenforceable, the remainder of the
56
Restrictive Covenants shall not thereby be affected and shall be given full
effect without regard to the invalid portions.
7.8 Non-Solicitation by the Seller of the Purchaser's Employees.
The Seller hereby covenants and agrees that, from and after the date hereof
until the second (2nd) anniversary of the Closing Date, neither it nor any of
its Affiliates will, directly or indirectly, solicit for employment any
Transferred Employee; provided, that this Section 7.8 shall not apply (a) if any
such employee has been terminated by the Purchaser or its Affiliates for any
reason or (b) if any such employee contacts the Seller or its Affiliates (i) in
response to a general solicitation for employment in newspapers or other
periodicals or (ii) on his or her own initiative without any encouragement by
the Seller.
7.9 Consents and Approvals, etc.
(a) Subject to Section 7.9(c), the Seller and the
Purchaser agree to use their commercially reasonable efforts to obtain all
Consents of all Governmental Bodies and other Persons required in connection
with the transactions contemplated hereby, including for the execution, delivery
and performance of this Agreement and transfer of the Packaged Gas Business and
Purchased Assets to be acquired hereunder by the Purchaser and the license to
the Third Party Intellectual Property.
(b) The Seller agrees to use commercially reasonable
efforts to obtain the Consent of any other party or parties to any Acquired
Contract, Real Property Lease, Seller Real Property Lease, Seller Real Property
Sublease or Third Party Intellectual Property to the transfer, assignment or
license thereof to the Purchaser in all cases in which such Consent is required
for assignment or license, as the case may be, and the Purchaser agrees to use
its commercially reasonable efforts to cooperate with the Seller to obtain any
such Consent; provided, that neither the Seller nor the Purchaser, nor any of
their respective Affiliates, shall be required to pay any consideration or to
provide any financial inducements to any party therefor other than any
assignment fee, other administrative fee or other fee, in each case incurred in
connection with the transfer of (i) the leased motor vehicles by the Seller to
the Purchaser (other than any early termination fees triggered by a decision by
the Purchaser to terminate the lease relating to any acquired motor vehicle
prior to the end of the term thereof, which cost shall be borne solely by the
Purchaser) any of which assignment or administrative fees shall be paid one-half
by the Seller and one-half by the Purchaser, and (ii) the Third Party
Intellectual Property, any of which assignment, administrative or other fees
incurred in connection with the assignment of any Third Party Intellectual
Property shall be paid in full by the Seller (except that the Seller shall not
pay for any such fees to the extent attributable to the transfer of Third Party
Intellectual Property beyond the scope of such Third Party Intellectual Property
enjoyed by the Seller with respect to the Packaged Gas Business as of the
Closing Date). To the extent that any of the Acquired Contracts or Real Property
Leases are not assignable without the Consent of another party, the Bill of
Sale, Assignment and Assumption Agreement, the Bills of Sale and the assignment
of Real Property Leases to be delivered at the Closing pursuant to Sections
4.2(c), 4.2(j) and 4.3(c), shall not constitute an assignment or an attempted
assignment of such Acquired Contract or Real Property Lease if such assignment
or attempted assignment would constitute a breach thereof. If, after the Seller
uses its commercially reasonable efforts to obtain any such Consent, such
57
Consent is not obtained, the parties agree to cooperate in any reasonable and
lawful arrangements designed to provide to the Purchaser the same or similar
benefits and liabilities under any such Acquired Contract, Real Property Lease,
Seller Real Property Lease, Seller Real Property Sublease or Third Party
Intellectual Property as would have been obtained by the Purchaser if such
Acquired Contract, Real Property Lease, Seller Real Property Lease, Seller Real
Property Sublease or Third Party Intellectual Property had been assigned or
licensed, as the case may be, to the Purchaser effective on the Closing Date,
including the subcontracting thereof to the Purchaser and enforcement for the
benefit of the Purchaser of any and all rights of the Seller against the other
party thereto arising out of the breach or cancellation thereof by such other
party or otherwise. If and to the extent such arrangements cannot be made, the
Purchaser shall have no obligation with respect to any such Acquired Contract,
Real Property Lease, Seller Real Property Lease, Seller Real Property Sublease
or Third Party Intellectual Property. The Seller agrees to use its commercially
reasonable efforts to obtain the Consent of any Governmental Body or other
Person to the transfer or assignment of all Permits to be acquired by the
Purchaser pursuant to Section 2.1(i). To the extent that any Permit (including
any Environmental Permit) is not transferable by the Seller to the Purchaser,
the Seller agrees to use its commercially reasonable efforts to cooperate with
the Purchaser, at the Purchaser's reasonable request, to assist the Purchaser in
its efforts to obtain a substantially equivalent permit.
(c) The Seller and the Purchaser have previously filed
with the FTC and DOJ the respective notification and report forms (the "HSR
Filing") required to be filed by each of them under the HSR Act with respect to
the transactions contemplated hereby. Each party shall promptly inform the other
party of any material communication made by such party to, or received by such
party from, the FTC or DOJ and any requests for additional information from any
Governmental Body with respect to the transactions contemplated by this
Agreement. The parties will use their commercially reasonable efforts to avoid
or eliminate any impediment under any antitrust law that may be asserted by any
United States federal, state or local antitrust authority so as to enable the
parties to close the transactions contemplated hereby expeditiously.
Notwithstanding the foregoing, nothing in this Section 7.9 shall require, or be
construed to require, Purchaser, in connection with the receipt of any
regulatory approval, to proffer or agree to sell or hold separate and agree to
sell or divest before or after the Closing Date, any assets, businesses or
interest in any assets or businesses of Purchaser or of the Packaged Gas
Business (or to the consent to any sale, or agreement to sell, by Purchaser of
any of its assets or businesses or of the Packaged Gas Business) (each a
"Divestiture"), except for one or a series of Divestitures of any assets or
businesses of Purchaser or of the Packaged Gas Business the revenues of which in
the aggregate did not exceed $75,000,000 for the 12 month period ending
September 30, 2003 or (ii) any conditions relating to, or changes or restriction
in, the operations of any such assets or businesses.
(d) Notwithstanding anything in Section 7.9(c) or
otherwise in this Agreement to the contrary:
(i) If the Purchaser is required to effect the
Divestiture of assets or business the revenues derived from which are equal to
or less than $25,000,000 for the 12 month period ending September 30, 2003 in
the aggregate, the Seller shall have no obligation to
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reimburse the Purchaser for any amount and the Purchaser shall be obliged to
effect such Divestiture at its sole cost and expense;
(ii) If the Purchaser is required to effect the
Divestiture of assets or businesses the revenues derived from which exceed
$25,000,000 for the 12 month period ending September 30, 2003 in the aggregate,
the Seller shall reimburse the Purchaser for fifty percent (50%) of any Loss of
Value (defined below) in connection with any such Divestiture in excess of
$25,000,000. "Loss of Value" means the amount, if any, by which (x) the
Benchmark Multiple (defined below) exceeds (y) the value of any proceeds
received by the Purchaser from such Divestiture less the costs and expenses
incurred by the Purchaser in connection with such Divestiture (including,
without limitation, taxes; fees of attorneys, brokers and other professionals or
agents; litigation costs; and any out-of-pocket expenses). "Benchmark Multiple"
means the amount equal to (A) the product of (x) the EBITDA-PGB of the assets
and/or businesses subject to such Divestiture for the twelve (12) month period
prior to such Divestiture and (y) six (6), if such assets and/or businesses are
part of the Packaged Gas Business, or (B) the product of (x) the EBITDA-ARG of
the assets and/or businesses subject to such Divestiture for the twelve (12)
month period prior to such Divestiture and (y) eight (8), if such assets and/or
businesses are owned by the Purchaser or its Affiliates; and
(iii) In the event that the FTC issues a complaint
challenging the transactions contemplated by this Agreement or authorizes its
staff to seek a preliminary injunction to prevent the consummation of the
transactions contemplated by this Agreement notwithstanding an offer by the
parties hereto to enter into a consent Order providing for the Divestiture of
assets or businesses the revenues derived from which equal or exceed $75,000,000
for the 12 month period ending September 30, 2003, this Agreement and the
transactions contemplated hereby may be terminated at the election of the
Purchaser or the Seller pursuant to Section 15.1(e).
(e) The Seller agrees that it shall not, for a period of
sixty (60) days commencing February 2, 2004, file, or participate in the filing
of, or enter into any other transaction that would require the filing of, any
notification and report forms required to be filed under the HSR Act, or enter
into any other transaction which would require FTC or DOJ approval.
Notwithstanding the preceding sentence, the Purchaser may file, or participate
in the filing of, any notification or report forms required to be filed under
the HSR Act at any time in response to the filing of any such notification or
report forms by any Third Party with respect to the Purchaser.
7.10 Accounts Receivable; Collections and Payments.
(a) From and after the Closing Date, the Seller hereby
constitutes and appoints the Purchaser, its successors and assigns, the true and
lawful attorneys of the Seller with full power of substitution, in the name of
the Seller or otherwise, and on behalf of and for the benefit of the Purchaser,
to demand and receive from time to time any and all Accounts Receivable, to give
receipts, releases or acquittances for or in respect of the same or any part
thereof; to collect, for the account of the Purchaser, all Accounts Receivable
transferred to the Purchaser as provided herein, and to endorse with the name of
the Seller any check received on account of any Accounts Receivable transferred
to the Purchaser; from time to time to institute
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and prosecute in the name of the Seller or otherwise any and all proceedings at
law, in equity or otherwise, which the Purchaser, its successors and assigns,
may deem proper to collect, assert or enforce any claim, right, title, debt or
account hereby assigned or transferred with respect to the Accounts Receivable;
and to take any action necessary to effect the transfer to the Purchaser of full
legal title in and beneficial ownership of any of the Accounts Receivable. The
Seller declares that the foregoing powers are coupled with an interest and shall
not be revocable by it.
(b) The Seller agrees that it shall transfer or deliver
to the Purchaser any cash or other property that the Seller may receive on or
after the Closing Date in respect of any Acquired Contracts, Acquired Permits,
Accounts Receivable or other items related to the Purchased Assets that are
being transferred to the Purchaser as provided in this Agreement within thirty
(30) days after the receipt thereof. The Purchaser agrees upon receipt of any
invoice or demand for payment related to any payables retained by the Seller to
promptly forward such invoice or demand for payment to the Seller.
(c) The Purchaser shall promptly transfer or deliver to
the Seller that portion of all rebates, discounts or similar amounts that the
Purchaser may receive on or after the Closing Date that relate to the operation
of the Packaged Gas Business or the purchase of goods and services, in each
case, by the Seller prior to the Closing Date. The Seller shall promptly
transfer or deliver to the Purchaser that portion of all rebates, discounts or
similar amounts that the Seller may receive on or after the Closing Date that
relate to the purchase of goods and services by the Purchaser on or after the
Closing Date.
7.11 Conduct of Packaged Gas Business Prior to the Closing Date.
During the period from the date hereof to the Closing Date, except as (A) set
forth on Schedule 7.11, (B) otherwise expressly contemplated by the Transaction
Documents, (C) consented to in writing by the Purchaser (which consent shall not
be unreasonably withheld or delayed), or (D) as required by applicable Law, the
Seller shall conduct the Packaged Gas Business in the Ordinary Course of
Business (including managing its working capital, including inventory at its
stores, in accordance with its past practice and custom) and not in a manner
inconsistent with how the Seller would conduct the Packaged Gas Business if it
was not selling the Packaged Gas Business, and shall use its commercially
reasonable efforts to (i) preserve its business organizations, (ii) keep
available the services of its officers and employees, (iii) preserve the
goodwill of the Packaged Gas Business, (iv) preserve relationships with
customers, suppliers, licensors, distributors, landlords, employees, agents and
other Persons in connection with the Packaged Gas Business, and (v) maintain
sales force activities. Without limiting the generality of the foregoing, during
the period from the date hereof to the Closing Date, the Seller shall not:
(a) sell, lease, license, transfer, pledge, mortgage,
encumber, grant, abandon, allocate to any other business unit, or otherwise
dispose of any Purchased Asset, except dispositions of Purchased Inventory and
Purchased Equipment in the Ordinary Course of Business; provided, however, that
the Seller shall not, in one or a series of transactions, convey or otherwise
transfer title to more than 100 Containers used or held for use in the Packaged
Gas Business to any one Third Party or to any Affiliate of the Seller, in either
case, without the prior written consent of the Purchaser.
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(b) increase the rate of compensation of, or pay or agree
to pay or increase any benefit or incentive to (other than stay bonuses or other
bonus arrangements paid by the Seller, if any), any of the Employees, except in
the Ordinary Course of Business or as required by Law or an existing Contract;
(c) alter the procedures of the Packaged Gas Business
regarding the collection of accounts receivable (for the avoidance of doubt, (i)
the collection practices listed on Schedule 7.11(c)(i) shall be permissible to
the extent such practices are in the Ordinary Course of Business of the Seller
and (ii) the Seller acknowledges and agrees that the collection practices listed
on Schedule 7.11(c)(ii) are not consistent with the Ordinary Course of Business
of the Seller);
(d) take any action, other than in the Ordinary Course of
Business, to modify or change the Valuation Principles;
(e) terminate or materially amend or modify, assign any
material rights relating to, any Real Property Lease or any Acquired Contract,
or enter into any new Contract, other than in the Ordinary Course of Business;
(f) make any capital expenditure or commitment pertaining
to the Packaged Gas Business in excess of (x) $500,000 individually or (y)
$1,000,000 in the aggregate on a monthly basis (or part thereof); and
(g) agree, directly or indirectly, whether in writing or
otherwise, to do any of the foregoing.
7.12 Exclusivity. As an inducement to the Purchaser to enter into
this Agreement, and in consideration of the time and expense which it has
devoted and will devote to the transactions contemplated hereby during such
period, except as between the Seller and the Purchaser pursuant to this
Agreement, until the earlier of (a) the Closing Date and (b) termination of this
Agreement in accordance with Section 15.1 hereof, the Seller shall not, and the
Seller shall cause its officers, directors, employees, agents and
representatives (including any investment banker, attorney or accountant
retained or acting on behalf of the Seller or any shareholder, director, officer
or employee of the Seller) not to directly or indirectly (i) initiate, solicit,
encourage or entertain proposals, inquiries, indications of interest, or offers
to purchase all or a portion of the Purchased Assets (an "Acquisition
Proposal"), or (ii) enter into any discussions, negotiations, agreements,
arrangements or commitments with respect an Acquisition Proposal with any
Person; provided, however, that the foregoing shall not restrict the Seller from
dispositions in the Ordinary Course of Business of Purchased Inventory and of
Purchased Equipment that is obsolete or in unusable condition and not necessary
for the operation of the Packaged Gas Business as currently conducted by the
Seller. The Seller will immediately cease any existing discussions with any
Persons concerning any Acquisition Proposal and will notify the Purchaser
promptly after it receives any Acquisition Proposal.
7.13 Agreements. From the date hereof through the Closing Date, the
Seller shall notify the Purchaser of its receipt of any written notice that a
party to any Material Contract has
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terminated or declined to renew or intends to terminate or decline to renew any
such Contract or that any party has asserted or intends to assert any claim
under any such Contract.
7.14 Excluded Containers. As soon as practicable, but in no event
later than three (3) months following the Closing Date, or immediately upon
written notice from the Purchaser if any Excluded Containers are discovered by
the Purchaser within sixteen (16) months after the Closing Date, the Seller, at
its sole cost and expense, shall remove any Excluded Containers from the
Purchaser's property or otherwise and properly dispose of all such Excluded
Containers.
7.15 Removal of Excluded Assets. Prior to the Closing, the Seller
shall segregate, remove or, with the written consent of the Purchaser, abandon
any Excluded Equipment (other than Excluded Containers, which are addressed in
Section 7.14) from those assets and operations of the Seller that are to become
Purchased Assets, except to the extent otherwise contemplated by any of the
Enabling Agreements.
7.16 The Seller's Trademarks.
(a) The Seller and the Purchaser acknowledge that certain
cylinders, dewars, lecture bottles and other containers that are included in the
Purchased Assets are stamped with certain trademarks owned or used by the
Seller, including those described on Schedule 7.16(a) (such trademarks listed on
Schedule 7.16(a), the "Marks" and such cylinders, dewars, lecture bottles and
other containers, the "Imprinted Containers"). In order to obviate the need for
the Purchaser to remark such Imprinted Containers, the Purchaser shall have the
right to use such Imprinted Containers in operating the Packaged Gas Business in
the Ordinary Course of Business on and after the Closing Date and shall not be
required to remove any trademarks or other markings, including the Marks, from
such Imprinted Containers; provided that the Purchaser shall use commercially
reasonable efforts to, as promptly as practicable, remove, strike over, sticker
over or otherwise obliterate the Marks from the Imprinted Containers solely to
the extent the Marks are present on Imprinted Containers as stickers, painted
symbols or via any other impermanent method (for the avoidance of doubt,
impermanent methods do not include stamping or engraving or neck rings attached
to Containers), except that with respect to Imprinted Containers that are stored
for future use, the Purchaser shall place an Airgas label on all Imprinted
Containers filled and shall use commercially reasonable efforts to remove,
strike over, sticker over or otherwise obliterate the Marks from such Imprinted
Containers prior to the use and distribution of such Imprinted Container in
connection with the Packaged Gas Business; provided, further that with respect
to any other materials or things transferred pursuant to this Agreement that
contain any Mark, the Purchaser shall use commercially reasonable efforts to
remove, strike over, sticker over or otherwise obliterate such Marks prior to
such items being distributed by the Purchaser to any Third Party. Purchaser
shall have no obligation to remove, strike over, sticker over or otherwise
obliterate any trademarks or other markings other than the Marks.
Notwithstanding the foregoing, the Purchaser shall not have any right to use the
Marks other than as specifically set forth above and, among other things, the
Purchaser shall not (i) claim any right, title or interest in or to any Mark by
registration or otherwise; (ii) use any Mark in any marketing activity; (iii)
apply any Mark to any product, package or container other than as provided
herein; or (iv) except to the extent that the Marks remain on the Imprinted
Containers in accordance with this Section 7.16(a), use any Mark as a corporate
name or
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trademark in whole or in part. The Purchaser hereby assigns to the Seller any
rights it might acquire in or to each Mark through use or otherwise, including
any goodwill symbolized thereby or associated therewith. Nothing in this Section
7.16(a) shall restrict the ability of the Purchaser to transfer to a Third Party
or otherwise dispose of any Imprinted Container; provided, however, that any
subsequent acquirer of any Imprinted Container shall have only such rights with
respect to the Marks as granted to the Purchaser pursuant to this Section
7.16(a) and shall be subject to all limitations imposed hereunder on the
Purchaser with respect to the use or transfer of the Marks.
(b) By the date that is no later than one hundred eighty
(180) days following the Closing Date, the Seller shall either remove or modify
the Marks from any of the Seller's cylinders, dewars, lecture bottles and/or
other containers that are not part of the Purchased Assets such that the Marks
BOC, BOC Gases or Airco do not appear on such Containers alone but instead
appear only in conjunction with another of Seller's trademarks (e.g., XXX
Xxxxxxx).
(c) At least ten (10) days prior to the Closing Date the
Seller shall deliver to the Purchaser a list of all stampings, engravings and
neckrings other than the Marks that are on the Containers that are part of the
Purchased Assets.
7.17 Access and Cooperation. From and after the Closing Date, the
parties shall take the following measures in order to facilitate the timely and
cost-effective performance of their obligations pursuant to (x) any
environmental transfer Laws ("Transfer Obligations"), (y) any Seller's
Remediation or (z) any investigations described in Section 7.27 hereof, in each
case concerning any particular Real Property that is either Owned Real Property
or Leased Real Property ("Subject Property"):
(a) The Seller, and those Persons acting at the direction
of the Seller, may enter upon and use the Subject Property, at reasonable times
and with reasonable prior notice, including use of roads and driveways, for the
purpose of complying with the Seller's Transfer Obligations and performing
Seller's Remediation.
(b) The Seller shall perform all Remediation at the
Subject Property in compliance with all Laws, including Environmental Laws, and
in such a manner as to minimize, to the extent practicable, damage to the
Subject Property (including to the Improvements, fixtures and appurtenances
thereon) and the disruption of or interference with the Purchaser's use of the
Subject Property (including the Improvements, fixtures and appurtenances
thereon). The Purchaser shall not use the Subject Property in such a manner as
would exacerbate the condition that is subject to the Seller's Remediation.
Without limiting the foregoing, the Purchaser shall not use the lime ponds at
the Miamiville, Ohio, or the Ringgold, Georgia, facilities for any purpose
until, with respect to each such facility, an approval from a Governmental Body
indicating the completion of such Remediation has been obtained.
(c) The Seller shall be responsible for the cost of any
repairs, replacements or damages to the Purchaser's Improvements, fixtures and
appurtenances within the Subject Property to the extent caused by the act or
omission of the Seller or caused by any Seller's Remediation. The Purchaser
shall be responsible for the cost of any repairs, replacements or
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damages to the Seller's Improvements, fixtures and appurtenances within the
Subject Property to the extent caused by the act or omission of the Purchaser.
(d) The Seller may connect to any utility lines which
serve the Subject Property, in order to provide water, electric, telephone,
sanitary sewer, storm sewer and other utility services to the Seller in
connection with the Seller's Remediation; provided, that the Seller shall obtain
all necessary utility approvals and permits prior to making any connections; and
that further, the Seller shall reimburse the Purchaser for all costs which the
Purchaser incurs as a result of the Seller's use of such utilities.
7.18 Tax Cooperation and Exchange of Information. The Seller and
the Purchaser will provide each other with such cooperation and information as
either of them reasonably may request of the other in filing any Tax Return
(including, for the avoidance of doubt, any amended Tax Returns or claims for
refund), determining any liability for Taxes or a right to a refund of Taxes or
participating in or conducting any audit or other proceeding in respect of Taxes
relating to the Purchased Assets or the Packaged Gas Business. Such cooperation
and information shall include providing copies of relevant Tax Returns or
portions thereof, together with accompanying schedules and related work papers
and documents relating to rulings or other determinations by taxing authorities.
The Seller and the Purchaser will make themselves (and their respective
employees) available, on a mutually convenient basis, to provide explanations of
any documents or information provided under this Section 7.18. Each of the
Seller and the Purchaser will retain all Tax Returns, schedules and work papers
and all material records or other documents in its possession (or in the
possession of its Affiliates) relating to Tax matters relevant to the Purchased
Assets or the Packaged Gas Business for the taxable period first ending after
the Closing and for all prior taxable periods until the expiration of the
statute of limitations of the taxable periods to which such Tax Returns and
other documents relate. After such time, before the Purchaser shall dispose of
any such documents in its possession (or in the possession of its Affiliates),
the Seller shall be given the opportunity, after ninety (90) days' prior written
notice, to remove and retain all or any part of such documents as the Seller may
select. Any information obtained under this Section 7.18 shall be kept
confidential, except as may be otherwise necessary in connection with the filing
of Tax Returns or claims for refund or in conducting an audit or other
proceeding.
7.19 Litigation. From the date hereof through the Closing Date, the
Seller shall notify promptly the Purchaser of (a) any Actions of the type
described in Section 5.10(a) and (b) any material Actions described in Section
5.10(d) or 5.10(e) that in each case from and after the date hereof are
commenced or, to the Knowledge of the Seller, threatened, against the Seller.
From the date hereof to the Closing Date, each party shall promptly notify the
other party of any Actions commenced or, to the Knowledge of such party,
threatened that, if adversely determined, would impair the ability of such party
to consummate the transactions contemplated hereby.
7.20 Acquisition Agreements. In the event that, from time to time,
the Purchaser has suffered losses in connection with any matter with respect to
which the Purchaser is not entitled to indemnification by the Seller hereunder,
at the written request of the Purchaser, the Seller shall cooperate with the
Purchaser to enforce for the benefit of the Purchaser, at the Purchaser's
expense, any indemnification rights the Seller may have under any Contract
pursuant to which
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the Seller acquired any of the Purchased Assets, to the extent indemnification
with respect to such matter is available under such Contract, or assign such
rights to the Purchaser to the extent of the applicable claim; provided, that
neither the Seller nor any of its Affiliates shall be required to expend any
funds in connection herewith.
7.21 Closing Conditions. Subject to Section 7.9(c), the Seller, on
the one hand, and each Purchaser, on the other hand, agree to use their
commercially reasonable efforts to cause all of the conditions to its
obligations and the obligations of the other parties hereto to consummate the
transactions contemplated hereby (other than the conditions contained in
Sections 8.3, 8.13 and 8.14, which conditions are exclusively the subject of
Section 7.2) to be satisfied as soon as practicable after the date of this
Agreement.
7.22 Instruments of Transfer. On the Closing Date, the Seller shall
deliver to the Purchaser or any Purchaser Subsidiary to which the Purchaser
assigns its rights hereunder, one or more executed Bills of Sale, and such other
good and sufficient instruments of assignment, transfer and conveyance, in form
and substance reasonably satisfactory to the Seller and the Purchaser, and their
respective counsel, as the Purchaser shall reasonably request to vest in the
Purchaser or such the Purchaser Subsidiary all of the Seller's title to the
Purchased Assets. With respect to the Owned Real Property, the Seller shall
convey such Owned Real Property to the Purchaser by recordable special warranty
deed or its equivalent under applicable state Laws. Simultaneously with such
delivery, the Seller shall take all actions necessary to put the Purchaser or
such the Purchaser Subsidiary in actual possession and operating control of the
Purchased Assets. From and after the Closing Date, upon request of the
Purchaser, the Seller shall execute, acknowledge and deliver all such further
assignments, transfers, conveyances and other instruments as the Purchaser shall
reasonably request to assign, transfer and convey to and vest in the Purchaser
its right, title and interest in the Purchased Assets, and as otherwise may be
appropriate to carry out the transactions contemplated by this Agreement. From
and after the Closing Date, upon the request of either the Seller or Purchaser,
the other party shall execute, acknowledge and deliver all such further
assignments, transfers, conveyances, or other instruments or documents, in form
and substance mutually acceptable to the parties hereto, and take such other
actions as may be reasonably required by the requesting party for the effective
assigning, transferring, granting, conveying, sharing, assuring and confirming
to the requesting party of any interests relating to the Owned Real Property,
Shared Sites, Retained Real Property and Excluded Businesses that is designated
to be acquired, assigned, leased or otherwise transferred to such party under
this Agreement.
7.23 Assumption of Liabilities by the Purchaser. On the Closing
Date, the Purchaser shall deliver to the Seller an executed Bill of Sale,
Assignment and Assumption Agreement and such other good and sufficient
instruments of assumption, transfer and conveyance, in form and substance
reasonably satisfactory to the Seller and the Purchaser, and their respective
counsel, as the Seller shall reasonably request to vest in the Purchaser all of
the Assumed Liabilities. From and after the Closing Date, upon request of the
Seller, the Purchaser shall execute, acknowledge and deliver all such further
instruments as the Seller shall reasonably request to vest in the Purchaser the
Assumed Liabilities, and as otherwise may be appropriate to carry out the
transactions contemplated by this Agreement.
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7.24 Title Commitments. At least thirty (30) days prior to Closing,
the Seller shall furnish to the Purchaser, at the Seller's expense, a current
commitment for title insurance issued by the Title Company with respect to each
parcel of Owned Real Property; provided, that, the Purchaser shall bear all
expenses associated with the issuance of any title insurance policies for the
Owned Real Properties.
7.25 Joint Use Property. The Seller and the Purchaser acknowledge
that, after the Closing Date, those Purchased Assets and those Excluded Assets
set forth on Schedule DEF-6 will be Joint Use Property. From and after the
Closing Date, the Seller and the Purchaser agree to negotiate and cooperate in
good faith in order to reach any reasonable and mutually agreeable arrangements
to provide the other party with the same benefits that the Seller derived from
any Joint Use Property prior to the Closing Date with respect to the Packaged
Gas Business and the Excluded Businesses, including by providing similar
substitute equipment to the other party. Without limiting and in furtherance of
the foregoing, the Seller agrees to provide the Purchaser with such information
necessary or desirable for the parties to determine the historical usage of such
Joint Use Property and each of the Seller and the Purchaser agree to provide the
other party with access to any such Joint Use Property.
7.26 Shared Sites. Subject to any required Consents, the Seller and
the Purchaser shall enter into a Purchaser Real Property Lease, Purchaser Real
Property Sublease, Seller Real Property Lease or Seller Real Property Sublease,
as the case may be, for the Owned Real Property, Leased Real Property or
Retained Real Property for each of those sites listed on Schedule 7.26. The
Seller and the Purchaser shall execute and deliver, at or after the Closing,
such other agreements, including easement agreements, as shall be necessary to
allow the Seller and the Purchaser to operate their businesses on the Shared
Sites in the Ordinary Course of Business, each such other agreement to be in
form and substance mutually acceptable to the parties hereto.
7.27 Environmental Assessment Reports.
(a) The Seller and the Purchaser shall cause to be
prepared a Phase I environmental site assessment report (each, a "Phase I
Report"), undertaken in accordance with the standards known as ASTM E 1527-00
Standard Practices for Environmental Site Assessments - Phase I Environmental
Site Assessment Process, certified to both the Seller and the Purchaser, with
respect to each parcel of Real Property, to determine whether any Recognized
Environmental Conditions (as defined in the ASTM Standards) exist there. The
Seller and the Purchaser shall bear the costs and expenses associated with such
Phase I Reports equally. A copy of each Phase I Report shall be delivered to the
Seller and the Purchaser promptly after the date upon which such Phase I Report
is completed (each such date, a "Phase I Completion Date"). Prior to the date
that is five (5) Business Days prior to the Closing Date, the Seller shall
indicate to the Purchaser whether it shall retain its interest in any parcel of
Owned Real Property so as to facilitate Remediation thereof; provided, however,
that in the event that the Seller exercises its right pursuant to this sentence
to retain its interest in the Owned Real Property in question, the parties shall
promptly enter into a Seller Real Property Lease.
(b) Prior to the date that is six (6) Business Days after
each Phase I Completion Date, where any Recognized Environmental Condition is
identified due to the actual
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or conjectured presence of environmental contamination at an Owned Real Property
in question, or at a Leased Real Property where the Recognized Environmental
Condition is identified as potentially arising out of the Seller's actions, the
Seller shall initiate a Phase II environmental site assessment in respect of
each such Recognized Environmental Condition; provided, however, that upon
request by the Seller, the Purchaser may waive the requirement that the Seller
undertake a Phase II environmental site assessment with respect to any
particular Recognized Environmental Condition. A copy of a report of each Phase
II environmental site assessment and any additional environmental site
assessment necessary to delineate the Recognized Environmental Condition in
question (each site assessment or other such reports, a "Phase II Report") shall
promptly be delivered to the Seller and the Purchaser as it is completed. With
respect to either Owned Real Property or Leased Real Property, where the
Recognized Environmental Condition is identified solely due to Hazardous
Substances migrating onto the property from an off-site source, no Phase II
Report shall be prepared pursuant to this Section 7.27(b).
7.28 Schedules. From and after the date hereof until the Closing
Date, the parties shall cooperate to correct any information on any Schedules
delivered in connection with this Agreement and to provide further detail with
respect to any Schedule for which generic descriptions were provided. Upon
agreement of the parties, any such supplements and amendments shall supersede
any previous Schedules provided by the Seller to the Purchaser for all purposes
of this Agreement.
7.29 Financing. The Purchaser will use its best endeavors not to
cause a default under the Credit Agreement prior to the Closing Date.
7.30 Other Agreements Related to the Excluded Businesses.
(a) If Seller is not self-supplying liquid nitrogen for
its requirement for MRI nitrogen it will seek supplies from Purchaser for xxxxx
nitrogen.
(b) Seller shall have the right to commercialize any new
technology that is part of its New Technology Business directly on its own
behalf. If Seller chooses to make any such new technology generally available to
Third Party industrial gas distributors Seller shall also make such new
technology available to Purchaser upon terms and conditions mutually agreed
upon, taking into account, among other things, Seller's relationship with
Purchaser.
7.31 Interim Financial Statements. At or prior to the Closing, the
Seller shall deliver to the Purchaser, at the Seller's expense, the Interim
Financial Statements, prepared in accordance with the Valuation Principles and
accompanied by a report by PricewaterhouseCoopers, addressed to the Purchaser
and the Seller, with the same scope as, and using the same procedures used in
preparing, the Financial Statements.
7.32 Ticking Fee. If the Closing Date is delayed in accordance with
the provisions of this Agreement as a result of the occurrence of a Transition
Extension Event, then the Purchaser shall pay to the Seller an amount per each
thirty or thirty-one day period (as provided below) of such delay (prorated for
any partial period) as follows:
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(i) $375,000 for the first thirty days of such
delay;
(ii) $1,500,000 for the next thirty-one days of
such delay; and
(iii) $3,000,000 for each thirty or thirty-one day
period (on an alternating basis) of such delay thereafter.
7.33 Finalization of Certain Enabling Agreements. The Seller and
the Purchaser shall negotiate in good faith to finalize, on mutually agreeable
terms and as soon as practicable after the date of this Agreement, those
Enabling Agreements for which term sheets are attached as Exhibits hereto.
7.34 Duty to Notify. Each of the Seller and the Purchaser hereby
agree to give prompt written notice to the other party of any event, condition
or set of circumstances occurring or existing on or after the date hereof that,
directly or indirectly, (a) may contravene, conflict with or result in a
violation or breach of (i) any representation or warranty of such party
contained in this Agreement or any certificate delivered pursuant to Sections
8.5 or 9.3 of this Agreement, whether made as of the date hereof, as of the
Closing Date, or any other date or (ii) any covenant or agreement of such party
contained in this Agreement, or (b) may render any of the conditions specified
in Sections 8 or 9 of this Agreement incapable of being satisfied before October
29, 2003; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement or any of the
other Transaction Documents. Any such notice shall describe the circumstances
giving rise to such notice in reasonable detail and shall reference the section
numbers to this Agreement of the representations, warranties, covenants,
agreements and/or conditions to which it relates.
7.35 Additional Real Property Matters. At any time after the
Closing, upon written request by the Seller, the Seller and the Purchaser shall
negotiate in good faith to transfer or lease to the Seller such portion of the
real property site to be owned by the Purchaser at Lansing, Michigan, as is
required by the Seller for it to install a liquid helium center at such
location.
SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
The obligation of the Purchaser to proceed with the Closing hereunder
is subject to the satisfaction of the following conditions on the Closing Date,
any of which may be waived by the Purchaser by executing a writing at or prior
to the Closing:
8.1 Representations and Warranties. At the date hereof and as of
and at the Closing Date (except if made as of an earlier date, in which case as
of such date), the representations and warranties of the Seller contained in
Section 5 of this Agreement shall be true and correct without regard to any
limitation or qualification as to materiality, Business Material Adverse Effect
or any similar qualifier set forth in any such representation and warranty,
except, in each case or in the aggregate with the other representations and
warranties of the Seller set forth in Section 5, as does not constitute a
Business Material Adverse Effect.
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8.2 Covenants and Agreements. All the terms, covenants, agreements
and conditions of this Agreement (other than the terms, covenants and agreements
of Section 7.2) to be complied with and performed by the Seller on or before the
Closing Date shall have been complied with and performed in all material
respects.
8.3 Compliance with Section 7.2. All of the terms, covenants and
agreements of Section 7.2 to be complied with and performed by the Seller on or
before the Closing Date shall have been complied with and performed by the
Seller in all material respects.
8.4 No Business Material Adverse Effect. Since September 30, 2003,
there shall not have occurred a Business Material Adverse Effect.
8.5 Officer's Certificate. The Purchaser shall have received
certificates of an appropriate officer of the Seller to the effect of Sections
8.1, 8.2, 8.3 and 8.4 hereof.
8.6 Litigation.
(a) No Action by or before any Governmental Body of
competent jurisdiction shall have been instituted or threatened that has a
reasonable likelihood of success and (i) that would have a material adverse
effect on the Purchaser's ability to consummate the transactions contemplated by
this Agreement or (ii) that would prohibit or materially limit the ownership or
operation by the Purchaser of the Packaged Gas Business or the Purchased Assets.
(b) There shall not be any Law in effect which restrains
or prohibits the consummation of the transactions contemplated by this Agreement
and the other Transaction Documents.
8.7 Regulatory Consents. There shall have been received all
Consents of all Governmental Bodies necessary for the consummation by the
Purchaser of the transactions contemplated by this Agreement and the other
Transaction Documents, all required notice periods and waiting periods with
respect thereto shall have expired or terminated, and all conditions contained
in any such Consents required to have been satisfied prior to consummation by
the Purchaser of the transactions contemplated by this Agreement and the other
Transaction Documents shall have been satisfied.
8.8 FIRPTA Affidavit. The Seller shall have furnished the
Purchaser with a certificate stating that the Seller is not a "foreign" person
within the meaning of Section 1445 of the Code, which certificate shall set
forth all information required by, and otherwise be executed in accordance with,
Treasury Regulation Section 1.1445-2(b)(2).
8.9 Environmental Transfer Laws. The Seller shall have fulfilled
its obligations at Seller's expense (if any) under all applicable environmental
transfer Laws, including the New Jersey Industrial Site Recovery Act and the
Connecticut Transfer Act, to the extent such Laws require those obligations to
be fulfilled as a condition precedent to the consummation of this Agreement and
the other Transaction Documents and to the performance of the transactions
contemplated hereunder and thereunder.
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8.10 Closing Deliverables. The Seller shall have delivered, or
caused to be delivered, to the Purchaser, each of the documents required to be
delivered by the Seller to the Purchaser pursuant to Section 4.2 hereof.
8.11 Interim Financial Statements. The Purchaser shall have
received the Interim Financial Statements.
8.12 Financing. The Purchaser shall have obtained sufficient
financing to effect the purchase of the Purchased Assets; provided, however,
that this Section 8.12 shall be of no force and effect unless, on the date that
the Closing would have occurred but for the condition set forth in this Section
8.12 (the "Expected Closing Date"), (a) a Financing Extension Condition shall
have occurred and be continuing, and (b) the Purchaser shall have delivered to
the Seller (A) an officer's certificate certifying the existence of such
Financing Extension Condition and the details thereof (an "Extension Officer's
Certificate"), and (B) a copy of a certificate or letter from the U.S. agent
under the Credit Agreement addressed to the Purchaser stating that the lenders
have not funded under the Credit Agreement (an "Extension Financing Source
Certificate"). To the extent that the conditions in the foregoing sentence are
satisfied, the survival of this Section 8.12 shall be extended until the earlier
of (x) the last Friday of the month succeeding the month in which the Expected
Closing Date occurred and (y) October 29, 2004, it being understood that the
survival of this Section 8.12 may be further extended until the earlier of (x)
the last Friday of the second succeeding month after the month in which the
Expected Closing Date occurred and (y) October 29, 2004; provided that (a) on
the last day of the first extension period, a Financing Extension Condition
shall have occurred and be continuing, and (b) prior to or on the last day of
the first extension period, the Purchaser shall have delivered to the Seller,
(A) an updated Extension Officer's Certificate, and (B) an updated Extension
Financing Source Certificate. If on the last day of the second extension period
(a) a Financing Extension Condition shall have occurred and be continuing, and
(b) the Purchaser shall have delivered to the Seller (A) an updated Extension
Officer's Certificate and (B) an updated Extension Financing Source Certificate,
then the Purchaser or the Seller may, by written notice to the other party,
elect to terminate this Agreement in accordance with Section 15.1(d) and the
Purchaser shall pay to the Seller the Termination Payment as liquidated damages
in accordance with Section 15.2(c).
8.13 Key Transition Items. Each of the Key Transition Items shall
have been completed by the number of days prior to Closing set forth next to
each such Key Transition Item in the Transition Plan; provided that the
Purchaser has complied with its obligations under Section 7.2 and the Transition
Plan.
8.14 Readiness to Assume Operational Control. The Purchaser shall
be prepared to assume full operational control of the Packaged Gas Business at
Closing; provided, however, that this Section 8.14 shall be of no force or
effect unless, on the date that the Closing would have occurred but for the
condition set forth in this Section 8.14 (the "Expected Transition Closing
Date"), (a) a Transition Extension Event shall have occurred and be continuing,
and (b) the Purchaser shall have delivered to the Seller, on the Expected
Transition Closing Date, an officer's certificate certifying the existence of
such Transition Extension Event. To the extent that the conditions in the
foregoing proviso are satisfied, the survival of this Section 8.14 shall be
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extended until such time as the Transition Extension Event is no longer in
effect. Notwithstanding the foregoing, this Section 8.14 shall be of no force or
effect on October 29, 2004.
SECTION 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
The obligation of the Seller to proceed with the Closing hereunder is
subject to the satisfaction of the following conditions on the Closing Date, any
of which may be waived by the Seller by executing a writing at or prior to the
Closing:
9.1 Representations and Warranties. At the date hereof and as of
and at the Closing Date (except if made as of an earlier date, in which case as
of such date), the representations and warranties of the Purchaser contained in
Section 6 of this Agreement shall be true and correct without regard to any
limitation or qualification as to materiality, material adverse effect or any
similar qualifier set forth in any such representation and warranty, except, in
each case or in the aggregate with the other representations and warranties of
the Purchaser set forth in Section 6, as would not materially adversely affect
the ability of the Purchaser to consummate the transactions contemplated by this
Agreement.
9.2 Covenants and Agreements. All the terms, covenants, agreements
and conditions of this Agreement to be complied with and performed by the
Purchaser on or before the Closing Date shall have been complied with and
performed in all material respects.
9.3 Officer's Certificate. The Seller shall have received
certificates of an appropriate officer of the Purchaser to the effect of
Sections 9.1 and 9.2 hereof.
9.4 Litigation.
(a) No Action by or before any Governmental Body of
competent jurisdiction shall have been instituted that has a reasonable
likelihood of success and that would have a material adverse effect on the
Seller's ability to consummate the transactions contemplated by this Agreement.
(b) There shall not be any Law or Order in effect which
restrains or prohibits the consummation of the transactions contemplated by this
Agreement and the other Transaction Documents.
9.5 Regulatory Consents. There shall have been received all
Consents of all Governmental Bodies necessary for the consummation by the Seller
of the transactions contemplated by this Agreement and the other Transaction
Documents, all required notice periods and waiting periods with respect thereto
shall have expired or terminated, and all conditions contained in any such
Consents required to have been satisfied prior to consummation by the Seller of
the transactions contemplated by this Agreement and the other Transaction
Documents shall have been satisfied.
9.6 Environmental Transfer Laws. The Purchaser shall have
fulfilled its obligations (if any) under applicable environmental transfer Laws,
including the New Jersey Industrial Site
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Recovery Act and the Connecticut Transfer Act, to the extent such Laws require
those obligations to be fulfilled as a condition precedent to the consummation
of this Agreement and the other Transaction Documents and to the performance of
the transactions contemplated hereunder and thereunder.
9.7 Closing Deliverables. The Purchaser shall have delivered, or
caused to be delivered, to the Seller, each of the documents required to be
delivered by the Purchaser to the Seller pursuant to Section 4.3 hereof.
SECTION 10. EMPLOYEES
10.1 Transfer of Employees. The Purchaser shall make offers of
employment to the Employees pursuant to the procedures set forth in this Section
10.1.
(a) Aligned Employees. The Purchaser shall, at least
thirty (30) days prior to Closing, make offers of employment to each of the
Aligned Employees, except to the extent individuals are added to the list of
Aligned Employees after such time in accordance with this Agreement, in which
case the Purchaser shall make offers of employment to such Aligned Employees as
many days prior to the Closing as is reasonably practicable.
(b) Unaligned Employees. The Purchaser shall, at least
fourteen (14) days prior to Closing, make offers of employment to the Unaligned
Employees selected by the Purchaser, and the Purchaser shall identify to the
Seller which Unaligned Employees received offers within two (2) Business Days
following the making of any such offer; provided, however, that any Unaligned
Employee may decline, in a writing to be delivered to the Purchaser and the
Seller, to be considered for employment with the Purchaser after the earlier of
(i) the Purchaser having had a reasonable opportunity to generally describe
employment with the Purchaser, and such Unaligned Employee having had a
reasonable opportunity to consider such employment, or (ii) thirty (30) days
prior to the Closing.
(c) Retained Employees. The Purchaser shall not be
entitled to make an offer of employment to any of the Retained Employees, and
the Retained Employees shall not become Transferred Employees.
(d) CSC Employees. During the period beginning no later
than the date hereof and ending sixty (60) days prior to Closing, the Seller and
the Purchaser shall select, in accordance with the procedures set forth in
Schedule 10.1(d), from the list of CSC Employees set forth on Schedule DEF-7
persons whom the Purchaser shall add to the list of "Aligned Employees" or
"Unaligned Employees", respectively, and persons whom the Seller shall add to
the list of "Retained Employees", which persons shall thereafter be treated as
Aligned Employees, Unaligned Employees and Retained Employees, respectively, for
all purposes of this Agreement.
(e) Sales Employees. The Seller and the Purchaser shall
select, in accordance with the procedures set forth in Schedule 10.1(d), from
the list of Sales Employees set forth on Schedule DEF-8 persons whom the
Purchaser and the Seller, respectively, shall add to the list of "Aligned
Employees" and "Retained Employees", which persons shall thereafter be treated
as
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Aligned Employees and Retained Employees, respectively, for all purposes of this
Agreement. The selection described in the preceding sentence shall be made no
later than ten (10) days prior to the announcement of such selection, which
announcement shall be made no later than April 30, 2004.
(f) Notice.
(i) The Purchaser shall notify the Seller in
writing (by email or telecopy to the Director of Human Resources for the
Seller's U.S. ISP business) as to each Employee who has accepted an offer of
employment and each Employee who has rejected an offer of employment made
pursuant to Section 10.1(a) or (b) (and, in the case of a rejected offer, shall
provide the Seller with a copy of the applicable offer letter), in each instance
within seven (7) Business Days following the receipt of such acceptance or
rejection; provided, however, that such notice shall be provided no later than
five (5) Business Days prior to Closing.
(ii) The Seller shall notify the Purchaser within
seven (7) Business Days after any CSC Employee or Unaligned Employee becomes a
Transferred Employee whether such Transferred Employee has a Seller-leased
vehicle, which lease will have been listed on the updated Schedule 2.1(c)(iii)
at Closing.
(g) Responsibility for Certain Employees; Offers.
(i) Offers. If the Purchaser makes an offer of
employment to any Employee which offer includes (A) a total annual cash
compensation opportunity (base salary (or hourly rate of pay, as applicable)
plus such Employee's current bonus target) that is at least equal to 90% of the
Employee's current total cash compensation opportunity (base salary (or hourly
rate of pay, as applicable) plus such Employee's current bonus target) and (B)
employment at a location that does not extend the Employee's current one-way
commute greater than 50 miles, as measured by the most commonly traveled route,
then such offer of employment will be considered a "Qualifying Offer." Any offer
of employment by the Purchaser to an Employee that does not meet the
requirements for a Qualifying Offer is hereinafter referred to as a
"Non-Qualifying Offer."
(ii) Qualifying Offers. If the Purchaser makes a
Qualifying Offer of employment to an Employee and such Employee does not accept
such Qualifying Offer prior to the Closing Date for any reason, the Purchaser
shall have no obligation to hire the Employee and the Purchaser shall not be
responsible for any costs or liabilities associated with such Employee,
including with respect to the termination of such Employee's employment. The
Seller shall cease to employ any Employee who does not accept a Qualifying Offer
of employment made to such Employee by the Purchaser and shall not rehire any
such Employee for a period of at least twelve (12) months following the Closing
Date without the prior written consent of the Purchaser.
(iii) Non-Qualifying Offers. If the Purchaser
makes a Non-Qualifying Offer of employment to any Employee and such Employee
does not accept such Non-Qualifying Offer for any reason, then (A) the Seller
shall cease to employ such Employee and neither the Purchaser nor the Seller
shall rehire any such Employee for a period of at least twelve (12)
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months following the Closing Date without the prior written consent of the other
party, (B) the Seller shall pay such Employee a cash severance payment in
accordance with the terms of the BOC Group Severance Security Plan (the "Seller
Severance Plan") as in effect on the date hereof (each such payment a "Severance
Payment") (it being agreed by the parties that the formula for calculating the
Severance Payments is set forth on Schedule 10.1(g)(iii)) and (C) the Purchaser
shall, within thirty (30) days of receipt of an invoice from the Seller,
reimburse the Seller for one-half of the total Severance Payments made in
accordance with clause (B) above. If the Purchaser makes a Non-Qualifying Offer
of employment to an Employee and such Employee accepts such Non-Qualifying
Offer, then (x) subject to Section 10.2, the Employee shall become a Transferred
Employee pursuant to Section 10.2, (y) the Purchaser shall pay such Employee an
amount equal to the amount such Employee would have received from the Seller
pursuant to clause (B) of the preceding sentence (excluding pay in lieu of
notice) if the employment of such Employee had been terminated by the Seller
following the rejection of a Non-Qualifying Offer (each such payment, a
"Transition Payment") and (z) the Seller shall, within thirty (30) days of
receipt of an invoice from the Purchaser, reimburse the Purchaser for one-half
of the total Transition Payments made in accordance with clause (y) above.
Notwithstanding anything in this Section 10.1(g) to the contrary, (I) the
Seller's portion of the payments provided in accordance with this Section
10.1(g)(iii) shall not exceed $550,000 in the aggregate (the "Seller Limit") and
the Purchaser shall be responsible for any portion of the Severance Payments
and/or Transition Payments (in each case calculated in accordance with Schedule
10.1(g)(iii)) in excess of the Seller Limit that the Seller would otherwise be
responsible for pursuant to this Section 10.1(g)(iii), and (II) the Seller's
obligation to make any Severance Payments shall be subject to the execution by
the applicable Employee of a release of claims against the Seller and its
Affiliates reasonably satisfactory to the Seller in accordance with the terms of
the Seller's Severance Plan as in effect on the date hereof.
(h) Notwithstanding anything in this Section 10, any
offer of employment made by the Purchaser to any Employee shall comply with
applicable Law.
(i) Employee Information. The Seller agrees to provide,
on the Closing Date, the information listed on Schedule 10.1(i) for each
Transferred Employee (collectively, the "Employee Information"). The Seller
agrees to use commercially reasonable efforts to obtain consents from Employees
who are employed as drivers to include, in addition to the other Employee
Information, such Employee's Department of Transportation records in the
Employee Information provided to the Purchaser.
10.2 Transferred Employees. Each Employee who accepts an offer of
employment from the Purchaser, whether a Qualifying Offer or a Non-Qualifying
Offer, and who continues to be an employee of the Seller until immediately prior
to the Closing, shall become employed by the Purchaser either (i) as of the
Closing Date, or (ii) in the event any such Employee is on leave approved by the
Seller in the Ordinary Course of Business on the Closing Date, as of the date
that such Employee is no longer on any such approved leave, provided that the
Employee reports to work with the Purchaser within thirty (30) days after the
end of any such approved leave, and in no event, other than a military leave,
later than one-hundred-twenty (120) days following the Closing Date. A list of
Employees on an approved leave, the date such approved leave is expected to end
(if available) and the reason for such approved leave is provided on Schedule
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10.2, such list to be updated as of the Closing. Employees who are employed by
the Purchaser in accordance with the foregoing sentence shall be "Transferred
Employees" from and after their first date of employment with the Purchaser. The
Purchaser shall, subject to any applicable restrictions, have the right to
administer a standard drug test (as administered to all similarly situated
employees hired by the Purchaser in the Ordinary Course of Business) to each
Employee that accepts the Purchaser's offer of employment and the failure of any
such Employee to take or pass such drug test prior to the Closing Date shall be
considered a rejection of a Qualifying Offer of employment. Any Employee who
fails to take or pass such drug test prior to the Closing Date shall not be
deemed a "Transferred Employee" for purposes of this Agreement.
10.3 Employee Benefits.
(a) The Purchaser shall or shall cause a subsidiary to
extend, on the Closing Date, coverage under the Purchaser's then-existing
employee benefit plans, programs and arrangements, including any "employee
welfare benefit plans" and "employee pension benefit plans," each as defined in
Section 3 of ERISA, to the Transferred Employees on the same terms on which
similarly situated employees of the Purchaser participate in such plans. For all
purposes of such employee benefit plans, programs and arrangements, including,
without limitation, eligibility, participation, vesting and benefit accrual
(other than for benefit accrual for any defined benefit pension plan) the
Purchaser shall credit Transferred Employees for prior service with the Seller
and its Affiliates to the extent the Seller recognized such service; provided,
however, that no Transferred Employee who received a Non-Qualifying Offer will
be credited with service with the Seller or its Affiliates for purposes of any
applicable severance plan of the Purchaser (any such plan, the "Purchaser
Severance Plan").
(b) To the extent permitted by applicable Law, on or as
promptly as practicable after the Closing Date but in no event later than
fifteen (15) days after the applicable Employee becomes a Transferred Employee,
the Seller shall pay to the Purchaser, in respect of all accrued and unused
vacation for each Transferred Employee with respect to the Seller's fiscal year
that includes the Closing Date (the "Current Fiscal Year"), an amount equal to
the product of (i) the number of accrued, but unused, vacation days for such
Transferred Employee, multiplied by (ii) for such Transferred Employee, the
lesser of (A) the daily eight (8) hour rate of base salary (or hourly rate of
pay, as applicable) contained in such Transferred Employee's Offer, and (B) the
daily eight (8) hour rate of base salary (or hourly rate of pay, as applicable)
that the Seller disclosed to the Purchaser pursuant to 5.18(e) as payable to
such Transferred Employee immediately prior to the Closing. The Purchaser shall,
as of the Closing, allow Transferred Employees who have vacation accrued with
respect to the Current Fiscal Year, but unused as of the Closing Date, to use or
be compensated for such vacation following the Closing Date in accordance with
the Purchaser's applicable vacation policies. The Seller shall directly pay to
the Transferred Employees, on or as promptly as practicable after the Closing
Date but in no event later than fifteen (15) days after the applicable Employee
becomes a Transferred Employee, any accrued vacation in respect of any fiscal
year prior to the Current Fiscal Year.
(c) The Purchaser shall (i) cause its group health plans
to cover Transferred Employees employed by the Purchaser and dependents of such
Transferred Employees to the extent such Transferred Employees and dependents
are covered under the Seller's group health
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plans as of the Closing Date and to be responsible (in accordance with the
Purchaser's employee welfare benefit plans and employee pension benefit plans)
for covered expenses incurred by such Transferred Employees and dependents on or
after the Closing Date; (ii) waive proof of insurability requirements for
initial extension of both basic and optional benefit coverage under its group
health plans or other group insurance welfare benefit plans for such Transferred
Employees and dependents; (iii) credit deductible payments and co-insurance
payments made in 2004 by such Transferred Employees and their dependents under
the Seller's group health plans for expenses incurred on or prior to the Closing
Date towards deductibles and out of pocket maximums in effect for its group
health plans for 2004; and (iv) waive all pre-existing condition clauses in its
group health plans for such Transferred Employees and their dependents, but only
to the extent such pre-existing conditions were waived under the Seller's group
health plan. For purposes of the preceding sentence, "group health plan" shall
have the meaning proscribed in Section 5000(b)(1) of the Code. Notwithstanding
the above, in respect of any person who becomes a Transferred Employee after the
Closing Date in accordance with the first sentence of Section 10.2, the term
"Closing Date," as used in this Section 10.3, shall refer to the date on which
such person becomes a Transferred Employee.
(d) Notwithstanding the foregoing, effective as of the
Closing Date, the Transferred Employees shall be eligible to participate in the
Purchaser Severance Plan, a copy of which has been provided to the Seller as of
the date hereof, on the same terms on which similarly situated employees of the
Purchaser participate in such plan; provided, that Purchaser shall credit
Transferred Employees who receive Qualifying Offers for prior service with the
Seller and its Affiliates to the extent the Seller recognized such service for
the purpose of the Seller Severance Plan. If the employment of a Transferred
Employee who received a Non-Qualifying Offer with the Purchaser is terminated by
the Purchaser following the Closing Date, such Transferred Employee shall be
eligible to participate in the Purchaser Severance Plan, but only with respect
to service with the Purchaser.
10.4 COBRA. The Seller shall be responsible for providing such
continuation coverage, within the meaning of COBRA, as is required pursuant to
COBRA in respect of any Employee or "qualified beneficiary" (as defined in
COBRA) who incurs a "qualifying event" prior to the Closing Date or any Employee
who does not become a Transferred Employee in accordance with Section 10.2. The
Purchaser shall be responsible for providing such continuation coverage as is
required under COBRA in respect of any Transferred Employee employed by the
Purchaser, or qualified beneficiary of a Transferred Employee, in either case,
who incurs a qualifying event on or after the Closing Date.
10.5 Unemployment Insurance. At the request of the Purchaser, the
Seller, to the extent permitted by relevant state unemployment insurance Law,
agrees to a total or partial transfer of experience rating, and/or transfer of
applicable reserve balances, as applicable, relating to Transferred Employees.
The Seller will provide to the Purchaser information reasonably requested by the
Purchaser to effectuate such transfer.
10.6 Payroll Tax. For purposes of payroll taxes with respect to all
employees of the Seller that become employees of the Purchaser, the Seller and
the Purchaser agree to treat the
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transactions contemplated herein as a transaction described in Treasury
Regulation Sections 31.3121(a)(1)-1(b)(2) and 31.3306(b)(1)-1(b)(2).
10.7 Cooperation.
(a) Upon the Purchaser providing reasonable notice to the
Seller, the Seller shall permit the Purchaser a reasonable opportunity to meet
with the Employees during the Seller's and applicable Employee's normal business
hours; provided that the Purchaser shall be responsible for any third-party
out-of-pocket expenses incurred at the Purchaser's request in connection with
any such meeting. Such opportunity shall be in accordance with applicable Laws
and for the sole purpose of informing such Employees about the terms and
conditions of employment with the Purchaser, including information about the
Purchaser's benefit plans. All contact with such Employees initiated by the
Purchaser will be done at the Employee's principal employment location or
another mutually agreed upon location and the Purchaser's representative may, in
the sole discretion of the Seller, be accompanied by at least one Seller
representative during such contact (any costs associated with such Seller
representative to be borne by the Seller). Any meetings held by the Purchaser
with an Employee outside of the Seller's and applicable Employee's normal
business hours shall be conducted solely on a voluntary basis, and the Seller
shall have no liability or obligation with respect thereto.
(b) Notwithstanding Section 10.7(a), the Seller shall
permit the Purchaser to communicate and confer with the Aligned Employees and
Sales Employees set forth on Exhibit D to the Employee Side Letter no later than
the earlier of (x) two (2) weeks following the date hereof and (y) April 15,
2004; provided, however, that (A) any such communications and conferences shall
be subject to the requirements of (i) applicable antitrust Laws and (ii) Section
7.6 of this Agreement and the MCDA, (B) the Purchaser shall be responsible for
any third-party out-of-pocket expenses incurred at the Purchaser's request in
connection with any such communication or conference, (C) any such communication
or conference that occurs or is held outside of the Seller's or applicable
Aligned Employee's or Sales Employee's normal business hours shall be conducted
solely on a voluntary basis, and the Seller shall have no liability or
obligation with respect thereto and (D) any such communication or conference
shall not conflict with the Seller's ability to conduct the Packaged Gas
Business in the Ordinary Course of Business through the Closing Date.
10.8 WARN. The Purchaser shall be responsible for any obligation
with respect to the Transferred Employees under WARN arising on or after the
Closing Date. The Seller shall be responsible for any such obligation arising
prior to the Closing Date.
10.9 Collective Bargaining Arrangements. Notwithstanding anything
to the contrary in this Section 10:
(a) The terms and conditions of employment of any
Transferred Employee subject to a collective bargaining agreement that is not an
"Assumed Agreement" (as defined below) shall be in accordance with the
requirements of the National Labor Relations Act, as amended, and any other
applicable Law.
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(b) The Seller shall assign and the Purchaser agrees to
assume as successor employer, as of the Closing Date, the collective bargaining
agreements listed or described in Schedule 10.9(b) covering and only with
respect to Employees in Bellmawr, New Jersey, Hawaii and Ann Arbor, Michigan
(each, an "Assumed Agreement") and continue the employment of the Employees
covered by, and, subject to Section 2.4(p), be responsible for any obligations
arising under, each Assumed Agreement on and after the Closing Date. Each
Employee covered by an Assumed Agreement who is an employee of the Seller
immediately prior to the Closing shall become a Transferred Employee and the
terms and conditions of employment of any such Transferred Employee shall be
subject to the applicable Assumed Agreement (or any successor thereto). Complete
copies of each Assumed Agreement, listed on Schedule 10.9(b), have been provided
to the Seller prior to the date hereof.
SECTION 11. BROKERAGE
The Seller, on the one hand, and the Purchaser, on the other hand,
shall indemnify and hold harmless the other against and in respect of any
liability, cost or expense resulting from any agreement, arrangement or
understanding made by such party with any third party for brokerage or finders
fees or other commissions relative to this Agreement or the transactions
contemplated hereby.
SECTION 12. EXPENSES
Except as otherwise provided herein or therein, each party hereto shall
bear all expenses incurred by it in connection with this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby, including all compensation and expenses of their respective
counsels, actuaries, financial advisors and accountants, whether or not the
Closing shall have occurred.
SECTION 13. TRANSFER TAXES AND RECORDING EXPENSES
13.1 Transfer and Recording Taxes. The Seller and Purchaser shall
each pay one-half of all sales, use, value added, transfer, stamp, registration,
recording, documentary, excise, real property transfer or gains, or similar
Taxes incurred as a result of the transactions contemplated in this Agreement,
and the Seller and the Purchaser agree to jointly file all required change of
ownership and similar statements; provided, however, that the Purchaser shall be
solely liable for any increase in any of the foregoing Taxes to the extent
attributable to any designation by the Purchaser of any Purchaser Subsidiaries
to purchase any of the Purchased Assets above the amount of the foregoing Taxes
that would have resulted if the Purchaser had effected at the Closing the
purchase of the Purchased Assets and the assumption of the Assumed Liabilities
thereunder. The Seller and the Purchaser agree to cooperate so as to minimize
the amount of any such Taxes. The Purchaser expressly authorizes the Seller to
collect and remit such Taxes as may be required by any applicable Law. If the
purchase of any Purchased Assets is exempt from sales or use Tax, then, where
required by Law, at the Closing, the Purchaser shall deliver to the Seller such
properly completed resale exemption certificates and other similar certificates
or instruments, in form and content acceptable to the Seller, as are necessary
to claim available exemptions from the payment of sales, transfer, use or other
similar Taxes under applicable Law.
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13.2 Real and Personal Property Taxes. Real and personal property
taxes applicable to any of the Purchased Assets, including but not limited to
any payments made under an Industrial District Agreement or any similar
agreement under which amounts are paid to a Governmental Body in lieu of
property taxes, shall be prorated between the Seller, on the one hand, and the
Purchaser, on the other hand, as of the Closing Date.
13.3 Tax Returns. The Purchaser and the Seller shall cooperate in
good faith in preparing in a timely manner any and all property transfer Tax
Returns and other similar filings required by Law in connection with the
transactions contemplated hereby and relating to the Purchased Assets, any part
thereof or ownership interest therein, including duly and properly executing and
acknowledging any such filings and executing such affidavits in connection with
such filings as shall have been required by Law or reasonably requested by the
other party. Each party (whether the Purchaser or the Seller, as the case may
be) shall provide copies of such Tax Returns to the other party within a
reasonable period following the filing of such Tax Returns by such party.
SECTION 14. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
14.1 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements contained in this
Agreement and the other Transaction Documents shall survive the Closing, but
shall be subject to all limitations and other provisions relating thereto
contained in this Agreement. Such representations, warranties, covenants and
agreements contained herein are exclusive, and the parties hereto confirm that
they have not relied upon any other representations, warranties, covenants and
agreements as an inducement to enter into this Agreement or otherwise.
14.2 Indemnification of the Purchaser. Subject to Sections 14.3 and
14.4 hereof, the Seller agrees to defend, indemnify and hold harmless the
Purchaser and its respective Affiliates and their respective officers,
directors, agents and representatives and the respective successors and
permitted assigns of each of the foregoing (collectively, the "Purchaser
Indemnitees") against and in respect of any costs, damages (including claims for
natural resource damages or Remediation), losses, expenses, claims, obligations,
diminution of value or other liabilities (including legal and other expenses
incurred in investigating and defending or enforcing any claims or deficiencies)
(collectively, "Losses"), incurred by the Purchaser Indemnitees to the extent
resulting or arising from:
(a) a breach of any of the representations or warranties
made by the Seller in Section 5 of this Agreement or in the certificate
delivered pursuant to Section 8.5;
(b) except with respect to Environmental Remediation
Liabilities, which are covered by Section 14.2(c) below, a breach of any of the
covenants or agreements (other than the Transaction Documents and the covenants
or agreements contained in Section 7.2(a) through (g)) made or to be performed
by the Seller pursuant to this Agreement;
(c) all liabilities or obligations to perform Remediation
on or about an Owned Real Property or a Leased Real Property, except to the
extent such liabilities or obligations are
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caused, increased or otherwise exacerbated by the Purchaser or its Affiliates or
agents, arising out of or relating to (collectively, "Environmental Remediation
Liabilities"):
(A) any Known Environmental Liability; or
(B) other than any Known Environmental
Liabilities, any condition or contamination that Purchaser can show
arose due to Seller's actions in operating the Packaged Gas Business or
the Purchased Assets, or the Seller's omissions with respect to the
operation of the Packaged Gas Business or the Purchased Assets to the
extent such omissions were inconsistent with obligations under
applicable Environmental Law or were otherwise not commercially
reasonable.
(d) except with respect to Environmental Remediation
Liabilities, which are covered by Section 14.2(c) above, the Excluded
Liabilities;
(e) any liability or obligation (excluding Environmental
Remediation Liabilities, which are covered by Section 14.2(c) above) with
respect to the Seller's operation of property subject to a Purchaser Real
Property Lease or the Purchaser Real Property Sublease on or after the Closing
Date; or
(f) any failure to comply with the "bulk sales" laws
applicable to the transactions contemplated by this Agreement.
The obligations of the Seller hereunder shall bind the successors and
assigns of the Seller.
For all purposes of Section 14.2, a breach of the Seller's
representations and warranties shall be determined without regard to any
limitation or qualification as to "materiality", "material", "materially" or
"Business Material Adverse Effect" set forth in such representation or warranty.
14.3 Duration of Indemnification of the Purchaser. The Seller's
obligations to defend, indemnify and hold harmless the Purchaser Indemnitees
under Section 14.2 shall apply only to any Claim Notice (as hereinafter defined)
given pursuant to Section 14.8 within the following periods:
Section 14.2(a) Eighteen (18) months after the Closing Date,
except that the Seller's indemnification
obligation with respect to a breach of any
representation or warranty contained in
Sections 5.1, 5.2, the second sentence of
Section 5.9 or the first sentence of Section
5.14(a) shall survive until the expiration
of the applicable statute of limitations.
Section 14.2(b) Eighteen (18) months after the Closing Date
with respect to covenants and agreements of
the Seller that by their terms are to be
performed in full prior to or on the Closing
Date.
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No time limit with respect to covenants and
agreements of the Seller that by their terms
are to be performed or completed after the
Closing Date.
Section 14.2(c) Six (6) years after the Closing Date, except
that Seller's indemnification obligation
with respect to Known Environmental
Liabilities shall have no time limit.
Section 14.2(d) No time limit; provided, that, the Seller's
indemnification obligation with respect to
any claims in respect of Taxes shall survive
until the expiration of the applicable
statute of limitations.
Section 14.2(e) Twelve (12) months after the date on which
Seller ceases to operate the property
subject to a Purchaser Real Property Lease
or the Purchaser Real Property Sublease
Section 14.2(f) No time limit.
14.4 Limitations on Indemnification of the Purchaser.
(a) The Seller's obligations to defend, indemnify and
hold harmless the Purchaser Indemnitees (i) under Sections 14.2(a) and
14.2(c)(B) shall apply only after the Purchaser Indemnitees have suffered Losses
under Sections 14.2(a) and 14.2(c)(B) (except for those based upon, arising out
of or otherwise in respect of Sections 5.1, 5.2, the second sentence of Section
5.9 or the first sentence of Section 5.14(a)) in excess of an aggregate of four
million dollars ($4,000,000), after which the Seller shall only be obligated to
indemnify Losses in excess of such amount (the "Minimum Amount"), and (ii) in
any case shall apply only after the amount of any individual Loss or any series
of related Losses indemnified against hereunder shall exceed fifty thousand
dollars ($50,000) and then shall apply to the entire amount of such Loss. The
Seller will be obligated only to indemnify Losses relating to Sections 14.2(a)
and 14.2(c)(B) (except for those based upon, arising out of or otherwise in
respect of Section 5.1, 5.2, the second sentence of Section 5.9 or the first
sentence of Section 5.14(a)) up to an aggregate amount equal to twenty-five
percent (25%) the Purchase Price (the "Maximum Amount"). Notwithstanding the
foregoing provisions of this Section 14.4, the Purchaser shall be entitled to
receive indemnification payments in respect of the indemnification payments
under Sections 14.2(b), (c)(A), (d), (e) and (f) without regard to the
individual or aggregate amount thereof, without regard to whether the aggregate
amount of all other indemnification payments shall have exceeded, in the
aggregate, the Minimum Amount or shall have exceeded, in the aggregate, the
Maximum Amount. Any claim which is within the description of Section 14.2(a) or
14.2(b) and which is also within the description of any of Sections 14.2(c)
through 14.2(f), shall be deemed to be asserted and treated hereunder for all
purposes as a claim arising out of Section 14.2(c) through 14.2(f), as
appropriate.
(b) Remediation of Particular Matters. The Seller's
obligation to indemnify the Purchaser Indemnitees pursuant to Section 14.2(c)
shall be subject to and limited by the following conditions:
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(i) Seller's Remediation. The Seller shall have
the right but not the obligation to conduct and control the management of any
Remediation that is subject to indemnification pursuant to this Agreement (any
such Remediation for which the Seller makes such an election, a "Seller's
Remediation"). In furtherance of this right, prior to initiating any Remediation
regarding which the Purchaser may seek indemnification pursuant to Section
14.2(c) hereof, the Purchaser shall notify the Seller of such Environmental
Liability and its intention to undertake such Remediation. The Seller shall,
within thirty (30) days of the Seller's receipt of such notice (or reasonable
shorter period, in the case of an emergency Remediation), indicate to the
Purchaser that (i) it intends to undertake said Remediation or (ii) that more
information is needed from the Purchaser before the Seller can reasonably
determine that the Purchaser's claim would be subject to indemnification
pursuant to this Agreement. The Purchaser shall promptly respond to such
requests for information (to the extent such information is reasonably available
to the Purchaser) and, within thirty (30) days after the Seller's receipt of
such information, the Seller shall notify the Purchaser as to whether it shall
undertake such Remediation. Prior to a determination by the Seller that it shall
undertake such actions pursuant to this Section 14.4(b)(i), the Purchaser shall
take only those actions necessary to comply with applicable Environmental Law or
to address conditions that pose an immediate and acute health risk.
Notwithstanding the procedure set forth in this Section 14.4(b)(i), the parties
hereto agree that all Known Environmental Liabilities are deemed to be Seller's
Remediation.
(ii) Purchaser's Remediation. In undertaking any
Remediation for which the Purchaser shall seek indemnification pursuant to
Section 14.2(c) of this Agreement, the Purchaser shall: (A) utilize only such
actions which (1) are necessary to resolve and discharge the Environmental
Liability in question, and (2) employ the most cost-effective means available
that is consistent with good business practice and the use of the property
immediately prior to the Closing Date and is acceptable to the relevant
Governmental Body; (B) initiate and diligently pursue until completion all such
actions in compliance with all applicable Law, including all Environmental Law;
(C) not cause, through its own action or inaction, any undue delay in obtaining
written notice from the appropriate Governmental Authority that no further
investigation or remediation is necessary with respect to the matter in
question; and (D) provide copies to the Seller of all material correspondence
and reports prior to the Purchaser undertaking any Remediation work at a Subject
Property. In particular, the Purchaser shall provide to the Seller, for the
Seller's review and comment, the Purchaser's proposed Remediation plan, which
shall include the data, evaluations, reports and other information upon which
the Purchaser relied in preparing its proposed Remediation plan. The Seller
shall provide comments to the Purchaser on the proposed Remediation plan within
sixty (60) days (or, in the event that submission of the Remediation plan is
required in less than sixty (60) days under applicable Environmental Law, then
within a reasonable time prior to the submission of the Remediation plan,
provided that the Purchaser shall use commercially reasonable efforts to obtain
an extension of time for submission of such plan) of the receipt thereof (it
being understood that if the Seller does not provide any such comments, the
Purchaser may proceed with performance of such Remediation), after which the
Purchaser shall provide the final Remediation plan to the Seller for the
Seller's approval, which approval may not be unreasonably withheld or delayed.
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(iii) Remediation of Leased Real Property. In the
event that an Action is commenced against the Purchaser after the Closing
relating to a Known Environmental Liability on a Leased Real Property:
(A) If such Known Environmental
Liability is not identified as having been caused by the Seller, the
Purchaser shall first demand indemnification from the lessor of the
Leased Real Property for any liability relating to the Known
Environmental Liability. The Purchaser shall thereafter seek in good
faith to obtain such indemnification from such lessor; provided,
however, if such lessor refuses or fails to assume the defense of the
matter and to indemnify the Purchaser for all losses related to the
matter, the Purchaser may require the Seller to provide such
indemnification as would otherwise be available under this Section 14.
In such applicable circumstances, the Purchaser shall assign to the
Seller all rights it has under the lease and at Law to recover from the
lessor any losses relating to the Known Environmental Liability in
question.
(B) If such Known Environmental
Liability is identified as having been caused by the Seller, all of the
obligations of the Seller with respect to indemnification of the
Purchaser for such matters under this Section 14 shall apply.
14.5 Indemnification of the Seller by the Purchaser. Subject to
Sections 14.6 and 14.7 hereof, the Purchaser agrees to defend, indemnify and
hold harmless the Seller and its Affiliates and their respective officers,
directors, agents and representatives and the respective successors and
permitted assigns of each of the foregoing (the "Seller Indemnitees") against
and in respect of any Losses incurred by the Seller Indemnitees to the extent
resulting or arising from:
(a) a breach of any of the representations or warranties
made by the Purchaser in Section 6 of this Agreement or in the certificate
delivered pursuant to Section 9.3;
(b) a breach of any of the covenants or agreements (other
than the Transaction Documents or the covenants or agreements contained in
Section 7.2(a) through (g)) made or to be performed by the Purchaser or its
successors pursuant to this Agreement;
(c) (i) any liability or obligation (other than Excluded
Liabilities) of any nature or kind, known or unknown, fixed, accrued, absolute
or contingent, or any claim, demand or condition asserted with respect to the
Purchaser's operation of the Purchased Assets arising out of events occurring on
or after the Closing Date or (ii) any Assumed Liability; or
(d) any liability or obligation (including Environmental
Liabilities) with respect to the Purchaser's operation of real property subject
to a Seller Real Property Lease or the Seller Real Property Sublease on or after
the Closing Date.
The obligations of the Purchaser hereunder shall bind the successors
and assigns of the Purchaser.
For all purposes of this Section 14.5, a breach of the Purchaser's
representations and warranties shall be determined without regard to any
limitation or qualification as to
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"materiality", "material", "materially" or "material adverse effect" set forth
in such representation or warranty.
14.6 Duration of Indemnification of the Seller. The Purchaser's
respective obligations to defend, hold harmless and indemnify the Seller
Indemnitees under Section 14.5 shall apply only to any Claim Notice given
pursuant to Section 14.8 within the following periods:
Section 14.5(a) Eighteen (18) months after the Closing Date,
except that the Purchaser's indemnification
obligation with respect to a breach of any
representation or warranty contained in
Sections 6.1 or 6.2 shall survive until the
expiration of the applicable statute of
limitations.
Section 14.5(b) Eighteen (18) months after the Closing Date
with respect to covenants and agreements of
the Purchaser that by their terms are to be
performed in full prior to or on the Closing
Date.
No time limit with respect to covenants and
agreements of the Purchaser that by their
terms are to be performed or completed after
the Closing Date.
Section 14.5(c) No time limit, provided that the Purchaser's
indemnification obligation with respect to
any claims in respect of Taxes shall survive
until the expiration of the applicable
statute of limitations.
Section 14.5(d) Twelve (12) months after the date on which
Purchaser ceases to operate the property
subject to a Seller Real Property Lease or
the Seller Real Property Sublease.
14.7 Limitation on Indemnification of the Seller. The Purchaser's
obligation to defend, indemnify and hold harmless the Seller Indemnitees (i)
under Section 14.5(a) shall apply only after the Seller Indemnitees have
suffered Losses under Section 14.5(a) in excess of the Minimum Amount, after
which the Purchasers shall only be obligated to indemnify Losses in excess of
such amount; and (ii) in any case shall apply only after the amount of any
individual or any series of related Losses indemnified against hereunder shall
exceed fifty thousand dollars ($50,000) and then shall apply to the entire
amount of such Loss. The Purchaser will be obligated only to indemnify Losses
relating to breaches of representations and warranties in excess of the Minimum
Amount and up to an aggregate amount equal to the Maximum Amount.
Notwithstanding the foregoing provisions of this Section 14.7, the Purchaser
shall be entitled to receive indemnification payments in respect of the
indemnification payments under Sections 14.5(b), (c) and (d) without regard to
the individual or aggregate amount thereof and without regard to whether the
aggregate amount of all other indemnification payments shall have exceeded, in
the aggregate, the Minimum Amount or shall have exceeded, in the aggregate, the
Maximum Amount. Any claim which is within the description of Section 14.5(a) or
14.5(b),
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which is also within the description of any of Sections 14.5(c) and 14.5(d),
shall be deemed to be asserted and treated hereunder for all purposes as a claim
arising out of Sections 14.5(c) and 14.5(d), as appropriate.
14.8 Procedure for Indemnification. After a party becomes aware
that any claim is threatened or asserted against it or the existence of any
other circumstances that would occasion the indemnification described in this
Section 14 (a "Covered Claim"), such party shall provide the party from whom it
is seeking indemnification with a notice (a "Claim Notice") of such Covered
Claim pursuant to the provisions of Section 20 hereof. Failure to give such
notice promptly shall not relieve the Assuming Party (defined below) of its
indemnification obligations hereunder except to the extent it actually is
prejudiced by such failure. Each Claim Notice shall describe the Covered Claim,
the party threatening or asserting it (if applicable), the relief sought, and
the basis for indemnification hereunder with respect thereto. In the case of a
third-party claim, the party receiving such notice may, at its option, assume
the defense of such Covered Claim (the "Assuming Party"); provided, that, within
forty (40) days after the Claim Notice is given (or sooner, if the nature of the
Covered Claim so requires), the party receiving such notice shall have given
notice to the other party (the "Notifying Party"), pursuant to the provisions of
Section 20 hereof, of its election to assume such defense. If the defense is so
assumed by the Assuming Party with counsel reasonably acceptable to the
Notifying Party, the Notifying Party shall be entitled to participate in the
defense of the Covered Claim with its own counsel at its own expense, and the
Notifying Party shall provide such cooperation at the expense of the Assuming
Party (including providing available information and personnel to the Assuming
Party) as the Assuming Party shall reasonably request to facilitate such
defense. The Assuming Party shall have the right to defend and/or settle any
such Covered Claim on such terms and conditions and in such amounts as it deems
appropriate, and the Notifying Party shall promptly execute all documents
reasonably requested of it with respect to any such defense and/or settlement;
provided, however, any such settlement shall include an unconditional release by
the claimant of all indemnified persons with respect to such Covered Claim and
the indemnified persons shall not be required to take any action other than the
delivery of such release. If the party receiving the notice does not assume the
defense of a given Covered Claim pursuant hereto or fails to notify the
Notifying Party of its election hereunder or contests its obligation to
indemnify under this Agreement, or if the third party seeks remedies in addition
to the monetary damages, the party giving the notice shall defend against such
Covered Claim in such manner, and/or settle such Covered Claim on such terms, as
it shall, in its sole reasonable judgment, determine to be appropriate under the
circumstances and such action shall be binding on the parties for the purposes
of this Section 14. Notwithstanding the preceding sentence, no party may settle
or compromise any Covered Claim over the objection of the other. Notwithstanding
the foregoing, in any action or proceeding in which the counsel chosen by the
Notifying Party determines that counsel chosen by the Assuming Party cannot
represent both the Notifying Party and the Assuming Party in connection with the
defense of any Covered Claim consistent with the applicable rules of
professional conduct, the Notifying Party shall have the right to employ
separate counsel at the Notifying Party's expense and to control its own defense
in connection therewith.
14.9 Payment Limitation. Payments by the Seller pursuant to Section
14.2, or by the Purchaser pursuant to Section 14.5, as the case may be, shall be
limited to the amount of any loss
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or damage that remains after deducting therefrom (i) any Tax Benefit to the
Purchaser Indemnitee or Seller Indemnitee, as the case may be, and (ii) any
insurance proceeds and any indemnity, contribution or other similar payment
recoverable by the Purchaser Indemnitee or Seller Indemnitee, as the case may
be, from any Third Party with respect thereto. A Tax Benefit will be considered
to be recognized by the Purchaser Indemnitee or Seller Indemnitee, as the case
may be, for purposes of this Section 14.9 in the Tax period in which the
indemnity payment occurs, and the amount of the Tax Benefit shall be determined
by assuming that the Purchaser Indemnitee or Seller Indemnitee, as the case may
be, is in the maximum applicable statutory tax bracket after any deductions or
other allowances reportable with respect to a payment hereunder.
14.10 Exclusive Remedy. Subject to Section 17, the Parties hereby
acknowledge and agree that their sole and exclusive remedy with respect to any
and all claims relating to the subject matter of this Agreement shall be
pursuant to the indemnification provisions set forth in this Section 14 (other
than with respect to the Transaction Documents and the remedies provided for
therein and other than claims of, or causes of action arising from, fraud). In
furtherance of the foregoing, the Parties hereby waive, to the fullest extent
permitted under applicable Law, any and all rights, claims and causes of action
it may have against the Seller (other than with respect to the Transaction
Documents and the remedies provided for therein and other than claims of, or
causes of action arising from, fraud) arising under or based upon any breach of
a representation or warranty contained herein other than the remedies expressly
provided in this Section 14.
14.11 Exceptions. The Seller shall have no liability under any
provision of this Agreement for any losses and damages to the extent that such
losses and damages are caused by actions taken by the Purchaser and its
Affiliates after the Closing Date. In no event shall any Party be liable for
consequential, special, indirect, incidental or punitive damages, except to the
extent special, indirect, consequential or punitive damages are awarded to a
third party against an Indemnified Party in circumstances in which such
Indemnified Party is entitled to indemnification hereunder.
SECTION 15. TERMINATION OF AGREEMENT
15.1 Events of Termination. This Agreement and the transactions
contemplated hereby may be terminated or abandoned at any time prior to the
Closing Date as follows:
(a) upon the written agreement of the Seller and the
Purchaser;
(b) at the election of the Purchaser, if (i) the Seller
has breached any representation or warranty contained in this Agreement that is
qualified by materiality or a Business Material Adverse Effect requirement, (ii)
the Seller has breached in any material respect any representation or warranty
contained in this Agreement that is not so qualified, (iii) the Seller has
breached any covenant or agreement contained in this Agreement that is qualified
by materiality or a Business Material Adverse Effect requirement, or (iv) the
Seller has breached in any material respect any covenant or agreement contained
in this Agreement that is not so qualified, in the case of (i), (ii), (iii) or
(iv), which breach has been notified to the Seller in writing by the Purchaser
and cannot been cured on or prior to the date set forth in Section 15.1(f),
provided that if the Seller is not using its commercially reasonable efforts to
so cure, on the date that is thirty (30) days following delivery of such written
notice;
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(c) at the election of the Seller, if (i) the Purchaser
has breached any representation or warranty contained in this Agreement that is
qualified by materiality or material adverse effect or (ii) if the Purchaser has
breached in any material respect any representation or warranty contained in
this Agreement that is not so qualified, (iii) the Purchaser has breached any
covenant or agreement contained in this Agreement that is qualified by
materiality or material adverse effect, or (iv) the Purchaser has breached in
any material respect any covenant or agreement contained in this Agreement that
is not so qualified, in the case of (i), (ii), (iii) or (iv) which breach has
been notified to the Purchaser in writing by the Seller and cannot been cured on
or prior to the date set forth in Section 15.1(f), provided that if the
Purchaser is not using its commercially reasonable efforts to so cure, on the
date that is thirty (30) days following delivery of such written notice;
(d) at the election of the Purchaser or the Seller in
accordance with Section 8.12;
(e) at the election of the Purchaser or the Seller in
accordance with Section 7.9(d)(iii);
(f) upon written notice by either the Seller or the
Purchaser, if the Closing Date shall not have occurred before October 29, 2004,
for any reason other than (i) the failure of the party seeking to terminate this
Agreement to perform its obligations hereunder or (ii) a breach of a
representation or warranty by such party herein, in each case that would give
the other party the right to terminate the Agreement; or
(g) upon written notice by the Purchaser, if, after the
date hereof, there shall have occurred a Business Material Adverse Effect.
15.2 Consequences of Termination. If this Agreement shall be
terminated pursuant to 15.1, this Agreement shall thereafter become void and
neither party shall have any further obligation to the other hereunder, except
as set forth in Sections 7.6, 10.5, 11, 12 and this Section 15.2; provided,
however, that
(a) (i) if the Seller shall have the right to terminate
this Agreement pursuant to any of Sections 15.1(c)(i) or 15.1(c)(ii), where such
breach was caused with an intent to mislead or defraud, or Section 15.1(c)(iii)
or Section 15.1(c)(iv), or (ii) if the Purchaser shall have the right to
terminate this Agreement pursuant to any of Sections 15.1(b)(i) or 15(b)(ii),
where such breach was caused with an intent to mislead or defraud, or Section
15.1(b)(iii) or Section 15.1(b)(iv), it is expressly understood and agreed that,
subject to Sections 15.2(b) and 15.2(c), the terminating party's right to pursue
all legal remedies for breach of contract and damages shall survive such
termination unimpaired; provided, however, that no party shall have any remedy
for the breach of any covenant or agreement contained in Section 7.2(a) through
(g) and each party expressly waives and disclaims any claim based on any such
breach;
(b) except as set forth in Section 15.2(a), prior to the
Closing Date, the sole and exclusive rights and remedies of either party for and
with respect to breach of representations and warranties of the other party
under this Agreement, which shall occur prior
87
to the Closing Date, and are known to such party, shall be to terminate this
Agreement to the extent permitted by, and in accordance with, Section 15.1; and
(c) notwithstanding anything to the contrary contained in
this Agreement, upon termination of this Agreement in accordance with Section
15.1(d), the Purchaser shall pay to the Seller (i) an amount equal to $5,000,000
in the event that this Agreement is terminated in connection with the occurrence
of a Financing Extension Condition that arises from or relates to an Financial
Market Non-Funding Condition or (ii) an amount equal to $10,000,000 in the event
that this Agreement is terminated in connection with the occurrence of a
Financing Extension Condition that arises from or relates to an Other
Non-Funding Condition (such payment under clause (i) or clause (ii), as
applicable, the "Termination Payment"), as liquidated damages, in immediately
available funds by wire transfer to such account as the Seller shall designate
in writing to the Purchaser and Purchaser shall have no further liability or
obligation to the Seller relating to or arising from this Agreement; provided,
that in the event that any of the conditions to Closing set forth in Sections
8.1, 8.2, 8.3, 8.4, 8.7 and 8.10 hereof are not satisfied as of the time that
the Termination Payment is required to be paid (other than those which by their
nature are to be satisfied at the Closing), the Purchaser shall not be required
to make the Termination Payment in connection with such termination, but the
Purchaser shall have no further liability or obligation to the Seller relating
to or arising from this Agreement.
SECTION 16. CONSENT TO JURISDICTION; SERVICE OF PROCESS;
DISPUTE RESOLUTION; WAIVER OF JURY TRIAL
16.1 General Disputes. Except with regard to Factual Environmental
Disputes (as defined below), which are exclusively covered by Section 16.2
below:
(a) The Seller, on one hand, and the Purchaser, on the
other hand, shall attempt in good faith to resolve any dispute, controversy or
claim between them arising out of or relating to this Agreement, including any
dispute over the breach, termination, interpretation, or validity hereof (the
"Dispute"). Each party may request through written notice that the Dispute be
referred to senior executives of the parties who have authority to resolve the
Dispute. The executives shall attempt to resolve the Dispute by agreement within
thirty (30) days of such notice. In attempting to resolve the Dispute the
parties shall not be waiving and shall not be deemed to have waived any rights
which they may have under this Agreement or otherwise as a result of the
resolution of a Dispute pursuant to this Section 16.1;
(b) If the parties to the Dispute are unable to resolve
the Dispute as provided in Section 16.1(a), then the Dispute shall be resolved
in accordance with this Section 16.1(b) unless the parties otherwise agree to an
alternative dispute resolution procedure. All Actions arising out of or relating
to the Transaction Documents shall be heard and determined exclusively in any
New York federal court sitting in the Borough of Manhattan of The City of New
York; provided, however, that if such federal court does not have jurisdiction
over such Action, such Action shall be heard and determined exclusively in any
New York state court sitting in the Borough of Manhattan of The City of New
York. Consistent with the preceding sentence, the parties hereto hereby (a)
submit to the exclusive jurisdiction of any federal or state court sitting in
the Borough of Manhattan of The City of New York for the purpose of any Action
arising out of or relating to this Agreement brought by either party hereto and
88
(b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be enforced
in or by any of the above-named courts.
(c) EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 16.1(c).
(d) Any and all service of process and any other notice
in any such claim shall be effective against any party if given personally or by
registered or certified mail, return receipt requested, or by any other means of
mail that requires a signed receipt, postage prepaid, mailed to such party as
herein provided. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by Law.
16.2 Factual Environmental Disputes.
(a) If the parties do not agree concerning a particular
factual matter that is relevant to a determination of any party's rights and/or
obligations under this Agreement with respect to any environmental matter (a
"Factual Environmental Dispute"), and if it is necessary to resolve such factual
dispute in order to establish any rights and/or obligations under this
Agreement, the parties shall endeavor, using good faith efforts (and relying on
environmental consultants and/or other technical experts, where appropriate), to
negotiate a mutually satisfactory resolution to the Factual Environmental
Dispute. In the event that the parties are unable to resolve such Factual
Environmental Dispute within thirty (30) Business Days after one party first
contacts the other party to attempt to resolve the Factual Environmental Dispute
in question (or, if the parties mutually agree to waive this initial thirty (30)
Business Day period):
(A) The parties shall mutually agree on
one person who has the technical background and expertise necessary to
resolve the Factual Environmental Dispute (a "Technical Expert"); or,
failing such agreement, each party shall designate one such Technical
Expert, and within fifteen (15) Business Days after both Technical
Experts are so designated, those two Technical Experts shall designate
a third Technical Expert (which such third Technical Expert shall not
be a current or former employee or agent of either party or of their
respective Technical Experts); and
89
(B) Within thirty (30) Business Days
after designation of the Technical Expert(s), such Technical Expert(s)
shall independently consider all information relevant to the
determination and resolution of the Factual Environmental Dispute, each
party having a reasonable opportunity to provide timely input to the
Technical Expert(s), and shall make a single recommendation (including
a good faith estimate of the cost to implement the recommendation) to
the parties regarding the factual matter(s) that is the subject of
dispute (with a vote of two being necessary to reach this
recommendation if three Technical Experts have been designated). In the
event that the estimated cost to implement the recommendation of the
Technical Expert(s) is: (i) less than $100,000, the recommendation
shall be exclusive, final and binding upon the parties as to the
factual matters thereby addressed; and (ii) equal to or greater than
$100,000, the recommendation shall be not be exclusive, final and
binding upon the parties as to factual matters thereby decided.
(b) The parties shall share the costs and expenses of the
Technical Expert(s) equally.
SECTION 17. ENFORCEMENT OF CERTAIN PROVISIONS
(a) The parties acknowledge and agree that if any party
breaches any provision of this Agreement applicable to such party, any remedy at
law would be inadequate and insufficient and would cause the non-breaching party
irreparable harm and that the non-breaching party, in addition to seeking
monetary damages in connection with any such breach, shall be entitled to
specific performance and injunctive and other equitable relief to prevent or
restrain a breach of this Agreement or to enforce the provisions of this
Agreement without the requirement of posting bond or other security.
(b) If any of the covenants contained in any of Sections
7.6, 7.7, 7.8 or 10.5, or any part thereof, is hereafter construed to be invalid
or unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full force and effect, without regard to the
invalid portions. If any of the covenants contained in any of Sections 7.6, 7.7,
7.8 or 10.5, or any part thereof, is held by a court of competent jurisdiction
to be unenforceable because of the duration of such provision or the geographic
area covered thereby or for any other reason, the parties agree that the court
making such determination shall have the power to reduce the duration and/or
geographic area of such provision or otherwise modify the terms of any such
covenant and, in its reduced form, said provision shall then be enforceable;
provided, however, that any such reduction or modification shall apply only with
respect to the operation of such Section in the jurisdiction of such court.
SECTION 18. BULK SALES LAW
Subject to Section 14.2(f), the Purchaser hereby waives compliance by
the Seller with the provisions of the bulk sales Law of any state, including
with respect to Tax.
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SECTION 19. PUBLIC ANNOUNCEMENTS
No press release or other public announcement, or communication with
any news media, shall be made by or on behalf of any party hereto concerning
this Agreement or the transactions contemplated hereby without providing prior
written notice thereof to the other party, except as may be required by
applicable Law or the regulations or listing rules of any securities exchange.
The parties shall cooperate as to the timing and contents of any such press
release, public announcement or communication.
SECTION 20. NOTICES
All notices and all other communications hereunder shall be in writing
and shall be deemed given if delivered personally or sent by registered or
certified mail, postage prepaid (return receipt requested), sent by facsimile
(receipt of which is confirmed) or sent by a nationally recognized overnight
courier to a party at the following address (or at such other address for a
party as shall be specified by like notice):
If to the Seller:
The BOC Group, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxx, Esq.
with a copy to:
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx, Esq.
If to the Purchaser:
Airgas, Inc.
000 Xxxxx Xxxxxx-Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000-5283
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxx
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with a copy to:
Xxxx, Xxxxx, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Each such notice or other communication shall be effective at the time
of receipt if delivered personally or sent by facsimile (with receipt confirmed)
or nationally recognized overnight courier, or three (3) Business Days after
being mailed, registered or certified mail, postage prepaid, return receipt
requested.
SECTION 21. CONSTRUCTION
All references herein to a Section, Schedule or Exhibit are to a
Section, Schedule or Exhibit, respectively, of or to this Agreement, unless
otherwise indicated. Disclosure of any fact or item in any Schedule shall,
should the existence of such fact or item be relevant to any other Schedule, be
deemed to be disclosed with respect to that other Schedule so long as the
relevance of such disclosure to such other Schedule is identified by specific
cross-reference. The headings of Sections in this Agreement are provided for
convenience only and will not affect the construction or interpretation of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. The meanings given to terms
defined herein shall be equally applicable to both the singular and plural forms
of such terms. Unless otherwise expressly provided, the words "include,"
"includes" and "including" shall be construed as if followed by the phrase
"without being limited to." Words such as "herein," "hereof," "hereby,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular Section of this Agreement, unless the context clearly
indicates otherwise. The parties hereto agree that they have been represented by
counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document.
SECTION 22. EXTENSIONS AND WAIVERS
This Agreement may not be amended, supplemented or otherwise modified
in any respect except by an instrument in writing of even or subsequent date
hereto duly executed by the parties hereto. The parties hereto may not (a)
extend the time for the performance of any of the obligations or other acts of
the parties hereto, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any documents delivered pursuant to
this Agreement or (c) waive compliance with or modify any of the covenants or
agreements contained in this Agreement and waive or modify performance of any of
the obligations of any of the parties hereto, except by an instrument in writing
signed by the parties purporting to be bound thereby.
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SECTION 23. ENTIRE AGREEMENT
This Agreement, including the Schedules and Exhibits attached hereto
which are hereby incorporated by reference, the MCDA, the Employee Side Letter
and the Encumbered Asset Side Letter contain all the terms agreed upon among the
parties with respect to the subject matter hereof and supersedes all prior
agreements, arrangements and communications, whether oral or written with
respect to such subject matter.
SECTION 24. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW OR
CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY OTHER JURISDICTION.
SECTION 25. TRANSFERABILITY; NO THIRD PARTY BENEFICIARIES
The respective rights and obligations of each party hereto shall not be
assignable by such party without the written consent of the other party, except
that any party without such consent may assign its rights and obligations under
this Agreement to (a) any one or more wholly owned subsidiary of such party or
(b) any successor in the event of a merger, consolidation, sale of all or
substantially all of its assets, liquidation or dissolution (provided any such
assignee pursuant to the foregoing clause (a) or (b) executes and delivers to
such other party an agreement satisfactory in form and substance to such other
party under which such assignee assumes and agrees to perform and discharge all
the obligations and liabilities of the assigning party), but any such permitted
assignment shall not relieve the assigning party of its obligations hereunder.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assignees. Nothing herein
express or implied is intended to confer upon any Person, other than the parties
hereto and their respective successors and permitted assignees, any rights,
remedies, obligations or liabilities under or by reason of this Agreement. Any
attempted or purported assignment in violation of this Section 25 shall be null
and void.
SECTION 26. SEVERABILITY
If any provision hereof or the application thereof to any Person or
circumstance shall be invalid or unenforceable to any extent, the remainder of
this Agreement and the application of such provision to other Persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 27. COUNTERPARTS
This Agreement may be executed in any number of counterparts with the
same effect as if the signatures to each such counterpart were upon the same
instrument.
[Signatures follow on next page]
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its duly authorized representative in its name
and on its behalf as of the date first above written.
THE BOC GROUP, INC.
By: /s/ X. X. Xxxxx
------------------------------------------------
Name: X. X. Xxxxx
Title: Attorney-In-Fact
AIRGAS, INC.
By: /s/ X. X. Xxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President Corporate Development
EXECUTION COPY
EXHIBIT K
Note: Pursuant to a request submitted to the Securities and Exchange Commission
for confidential treatment, portions of sections 8.1 and 8.2 of the LOX/LIN/LAR
Products Supply Agreement were omitted. The omitted information is marked with
brackets and asterisks [**]. The omitted information has been filed separately
with the Securities and Exchange Commission.
LOX/LIN/LAR PRODUCTS SUPPLY AGREEMENT
This Product Supply Agreement (the "AGREEMENT") is made as of July 30,
2004 (the "EFFECTIVE DATE"), between The BOC Group, Inc. ("SELLER"), with its
headquarters at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000, and Airgas,
Inc., with its headquarters at 000 X. Xxxxxx-Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxxxx 19087 ("BUYER").
1. Sale and Purchase.
1.1 A Reserved Volumes. Seller currently operates industrial gas
production facilities (each a "PLANT") in Claymont, DE, Bethlehem, PA, Kittery,
ME, Buffalo, NY, and Selkirk, NY (such locations collectively the "EASTERN
CONFERENCE"); Indianapolis, IN, Fostoria, OH, Hartford, IL, and LaPorte, IN
("Springville"), Braddock, PA, and Xxxxxx, WV (such locations collectively the
"MIDWEST CONFERENCE"); Nashville, TN, Aiken, SC, Birmingham, AL, and Midland, NC
(such locations collectively the "SOUTHEAST CONFERENCE"), Dallas, TX , Geismar,
LA , and Enid OK (such locations collectively the "SOUTHWEST CONFERENCE"),
Sacramento, CA, City of Industry, CA, Vancouver, WA and Trail, BC(such locations
collectively the " WESTERN CONFERENCE"). Commencing on the date hereof, and
continuing throughout the Term (as defined in Section 3), Seller agrees to sell
to Buyer from each of the Plants listed above, up to that volume per month of
liquid nitrogen ("LIN"), liquid oxygen ("LOX") and liquid argon ("LAR"); and
(XXX, LOX and LAR individually a "PRODUCT" and collectively the "PRODUCTS") as
is indicated on Attachment A attached hereto, as such volumes may be adjusted in
accordance with the terms of this Agreement (such volumes of Products, as so
adjusted, as to any Product, as to any Plant and/or as to any Conference, as
applicable, the "RESERVED VOLUMES"). Seller has no responsibility to provide
volumes above the Reserved Volumes.
1.1B Volumes of Product taken under this Agreement will not be
considered applicable towards any other agreement between Buyer and Seller.
1.2 Right to Purchase. Commencing on the date hereof and
continuing through the Term, Buyer, directly or through one or more of its
direct or indirect operating subsidiaries
("SUBSIDIARIES"), shall have the right to purchase from Seller each month up to
the Reserved Volume of each Product at each Plant for use at their cylinder
filling facilities. Buyer may move Product to sites other than cylinder filling
facilities, subject to the conditions in Section 1.3.
1.3 Adjustments to Reserved Volumes.
(a) By written notice to Seller given no less than sixty
(60) days prior to September 30, 2005, September 30, 2008, September 30, 2011
and/or September 30, 2014, and, subject to the consent of Seller not to be
unreasonably withheld, more frequently by mutual agreement, Buyer may (i)
reallocate volumes of any or all Products from Plant to Plant within a
Conference and/or (ii) reallocate up to twenty-five percent (25%) of the actual
volumes (defined as the average monthly purchase amounts for the prior 12 month
period) from the Reserved Volumes of any or all Products for Plants within one
or more Conferences immediately prior to such reallocation to other Plants in
other Conferences. At least 50% of the moved volumes must be transferred to
another Buyer cylinder filling facility. Volumes moved to other Seller plants
are subject to the consent of Seller, not to be unreasonably withheld.
1.4 Ancillary Services. In addition to the Products to be supplied
under this Article 1, Seller, if so requested by Buyer or a Subsidiary, also
agrees to provide Buyer or such Subsidiary the ancillary services described in
Attachment F (each an "ANCILLARY SERVICE" and collectively the "ANCILLARY
SERVICES").
2. Take or Pay.
2.1 Reporting. On or before the 15th day of each month during the
Term, Seller shall provide Buyer with a written report by Plant and Product
showing the amount of each Product purchased by Buyer from each Plant during the
previous calendar month (each a "MONTHLY REPORT" and collectively the "MONTHLY
REPORTS") under this Agreement. For purposes of this Agreement, Products
purchased by Buyer hereunder shall be deemed to have been purchased from the
Plant closest to the point of delivery of such Product. The parties shall use
good faith efforts to promptly resolve any disputes regarding the Monthly
Reports and any dispute that cannot be amicably resolved may be submitted by
either party for Dispute Resolution as provided in Section 16.3 hereof.
2.2 Shortfall Amounts. Every six months ("SIX MONTH PERIOD"),
Seller shall give Buyer written notice of the amount by which Xxxxx's purchases
of Products during the
2
immediately preceding Six Month Period fell short of the following minimum
amounts (the "TAKE-OR-PAY MINIMUMS"):
By Conference -
85% of the aggregate volumes in Attachment I of LOX and LIN
combined for such Conference for such Six Month Period.
85% of the aggregate volumes in Attachment I of LAR for such
Conference for such Six Month Period.
Each such shortfall is referred to herein as a "Conference Take-or Pay
Shortfall Amount". Buyer can one time reduce the Take-or-Pay Minimums by 20%
from the Take-or-Pay Minimums then in effect (the "Adjustment") should Buyer
experience an extraordinary loss of volume due to economic or market conditions;
provided, that Buyer may not elect the Adjustment until five years later than
the initial date of this Agreement. The Adjustment will be rescinded when the
Buyer's volumes have returned to approximately their prior levels.
2.3 Shortfall Payments. Buyer agrees either to (A) purchase the
amount of the Conference Take or Pay Shortfall Amount in the subsequent Six
Month Period, in which case, volumes each month in the subsequent Six Month
Period shall apply (i) first to one sixth (1/6th) of the Take or Pay Minimums
for the current Six Month Period, and then, to the extent such 1/6th of the Take
or Pay Minimum is satisfied, (ii) second, towards the Take or Pay Shortfall
Amount from the prior period, or (B) pay Seller 50% of the Conference
Take-or-Pay Price (as determined below) for all Conference Take-or-Pay Shortfall
Amounts. The Conference Take-or-Pay Prices for LOX and LIN, taken together, and
for LAR shall be equal to the weighted average Base Price of the LOX and LIN,
taken together, purchased by Buyer from Plants in such Conference during the Six
Month Period in which Buyer failed to purchase the Take-or-Pay Minimums and the
weighted average Base Price of the LAR purchased by Buyer from Plants in such
Conference during such Six Month Period. Any such shortfall will be billed
following the conclusion of the applicable Six Month Period. The Take or Pay
Shortfalls will be billed (if applicable) beginning with the second Six Month
Period of the Agreement.
3. Term. The term of this Agreement shall commence on the Effective Date
and shall continue for a period of 15 years therefrom, on which date this
Agreement shall automatically terminate (the "TERM").
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4. Buyer's Obligations.
Buyer shall, without cost to Seller,
(a) Provide sufficient physical access to areas in which
storage vessels are located to Seller and Seller's authorized representatives
for all proper purposes under this Agreement; and
(b) Comply with all relevant reporting obligations under
the Emergency Planning and Community Right-To-Know Act of 1986, 42 U.S.C.
Section 11001-11050 (EPCRA, also commonly known as Title III of the Superfund
Amendments and Reauthorization Act of 1986 (XXXX Title III)) resulting from the
presence of the chemicals supplied under this Agreement. Further, it is the
responsibility of Buyer to warn its employees and others exposed to the hazards
posed by Buyer's storage and use of Products and to comply with all federal,
state and local legal notification, reporting and/or permit requirements that
may be associated with the storage or use of a Product.
(c) Provide storage vessels in satisfactory condition for
safe operation with cryogenic materials as commonly defined by the industry as
well as 1) evidence that annual inspections have been completed on said storage
vessels, 2) LOX deliveries must be on a concrete pad, 3) acceptable access for
Seller's delivery vehicles, 4) LOX tanks cannot have aluminum inner linings, and
5) storage vessels must have dual safety valves and rupture discs.
5. Specifications; Standards of Performance.
All Products delivered by Seller shall conform to the applicable
specifications set forth in Attachment G (the "SPECIFICATIONS"). All Ancillary
Services performed by Seller shall be performed in a workmanlike fashion.
6. Delivery.
6.1 Delivery of Products. Product shall be delivered by Seller
F.O.B. Seller's delivery vehicle, if the delivery vehicle is supplied by Seller,
or F.O.B. Buyer's delivery vehicle, if the delivery vehicle is supplied by
Buyer. Risk of loss shall pass to Buyer upon delivery to Buyer's facility, if
delivery is made in Seller's vehicle, or to Buyer's delivery vehicle, if
delivery is made in Buyer's vehicle. Buyer shall have the right, with a minimum
of 7 days advance written notice, to observe Seller's normally scheduled
calibration of meters on Seller's delivery vehicles. In the event that Xxxxx has
concerns regarding the calibration of a specific meter on one of the
4
Buyer's vehicles beyond a normal variance of +/- 2.5% or regular significant
variance in the same direction, Buyer will provide documentation regarding its
concerns on the specific meter to the Seller and shall have the right, with a
minimum of 7 days advance written notice, to require and observe the performance
of meter calibration on the particular unit in question. Seller will use
commercially reasonable efforts to deliver Products so as to avoid customer
run-outs and will use commercially reasonable efforts to deliver LOX and LIN
within twenty-four (24) hours' and LAR within forty-eight (48) hours' of
receiving notice of a requested delivery. If Seller fails to make timely
delivery of Product such that Buyer, or a customer of Buyer, experiences
interruption of supply or if interruption of supply appears imminent (Buyer to
obtain confirmation from a Scheduling Supervisor or Manager of Seller's National
Operations Center, as noted in Attachment J), Buyer may purchase the Product
Seller has failed to deliver from a third party. Seller shall pay Buyer the
difference between the cost to Buyer of purchasing such alternative Product and
the cost of such Product under this Agreement. Such purchases shall be applied
to the applicable Take-or-Pay Minimums as though they had been made from Seller.
Such remedy shall be in addition to, and not in lieu of, any other remedy Buyer
may have under this Agreement. Such Product shall be deemed to have been
purchased from Seller for purposes of determining whether Buyer has purchased
the applicable Reserved Volumes of such Product.
6.2 Notice of Requirements. Buyer shall monitor its inventory of
Product and give reasonable notice, in accordance with Section 6.1, of the
quantity of Product needed to permit delivery prior to exhaustion of such
inventory; provided, however, that if Buyer or, with Buyer's consent, Seller
installs telemetry, Seller shall be solely responsible for such monitoring.
Buyer will use commercially reasonable efforts to provide notice of significant
changes in use so Seller can adequately monitor such inventory.
7. Prices and Charges for Products and Services.
7.1 Prices. The price for Product sold shall be comprised of a
"BASE PRICE", and a "DISTRIBUTION COST" (when Product is delivered by Seller,
calculated in accordance with Attachments B and C), and shall be subject to
adjustment as provided herein (collectively the "PRICE"). The Base Price for a
Product shall be the amount for such Product set forth on Attachment B, as
appropriate, and shall be subject to adjustment as provided in Attachment E.
7.2 Surcharges.
5
(a) If during any Contract Year a Plant of Seller
providing Products hereunder experiences an extraordinary increase in its truck
fuel costs or power costs and such extraordinary cost increases are likewise
being experienced by a majority of the other producers in the industry within
three hundred (300) miles of such Plant, Seller, after giving 30 days written
notice to Buyer, may charge Buyer and Buyer shall pay a surcharge (a
"SURCHARGE") in an amount no greater than the amount required for Seller to
recover such increased costs. For purposes of the first Surcharge imposed with
respect to truck fuel costs and the first Surcharge imposed with respect to
power costs, an "extraordinary increase" shall be defined as an increase of at
least 25% as compared to the average cost for such item of cost in the previous
calendar quarter. A Surcharge shall remain in effect until the earlier of (i)
date upon which Seller's costs return to an amount comparable to what they were
prior to such extraordinary increase in its costs, or (ii) the date upon which
the costs of other producers in the industry within three hundred (300) miles of
such Plant return to an amount comparable to what they were prior to such
extraordinary increase in their costs. In addition, as costs are reducing to
such prior levels, Seller shall make reasonable periodic reductions in the
Surcharge. Prior to imposing a Surcharge under this Section 7.2, Seller shall
provide Buyer with evidence supporting the need for the Surcharge. If Xxxxx
disputes said Surcharge, Buyer may, at its own cost, hire an independent
auditor, to whom Seller has no reasonable objection, to document validity of
said surcharge. If the Surcharge is not deemed valid by the auditor based on the
aforementioned increased costs, Seller will not implement any such surcharge and
provided Seller concurs with the auditor, will be responsible for paying the
independent auditor. If Xxxxxx does not agree with the conclusions of the
auditor, Seller may invoke the provisions of Section 16.3 in order to resolve
the dispute.
(b) If during any Contract Year a Plant of Seller
providing Products hereunder experiences extraordinary cost increases in its
truck fuel costs or power costs but such extraordinary cost increases are not
being experienced by a majority of the other producers in the industry within
three hundred (300) miles of such Plant, Seller, by giving written notice to
Buyer (a "SELLER SPECIFIC SURCHARGE NOTICE"), may advise Buyer that it is going
to charge Buyer a surcharge (a "SELLER SPECIFIC SURCHARGE") in an amount no
greater than the amount required for Seller to recover such increased costs.
Concurrently with its delivery of a Seller Specific Surcharge Notice, Seller
shall provide Buyer with evidence supporting the need for the Seller Specific
Surcharge. Buyer, within thirty (30) days after receiving a Seller Specific
Surcharge Notice, may, by written
6
notice to Seller ("BUYER REFUSAL NOTICE"), refuse to accept the Seller Specific
Surcharge. Seller, upon receipt of a Buyer Refusal Notice, may either (a)
refrain from charging the Seller Specific Surcharge or (b) within ten (10) days
after receiving the Buyer Refusal Notice, give Buyer written notice that Seller
will no longer supply Products to Buyer from the affected Plant (a "SELLER
TERMINATION NOTICE"). If Seller sends Buyer a Seller Termination Notice, Buyer
shall no longer be required to purchase any Products from such Plant and the
Reserved Volumes and Take-or-Pay Minimums shall be adjusted accordingly. If
Buyer does not deliver a Buyer Refusal Notice, the Seller Specific Surcharge
shall remain in effect until the date upon which Seller's costs return to an
amount comparable to what they were prior to such extraordinary increase in its
costs. In addition, as costs are reducing to such prior levels, Seller shall
make reasonable periodic reductions in the Seller Specific Surcharge. If Xxxxx
disputes said Surcharge, Buyer may, at its own cost, hire an independent
auditor, to whom Seller has no reasonable objection, to document validity of
said surcharge. If the surcharge is not deemed valid by the auditor based on the
aforementioned increased costs, Seller will not implement any such surcharge and
provided Seller concurs with the auditor, will be responsible for paying the
independent auditor. If Xxxxxx does not agree with the conclusions of the
auditor, Seller may invoke the provisions of Section 16.3 in order to resolve
the dispute.
(c) Any Surcharge or Seller Specific Surcharge shall be
one that Seller is applying generally to its customers and not one applicable to
Buyer alone. Surcharges and Seller Specific Surcharges shall be in addition to
the Price and neither the assessment of nor changes in such Surcharges and
Seller Specific Surcharges shall be construed as a Price adjustment under
Section 8.1; provided, however that there shall be no duplication of Price
adjustments and Surcharges or Seller Specific Surcharges hereunder.
8. Adjustments in Prices.
8.1 Adjustments. The Price of each Product will be adjusted on
[**] as outlined in Attachment E. Distribution Matrices will also be adjusted
[**], as outlined in Attachment E. Notwithstanding the foregoing, in [**], Buyer
shall have the right to furnish written evidence (the "QUOTED PRICE") to Seller
(which Quoted Price may be either FOB Seller's Plant or a delivered price), at
least 60 days prior to [**] and at least 60 days prior to [**], of its ability
to purchase one or more Products for one or more Plants and/or one or more
Conferences from one or more responsible suppliers thereof, for a term of not
less than [**], in like quantity and quality and by
7
like delivery with similar terms and conditions as compared to the quantity and
quality and delivery method for such Product Seller is then delivering to Buyer
for such Plants(s) and/or Conference(s) under this Agreement, at a lower price
than Seller's then-current Price. The comparison will be the difference in
delivered prices and not solely FOB prices, with reasonable allowances for
situations where Buyer product distribution is via Buyer FOB product purchases.
In addition to the [**] Reviews, Buyer, any two times during the Term of this
Agreement after [**], may, in accordance with the conditions of the immediately
preceding sentence, submit a Quoted Price to Seller [**] ("WILD CARD REVIEW").
Should the Quoted Price be lower than the Price, Seller will reduce its Price
for such Product(s) to Buyer for such Plant(s) or in such Conference(s) by [**]
or the difference in the Quoted Price and the applicable current Product price.
Any such Price adjustment shall take place [**] immediately following the date
on which Buyer submitted a Quoted Price. It is expressly understood that, should
Buyer submit a Quoted Price, the submission of such Quoted Price to Seller shall
be considered to be a [**] Review or a Wild Card Review, as the case may be,
regardless of whether the Quoted Price is for one or more Plants and/or one or
more Conferences.
8.2 Adjustments greater than [**]. Notwithstanding the foregoing,
in the event that the Seller seeks to implement a calculated price increase per
Attachment E or Attachment F which is greater than [**] in any year for a
particular Plant or Plants, Buyer shall have the right to move those volumes to
an alternative supplier with 60 days notice and Buyer's obligations under
Section 2 shall be correspondingly reduced. Buyer will negotiate in good faith
to identify any equivalent potential volume from other Buyer cylinder filling
plants that may be moved to Seller's other production facilities, subject to the
competitiveness of the pricing at the Seller's alternative production sites and
subject to Buyer's contractual obligations to other suppliers. Increases to the
LOX and LIN prices at Kittery, Sacramento, Nashville and City of Industry will
be subject to a [**] cap for the increases permitted on [**]. Thereafter, they
will be subject to the [**] cap provided for herein. Seller may elect, at its
discretion, to implement only a [**] increase in a given year (or years) when
the escalation formula exceeds [**].
9. [Reserved]
10. Invoicing and Payment.
8
10.1 Payment Terms. Seller shall invoice Buyer as each delivery of
Product is made or monthly if the parties so agree. All payments due Seller
hereunder shall be made to Seller at the location indicated on the invoice. The
undisputed portion of all invoices shall be payable net thirty (30) days. The
timely payment by Buyer of all amounts due and owing to Seller hereunder is an
express condition to the continued performance by Xxxxxx of its obligations
hereunder.
10.2 Any sales tax imposed by any present or future law or by any
government authority in connection with any Product sold hereunder, if paid by
Xxxxxx as a result of its performance under this Agreement shall be added to
Seller's billing and paid by Xxxxx, unless Buyer provides Seller with an
applicable tax exemption certificate.
11. Warranty.
11.1 Seller's Sole Warranties. Seller warrants that each Product
shall conform to the specifications and express warranties set forth for such
Product in the Attachment(s) and that at the time of delivery, Seller shall have
good title and the right to transfer the same and that the same shall be
delivered free of encumbrances. THE FOREGOING WARRANTY IS THE SOLE WARRANTY AND
IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, IN FACT OR BY LAW,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12. Indemnity.
12.1 Each party shall be responsible for property damage and
personal injury arising from the negligent acts or omissions of such party. Each
party shall indemnify, defend and hold harmless the other party from all losses,
claims and/or damages arising from personal injury and/or tangible property
damage due to the negligent acts or omissions of such party. In the event a
party seeks to be indemnified hereunder, it shall promptly notify the other
party in writing of the facts and circumstances upon which any such claim
("CLAIM") is based. The other party shall defend each Claim with counsel of its
sole choice and shall have the sole authority to settle or compromise the same.
As long as the other party defends a Claim, the party shall not be responsible
for the fees of attorneys retained separately by the party bringing the Claim.
Upon the other party's request, the party bringing the Claim shall cooperate
with the other party in the defense of each Claim with such cooperation
including providing information necessary to
9
answer interrogatories, producing requested documents and making employees
available as witnesses at oral deposition and/or trial. The parties intend that
the indemnity obligation provided for herein shall cover tangible property
damage, bodily injury and death, and each party hereby knowingly and
intentionally agrees to waive immunity from suit by the other party, which a
party may enjoy under any applicable workers' compensation law or any other
applicable federal, state or local law, rule or regulation to the extent
necessary to allow a party to be fully defended, indemnified and held harmless
hereunder. This paragraph shall survive termination of this Agreement for a
period of two (2) years. The foregoing obligations of a party shall not extend
to claims, losses or damages due to the acts or omissions of an indemnified
party and not be transferred to any third party without the prior written
consent of the indemnifying party.
13. Limitation of Liability.
13.1 Obligation to Warn. Buyer acknowledges that there are hazards
associated with the use of the Products, that it understands such hazards, and
that it is the responsibility of Buyer to warn its employees and others exposed
to such hazards through Buyer's storage and use of the Product. Seller shall
provide Buyer with copies of Material Safety Data Sheets relating to the
Products for Buyer to make such warnings, and Buyer shall hold harmless,
indemnify and defend Seller from and against any liability incurred by Seller
because such warnings were not made.
13.2 Limitation on Claims. No claim of any kind with respect to
non-delivery of a Product shall be greater than the Price payable hereunder for
the Product in respect to which such claim is made and Buyer's sole and
exclusive remedy (except for the remedy of termination for material default in
accordance with the terms of Section 15.3 and the indemnification provisions set
forth in Section 12.1) for delivery of nonconforming Product to Buyer shall be
replacement by Seller of a like quantity of conforming Product at no additional
cost to Buyer plus the cost of cleaning all delivery vessels, storage vessels
and delivery equipment contaminated by such nonconforming Product. Xxxxx agrees
that the limitations set forth in this Section 13.2 and Section 13.3 shall
survive and apply even if any remedy herein is found to fail for its essential
purpose.
13.3 Waiver of Consequentials. Seller shall not be liable in
contract or tort (including negligence and strict liability) for any direct
damages not expressly provided for in this Agreement or for any indirect,
special, incidental or consequential damages arising out of its performance or
non-performance hereunder. Buyer shall not be liable in contract or tort
10
(including negligence and strict liability) for any indirect, special,
incidental or consequential damages arising out of its performance or
non-performance hereunder.
13.4 All claims by Xxxxx having anything to do with any Product
sold or delivered by Seller (or not delivered) shall be made in writing within
sixty (60) days after delivery thereof (or after the same have been delivered),
and failure by Buyer to give such written notice shall constitute a complete
defense for Seller against all such claims.
14. Force Majeure.
14.1 Force Majeure Events. Neither party hereto shall be considered
in default in the performance of its obligations hereunder (other than its
obligation to make any payment of money hereunder), or be liable in damages or
otherwise for any failure or delay in performance that is due to strike,
lockout, concerted act of workers or other industrial disturbance, fire,
explosion, flood or other natural catastrophe, civil disturbance or acts of
terrorism, riot or armed conflict, whether declared or undeclared, curtailment,
shortage, rationing or allocation of normal sources of supply of labor,
materials, transportation, energy or utilities, accident, act of God, delay of
subcontractors or vendors, sufferance of or voluntary compliance with government
acts and government regulations (whether or not valid), embargo, machinery or
equipment breakdown, or any other cause, whether similar or dissimilar to any of
the causes or categories of causes described above, and that is beyond the
reasonable control of the party claiming excuse hereunder.
14.2 Strikes, etc. Neither party hereto shall be required to make
any concession or grant any demand or request to bring to an end any strike or
other concerted act of workers.
14.3 Notice. Either party affected by an event described in Section
14.1 shall, within forty-eight (48) hours after learning of such event and
ascertaining that it has affected or will affect its performance hereunder, give
notice to the other party, stating the nature of the event, its anticipated
duration and any action being taken to avoid or minimize its effect.
14.4 Allocation of Products. If any event within Section 14.1 shall
only partially reduce Seller's ability to produce or deliver Product, Seller may
prorate its available supply among Buyer and Sellers other customers in a fair
and equitable manner. Notwithstanding the foregoing, in the event of a Seller
Force Majeure, the following priorities shall apply: (i) first priority will be
given to those customers where lack of supply may pose a public health and/or
safety risk (including the applicable customers of Buyer in this category); (ii)
second priority will
11
be given pro rata to Buyer and Seller's other take or pay customers who are
affected by the Seller Force Majeure up to their total requirements; and (iii)
third priority will be given to Seller's other customers on such basis as seller
reasonably determines. This allocation applies not only to the curtailed
production at the Plants affected by the Force Majeure but also to Products held
in inventory in tanks at Seller's Plants. If during a Seller Force Majeure, the
Take or Pay Minimum is not satisfied, Seller shall waive the requirements of
Section 2.2 for so long as such Seller Force Majeure shall exist. Within 72
hours after the occurrence of any event within Section 14.1, Seller shall
provide Buyer with a written allocation plan.
14.5 Other Supply Sources. If Seller, under the circumstances
described in this Article 14, is unable to supply the Reserved Volume of any
Product, Buyer may purchase such Product during the period of Seller's inability
from other qualified vendors and such purchases shall be deemed to have been
made from Seller for purposes of determining whether Buyer has purchased the
applicable Take-or-Pay Minimum.
15. Financial Impairment; Breaches.
15.1 Bankruptcy Scenarios. Unless otherwise required by law, if a
petition is brought by or against either party under any present or future
bankruptcy or insolvency laws seeking any reorganization, arrangement,
readjustment, liquidation, dissolution or similar relief with respect to such
party, or if either party shall make any assignment for the benefit of
creditors, or if a receiver is appointed for either party, the other party may,
at its option, terminate this Agreement by written notice. The election of any
option under this Section 16.1 shall not preclude the exercise of any other
option.
15.2 Damages for Xxxxx's Breach. In the event of a material breach
of this Agreement by Buyer, which breach Buyer fails to cure within thirty (30)
days of written notice thereof from Seller (or, if such cure is not possible
within such thirty (30) days but has been commenced and is being diligently
pursued by Buyer, then such longer period as shall be necessary), Seller may
terminate this Agreement in addition to any other remedies it may have.
15.3 Damages for Seller's Breach. In the event of a material breach
of this Agreement by Seller, which breach Seller fails to cure within thirty
(30) days of written notice thereof from Buyer (or, if such cure is not possible
within such thirty (30) days but has been commenced and is being diligently
pursued by Seller, then such longer period as shall be necessary), Buyer may
terminate this Agreement in addition to any other remedies it may have.
12
16. General Provisions.
16.1 Representatives. Each party agrees to designate a
representative with decision-making authority for purposes of administering and
resolving disputes under this Agreement. Seller's initial representative shall
be Xxxxxx X. Xxxxx and Xxxxx's initial representative shall be Xxx Xxxxx. Either
party may change its representative by written notice to the other party given
in accordance with Section 16.6.
16.2 Entire Agreement: Headings. This Agreement together with any
terms and conditions of the Attachment(s) hereto constitutes the entire
agreement between the parties. No terms and conditions in any form of purchase
order, order acknowledgment or other acceptance forms issued with respect to
transactions under this Agreement shall alter the terms hereof and thereof and
objection is hereby made to all such additional or different terms. Acceptance
is expressly limited to the terms offered herein and therein. No modification or
waiver of this Agreement shall bind either party unless in writing and signed
and accepted by a duly authorized representative of each party. Headings of any
Sections, subsections, Attachments or Exhibits shall be for ease of reference
only and shall in no way affect or be deemed to affect the meaning of the
provisions of this Agreement.
16.3 Dispute Resolution. Unless a dispute resolution mechanism is
expressly provided for a particular dispute arising under this Agreement, any
dispute between the parties relating to this Agreement that cannot be resolved
with reasonable promptness shall be referred to each party's designated
representative under Section 16.1 in an effort to obtain prompt resolution.
Neither party shall commence any action against the other until the expiration
of sixty (60) days from the date of referral to such senior managers; provided,
however, this shall not preclude a party from instituting an action seeking
injunctive relief to prevent irreparable damage to such party. In the event that
the senior managers are unable to resolve the dispute as set forth above, the
dispute shall be submitted to a mutually agreeable neutral advisor for initial
fact finding and non-binding mediation. Neither party shall unreasonably
withhold acceptance of such an advisor and the selection of the advisor shall be
made within thirty (30) days after written notice by one of the parties for such
fact finding and mediation. The advisor shall be instructed to complete fact
finding and the mediation within sixty (60) days of his or her appointment.
16.4 Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party, not to be unreasonably
delayed or denied. This Agreement
13
shall inure to the benefit of and be binding upon the successors and, if
properly assigned, the assigns of both parties.
16.5 Severability. If any provision of this Agreement is held
invalid by any law and/or regulation, all other provisions hereof shall continue
in full force and effect.
16.6 Notices. Any notice required to be given under this Agreement
shall be given by fax (with confirmation by regular mall), certified mail or by
overnight courier providing proof of delivery to the address set forth below or
such other address as is set forth in a notice given in accordance herewith;
If to Seller:
BOC Gases Division of
The BOC Group, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
With a copy to:
The BOC Group, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
If to Buyer:
Airgas, Inc.
000 X. Xxxxxx-Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx
Attention: President
Fax #(000) 000-0000
16.7 Governing Law. This Agreement shall be governed by and
construed according to the laws of the Commonwealth of Pennsylvania without
giving effect to its conflicts of law provisions.
16.8 Priority of Provisions. This Agreement includes and
incorporates in their entirety the terms and conditions of all Attachments and
Exhibits hereto, whether in existence at the Effective Date or added thereafter
through an amendment of the Agreement, in the event of conflict between the
terms of this Agreement and any of its Attachments/Exhibits, the terms of the
Attachments/Exhibits shall govern. Attachments hereto at the time of execution
of this Agreement are: Attachments A-J.
14
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first written above.
THE BOC GROUP, INC.
By:/s/Xxxxx Xxxxxxxx
-----------------
Name: Xxxxx Xxxxxxxx
Title:Vice President
AIRGAS, INC.
By:/s/Xxxxxx X. Xxxxx
-----------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
15
EXECUTION COPY
EXHIBIT M-1
Note: Pursuant to a request submitted to the Securities and Exchange Commission
for confidential treatment, portions of sections 1(e), 1(f), 3, 4(a), 5(e),
6(a), 6(b), 6(c), 6(e), 6(f), 6(g), 7(a), 7(b), 8(a) through 8(c) and 10 of the
Gaseous Helium Supply Agreement were omitted. The omitted information is marked
with brackets and asterisks [**]. The omitted information has been filed
separately with the Securities and Exchange Commission.
GASEOUS HELIUM SUPPLY AGREEMENT
THIS GASEOUS HELIUM SUPPLY AGREEMENT (the "AGREEMENT"), made this July
30, 2004 (the "EFFECTIVE DATE") by and between Airgas, Inc., a Delaware
corporation having an office at 000 X. Xxxxxx-Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxxxx 19087 (hereinafter "AIRGAS") and The BOC Group, Inc., a Delaware
corporation, having an office at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx
00000 (hereinafter "BOC").
WITNESSETH:
WHEREAS, Airgas desires to purchase gaseous helium from BOC and BOC
desires to sell gaseous helium to Airgas.
NOW THEREFORE, in consideration of the foregoing premise and the
following covenants, the parties hereto hereby agree as follows:
1. DEFINITIONS. (a)(a) As used herein, the term "Product" shall mean bulk
gaseous helium delivered in jumbo tube trailers or gaseous helium delivered into
a tube trailer utilized as Airgas' helium storage vessel at helium transfill
facilities where BOC and Airgas facilities are co-located.
(b) As used herein, the term "SUPPLY PERIOD" shall mean the
fifteen (15) year period commencing on the Effective Date.
(c) As used herein, the term "CONTRACT YEAR" shall mean each
twelve (12) consecutive month period during the term hereof commencing with the
first day of the Supply Period.
(d) As used herein, the term "MMSCF" shall mean million standard
cubic feet, the term "CCF" shall mean hundred standard cubic feet and the term
"SCF" shall mean standard cubic feet.
(e) As used herein, the term "MAXIMUM VOLUME" shall mean [**],
which was the actual volume of gaseous helium, either in purified form or in a
mixture with other gases, supplied in high pressure cylinders to customers
located within the 48 contiguous states during the BOC fiscal year ending
September 30, 2003.
(f) The term "BOC'S US COCKTAIL MIX" shall mean [**]
2. TERM. The term of this Agreement shall commence on the Effective Date
and shall continue until and shall expire upon the expiration of the Supply
Period. Notwithstanding the foregoing, Airgas shall have the right to terminate
the Agreement effective at the end of the tenth (10th) Contract Year, or
effective the end of any Contract Year thereafter, by giving BOC not less than
twelve (12) months prior written notice.
3. BOC'S SUPPLY OBLIGATION. During the initial Contract Year, BOC shall be
obligated to supply all Product requested for delivery by Xxxxxx, up to the
Maximum Volume. During subsequent Contract Years, BOC shall be obligated to
supply all Product requested for delivery by Airgas up to [**] of Airgas' actual
purchases of Product during the previous Contract Year, not to exceed the
Maximum Volume.
4. Airgas' Purchase Obligation. (a) (a) On or before the 15th day of each
month during the Term, BOC shall provide Airgas with a written report showing
the amount of Product purchased by Xxxxxx during the previous calendar month
(each a "Monthly Report" and collectively the "Monthly Reports") under this
Agreement. The parties shall use good faith efforts to promptly resolve any
disputes regarding the Monthly Reports and any disputes that cannot be amicably
resolved may be submitted by either party for Dispute Resolution as provided in
Section 16 hereof. Airgas shall be obligated to purchase, or pay for if not
purchased, [**] during the initial Contract Year and [**] of the difference
between BOC's supply obligation specified in Paragraph 3 and the amounts listed
on Exhibit I ("Take or Pay Quantity") during all subsequent Contract Years
hereunder. Airgas will use commercially reasonable efforts to purchase [**] of
its requirements for Product at facilities co-located with a BOC helium
transfill from BOC and such purchase will count towards the Take of Pay Quantity
to be purchased or paid for by Airgas. In the event that Xxxxxx has failed to
purchase the Take or Pay Quantity during any Contract Year, Airgas shall be able
to avoid penalties for failing to purchase the Take or Pay Quantity by
purchasing a quantity of additional Product ("Shortfall Make-Up Volume") equal
to the shortfall during the previous Contract Year ("Shortfall Year") [**]. The
quantity of Shortfall Make-Up Volume taken by Airgas each month shall be
calculated by subtracting (i) [**] of Airgas' Take or Pay Quantity applicable to
the [**] from (ii) the total quantity of Product purchased by Airgas during such
month. In the event that Xxxxxx fails to purchase sufficient Shortfall Make-Up
Volume to offset the shortfall relative to the Take or Pay Quantity during the
Shortfall Year, then in such event, Airgas shall pay to BOC, an amount equal to
(i) the shortfall versus the Take or Pay Quantity not satisfied during the [**],
multiplied by (ii) the applicable price for Product during the Shortfall Year
within thirty (30) days after the conclusion of the [**]. Shortfall Make-Up
Volume taken by Airgas during any [**] shall not be included in Airgas' volume
for purposes of determining whether Airgas has purchased the Take or Pay
Quantity during the [**].
2
(b) To the extent consistent with its business needs, Airgas will
use all reasonable efforts to purchase Product at a reasonably constant monthly
rate.
(c) Contemporaneously with the execution hereof, BOC and Xxxxxx
shall enter into a definitive written agreement that shall allocate Airgas'
volume purchases for Product under this Agreement and that certain Helium Supply
Agreement between BOC and Airgas dated September 1, 1996.
5. DELIVERIES OF PRODUCT. (a) For Product delivered in tube trailers, BOC
shall deliver Product to facilities designated by Airgas in jumbo tube trailers
(nominal capacity of at least 170,000 scf) rented to Airgas by BOC. Tube
trailers provided by BOC may be switched out with Airgas-owned trailers. At
facilities where an Airgas cylinder filling facility is co-located with a BOC
helium transfill, Product shall be supplied via a pipeline connecting the BOC
helium transfill to the location in Airgas' plant where helium cylinders are
filled, with a tube trailer utilized as an intermediate storage vessel ("Storage
Trailer"), or via another mutually acceptable means. BOC will use commercially
reasonably efforts to deliver Product so as to avoid customer run-outs and use
commercially reasonable efforts to deliver Product within forty-eight hours of
receiving notice of a requested delivery.
(b) Deliveries which may be made during a strike or other labor
disturbance affecting Airgas shall be at the sole risk of Airgas. Xxxxxx shall
indemnify and hold BOC harmless from and against all costs, damages, liabilities
or claims arising directly or indirectly from such deliveries.
(c) The volume of Product delivered in tube trailers shall be
measured by BOC when tube trailers are dispatched from BOC's facility. Billings
shall be made in cubic feet of gas at 70oF and at one atmosphere of pressure
using standard P.V.T. (pressure, volume, temperature) conversion tables. Airgas
may measure the volume of, and/or test, BOC's Product upon its arrival at the
Airgas facility to which it is being delivered and shall notify BOC within seven
(7)
3
days of delivery if any Product is found to be less than the quantity
represented by BOC or is found to not meet specifications. In addition, Xxxxxx
shall have a reasonable opportunity upon reasonable advance written notice to
test BOC's Product measuring devices at BOC's facilities during the Supply
Period. Airgas shall receive full credit for residual Product in tube trailers
returned to BOC with pressures of 500 p.s.i.g. or less. No credit shall be given
for residual Product in tube trailers returned to BOC with pressures in excess
of 500 p.s.i.g.
(d) The volume of Product delivered by BOC to Airgas via pipeline,
in accordance with Paragraph 5(a) above, shall be determined by measuring the
volume of Product filled into a Storage Trailer or stationary tubes by the
P.V.T. method described in sub-paragraph 5.(c) above.
(e) In the event that tube trailers returned from Airgas locations
for refilling (either BOC or Airgas tube trailers) require purging due to the
acts or omissions of Airgas, BOC shall so notify Airgas and Airgas shall have
forty-eight (48) hours in which to verify BOC's claim. Any, dispute that cannot
be amicably resolved may be submitted by either party for Dispute Resolution as
provided in Section 16 hereof. If tube trailers returned from Airgas locations
for refilling require purging due to the acts or omissions of Airgas, the
following charges shall apply:
[**]
6. PRICE AND PRICE ADJUSTMENT. (a) The price for Product delivered
hereunder shall initially be [**] per ccf (the "BASE PRICe") FOB delivered to
the Airgas location, or for co-located facilities, delivered into the Storage
Trailer utilized as Airgas' helium storage vessel at the facility, subject to
adjustment pursuant to Sub-Paragraph 6(b).
(b) Effective [**], the price for Product shall be adjusted (up or
down) by [**] ("ADJUSTMENT Period").
(c) Notwithstanding the foregoing, in the event that BOC projects,
in good faith, that BOC's US Cocktail Mix cost will change by [**] during any
Adjustment Period, as compared to the previous Adjustment Period, BOC shall
adjust the price for Product hereunder by [**] of the projected price adjustment
for the next [**] effective the [**] prior to the next price adjustment date
(referred to hereinafter as a "[**] PRICE ADJUSTMENT"). In such case, the price
for Product effective the following [**] shall be calculated in the same manner
as if the [**] Price Adjustment had not taken place. No further adjustments
shall be made due to any inaccuracy of BOC's good faith projection of the change
in BOC's US Cocktail Mix cost as long as BOC's
4
projection was accurate to within +/- 1%. However, in the event that BOC's
projection was inaccurate by more than 1%, the price for Product shall be
adjusted retroactive to the [**] effective date of the [**] Price Adjustment.
The adjusted price effective [**] shall be the price for Product effective prior
to the [**] Price Adjustment, plus [**] of the change in the price for Product
based on the actual change in BOC's US Cocktail Mix cost. A credit or additional
billing will be issued by BOC within thirty (30) days after completion of the
calculation of the value of BOC's US Cocktail Mix cost.
(d) Upon completion of the calculation of BOC's US Cocktail Mix
cost, BOC will provide to Airgas (i) the percentage of BOC's total supply
included in the calculation from each source, and (ii) the percentage change in
price for each of those sources from the previous Adjustment Period.
(e) Xxxxxx shall have the right to audit BOC's calculation of
BOC's US Cocktail Mix cost after notifying BOC in writing of its intent to
conduct an audit which shall be completed within ninety (90) days of Airgas'
receipt of the result of BOC's calculation. Such audit will be conducted by a
mutually acceptable third-party auditor. The auditor shall only disclose to
Airgas whether BOC has completed the calculations in accordance with the
provisions of this Agreement, or in the event of an error in BOC's calculations,
the auditor shall inform both parties of the correct calculation. In the event
of a material error (greater than 1% error in price for Product), the price for
Product shall be adjusted retroactive to the relevant [**] price adjustment
date. For errors of less than 1%, no adjustments shall be made. Airgas shall
bear the cost of the audit unless a material error (greater than 1% error in
price for Product) is found, in which case the cost of the audit shall be borne
by BOC.
(f) Notwithstanding the foregoing, in the event that BOC seeks to
implement an annual price increase of greater than [**], Airgas shall have the
right to purchase Product from a lower cost supplier and reduce its Take or Pay
Quantity for that Contract Year and for subsequent Contract Years, by notifying
BOC within thirty (30) days of receipt of BOC's price increase notification. In
no event shall the Take or Pay Quantity hereunder be less than [**] per Contract
Year.
(g) In the event that Airgas, at its option, elects to purchase
Product that is guaranteed
5
to conform to the specifications for either Analytical Grade 5 or Grade 5.5, the
price for Product shall [**]
7. PRICE REOPENERS. (a) Either party shall have the right to request good
faith negotiations for the purpose of establishing new base prices to be
applicable during Contract Years [**], by providing written notice to the other
party not less than six (6) months prior to the end of the [**] Contract Years,
whichever is applicable. In addition, on not more than two occasions during the
term of this Agreement, but not before the end of the [**] Contract Year ("WILD
CARD REOPENER"), Airgas shall have the right to request a good faith
renegotiation of the price for Product if it believes that the market price is
below the then current price for Product hereunder by at least [**]. In the
event that the parties are not able to agree on new prices for Product within
ninety (90) days of the written notice requesting a price reopener, the price
for Product shall finally be determined via binding arbitration in accordance
with the procedure defined in subparagraph 7(b).
(b) If agreement on a new price for Product has not been reached
within ninety (90) days of the date of the requesting Party's notice requesting
redetermination, then the requesting Party may submit the resolution of this
matter to arbitration at any time within forty-five (45) days after the end of
such ninety (90) day period by giving the other Party written notice. Included
with such notice, such Party requesting arbitration shall name one (1)
arbitrator. The Party receiving such notice, shall, by notice to the other Party
within thirty (30) days thereafter, name the second arbitrator. Within ten (10)
days following designation of the second arbitrator, the two arbitrators so
selected shall name a third arbitrator and the three arbitrators so selected
shall resolve the dispute in the manner provided herein. If the two arbitrators
selected by the parties are unable to agree upon a third arbitrator, the third
arbitrator, upon application by either party, shall be selected by the American
Arbitration Association in Philadelphia, Pennsylvania in accordance with its
Commercial Arbitration Rules. The arbitrators selected to act hereunder shall be
qualified by education, experience, and training to decide upon the particular
question in dispute, and shall not be an employee or former employee of either
Party. The arbitrators shall be bound in their deliberations and decisions by
the parameters set forth in this Agreement. The arbitrators so appointed, after
giving the Parties due notice of hearing and reasonable opportunity
6
to be heard, shall promptly hear and determine the question submitted and shall
render their decisions within one hundred twenty (120) days after the selection
or appointment of the third arbitrator. The decision of the arbitrators, or of a
majority thereof, made in writing, shall be final and binding upon the Parties
hereto as to the question submitted, and the Parties will abide by and comply
with such decisions. Each Party shall bear the expenses of its arbitrator, and
the expenses of the third arbitrator shall be borne equally by BOC and Airgas.
The sole issue to be decided by the arbitrators shall be the Price for Product
under this Agreement effective the beginning of the [**] Contract Years, as
applicable, for scheduled reopeners, or effective the date of Airgas' written
notice if for a Wild Card Reopener. Within ten (10) days following the selection
or appointment of the third arbitrator, Buyer and Seller shall simultaneously
submit to the arbitrators written proposals for a new Price for Product designed
to reflect the then current price at which willing buyers and sellers in
arms'-length transactions are currently agreeing to buy and sell Product under
long-term agreements, with greater weight given to other term sales by BOC and
to agreements most recently consummated. The arbitrators must select either
Buyer's or Seller's proposal. The arbitration shall be held in Pennsylvania. The
laws of the Commonwealth of Pennsylvania shall be applicable to all substantive
and procedural issues.
8. TUBE TRAILER RENTAL; TUBE TRAILER SALE. (a) (a) At Airgas' request, BOC
shall provide jumbo tube trailers for the delivery of Product hereunder. If so
requested, such tube trailers shall be rented to Airgas for a monthly rate of
[**] per month. For partial months, daily rental shall be charged at the rate of
[**] per day. Rental will be assessed from the date on which a full trailer
departs the BOC filling facility until the date on which the empty trailer with
which the full trailer was switched out returns to BOC for filling.
(b) The tube trailer rental rates provided for in subparagraph
8(a) above will be reviewed at the end of the [**] years of this Agreement based
upon changes in appropriate indices.
(c) During the term, BOC agrees to provide jumbo tube trailers to
Airgas for storage of Product at the locations set forth on Exhibit II (the
"Option Trailers"). The Option Trailers (also specified by trailer no. in
Exhibit II) will be provided on a rent free basis provided, however, that until
Xxxxxx asks that title to an Option Trailer be conveyed to it, Airgas will pay
BOC a monthly maintenance fee of [**] per Option Trailer. BOC shall have the
right to adjust the monthly
7
maintenance fee at the end of the [**] years of this Agreement based on changes
in BOC's actual cost to maintain tube trailers.
(d) At any time and from time to time during the term, upon the
written request of Airgas, BOC shall convey title to one or more of the Option
Trailers to Airgas at a price of $1.00 per Option Trailer. Title to any Option
Trailers that have not previously been conveyed to Airgas prior to the end of
the term will be conveyed to Airgas at that time. Any Option Trailer conveyed to
Airgas hereunder shall be in good condition and shall be free and clear of any
liens or encumbrances.
(e) BOC shall execute such bills of sale and other instruments of
transfer as Airgas may reasonably request in connection with the transfer of
title to Option Trailers as provided herein.
9. BILLING AND PAYMENT. BOC shall invoice Airgas for Product delivered
hereunder after each delivery. Invoices for tube trailer rental shall be issued
on a monthly basis. Payment shall be made to the address specified on BOC's
invoice net thirty (30) days. Any sales tax imposed by any present or future law
or by any government authority in connection with any Product sold or tube
trailer delivered hereunder, if paid, or to be paid, by BOC as a result of its
performance under this Agreement shall be added to BOC's billing and paid by
Xxxxxx, unless Airgas provides BOC an applicable tax exemption certificate.
10. SPECIFICATION AND WARRANTY. All Product delivered under this Agreement
shall be a minimum of conformance grade 5 purity which shall be defined as [**]
pure and shall meet the additional specifications set forth on Exhibit III,
unless Airgas, at its option, elects to purchase Product that meets the
specifications for either Analytical Grade 5 or Grade 5.5 Product (defined in
Exhibit III), in which case the Product shall meet such specifications. Any
quantity of Product shown by a recognized standard test to be of lesser purity
than the purity guaranteed by BOC may be rejected by Xxxxxx, in its discretion,
but BOC reserves the right to confirm test results of all Product rejected.
THERE IS NO WARRANTY OF MERCHANTABILITY AND THERE ARE NO OTHER WARRANTIES,
EXPRESSED, OR IMPLIED, THAT EXTEND BEYOND THIS STANDARD OF PURITY.
11. CLAIMS. All claims by Xxxxxx having anything to do with any Product
sold or delivered by BOC (or not delivered) shall be made in writing within
sixty (60) days after delivery thereof (or after the same have been delivered),
and failure by Xxxxxx to give such written notice shall
8
constitute a waiver by Xxxxxx of such claims and a complete defense for BOC
against all such claims.
12. EXCUSED NON-PERFORMANCE. Either party's performance hereunder (except
the obligation to pay money when due) shall be subject to floods, strikes or
other labor disturbances, fires, accidents, wars, delays of carriers, inability
to obtain power or fuel, breakdown of major equipment, failure or loss of normal
sources of supply, restraints of government, or any other similar or dissimilar
cause beyond such party's reasonable control. Delivery of Product shall be made
by BOC from its facility normally serving Airgas hereunder. If sufficient
production from any such facility or any third party supplier to BOC becomes
unavailable for the reasons set forth immediately above, BOC may divide the
available production among its various contract customers; provided, however,
that the percentage decrease in the amount of Product delivered to Airgas shall
be no more than fifty percent (50%) of the percentage decrease in the amount of
Product delivered to such other customers generally (e.g., if deliveries to
other customers are reduce by 10%, deliveries to Airgas will be reduced by no
more than 5%). If the Take or Pay Quantity is not satisfied, Airgas shall be
given a waiver of the requirements of Paragraph 4 for as long as such BOC Force
Majeure shall exist. Within 48 hours after the occurrence of an event within
this Paragraph 12, BOC shall provide Airgas with a written allocation plan. BOC
shall use all reasonable efforts to obtain replacement Product from other
sources, either within or separate from BOC, on a temporary basis until
sufficient production is again available. Airgas shall be promptly notified of
the foregoing and shall have the right to decline any such temporary replacement
Product, but shall pay all additional costs incurred by BOC or Airgas associated
with any such Product that it accepts.
13. ALLOCATIONS OF RESPONSIBILITY. (a) Final determination of the
suitability of Product for any use contemplated by Xxxxxx is the sole
responsibility of Airgas, and BOC shall have no responsibility in connection
therewith. Airgas shall avail itself of testing devices to determine the purity
of the Product before Airgas uses such Product, as it sees fit, but no error in,
or failure to make, any such test shall impair any right on the part of Airgas
to obtain a refund or replacement as provided in Paragraph 13(d).
9
(b) Neither party shall be liable to the other for consequential
damages under any circumstances, including without limitation, consequential
damages caused by or arising out of, in whole or in part, any negligent act or
omission or related strict liability.
(c) Subject to the provisions of Paragraph 12 and Paragraph 13(e)
herein, provided that BOC makes commercially reasonable good faith efforts to
perform its obligations hereunder, Xxxxxx's sole and exclusive remedy for each
unexcused failure on the part of BOC to deliver Product to Airgas when required
hereunder, whether or not such failure was caused in whole or in part, by any
negligence, shall be to recover from BOC the difference between the cost to
Airgas of any purchase of Product in substitution for the Product BOC failed to
deliver and the lesser price that would have been applicable to the purchase of
such substituted quantity of Product hereunder. Any Product purchased from a
third-party pursuant to this paragraph shall be credited towards Xxxxxx' Take Or
Pay Quantity for that Contract Year.
(d) Subject to the provisions of Paragraph 13(e) herein, provided
that BOC makes commercially reasonable good faith efforts to perform its
obligations hereunder, Xxxxxx's sole and exclusive remedy for each unexcused
failure or act on the part of BOC whereby Product of a purity less than that
stated in Paragraph 10 hereof is delivered to Airgas, whether or not such
failure or act was, in whole or in part, negligent, or could be the basis of a
claim on the grounds of strict liability, shall be to receive a refund equal to
the price of such quantity of non-conforming Product, or the replacement thereof
with Product meeting the level of purity provided in Paragraph 10 at no
additional charge to Airgas.
(e) If at any time during the Supply Period, BOC shall fail on at
least three (3) separate occasions to provide Product as required under this
Agreement, unless excused pursuant to the provisions of Paragraph 12 above, and
each such failure shall continue for more than fifteen (15) days after notice
thereof from Airgas to BOC, Airgas may terminate this Agreement on sixty (60)
days written notice to BOC.
(f) It is a responsibility of Airgas to comply with all relevant
reporting obligations under the Emergency Planning and Community Right-to-know
Act of 1986 (XXXX Title III) and any other statutes and regulations concerning
the storage, handling or use of Product or resulting from the presence of the
Product supplied under this Agreement. Further, it is the responsibility of
Airgas to warn and protect its employees and others exposed to the hazards posed
by Xxxxxx's
10
storage and use of Product. By execution of this Agreement, Xxxxxx acknowledges
receipt of the Material Safety Data Sheet(s) which describe the Product. Upon
Xxxxxx's request and BOC's approval, BOC will provide Haz-OP training for
Airgas's employees at BOC's standard charge therefor.
(g) Airgas acknowledges that it has (i) full knowledge of the
hazards associated with the storage, distribution and use of Product and Airgas
hereby assumes all responsibility for warning its personnel and any third
parties on its premises of such hazards and (ii) read and understands the
provisions of this Agreement, including the provisions of Paragraph 13 (a)-(e)
above.
14. CONTRACTUAL. This Agreement shall not be binding upon BOC or Airgas
until it is executed and delivered by their duly authorized representatives. No
change, modification, discharge or waiver of or addition to any of said
provisions shall be binding upon BOC, or Airgas unless set forth in writing,
specifically identified as and executed and delivered by a duly authorized
representative of each of them, and no such change, modification, discharge or
waiver of or addition to any of said provisions shall be effected by any
acknowledgment or acceptance by BOC of any purchase order, acknowledgment or
other form submitted by Airgas specifying dates, quantities or locations and
also containing different or additional provisions. This Agreement shall inure
to the benefit of and shall be binding upon BOC and Airgas and their respective
permitted successors and assigns, including any entity (i) with which Airgas may
merge or consolidate or (ii) to which Airgas may transfer any of its
subsidiaries or assets comprising its distribution operations.
15. GOVERNING LAW. The laws of the Commonwealth of Pennsylvania shall
govern the validity, effect, construction and interpretation of the terms of
this Agreement without application of the rules of law in Pennsylvania regarding
conflicts of laws.
16. DISPUTE RESOLUTION. (a) Each party agrees to designate a representative
with decision-making authority for purposes of administering and resolving
disputes under this Agreement. BOC's initial representative shall be Xxxxxx
Xxxxxxxxx, and Xxxxxx' initial representative shall be Xxx Xxxxx. Either party
may change its representative by written notice to the other party given in
accordance with Paragraph 17.
11
(b) Unless a dispute resolution mechanism is expressly provided
for a particular dispute arising under this Agreement, any dispute between the
parties relating to this Agreement that cannot be resolved with reasonable
promptness shall be referred to each party's designated representative in an
effort to obtain prompt resolution. Neither party shall commence any action
against the other until the expiration of sixty (60) days from the date of
referral to such senior managers; provided, however, this shall not preclude a
party from instituting an action seeking injunctive relief to prevent
irreparable damage to such party. In the event that the senior managers are
unable to resolve the dispute as set forth above, the dispute shall be submitted
to a mutually agreeable neutral advisor for initial fact finding and non-binding
mediation. Neither party shall unreasonably withhold acceptance of such an
advisor and the selection of the advisor shall be made within thirty (30) days
after written notice by one of the parties for such fact finding and mediation.
The advisor shall be instructed to complete fact finding and the mediation
within sixty (60) days of his or her appointment.
17. NOTICES. All notices or other communications required or permitted to
be given by one party to the other shall be in writing and shall be deemed given
when transmitted by confirmed facsimile, when delivered personally or by
overnight courier or three (3) business after being deposited in the United
States Postal Service. All such notices and communications shall be addressed
and delivered to the following addresses:
(a) If to Airgas, to Airgas, Inc., 000 X. Xxxxxx-Xxxxxxx Xxxx,
Xxxxx 000, Xxxxxx, XX 00000, facsimile 000-000-0000, marked to the attention of:
Chairman and Chief Executive Officer.
(b) If to BOC to BOC Gases, 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX
00000 marked to the attention of: Vice President, Helium, with a copy addressed
to The BOC Group, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX 00000, Attention:
Law Department.
Either party may change its address, facsimile number or receiving person by
providing written notice to the other party.
18. ASSIGNMENT. Neither party shall assign this Agreement without the prior
written consent of the other party, provided that such consent shall not be
unreasonably withheld. Any purported
12
assignment in violation of the provisions of the preceding sentence shall be
null and void and of no force and effect.
19. ENFORCEABILITY. If any provision of this Agreement shall be determined
to be unenforceable or unlawful by a final judgment, not subject to appeal, of a
court of competent jurisdiction, the parties hereto shall nevertheless be bound
by the remaining provisions hereof; provided however, that either party hereto
shall have the right to have this Agreement reformed to preserve, so far as
possible, the economic bargain of the parties as expressed herein.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first written above.
THE BOC GROUP, INC.
By: /s/Xxxxx Xxxxxxxx
-----------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
AIRGAS, INC.
By: /s/Xxxxxx X. Xxxxx
------------------
Name: Xxxxxx X. Xxxxx
Title:Vice President
13
