<PAGE>
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.
--------------------------------------------------------------------------------
ASSET PURCHASE
AGREEMENT
BY AND BETWEEN
AIRGAS, INC.
AND
THE BOC GROUP, INC.
-----------------------------------
DATED AS OF MARCH 31, 2004
-----------------------------------
--------------------------------------------------------------------------------
<PAGE>
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
</TABLE>
ii
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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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iii
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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
WAIVERS.....................................................................
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
</TABLE>
iv
<PAGE>
LIST OF SCHEDULES
<TABLE>
<CAPTION>
Schedule
Description
--------
------------
<S>
<C>
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
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
Schedule
Description
--------
------------
<S>
<C>
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
</TABLE>
vi
<PAGE>
LIST OF EXHIBITS
<TABLE>
<S>
<C>
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
</TABLE>
vii
<PAGE>
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.
<PAGE>
2
"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.
<PAGE>
3
"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
<PAGE>
4
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.
<PAGE>
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.
<PAGE>
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,
<PAGE>
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.
<PAGE>
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.
<PAGE>
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 Hart-Scott-Rodino 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 &
Young, 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,
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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 overlease;
<PAGE>
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 overlease (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 overlease (1)
sublandlord shall notify subtenant of such
decision and offer to assign to
subtenant sublandlord's interest in the
overlease, (2) subtenant shall notify
sublandlord, within five (5) Business Days
of receiving such notification from
sublandlord, of subtenant's intention to
assume the overlease and (3) if
sublandlord requests to be assigned
sublandlord's interest in the overlease,
sublandlord shall use commercially
reasonable efforts to facilitate the
assignment of the overlease 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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
21
"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) petty 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
<PAGE>
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
<PAGE>
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 petty 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);
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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;
<PAGE>
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.
<PAGE>
29
(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
<PAGE>
30
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
<PAGE>
31
(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.
<PAGE>
32
(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
56-0732648. The Seller's employer
identification number is 13-1600079.
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, 599 Lexington Avenue, New York, New
York, 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.
<PAGE>
33
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);
<PAGE>
34
(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;
<PAGE>
35
(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).
<PAGE>
36
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.
<PAGE>
37
(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.
<PAGE>
38
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
41
(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.
<PAGE>
42
(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.
<PAGE>
43
(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
<PAGE>
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
<PAGE>
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 Rea
