1
Exhibit A
AGREEMENT AND PLAN OF MERGER
Among
Praxair, Inc.,
PX Acquisition Corp.
and
CBI Industries, Inc.
Dated as of December 22, 1995
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated as of December 22, 1995, among CBI Industries, Inc., a
Delaware corporation (the "Company"), Praxair, Inc., a Delaware corporation
("Praxair"), and PX Acquisition Corp., a Delaware corporation and a wholly-
owned subsidiary of Praxair ("Purchaser"). The Company and Purchaser are
hereinafter sometimes collectively referred to as the "Constituent
Corporations."
RECITALS
WHEREAS, the respective Boards of Directors of each of Praxair,
Purchaser and the Company have approved the acquisition of the Company by
Praxair upon the terms and subject to the conditions set forth herein;
WHEREAS, on November 3, 1995, Purchaser commenced an offer to
purchase (the "Initial Offer") all outstanding shares of Common Stock, par
value $2.50 per share (the "Shares"), of the Company together with the
associated rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of March 4, 1986, as amended, between the Company and First
Chicago Trust Company of New York, as Rights Agent (as the same may be
further amended, the "Rights Agreement"), at a purchase price of $32 per
Share (and associated Right) (all references herein to "Rights" shall
include all benefits that may inure to holders of the Rights pursuant to
the Rights Agreement and, unless the context otherwise requires, all
references to "Shares" shall include the associated Rights), net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated November 3, 1995 (the
"Offer to Purchase") and in the related Letter of Transmittal
(collectively, the "Initial Offer Documents"); and
WHEREAS, the respective Boards of Directors of each of Praxair,
Purchaser and the Company have determined that it is in the best interests
of their respective stockholders for Purchaser to acquire the Company, upon
and subject to the terms and conditions of this Agreement, pursuant to the
Initial Offer, as amended pursuant to the terms of this Agreement (the
"Amended Offer"); and
WHEREAS, in furtherance of such acquisition, the respective
Boards of Directors of each of Praxair, Purchaser and the Company have
approved the merger of Purchaser with
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and into the Company (the "Merger") pursuant to this Agreement and the
Delaware General Corporation Law, as amended (the "DGCL"); and
WHEREAS, the Board of Directors of the Company (the "Board")
has, in light of and subject to the terms and conditions set forth herein,
(i) determined that the consideration to be paid for each Share in the
Amended Offer and the Merger is fair to, and in the best interests of, the
stockholders of the Company and (ii) has approved and adopted this
Agreement and the transactions contemplated hereby and has recommended
acceptance of the Amended Offer and approval and adoption by the
stockholders of the Company of this Agreement and the Merger; and
WHEREAS, each of the Company, Praxair and Purchaser desires to
make certain representations, warranties, covenants and agreements in
connection with this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
mutual representations, warranties, covenants, agreements and conditions
contained herein, the parties hereto agree as follows:
ARTICLE I
The Amended Offer; Actions by the Company; Directors
1.1. The Amended Offer. (a) Praxair and Purchaser have
filed with the Securities and Exchange Commission (the "Commission") a
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") with
respect to the Initial Offer which contains (included as exhibits) the
Initial Offer Documents. As promptly as practicable (but no later than the
fourth business day after the date of this Agreement), Praxair and
Purchaser shall file with the Commission an amendment to the Initial Offer
Documents (as so amended, and as the same may be further amended or
supplemented in accordance with the terms of this Agreement, the "Amended
Offer Documents"). The Company shall have the opportunity to review the
amendment to the Schedule 14D-1 to be filed in connection with the Amended
Offer prior to its being filed with the Commission. The Amended Offer
Documents shall contain a supplement to the Offer to Purchase, which shall
be mailed to the holders of Shares and which shall amend the Initial Offer
(i) to increase the price per Share payable in connection with the Amended
Offer to $33.00, (ii) to provide that the obligation of Praxair and
Purchaser to accept for payment and pay for Shares
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tendered pursuant to the Amended Offer shall only be subject to the
conditions set forth in Annex A hereto, and (iii) to change the expiration
date of the Amended Offer to midnight, New York City time, on a date that
is 10 business days following the filing of the amendment (as so extended,
and as it may be extended from time to time in accordance with the terms of
this Agreement, the "Expiration Date"); it being understood and agreed
that, except for the foregoing amendments or as otherwise provided herein,
the Amended Offer shall be on the same terms as the Initial Offer. Without
the prior written consent of the Company, Purchaser shall not decrease the
price per Share or change the form of consideration payable in the Amended
Offer, decrease the number of Shares sought or extend the Amended Offer
(other than as set forth below), amend or waive the Minimum Tender
Condition (as defined in Annex A), impose additional conditions to the
Amended Offer or amend any other term of the Amended Offer in any manner
adverse to the holders of Shares. Upon the terms and subject to the
conditions of the Amended Offer, Purchaser will accept for payment and will
purchase, as soon as permitted under the terms of the Amended Offer, all
Shares validly tendered and not withdrawn prior to the expiration of the
Amended Offer.
(b) Each of Praxair and Purchaser, on the one hand, and
the Company, on the other hand, agrees promptly to correct any information
provided by it for use in the Amended Offer Documents if and to the extent
that it shall have become false or misleading in any material respect, and
Praxair and Purchaser further agree to take all steps necessary to cause
the Amended Offer Documents as so corrected to be filed with the Commission
and to be disseminated to stockholders of the Company, in each case as and
to the extent required by applicable federal securities laws.
(c) Praxair and Purchaser agree that Purchaser shall not
terminate or withdraw the Amended Offer or extend the then scheduled
Expiration Date unless at the Expiration Date the conditions to the Amended
Offer described in Annex A hereto shall not have been satisfied or earlier
waived. If at the Expiration Date, the conditions to the Amended Offer
described in Annex A hereto shall not have been satisfied or earlier
waived, Purchaser may and, if requested by the Company, shall extend the
Expiration Date on one or more occasions for an additional period or
periods of time until the earlier of (i) the date which is sixty business
days following the date of the Amended Offer or (ii) the date this
Agreement is terminated in accordance with its terms; provided, that, this
sentence shall not be applicable in the event the conditions set forth in
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paragraph (v)(g) of Annex A hereto shall not have been satisfied or earlier
waived at the Expiration Date. Praxair and Purchaser shall use their
reasonable best efforts to consummate the Amended Offer in accordance with
the terms of this Agreement and the conditions to the Amended Offer set
forth in Annex A.
1.2. Actions by the Company. (a) The Company hereby
approves of and consents to the Amended Offer and represents that (i) the
Board by vote of all directors at a meeting duly called and held, has, in
light of and subject to the terms and conditions set forth herein,
unanimously (x) determined that each of the Amended Offer and the Merger is
fair to, and in the best interests of, the stockholders of the Company and
(y) approved this Agreement and the transactions contemplated hereby,
including the Amended Offer and the Merger, and recommends acceptance of
the Amended Offer and approval and adoption of this Agreement and the
Merger by the stockholders of the Company and (ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇ Bros."), the Company's
financial advisors, have rendered to the Board their respective opinions
that the consideration to be received by the stockholders of the Company
pursuant to the Amended Offer and the Merger is fair to such stockholders
from a financial point of view.
(b) The Company agrees that it shall, on the same day that
Purchaser and Praxair file with the Commission an amendment to the Initial
Offer Documents pursuant to Section 1.1 hereof, file with the Commission an
amendment to its Solicitation/Recommendation Statement on Schedule 14D-9,
dated November 16, 1995 (including exhibits, as so amended, and as amended
from time to time, the "Amended Schedule 14D-9"), which amendment shall
include (i) subject to the proviso in the second sentence of
Section 1.2(c), the recommendation described in Section 1.2(a) hereof and
(ii) the information with respect to the Company and its officers and
directors, (including any directors to be elected or appointed pursuant to
Section 1.3 hereof) in form and substance satisfactory to Praxair and its
counsel, that is required under Section 14(f) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Rule 14f-1 promulgated
thereunder. In such connection, Praxair and Purchaser shall promptly
furnish the Company with all information concerning their designees
required by Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
Praxair and Purchaser shall have the opportunity to review the Amended
Schedule 14D-9 prior to its being filed with the Commission.
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(c) The Company agrees that copies of such Schedule 14D-9
(excluding exhibits), shall be enclosed with the Amended Offer Documents to
be mailed by Purchaser to the stockholders of the Company in connection
with the Amended Offer. Each of the Company, one the one hand, and Praxair
and Purchaser, on the other hand, agrees promptly to correct any
information provided by either of them for use in the Amended Schedule 14D-
9 if and to the extent that it shall have become false or misleading in any
material respect, and the Company further agrees to take all steps
necessary to cause the Amended Schedule 14D-9 as so corrected to be filed
with the Commission and to be disseminated to the stockholders of the
Company, in each case as and to the extent required by applicable federal
securities laws; provided, however, that, subject to the provisions of
Article IX, such recommendation may be withdrawn, modified or amended to
the extent that the Board deems it necessary to do so in the exercise of
its fiduciary and other legal obligations after being so advised by outside
counsel. In connection with the Amended Offer, the Company will furnish
Praxair and Purchaser with such information, including lists of the
stockholders of the Company, mailing labels and lists of security
positions, and such assistance as Praxair or Purchaser or their agents may
request in communicating the Amended Offer to the record and beneficial
holders of the Shares.
1.3. Directors. Promptly upon the purchase of and payment
for any Shares by Purchaser pursuant to the Amended Offer which represent
at least a majority of the Shares (on a fully diluted basis) and from time
to time thereafter, Praxair and Purchaser shall be entitled to designate
members of the Board such that Praxair and Purchaser, subject to compliance
with Section 14(f) of the Exchange Act, will have a number of
representatives on the Board, rounded up to the next whole number, equal to
the product of (x) the total number of directors on the Board multiplied by
(y) the percentage of the outstanding Shares beneficially owned by
Purchaser or its affiliates; provided, that, any action to be taken prior
to the Effective Time (as defined in Section 2.3 hereof) by the Board with
respect to this Agreement shall be approved by a majority of those
directors of the Company who have not been designated by Praxair or
Purchaser. Notwithstanding the foregoing, until the Effective Time, the
Company and Praxair shall use all reasonable efforts to retain as members
of Company's Board of Directors at least two directors who at the time are
neither officers of Praxair or the Company (or any of their respective
affiliates), nor designees of Purchaser (or any of its affiliates), nor
shareholders or affiliates of Purchaser (or any respective affiliate) (the
"Disinterested
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Directors"). The Company shall, upon request by Praxair or Purchaser,
promptly increase the size of the Board to the extent permitted by the
Company's Restated Certificate of Incorporation (the "Company Charter")
and, to the extent required to comply with this Section 1.3, secure the
resignations of such number of directors as is necessary to enable
Praxair's designees to be elected to the Board and shall cause Praxair's
designees to be so elected.
ARTICLE II
The Merger; Closing; Effective Time
2.1. The Merger. Upon the terms and subject to the condi-
tions set forth in this Agreement, at the Effective Time (as defined in
Section 2.3 hereof) Purchaser shall be merged with and into the Company and
the separate corporate existence of Purchaser shall thereupon cease. The
Company shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation") and shall continue
to be governed by the laws of the State of Delaware, and the separate
corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in Article III. The name of Surviving Corporation
shall be "CBI Industries, Inc." The Merger shall have the effects
specified in the DGCL.
2.2. Closing. The closing of the Merger (the "Closing")
shall take place (i) at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 9:00 A.M. on the first business day following
the date on which the last to be fulfilled or waived of the conditions set
forth in Article VIII hereof (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the fulfillment
or waiver of those conditions) shall be satisfied or waived in accordance
with this Agreement or (ii) at such other place and time and/or on such
other date as the Company and Praxair may agree in writing (the "Closing
Date").
2.3. Effective Time. As soon as practicable following the
Closing, and provided that this Agreement has not been terminated or
abandoned pursuant to Article IX hereof, the Company and Praxair will cause
a Certificate of Merger (the "Delaware Certificate of Merger") to be execu-
▇▇▇, acknowledged and filed with the Secretary of State of Delaware as
provided in Section 251 of the DGCL. The Merger shall become effective at
the time when the Delaware
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Certificate of Merger has been duly filed with the Secretary of State of
Delaware (the "Effective Time").
ARTICLE III
Certificate of Incorporation and By-Laws
of the Surviving Corporation
3.1. The Certificate of Incorporation. The Company
Charter, as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation (the "Charter"),
until duly amended as provided therein or by applicable law, except that
the first paragraph of Article Fourth of the Charter shall be amended to
read in its entirety as follows: "The aggregate number of shares that the
Corporation shall have the authority to issue is Twenty Million and One
Thousand (20,001,000), of which One Thousand (1,000) shares shall be Common
Stock, par value $2.50 per share and Twenty Million (20,000,000) shares
shall be Preferred Stock, par value $1.00 per share."
3.2. The By-Laws. The by-laws of Purchaser in effect at
the Effective Time shall be the by-laws of the Surviving Corporation (the
"By-Laws"), until thereafter amended as provided therein or by applicable
law.
ARTICLE IV
Officers and Directors
of the Surviving Corporation
4.1. Directors. The directors of Purchaser at the Effec-
tive Time shall, from and after the Effective Time, be the directors of the
Surviving Corporation and shall hold office until their successors have
been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Charter and By-Laws.
4.2. Officers. The officers of the Company at the
Effective Time shall, from and after the Effective Time, be the officers of
the Surviving Corporation and shall hold office until their successors have
been duly appointed and qualified or until their earlier death, resignation
or removal in accordance with the Charter and By-Laws.
4.3. Further Assurances. If, at any time after the
Effective Time, the Surviving Corporation shall consider
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or be advised that any deeds, bills of sale, assignments, assurances or any
other actions or things are necessary or desirable to vest, perfect or
confirm of record or otherwise in the Surviving Corporation its right,
title or interest in, to or under any of the rights, properties or assets
of either of the Constituent Corporations acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger or
otherwise to carry out this Agreement, the officers of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of each of the Constituent Corporations or otherwise, all such
deeds, bills of sale, assignments and assurances and to take and do, in the
name and on behalf of each of the Constituent Corporations or otherwise,
all such other actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise
to carry out this Agreement.
ARTICLE V
Conversion or Cancellation of Shares in the Merger
5.1. Conversion or Cancellation of Shares. The manner of
converting or canceling shares of the Company and Purchaser in the Merger
shall be as follows:
(a) Conversion of Shares; Merger Consideration. At the
Effective Time, each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Praxair, Purchaser or any other
Subsidiary (as defined in Section 6.1(a) hereof) of Praxair (collectively,
the "Praxair Companies")) or Shares which are held by stockholders
("Dissenting Stockholders") exercising appraisal rights pursuant to
Section 262 of the DGCL) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to
receive, without interest, an amount in cash (the "Merger Consideration")
equal to $33.00 or such greater amount which may be paid pursuant to the
Amended Offer. All such Shares, by virtue of the Merger and without any
action on the part of the holders thereof, shall no longer be outstanding
and shall be canceled and retired and shall cease to exist, and each holder
of a certificate representing any such Shares shall thereafter cease to
have any rights with respect to such Shares, except the right to receive
the Merger Consideration for such Shares upon the surrender of such
certificate in accordance with Section 5.2 or the right, if any, to receive
payment from the Surviving Corporation of
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the "fair value" of such Shares as determined in accordance with
Section 262 of the DGCL.
(b) Cancellation of Shares. At the Effective Time, each
Share issued and outstanding at the Effective Time and owned by any of the
Praxair Companies, and each Share issued and held in the Company's treasury
at the Effective Time, shall, by virtue of the Merger and without any
action on the part of the holder thereof, cease to be outstanding, shall be
canceled and retired without payment of any consideration therefor and
shall cease to exist.
(c) Conversion of Purchaser Common Stock. At the
Effective Time, each share of Common Stock, par value $0.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of
Purchaser or the holders of such shares, be converted into one issued and
outstanding share of common stock of the Surviving Corporation.
(d) Convertible Preferred Stock. At the Effective Time,
each share of $2.27 Convertible Voting Preferred Stock, Series C of the
Company, par value $1.00 per share (the "Convertible Preferred Shares"),
shall remain outstanding and shall be entitled to the same dividend and
other relative rights, preferences, limitations and restrictions as are now
provided by the Company Charter; provided, that, after the Effective Time,
the Convertible Preferred Shares shall no longer be convertible into
Shares; and provided, further, that each Convertible Preferred Share shall
be convertible, after the Effective Time, into the amount of cash that the
holder thereof might have been entitled to receive if such holder had
converted such Convertible Preferred Shares into Shares immediately prior
to the Effective Time.
(e) Cumulative Preferred Stock. Each share of 7.48%
Cumulative Preferred Stock, Series D of the Company, par value $1.00 per
share (the "Series D Preferred Shares"), and $6.75 Cumulative Preferred
Stock, Series E of the Company, par value $1.00 per share (the "Series E
Preferred Shares" and together with the Series D Preferred Shares, the
"Cumulative Preferred Shares" and the Cumulative Preferred Shares, together
with the Convertible Preferred Shares and the Junior Participating
Preferred Stock, Series A of the Company, par value $1.00 per share, the
"Preferred Shares"), which immediately prior to the Effective Time is
issued and outstanding shall remain outstanding and shall be entitled to
the same dividend and other relative rights, preferences,
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limitations and restrictions as are now provided by the Company Charter.
5.2. Payment for Shares. Praxair shall make available or
cause to be made available to the paying agent appointed by Praxair (the
"Paying Agent") amounts sufficient in the aggregate to provide all funds
necessary for the Paying Agent to make payments pursuant to Section 5.1(a)
hereof to holders of Shares issued and outstanding immediately prior to the
Effective Time. Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each Person who was, at the
Effective Time, a holder of record (other than any of the Praxair
Companies) of issued and outstanding Shares a form (mutually agreed to by
Purchaser and the Company) of letter of transmittal and instructions for
use in effecting the surrender of the certificates which, immediately prior
to the Effective Time, represented any of such Shares in exchange for
payment therefor. Upon surrender to the Paying Agent of such certificates,
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, the Surviving Corporation shall
promptly cause to be paid to the persons entitled thereto a check in the
amount to which such persons are entitled, after giving effect to any
required tax withholdings. No interest will be paid or will accrue on the
amount payable upon the surrender of any such certificate. If payment is
to be made to a Person other than the registered holder of the certificate
surrendered, it shall be a condition of such payment that the certificate
so surrendered shall be properly endorsed or otherwise in proper form for
transfer and that the Person requesting such payment shall pay any transfer
or other taxes required by reason of the payment to a Person other than the
registered holder of the certificate surrendered or establish to the
satisfaction of the Surviving Corporation or the Paying Agent that such tax
has been paid or is not applicable. One hundred and eighty days following
the Effective Time, the Surviving Corporation shall be entitled to cause
the Paying Agent to deliver to it any funds (including any interest
received with respect thereto) made available to the Paying Agent which
have not been disbursed to holders of certificates formerly representing
Shares outstanding on the Effective Time, and thereafter such holders shall
be entitled to look to the Surviving Corporation only as general creditors
thereof with respect to the cash payable upon due surrender of their
certificates. Notwithstanding the foregoing, neither the Paying Agent nor
any party hereto shall be liable to any holder of certificates formerly
representing Shares for any amount paid to a public official pursuant to
any applicable abandoned property, escheat or similar law. The Surviving
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Corporation shall pay all charges and expenses, including those of the
Paying Agent, in connection with the exchange of cash for Shares and
Praxair shall reimburse the Surviving Corporation for such charges and
expenses.
For the purposes of this Agreement, the term "Person" shall
mean any individual, corporation (including not-for-profit), general or
limited partnership, limited liability company, going venture, estate,
trust, association, organization, Governmental Entity (as defined in
Section 6.1(d)) or other entity of any kind or nature.
5.3. Dissenters' Rights. If any Dissenting Stockholder
shall be entitled to be paid the "fair value" of his or her Shares, as
provided in Section 262 of the DGCL, the Company shall give Praxair notice
thereof and Praxair shall have the right to participate in all negotiations
and proceedings with respect to any such demands. The Company shall give
Praxair prompt notice of any demands received by the Company for appraisal
of Shares and Praxair shall have the right to participate in all
negotiations and proceedings with respect to such demands. Neither the
Company nor the Surviving Corporation shall, except with the prior written
consent of Praxair, voluntarily make any payment with respect to, or settle
or offer to settle, any such demand for payment. If any Dissenting
Stockholder shall fail to perfect or shall have effectively withdrawn or
lost the right to dissent, the Shares held by such Dissenting Stockholder
shall thereupon be treated as though such Shares had been converted into
the Merger Consideration pursuant to Section 5.1 hereof.
5.4. Transfer of Shares After the Effective Time. No
transfers of Shares shall be made on the stock transfer books of the
Surviving Corporation at or after the Effective Time.
ARTICLE VI
Representations and Warranties
6.1. Representations and Warranties of the Company. The
Company hereby represents and warrants to Praxair and Purchaser that,
except as set forth in the disclosure letter delivered to Praxair by the
Company on or prior to entering into this Agreement (the "Company
Disclosure Letter"):
(a) Organization, Good Standing and Qualification. Each
of the Company and its Subsidiaries (as defined
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below) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of organization and
has all requisite corporate or similar power and authority to own, lease
and operate its properties and assets and to carry on its business as
presently conducted and is qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the ownership or
operation of its properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in good
standing will not, when taken together with all other such failures have a
Company Material Adverse Effect (as defined below). The Company has made
available to Praxair a complete and correct copy of the Company's
certificate of incorporation and by-laws, each as amended to date. The
Company's certificate of incorporation and by-laws so delivered are in full
force and effect. Section 6.1(a) of the Company Disclosure Letter contains
a correct and complete list of each of its Subsidiaries (except for such
Subsidiaries that are immaterial) and each jurisdiction where the Company
and each of its Subsidiaries is organized.
As used in this Agreement, (i) the term "Subsidiary" means,
with respect to the Company, Praxair or Purchaser, as the case may be, any
entity, whether incorporated or unincorporated, domestic or foreign, of
which at least a majority of the securities or ownership interests having
by their terms ordinary voting power to elect a majority of the Board of
Directors or other persons performing similar functions is directly or
indirectly owned or controlled by such party or by one or more of its
respective Subsidiaries or by such party and any one or more of its
respective Subsidiaries and (ii) the term "Company Material Adverse Effect"
means a material adverse effect on the financial condition, business,
prospects or results of operations of the Company and its Subsidiaries
taken as a whole.
(b) Capital Structure. The authorized capital stock of
the Company consists of 240,000,000 Shares and 20,000,000 shares of
preferred stock, par value $1.00. As of September 30, 1995, there were
issued and outstanding 38,295,207 Shares; 3,484,713 Convertible Preferred
Shares; 550,000 Series D Preferred Shares; and 200,000 Series E Preferred
Shares. Each of the outstanding Convertible Preferred Shares are
convertible into 1.5 Shares. All of the issued and outstanding Shares and
Preferred Shares have been duly authorized and are validly issued, fully
paid and nonassessable and free of preemptive rights with respect thereto.
As of September 30, 1995, 1,488,407 Shares were held in the treasury of the
Company. As of the date hereof,
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there were outstanding options to purchase 1,216,350 Shares under the
Company's Stock Option Plan, effective as of January 1, 1987 (the "1987
Stock Option Plan") and outstanding options to purchase 70,500 Shares under
the Company's 1995 Stock Option Plan, effective as of January 1, 1995
(together with the 1987 Stock Option Plan, the CBI Restricted Stock Award
Plan (1978), the CBI 1983 Restricted Stock Award Plan, the CBI 1989
Restricted Stock Award Plan and the CBI 1994 Restricted Stock Award Plan,
the "Stock Plans"). The Company has no Shares or Preferred Shares reserved
for issuance, other than Shares reserved for issuance upon the exercise of
the conversion rights of holders of the Convertible Preferred Shares,
Shares and Preferred Shares reserved for issuance in connection with the
Rights granted pursuant to the Rights Agreement (which agreement will be
amended as described in Section 7.10(a) hereof), and Shares reserved for
issuance pursuant to the Company's 1994 Restricted Stock Award Plan,
effective March 9, 1994. Section 6.1(b) of the Company Disclosure Letter
contains a correct and complete list of each outstanding option to purchase
Shares under the Stock Plans (each a "Company Option"), including the
holder, date of grant, exercise price, the number of Shares subject thereto
and the number of stock appreciation rights, if any, granted in respect of
such Company Option. Except as set forth in Section 6.1(b) of the Company
Disclosure Letter, each of the outstanding shares of capital stock or other
securities of each of the Company's Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable and owned by a direct or
indirect wholly-owned subsidiary of the Company, free and clear of any
lien, pledge, security interest, claim or other encumbrance. Except as set
forth above and except as set forth in Section 6.1(b) of the Company
Disclosure Letter, there are no preemptive or other outstanding rights,
options, warrants, conversion rights, stock appreciation rights, redemption
rights, repurchase rights, agreements, arrangements or commitments to issue
or sell any shares of capital stock or other securities of the Company or
any of its Subsidiaries or any securities or obligations convertible or
exchangeable into or exercisable for, or giving any Person a right to
subscribe for or acquire, any securities of the Company or any of its
Subsidiaries, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. Except as set forth in Section 6.1(b)
of the Company Disclosure Letter, the Company does not have outstanding any
bonds, debentures, notes or other obligations the holders of which have the
right to vote (or convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter ("Voting
Debt").
14
(c) Corporate Authority; Approval and Fairness. The
Company has full requisite corporate power and authority and has taken all
corporate action necessary in order to execute, deliver and perform its
obligations under this Agreement and to consummate, subject only to
approval of this Agreement by the Company Requisite Vote (as defined in
Section 6.1(k) hereof), the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Board, and other than the Company Requisite Vote (as
defined in Section 6.1(k)), no other corporate proceedings are necessary to
authorize this Agreement or the consummation of the transactions
contemplated hereby. Assuming this Agreement constitutes a legal, valid
and binding agreement of Praxair and Purchaser, this Agreement constitutes
a legal, valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as enforcement may be limited
by general principles of equity, whether applied in a court of law or a
court of equity, and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally.
(d) Governmental Filings; No Violations. (i) Other than
the filings and/or notices (A) pursuant to Section 2.3 hereof, (B) under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (C) in connection, or in compliance, with the provisions of the
Exchange Act, (D) as may be required under any Environmental Law (as
defined in Section 6.1(l) hereof) pertaining to any notification,
disclosure or required approval triggered by the Merger or the transactions
contemplated hereby, (E) filing with, and approval of, the New York Stock
Exchange, Inc. and the Commission with respect to the de-listing and de-
registration of the Shares, (F) the Investment Canada Act ("ICA"), (G) such
consents, approvals, orders, authorizations, notifications, registrations,
declarations and filings as may be required under the corporation, takeover
or blue sky laws of various states or non-U.S. changes in control laws or
regulations and (H) to comply with the change of control, notification,
competition or other laws of jurisdictions listed in Section 6.1(d) of the
Company Disclosure Letter (collectively, the "Regulatory Filings"), no
notices, reports or other filings are required to be made by the Company
with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Company from, any government
or governmental, regulatory or administrative authority or agency,
domestic, foreign or supranational (each, a "Governmental Entity"), in
connection with the execution and delivery of this Agreement by the Company
and
15
the consummation by Purchaser of the Amended Offer and by the Company of
the Merger and the other transactions contemplated hereby, except those the
failure to make or obtain that are not, individually or in the aggregate,
reasonably likely to have a Company Material Adverse Effect or prevent,
materially delay or materially impair the ability of the Company or the
Purchaser to consummate any of the transactions contemplated by this
Agreement.
(ii) The execution, delivery and performance of this
Agreement by the Company do not, and the consummation by the Company of the
Merger pursuant to the terms of this Agreement and the other transactions
contemplated hereby will not, except as set forth in Section 6.1(d) of the
Company Disclosure Letter, constitute or result in (A) a breach or
violation of, or a default under, the Company Charter or the by-laws of the
Company or the comparable governing instruments of any of their
Subsidiaries, (B) a breach or violation of, or a default under, the
vesting, creation or acceleration of any rights or obligations or the
creation of a lien, pledge, security interest or other encumbrance on the
assets of the Company or any of its Subsidiaries (with or without notice,
lapse of time or both) pursuant to any provision of any agreement, lease,
contract, note, mortgage, indenture, arrangement or other domestic or
foreign obligation ("Contracts") of the Company or any of its Subsidiaries
or any Law (as defined in Section 6.1(i)) or governmental or non-
governmental permit or license to which the Company or any of its
Subsidiaries is subject or (C) any change in the rights or obligations of
any party under any of the Contracts, except, in the case of clause (B) or
(C) above, for any breach, violation, default, acceleration, creation or
change that, individually or in the aggregate, will not have a Company
Material Adverse Effect or prevent, delay or impair the ability of the
Company to consummate the transactions contemplated by this Agreement.
Section 6.1(d) of the Company Disclosure Letter sets forth a correct and
complete list of Contracts of the Company and its Subsidiaries pursuant to
which consents or waivers are or may be required prior to consummation of
the transactions contemplated by this Agreement (subject to the exception
set forth with respect to clauses (B) and (C) above). The Company will use
its reasonable best efforts to obtain the consents referred to in the
Disclosure Letter.
(e) Company Reports; Financial Statements. The Company
has filed with the Commission each registration statement, report, proxy
statement or information statement required to be filed by it since
December 31, 1994 (the "Audit Date"), including (i) the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 and (ii) the
16
Company's Quarterly Reports on Form 10-Q for the periods ended March 31,
1995, June 30, 1995, and September 30, 1995, (collectively, including any
such reports filed subsequent to the date hereof, the "Company Reports").
As of their respective dates, the Company Reports did not, and any Company
Reports filed with the Commission subsequent to the date hereof will not,
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not mis-
leading. Except as disclosed in Section 6.1(e) of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries, nor any of their
respective assets, businesses, or operations, is as of the date of this
Agreement a party to, or is bound or affected by, or receives benefits
under any contract or agreement or amendment thereto, that in each case
would be required to be filed as an exhibit to a Form 10-K as of the date
of this Agreement that has not been filed as an exhibit to a Company Report
filed prior to the date of this Agreement. As of their respective dates,
the consolidated financial statements included in the Company Reports
complied as to form in all material respects with then applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto. Each of the consolidated balance sheets
included in or incorporated by reference into the Company Reports (includ-
ing the related notes and schedules) fairly presents the consolidated
financial position of the Company and its Subsidiaries as of its date and
each of the consolidated statements of income and of changes in cash flows
included in or incorporated by reference into the Company Reports
(including any related notes and schedules) fairly presents the results of
operations and changes in cash flows, as the case may be, of the Company
and its Subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to the absence of notes and normal year-end
audit adjustments that will not be material in amount or effect), in each
case in accordance with U.S. generally accepted accounting principles
("GAAP") consistently applied during the periods involved, except as may be
noted therein.
(f) Absence of Certain Changes. Except as disclosed in
the Company Reports prior to the date hereof and except as disclosed in
Section 6.1(f) of the Company Disclosure Letter, since the Audit Date the
Company and its Subsidiaries have conducted their respective businesses
only in, and have not engaged in any material transaction other than
according to, the ordinary and usual course of such businesses and there
has not been (i) any change in the financial condition, business, prospects
or results of
17
operations of the Company and its Subsidiaries, except those changes that
will not, individually or in the aggregate, have a Company Material Adverse
Effect; (ii) any material damage, destruction or other casualty loss with
respect to any material asset or property owned, leased or otherwise used
by the Company or any of its Subsidiaries, whether or not covered by
insurance; (iii) except for dividends that have already been declared and
publicly announced on Shares and payment of dividends on Preferred Shares
in accordance with its terms, any declaration, setting aside or payment of
any dividend or other distribution in respect of the capital stock of the
Company; (iv) any change by the Company in accounting principles, practices
or methods. Since the Audit Date, except as provided for herein or as
disclosed in the Company Reports prior to the date hereof, there has not
been any increase in the compensation payable or that could become payable
by the Company and its Subsidiaries to their officers or key employees or
any amendment of any of the Compensation and Benefit Plans (as defined in
Section 6.1(h) hereof) other than increases or amendments in the ordinary
course of business consistent with past practice.
(g) Litigation and Liabilities. Except as disclosed in
the Company Reports prior to the date hereof and except as disclosed in
Section 6.1(g) of the Company Disclosure Letter, there are no (i) civil,
criminal or administrative actions, suits, claims, hearings, investigations
or proceedings pending or threatened against the Company or any of its
Subsidiaries or Affiliates, in any foreign or domestic jurisdiction or
(ii) obligations or liabilities, whether or not accrued, contingent or
otherwise and whether or not required to be disclosed, including those
relating to matters involving any foreign or domestic Environmental Law (as
defined in Section 6.1(l)), or any other facts or circumstances that so far
as can reasonably be foreseen could result in any claims against or
obligations or liabilities of the Company or any of its Subsidiaries or
Affiliates, except for those that are not, individually or in the
aggregate, likely to have a Company Material Adverse Effect or prevent the
Company from consummating the transactions contemplated by this Agreement;
provided, however, that since December 31, 1994 and except as set forth in
Section 6.1(g) of the Company Disclosure Letter, the Company and its
Subsidiaries have not been subject to any civil judgment or arbitration
award in any jurisdiction, domestic or foreign, with a value in excess of
$500,000.
18
(h) Employee Benefits.
(i) A copy (or, if unwritten, a summary thereof) of each
bonus, deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase, restricted
stock, stock option, employment, termination, severance, compensation,
medical, health or other plan, agreement, policy or arrangement that covers
employees, directors, former employees or former directors of the Company
and its Subsidiaries and which are sponsored, maintained or contributed to
by the Company or its Subsidiaries (and excluding multiemployer plans as
defined under ERISA (as hereinafter defined) and excluding plans in foreign
jurisdictions as to which contributions are mandatory) (the "Compensation
and Benefit Plans") and any trust agreements or insurance contracts forming
a part of such Compensation and Benefit Plans has been made available to
Praxair prior to the date hereof. The Compensation and Benefit Plans are
listed in Section 6.1(h) of the Company Disclosure Letter.
(ii) All Compensation and Benefit Plans are in substantial
compliance with all applicable law, including the Code and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Each
Compensation and Benefit Plan that is an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA (a "Pension Plan") and that is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service (the
"IRS"), and the Company is not aware of any circumstances likely to result
in revocation of any such favorable determination letter. There is no
pending or, to the knowledge of the officers of the Company, threatened
material litigation relating to the Compensation and Benefit Plans.
Neither the Company nor any Subsidiary has engaged in a transaction with
respect to any Compensation and Benefit Plan that, assuming the taxable
period of such transaction expired as of the date hereof, would subject the
Company or any of its Subsidiaries to a material tax or penalty imposed by
either Section 4975 of the Code or Section 502 of ERISA.
(iii) Except as disclosed in Section 6.1(h) of the Company
Disclosure Letter, as of the date hereof, no liability under Subtitle C
or D of Title IV of ERISA has been or is expected to be incurred by the
Company or any Subsidiary with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or the single-employer
plan of any entity which is considered one employer with the Company
19
under Section 4001 of ERISA or Section 414 of the Code (an "ERISA
Affiliate"), except for such a liability that has as of the date hereof
been satisfied. Except as set forth in Section 6.1(h) of the Company
Disclosure Letter, the Company and its Subsidiaries have not incurred and
do not expect to incur any withdrawal liability with respect to a
multiemployer plan under Subtitle E to Title IV of ERISA, except for such a
liability that has as of the date hereof been satisfied. No notice of a
"reportable event", within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to
be filed for any Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof or will be required to be filed in
connection with the transaction contemplated by this Agreement.
(iv) All contributions required to be made under the terms
of any Compensation and Benefit Plan have been timely made or have been
properly reflected on the most recent consolidated balance sheet filed or
incorporated by reference in the Company Reports prior to the date hereof.
Neither any Pension Plan nor any single-employer plan of an ERISA Affiliate
has an "accumulated funding deficiency" (whether or not waived) within the
meaning of Section 412 of the Code or Section 302 of ERISA. Neither the
Company nor its Subsidiaries has provided, or is required to provide,
security to any Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Code.
(v) Except as set forth in Section 6.1(h)(v) of the
Company Disclosure Letter, under each Pension Plan which is a single-
employer plan, as of the last day of the most recent plan year ended prior
to the date hereof, the actuarially determined present value of all
"benefit liabilities", within the meaning of Section 4001(a)(16) of ERISA
(as determined on the basis of the actuarial assumptions contained in the
Pension Plan's most recent actuarial valuation), did not exceed the then
current value of the assets of such Pension Plan, and there has been no
material adverse change in the financial condition of such Pension Plan
since the last day of the most recent plan year. Except as set forth in
Section 6.1(h)(v) of the Company Disclosure Letter, the withdrawal
liability under Subtitle E of Title I of ERISA of the Company and its
Subsidiaries under each multiemployer plan to which the Company, any of its
Subsidiaries or an ERISA Affiliate has contributed during the preceding
12 months, determined as if a "complete withdrawal", within the meaning of
Section 4203 of ERISA, had occurred as of the date hereof, does not exceed
$1,000,000.
20
(vi) Neither the Company nor its domestic Subsidiaries have
any obligations for retiree health and life benefits under any Compensation
and Benefit Plan, except as set forth in the Company Disclosure Letter.
For a minimum of the past ten years any such plan has always provided that
the Company or its domestic Subsidiaries may amend or terminate any such
plan at any time without incurring any material liability thereunder.
(vii) Except as disclosed in the Company Reports prior to
the date hereof or as specifically contemplated by this Agreement or as set
forth in Section 6.1(h) of the Company Disclosure Letter, the consummation
of the Merger and the other transactions contemplated by this Agreement
will not (x) entitle any employees of the Company or its Subsidiaries to
severance pay, or (y) accelerate the time of payment or vesting or trigger
any payment of compensation or benefits under, increase the amount payable
or trigger any other material obligation pursuant to, any of the
Compensation or Benefit Plans.
(viii) All Compensation and Benefit Plans covering current or
former non-U.S. employees or former employees of the Company and its
Subsidiaries comply in all material respects with applicable local law.
The Company and its Subsidiaries have no material unfunded liabilities with
respect to any Pension Plan that covers such non-US employees.
(i) Compliance with Laws. Except as set forth in the
Company Reports prior to the date hereof and except as disclosed in
Section 6.1(i) of the Company Disclosure Letter, the businesses of each of
the Company and its Subsidiaries have not been, and are not being,
conducted in violation of any law, ordinance, regulation, judgment, order,
decree, arbitration award, license or permit of any Governmental Entity
(collectively, "Laws") with such exceptions as would not likely have a
Company Material Adverse Effect. Except as set forth in the Company
Reports prior to the date hereof and except as disclosed in Section 6.1(i)
of the Company Disclosure Letter, the Company is not aware of any material
investigation or review by any Governmental Entity with respect to the
Company or any of its Subsidiaries nor has any Governmental Entity
indicated to the Company an intention to conduct the same. No change is
required in the Company's or any of its Subsidiaries' processes, properties
or procedures in connection with any such Laws, and the Company has not
received any notice or communication of any noncompliance with any such
Laws that has not been cured as of the date hereof with such
21
exceptions as would not likely have a Company Material Adverse Effect.
(j) Takeover Statutes. No supermajority vote is required
under any "fair price," "moratorium," "control share acquisition" or
similar antitakeover statute or regulation (each, a "Takeover Statute") in
connection with the Amended Offer, the Merger or the transactions
contemplated hereby. The Board has taken all appropriate and necessary
action such that the provisions of Section 203 of the DGCL will not apply
to any of the transactions contemplated by this Agreement.
(k) Voting Requirements; Company Articles. (i) The
affirmative vote of the holders of a majority of the outstanding stock
entitled to vote is the only vote of the holders of any class or series of
the Company's capital stock or of any Voting Debt of the Company necessary
to approve this Agreement and the transactions contemplated by this
Agreement (each outstanding Share being entitled to 1 vote and each
outstanding Convertible Preferred Share being entitled to 1.5 votes) (the
"Company Requisite Vote").
(ii) The Board of Directors of the Company has recommended
the Merger in accordance with Article Tenth of the Company Charter.
(iii) At least a majority of the Continuing Directors (as
defined in Article Fifteenth of the Company Charter) has approved the
Merger pursuant to the terms of this Agreement.
(l) Environmental Matters. Except as disclosed in the
Company Reports prior to the date hereof, except as disclosed in
Section 6.1(l) of the Company Disclosure Letter and except for such matters
that, alone or in the aggregate, will not have a Company Material Adverse
Effect, (i) the Company and its Subsidiaries have complied with all
applicable Environmental Laws; (ii) the properties presently or formerly
owned or operated by the Company or its Subsidiaries (including soil,
groundwater or surface features and buildings or structures thereon) (the
"Properties") do not contain any Hazardous Substances (as defined below)
other than as permitted under applicable Environmental Law, do not, and
have not, contained any underground storage tanks; (iii) neither the
Company nor any of its Subsidiaries has received any claims, notices,
demand letters or requests for information alleging that the Company may be
in violation of, or liable under, any Environmental Law and none of the
Company, its Subsidiaries or the Properties are subject to any agreement,
order or
22
decree involving liability under any Environmental Law; (iv) no Hazardous
Substance has been disposed of or released on any of the Properties; (v)
the Company and Subsidiaries are not subject to liability for any off-site
disposal or contamination; and (vi) there are no other circumstances
involving the Company or its Subsidiaries that could be expected to result
in any claims, liability, costs or losses or any restrictions on the
ownership, use, or transfer of any Property pursuant to any Environmental
Law.
"Environmental Law" means any law, regulation, order, decree,
opinion or agency requirement relating to pollution, contamination, wastes,
hazardous materials or the protection of the environment, human health or
safety and "Hazardous Substance" means any waste, mixture or matter
containing any substance that is listed, classified under or regulated by
any government authority pursuant to any Environmental Law including any
petroleum compounds, asbestos, lead and polychlorinated biphenyls.
(m) Taxes. Except for such matters that would not be
reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect, (a) the Company and its Subsidiaries have timely
filed all Tax Returns required to be filed by them with any taxing
authority with respect to Taxes for all periods heretofore ended, taking
into account any extension of time to file granted to or obtained on behalf
of the Company and its Subsidiaries, (b) all Taxes required to be paid with
respect to the periods covered by such Tax Returns or reports that are due
prior to the Effective Time have been paid or will be paid by the Effective
Time, (c) as of the date hereof, no deficiency for any amount of Tax has
been asserted or assessed by a taxing authority against the Company or any
of its Subsidiaries, except for amounts for which the Company has made an
adequate reserve as reflected in the Company Reports, (d) all liability for
Taxes of the Company or any of its Subsidiaries that are or will become due
or payable with respect to periods covered by the financial statements
referred to in Section 6.1(e) have been paid or adequately reserved for on
such financial statements to the extent required by GAAP, and (e) the
Company and its Subsidiaries are not liable for any Taxes arising out of
membership or participation in any consolidated, affiliated, combined or
unitary group in which it or any of its Subsidiaries was at any time a
member, other than such group the parent of which is the Company.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes", and "Taxable") includes all
federal, state, local and foreign
23
income, profits, franchise, gross receipts, environmental, customs duty,
capital stock, severances, stamp, payroll, sales, employment, unemployment,
disability, use, property, withholding, excise, production, value added,
occupancy and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to
such amounts and any interest in respect of such penalties and additions,
and (ii) the term "Tax Return" (including, with correlative meaning, the
term "Tax Returns") includes all returns and reports (including elections,
declarations, disclosures, schedules, estimates and information returns)
required to be supplied to a Tax authority relating to Taxes.
(n) Labor Matters. Except as set forth in Section 6.1(n)
of the Company Disclosure Letter and with such exceptions as would not have
a Material Adverse Effect, neither the Company nor any of its Subsidiaries
is a party to or otherwise bound by any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization, nor is the Company or any of its Subsidiaries the subject of
any proceeding asserting that the Company or any of its Subsidiaries has
committed an unfair labor practice or is seeking to compel it to bargain
with any labor union or labor organization nor is there, nor has there been
for the past five years, any labor strike, dispute, walkout, work stoppage,
slow-down, lockout or other such controversy involving the Company or any
of its Subsidiaries pending or threatened.
(o) Information. None of the Amended Schedule 14D-9, the
Proxy Statement (as defined in Section 7.4 hereof) or any other document
filed or to be filed by or on behalf of the Company with the Commission or
any other governmental entity in connection with the transactions
contemplated by this Agreement contained when filed or will, at the
respective times filed with the Commission or other governmental entity
and, in addition, in the case of the Proxy Statement at the date it or any
amendment or supplement is mailed to stockholders of the Company and at the
time of any Special Meeting (as defined in Section 7.3), contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading; provided that the foregoing shall not apply to information
supplied by Praxair or the Purchaser specifically for inclusion or
incorporation by reference in any such document. The Amended Schedule 14D-
9 and the Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and
24
regulations thereunder. None of the information supplied by the Company
specifically for inclusion or incorporation by reference in the Amended
Offer Documents or in any other document filed or to be filed by or on
behalf of Praxair or the Purchaser with the Commission or any other
Governmental Entity in connection with the transactions contemplated by
this Agreement contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
(p) Brokers and Finders. Neither the Company nor any of
its officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders fees
in connection with the Merger or the other transactions contemplated in
this Agreement except that the Company has employed ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇ Bros. as its financial advisors, the arrangements with which have
been disclosed to Praxair prior to the date hereof.
6.2. Representations and Warranties of Praxair and
Purchaser. Praxair and Purchaser represent and warrant to the Company as
follows:
(a) Organization. Each of Praxair and Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware and each of Praxair and Purchaser has all requisite
corporate or similar power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted.
(b) Authority. Each of Praxair and Purchaser has full
requisite corporate power and authority and has taken all corporate action
necessary to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by the Board of Directors of
each of Praxair and Purchaser and by Praxair as the sole stockholder of
Purchaser and no other corporate proceedings are necessary to authorize
this Agreement or the consummation of the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by each of
Praxair and Purchaser and, assuming this Agreement constitutes a legal,
valid and binding agreement of the Company, it constitutes a legal, valid
and binding agreement of each of
25
Praxair and Purchaser, enforceable against them in accordance with its
terms.
(c) Governmental Filings; No Violations. (i) Other than
the Regulatory Filings no filing or registration with, notification to, or
authorization, consent or approval of, any Governmental Entity is required
by Praxair or Purchaser in connection with the execution and delivery of
this Agreement, or the consummation by Praxair or Purchaser of the
transactions contemplated hereby except such other consents, orders,
authorizations, registrations, declarations and filings not obtained prior
to the Effective Time the failure of which to be obtained or made would
not, individually or in the aggregate, have a Praxair Material Adverse
Effect (as defined below).
(ii) The execution, delivery and performance of this Agreement
by each of Praxair and the Purchaser do not, and the consummation by the
Purchaser of the Merger pursuant to the terms of this Agreement and the
other transactions contemplated hereby will not, constitute or result in
(A) a breach or violation of, or a default under, their respective
certificates of incorporation or by-laws or the comparable governing
instruments of any of their Subsidiaries, (B) a breach or violation of, or
a default under, the vesting, creation or acceleration of any rights or
obligations or the creation of a lien, pledge, security interest or other
encumbrance on the assets of Praxair, the Purchaser or any of their
Subsidiaries (with or without notice, lapse of time or both) pursuant to
any provision of any agreement, lease, contract, note, mortgage, indenture,
arrangement or other domestic or foreign obligation ("Praxair Contracts")
of Praxair, the Purchaser or any of their Subsidiaries or any Law (as
defined in Section 6.1(i)) or governmental or non-governmental permit or
license to which Praxair, the Purchaser or any of their Subsidiaries is
subject or (C) any change in the rights or obligations of any party under
any of the Praxair Contracts, except, in the case of clause (B) or (C)
above, for any breach, violation, default, acceleration, creation or change
that, individually or in the aggregate, will not have a material adverse
effect on Praxair's or Purchaser's ability to perform their respective
obligations pursuant to this Agreement or consummate the Amended Offer and
the Merger (a "Praxair Material Adverse Effect") or for which Praxair or
Purchaser has received appropriate consents or waivers.
(d) Information. Neither the Amended Offer Documents nor
any other document filed or to be filed by or on behalf of Praxair or
Purchaser with the Commission or any other Governmental Entity in
connection with the
26
transactions contemplated by this Agreement contained when filed or will,
at the respective times filed with the Commission or other Governmental
Entity, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which
they were made, not misleading; provided, that, the foregoing shall not
apply to information supplied by the Company specifically for inclusion or
incorporation by reference in any such document. None of the information
supplied by Praxair or Purchaser specifically for inclusion or
incorporation by reference in the Amended Schedule 14D-9, the Proxy
Statement, or any other document filed or to be filed by or on behalf of
the Company with the Commission or any other governmental entity in
connection with the transactions contemplated by this Agreement contains
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
(e) Financing. Prior to the consummation of the Amended
Offer, Praxair will have caused Purchaser to have at the time of acceptance
for payment and purchase of Shares under the Amended Offer and at the
Effective Time, the funds necessary to consummate the Amended Offer and the
Merger and the transactions contemplated thereby and to pay related fees
and expenses.
ARTICLE VII
Covenants
7.1. Interim Operations. (a) The Company covenants and
agrees as to itself and its Subsidiaries that, after the date hereof and
prior to the date on which Purchaser's nominees comprise a majority of the
Board of Directors of the Company (unless Praxair shall otherwise approve
in writing and except as otherwise expressly contemplated by this
Agreement):
(i) the business of it and its Subsidiaries shall be
conducted in the ordinary and usual course and, to the extent consistent
therewith, it and its Subsidiaries shall use its reasonable best efforts to
preserve its business organization intact and maintain its existing rela-
tions and goodwill with customers, suppliers, distributors, creditors,
lessors, employees and business associates;
27
(ii) it shall not (A) sell or pledge any capital stock
owned by it in any of its Subsidiaries; (B) amend the Company Charter or
its by-laws or amend, modify or terminate the Rights Agreement; (C) split,
combine or reclassify its outstanding shares of capital stock; (D) declare,
set aside or pay any dividend payable in cash, stock or property in respect
of any Shares or Preferred Shares other than regular quarterly or semi-
annual cash dividends not in excess of $0.12 per Share and regular
quarterly or semi-annual cash dividends on the Preferred Shares; or
(E) repurchase, redeem or otherwise acquire, or permit any of its
Subsidiaries to purchase or otherwise acquire, any shares of its capital
stock or any securities convertible into or exchangeable or exercisable for
any shares of its capital stock except in connection with the ordinary
course of operations of the CBI Salaried Employee Stock Ownership Plan
(1987);
(iii) neither it nor any of its Subsidiaries shall except as
disclosed in Section 7.1(a) of the Company Disclosure Letter (A) issue,
sell, pledge, dispose of or encumber, or authorize or propose the issuance,
sale, pledge, disposition or encumbrance of, any shares of, or securities
convertible into or exchangeable or exercisable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of its
capital stock of any class or any Voting Debt or any other property or
assets (other than Shares issuable pursuant to options outstanding on the
date hereof under the Stock Plan or upon conversion of Convertible
Preferred Shares; (B) other than in the ordinary and usual course of busi-
ness, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose
of any other property or assets or encumber any property or assets
(including capital stock of any of its Subsidiaries) or incur or modify any
material indebtedness or other liability; or (C) make any commitments for,
make or authorize any capital expenditures other than existing capital
expenditures required to be made pursuant to existing capital projects, as
set forth in Section 7.1(a)(iii) of the Company Disclosure Letter, which
have been previously authorized or, by any means, make any acquisition of,
or investment in, assets or stock of any other Person or entity;
(iv) except as disclosed in Section 7.1(a) of the Company
Disclosure Letter, neither it nor any of its Subsidiaries shall terminate,
establish, adopt, enter into, make any new grants or awards under, amend or
otherwise modify, any Compensation and Benefit Plans or increase the
salary, wage, bonus or other compensation of any employees other than
increases in compensation in the ordinary course
28
of business, in each case, consistent with past practices with regard to
frequency and amount;
(v) neither it nor any of its Subsidiaries shall settle or
compromise any material claims or litigation or, except in the ordinary and
usual course of business modify, amend or terminate any of its material
Contracts or waive, release or assign any material rights or claims;
(vi) neither it nor any of its Subsidiaries shall make any
Tax election or permit any insurance policy naming it as a beneficiary or
loss-payable payee to be cancelled or terminated except in the ordinary and
usual course of business; and
(vii) neither it nor any of its Subsidiaries will authorize
or enter into an agreement to do any of the foregoing.
(b) Other Actions. The Company shall not, and shall not
permit any of its Subsidiaries to, take any action that would, or that
could reasonably be expected to, result in (i) any of the representations
and warranties of the Company set forth in this Agreement that are
qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in
any material respect or (iii) any of the conditions to the Merger set forth
in Article VIII not being satisfied.
7.2. Acquisition Proposals. The Company agrees that
neither it nor any of its Subsidiaries nor any of the officers and
directors of it or its Subsidiaries shall, and that it shall direct and use
its best efforts to cause its and its Subsidiaries' employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the
making of any proposal or offer with respect to a merger, reorganization,
consolidation or similar transaction involving, or any purchase of all or
any significant portion of the assets or any equity securities of (any such
proposal or offer being hereinafter referred to as an "Acquisition
Proposal"), it or any of its Subsidiaries (it being understood and agreed
that any action permitted under the exception in the next sentence shall
not be deemed a prohibited initiation, solicitation, encouragement or
facilitation hereunder). The Company further agrees that neither it nor
any of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall direct and use its
29
best efforts to cause its and its Subsidiaries' employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly,
except to the extent legally required for the discharge by the Board of its
fiduciary duties as advised by outside counsel, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any Person relating to an Acquisition Proposal with
respect to it or any of its Subsidiaries, or otherwise facilitate any
effort or attempt to make or implement an Acquisition Proposal with respect
to it or any of its Subsidiaries or any of their businesses. The Company
agrees that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing it being understood however
that resumption of any such activities, discussions or negotiations shall
not violate this provision to the extent legally required for the discharge
by the Board of its fiduciary duties, as advised by outside counsel. The
Company agrees that it will use its reasonable best efforts to promptly
inform the individuals or entities referred to in the first sentence of
this Section 7.2 of the obligations undertaken in this Section 7.2. The
Company agrees that it will notify Praxair immediately if (i) any such
inquiries, proposals or offers are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with it or its Subsidiaries or (ii) the Company
determines that it is legally required for the discharge by the Board of
its fiduciary duties as advised by outside counsel to deliver such
information or to enter into such negotiations or discussions. The Company
also agrees that it will promptly request each Person that has heretofore
executed any confidentiality agreement in connection with the consideration
of an Acquisition Proposal with respect to the Company or any of its
Subsidiaries or any of their businesses to return all confidential
information heretofore furnished to such Person by or on behalf of it or
any of its Subsidiaries.
7.3. Stockholders Meeting. The Company, acting through the
Board, will take, in accordance with applicable law, the Company Charter
and the Company's by-laws, all action necessary to duly call, give notice
of, convene and hold a special meeting of stockholders (the "Special
Meeting") as soon as practicable after the purchase of Shares by Purchaser
pursuant to the Amended Offer for the purpose of considering and taking
action upon the Merger and this Agreement and such other matters as may be
necessary to consummate the transactions contemplated by this Agreement.
30
Subject to the fiduciary obligations of the Board under applicable law as
advised by outside counsel, the Board shall recommend approval of the
Merger and the adoption of this Agreement. At any meeting of the Company's
stockholders, Praxair will cause the Shares acquired in the Amended Offer,
and any additional Shares owned by it or its affiliates, to be voted in
favor of this Agreement and the Merger.
7.4. Filings; Other Actions; Notification. (a) The
Company, acting through its Board, in consultation with Praxair, shall (i)
prepare and, following consummation of the Amended Offer, file with the
Commission a preliminary proxy statement (or, if applicable, a preliminary
information statement) relating to the matters to be considered at the
Special Meeting pursuant to this Agreement and use its reasonable best
efforts (x) to obtain and furnish the information required to be included
in the Proxy Statement (as hereinafter defined) and, after consultation
with Praxair, to respond promptly to any comments made by the Commission
with respect to the preliminary proxy statement (or, if applicable, a
preliminary information statement) and to cause a definitive proxy
statement (or, if applicable, a definitive information statement) (the
"Proxy Statement") to be mailed to its stockholders and (y) subject to the
fiduciary obligations of the Board of Directors of the Company under
applicable law as advised by outside counsel, to obtain the necessary
approvals of the Merger, this Agreement and such other matters as may be
necessary to consummate the transactions contemplated hereby by its
stockholders; and
(ii) subject to the fiduciary obligations of the Board
under applicable law as advised by outside counsel, include in the Proxy
Statement the recommendation of the Board that stockholders of the Company
vote in favor of the approval of the Merger and the adoption of this
Agreement.
(b) The Company and Praxair each shall cooperate with each
other and use (and cause their respective Subsidiaries to use) their
respective best efforts to prepare and file as promptly as practicable all
documentation to effect all necessary applications, notices, petitions,
filings and other documents and to obtain as promptly as practicable all
permits, consents, approvals and authorizations necessary or advisable to
be obtained from any third party and/or any Governmental Entity in
connection with the Merger and to consummate the other transactions
contemplated by this Agreement. Subject to applicable laws relating to the
exchange of information, Praxair and the Company shall have the right to
review in advance, and to
31
the extent practicable each will consult the other on, all the information
relating to Praxair or the Company, as the case may be, and any of their
respective Subsidiaries, that appear in any filing made with, or written
materials submitted to, any third party and/or any Governmental Entity in
connection with the Merger and the other transactions contemplated by this
Agreement. In exercising the foregoing right, each of the Company and
Praxair shall act reasonably and as promptly as practicable.
(c) The Company and Praxair each shall, upon request by
the other and subject to applicable laws relating to the exchange of
information, furnish the other with all information concerning itself, its
Subsidiaries, directors, officers and stockholders and such other matters
as may be reasonably necessary or advisable in connection with the Proxy
Statement or any other statement, filing, notice or application made by or
on behalf of Praxair, the Company or any of their respective Subsidiaries
to any third party and/or any Governmental Entity in connection with the
Merger and the transactions contemplated by this Agreement. Praxair agrees
that confidential information obtained by it pursuant hereto or pursuant to
the Confidentiality Agreement dated December 5, 1995 has been and shall be
treated in accordance with the provisions of such Confidentiality
Agreement.
(d) The Company and Praxair each shall keep the other
apprised of the status of matters relating to completion of the
transactions contemplated hereby, including promptly furnishing the other
with copies of notice or other communications received by Praxair or the
Company, as the case may be, or any of its Subsidiaries, from any third
party and/or any Governmental Entity with respect to the Merger and the
other transactions contemplated by this Agreement. The Company and Praxair
each shall give prompt notice to the other of any change that is reasonably
likely to result in a Company Material Adverse Effect or Praxair Material
Adverse Effect, respectively.
(e) Without limiting the generality of the undertakings
pursuant to this Section 7.4, the Company and Praxair each agree to take or
cause to be taken the following actions: (i) provide promptly to any and
all federal, state, local or foreign court or Government Entity with
jurisdiction over enforcement of any applicable antitrust laws ("Government
Antitrust Entity") information and documents requested by such Government
Antitrust Entity or necessary, proper or advisable to permit consummation
of the Merger and the transactions contemplated by this Agreement and (ii)
take promptly, in the event that any
32
permanent or preliminary injunction or temporary restraining order, hold
separate order or other order is entered or sought in any proceeding that
would make consummation of the Merger or the Amended Offer in accordance
with the terms of this Agreement unlawful or that would prevent or delay
consummation of the Merger or the other transactions contemplated by this
Agreement, any and all steps (including the appeal thereof or the posting
of a bond and including the making of any divestiture; provided, that, the
making of any such divestitures with respect to assets in the United States
does not relate to assets generating more than $200,000,000 in revenues per
annum in the aggregate) necessary to vacate, modify or suspend or avoid
such injunction or order so as to permit such consummation of the Amended
Offer no later than the 60th business day after the date of the Amended
Offer.
7.5. Access. Upon reasonable notice, and except as may
otherwise be required by applicable law, the Company shall (and shall cause
its Subsidiaries to) afford Praxair's officers, employees, counsel,
accountants and other authorized representatives ("Representatives")
access, during normal business hours throughout the period prior to the
Effective Time, to its properties, books, contracts and records and, during
such period, shall (and shall cause its Subsidiaries to) furnish promptly
to the other all information concerning its business, properties and
personnel as may reasonably be requested; provided that, no investigation
pursuant to this Section 7.5 shall affect or be deemed to modify any repre-
sentation or warranty made by the Company, Praxair or Purchaser; and
provided, further, that, the foregoing shall not require the Company to
permit any inspection, or to disclose any information, that in the
reasonable judgment of the Company would result in the disclosure of any
trade secrets of third parties or violate any of its obligations with
respect to confidentiality if the Company shall have used reasonable best
efforts to obtain the consent of such third party to such inspection or
disclosure and provided, further, that Praxair shall use its reasonable
best efforts to promptly notify the Company if it discovers any information
that might indicate that any representation or warranty by the Company is
incorrect, incomplete or otherwise deficient. All requests for information
made pursuant to this Section 7.5 shall be directed to an executive officer
of the Company or such Person as may be designated by its officers.
7.6. Publicity. The initial press release shall be a joint
press release and thereafter the Company and Praxair each shall use
reasonable best efforts to consult with each other prior to issuing any
press releases or
33
otherwise making public announcements with respect to the Merger and the
other transactions contemplated by this Agreement and prior to making any
filings with any third party and/or any Governmental Entity (including any
national securities exchange) with respect thereto.
7.7. Benefits.
(a) Stock Options. The Company shall take all actions
necessary to provide that, immediately prior to the consummation of the
Amended Offer, each Company Option which is not then exercisable will be
exercisable in full and each Company Option (and each related stock
appreciation right) outstanding prior to the Effective Time pursuant to any
of the Stock Plans, whether or not then exercisable, shall be canceled and
only entitle the holder thereof, upon surrender thereof, to receive an
amount in cash equal to the difference between the Merger Consideration and
the exercise price per Share of such Company Option multiplied by the
number of Shares previously subject to such Company Option (such payment to
be net of applicable withholding taxes).
(b) Except as set forth in Section 7.7(b) of the Company
Disclosure Letter and except as provided herein or as otherwise agreed to
by the parties and to the extent permitted by the Stock Plans, (i) the
Stock Plans shall terminate immediately following the purchase of Shares
pursuant to the Amended Offer and the provisions in any other plan, program
or arrangement, providing for the issuance or grant of any other interest
in respect of the capital stock of the Company or any of its Subsidiaries
shall be deleted as of the Effective Time and (ii) the Company shall use
all reasonable efforts to ensure that following the Effective Time no
holder of Company Options or any participant in the Stock Plans or any
other plans, programs or arrangements shall have any right thereunder to
acquire any equity securities of the Company, the Surviving Corporation or
any subsidiary thereof.
(c) Employee Benefits. Praxair agrees that, during the
period commencing on consummation of the Amended Offer and ending on the
first anniversary thereof, the employees of the Company and its
Subsidiaries and former employees of the Company and its Subsidiaries,
other than employees covered by collective bargaining agreements, will
continue to be provided with benefits under employee benefit plans with a
value which is not less in the aggregate than that currently provided by
the Company and its Subsidiaries to such employees. In so providing any
such benefits or plans, for purposes of participation and vesting Purchaser
and Praxair agree to give employees of the Company and its
34
Subsidiaries service credit for all periods of employment with any such
entity prior to the Effective Time for purposes of any such plans or
benefits so provided. Praxair will, and will cause the Surviving
Corporation to, honor all employee (or former employee) benefit obligations
and contractual rights existing as of the Effective Time and, to the extent
set forth in the Company Reports or otherwise specifically disclosed in the
Company Disclosure Letter, all employment or severance agreements, plans or
policies of the Company and its Subsidiaries in accordance with their
terms. Purchaser acknowledge and agree that consummation of the Amended
Offer constitutes a "Change in Control" with respect to those persons
listed, and pursuant to the agreements and plans set forth in,
Section 7.7(c) of the Company Disclosure Letter.
7.8. Expenses. The Surviving Corporation shall pay all
charges and expenses, including those of the Paying Agent, in connection
with the transactions contemplated in Article V, and Praxair shall
reimburse the Surviving Corporation for such charges and expenses. Whether
or not the Merger is consummated, all costs and expenses incurred in con-
nection with this Agreement and the Merger and the other transactions
contemplated by this Agreement shall be paid by the party incurring such
expense, except as may be permitted by Section 9.5 hereof and except that
expenses incurred in connection with printing and mailing the Proxy
Statement shall be shared equally by Praxair and the Company.
7.9. Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, Praxair agrees that it will
indemnify and hold harmless each present and former director, officer and
employee of the Company, determined as of the Effective Time (the "Indemni-
fied Parties"), against any costs or expenses (including reasonable attor-
neys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative
or investigative, arising out of matters existing or occurring at or prior
to the Effective Time, whether asserted or claimed prior to, at or after
the Effective Time, to the fullest extent that the Company would have been
permitted under Delaware law and the Company Charter or the Company's by-
laws in effect on the date hereof to indemnify such Person (and Praxair
shall also advance expenses as incurred to the fullest extent permitted
under applicable law; provided, that, the Person to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such Person is not entitled to indemnification); and
provided, further, that, any
35
determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under Delaware law
and the Company Charter and the Company's by-laws shall be made by counsel
selected by the Surviving Corporation. Purchaser agrees that all rights to
indemnification in favor of any present or former employee, agent, director
or officer of the Company and its subsidiaries (the "Indemnified Parties")
as provided in their respective charters or by-laws, in an agreement
between an Indemnified Party and the Company or any of its subsidiaries, or
otherwise in effect on the date hereof shall survive the Merger and shall
continue in full force and effect for a period of not less than five years
from the Effective Time; provided that in the event any claim or claims are
asserted or made within such five-year period, all rights to
indemnification in respect of any such claim or claims shall continue until
final disposition of any and all such claims.
(b) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 7.9, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Praxair
thereof. An Indemnified Party may select counsel to represent him or her
in connection with any of the foregoing, which counsel shall be reasonably
acceptable to Purchaser, and Purchaser and the Company will cooperate in
the defense of any such matter; provided, however, that neither Purchaser
nor the Company shall be liable for any settlement effected without its
written consent and provided, further, that neither Purchaser nor the
Company shall be obligated to pay the fees and disbursements of more than
one counsel for all Indemnified Parties in any single matter except to the
extent that, in the opinion of counsel for the Indemnified Parties, two or
more of such Indemnified Parties have conflicting interests in the outcome
of such matter. Praxair shall not have any obligation hereunder to any
Indemnified Party if and when a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final, that
the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law.
(c) Praxair agrees that it shall use all reasonable
efforts to maintain the Company's existing officers, and directors,
liability insurance policy and employee benefit plan fiduciary liability
insurance ("D&0 Insurance") for a period of not less than five years from
and after the Effective Time; provided, (i) that Praxair may substitute
therefor policies of substantially similar coverage and amounts containing
terms no less advantageous
36
to the Indemnified Parties and (ii) if the existing D&O Insurance expires
or is canceled during such period, Praxair will use reasonable efforts to
obtain substantially similar D&O Insurance to the extent available;
provided, further, that, notwithstanding clauses (i) and (ii) of this
subsection 7.9(c), in the event that the aggregate annual premiums for D&O
Insurance at any time during such five year period shall exceed 175% of the
per annum rate of premium currently paid (the "Base Rate") by Company and
its Subsidiaries for such D&O Insurance on the date of this Agreement, then
Praxair shall only be obligated to provide the maximum coverage that shall
then be available at an annual premium equal to 175% of the Base Rate.
(d) If the Surviving Corporation or any of its successors
or assigns (i) shall consolidate with or merge into any other corporation
or entity and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual,
corporation or other entity, then and in each such case, proper provisions
shall be made so that the successors and assigns of the Surviving
Corporation shall assume all of the obligations set forth in the last two
sentences of Section 7.7(c) and this Section 7.9.
(e) The provisions of this Section 7.9 are intended to be
for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives.
7.10. Other Actions by the Company and Praxair.
(a) Rights. The Company, acting through its Board, shall
take all necessary action (and shall notify Praxair of any such actions
taken) prior to the Expiration Date including, without limitation,
supplementing or amending the Rights Agreement to ensure that, so long as
this Agreement has not been terminated, the Amended Offer is a "Permitted
Tender Offer" (as defined in the Rights Agreement), (it being understood
that the Company shall amend the definition of "Permitted Tender Offer" in
the Rights Agreement), no "Distribution Date" (as defined in the Rights
Agreement) will occur and Section 11.1(b) of the Rights Agreement will not
be triggered, in each case as a result of the announcement, commencement or
consummation of the Amended Offer or the execution or delivery of this
Agreement with the effect that none of such events will trigger the
exercisability of the Rights or the separation of the Rights from the
certificates to which they are attached. So long as this Agreement has not
been
37
terminated, the Board shall also take all further action (in addition to
that referred to above) requested in writing by Praxair or Purchaser
(including redeeming the Rights immediately prior to the Effective Time or
amending the Rights Agreement) in order to render the Rights inapplicable
to the Merger and the other transactions contemplated by this Agreement.
Except as provided above with respect to the Merger and the other
transactions by Praxair or Purchaser, the Board shall not (i) amend the
Rights Agreement or (ii) take any action with respect to, or make any
determination under, the Rights Agreement, including a redemption of the
Rights or any action to facilitate an Acquisition Proposal, provided,
however, that nothing herein shall be deemed to preclude the Company from
taking any action with respect to the Rights Agreement (including any
modification or amendment thereto or waiver thereof) as it applies to any
third party other than Praxair and the Purchaser to the extent required for
the Board of Directors of the Company to comply with its fiduciary
obligations under applicable law, as advised in writing by outside counsel
to the Company. The Company will promptly furnish to Praxair and Purchaser
a complete and correct copy of the Rights Agreement, as so amended.
(b) Takeover Statute. If any Takeover Statute is or may
become applicable to the Initial Offer, the Amended Offer, the Merger or
any other transaction contemplated by this Agreement, the Company and the
Board shall grant such approvals and take such actions as are necessary so
that such transactions may be consummated as promptly as practicable on the
terms contemplated by this Agreement or by the Merger and otherwise act to
eliminate or minimize the effects of such statute or regulation on such
transactions.
(c) Termination of Litigation. The parties hereto shall
immediately dismiss, with each party bearing its own costs and litigation
expenses, all proceedings pending between themselves and their affiliates
and each shall thereafter sign and deliver such further papers as may be
necessary in connection with such dismissals.
7.11. Notification of Certain Matters. Each of Praxair and
the Company shall give prompt notice to the other party of (i) the
occurrence, or non-occurrence, of any event the occurrence, or non-
occurrence, of which would be likely to cause either (A) any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the acceptance for
payment of Shares pursuant to the Amended Offer, (B) any condition set
forth in Annex A to be
38
unsatisfied in any material respect at any time from the date hereof to the
date the Purchaser purchases Shares pursuant to the Amended Offer or (C)
any condition set forth in Article VIII hereof to be unsatisfied in any
material respect at any time from the date hereof to the Effective Time,
and (ii) any material failure of Praxair or the Company, as the case may
be, or any officer, director, employee or agent thereof, to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 7.11 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
ARTICLE VIII
Conditions
8.1. Conditions to Obligations of Praxair and Purchaser.
The respective obligations of Praxair and Purchaser to consummate the
Merger are subject to the fulfillment of each of the following conditions,
any or all of which may be waived in whole or in part by Praxair or
Purchaser, as the case may be, to the extent permitted by applicable law:
(a) Stockholder Approval. This Agreement shall have been
duly approved by Company Requisite Vote, in accordance with applicable law,
the Company Charter and the by-laws of the Company;
(b) Purchase of Shares. Purchaser (or one of the Praxair
Companies) shall have purchased Shares pursuant to the Amended Offer;
(c) Governmental Consents. The waiting period applicable
to the consummation of the Merger under the HSR Act shall have expired or
been terminated;
(d) Litigation. No United States or state court or other
Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, judgment,
decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and prohibits consummation of the trans-
actions contemplated by this Agreement (collectively, an "Order");
39
(e) Other Obligations. The Company shall have fulfilled
its obligations under Sections 7.7(a) and (b) and Section 7.10 hereof.
8.2. Conditions to Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
fulfillment of each of the following conditions, any or all of which may be
waived in whole or in part by the Company to the extent permitted by
applicable law:
(a) Stockholder Approval. This Agreement shall have been
duly approved by the Company Requisite Vote, in accordance with applicable
law, the Company Charter and the by-laws of the Company;
(b) Purchase of Shares. Purchaser (or one of the Praxair
Companies) shall have purchased Shares pursuant to the Amended Offer;
(c) Governmental Consents. The waiting period applicable
to the consummation of the Merger under the HSR Act shall have expired or
been terminated; and
(d) Order. There shall be in effect no Order.
ARTICLE IX
Termination
9.1. Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, before or after the approval by stockholders of the Company
referred to in Sections 8.1(a) and 8.2(a) hereof, by the mutual consent of
Praxair and the Company, by action of their respective Boards of Directors.
9.2. Termination by Either Praxair or the Company. This
Agreement may be terminated and the Merger may be abandoned by action of
the Board of Directors of either Praxair or the Company if (i) Purchaser
shall have terminated the Amended Offer without purchasing any Shares
pursuant thereto; provided, that, in the case of termination of this
Agreement by Praxair, such termination of the Amended Offer is not in
violation of the terms of the Amended Offer or this Agreement or (ii) a
majority of the outstanding Shares shall not have been purchased pursuant
to the Amended Offer within 60 business days of the date thereof; provided,
further, that the right to terminate this Agreement pursuant to this
Section 9.2 will not be available
40
to any party who at such time is in material breach of its obligations
under this Agreement.
9.3. Termination by Praxair. So long as Praxair is not in
material breach of any of its obligation hereunder, this Agreement may be
terminated and the Merger may be abandoned at any time prior to the
purchase of a majority of the outstanding Shares pursuant to the Amended
Offer, before or after the approval by stockholders of the Company referred
to in Sections 8.1(a) and 8.2(a) hereof, by action of the Board of Di-
rectors of Praxair, if (x) the representations and warranties of the
Company set forth in the Agreement shall not be true and correct in any
respect as of the Expiration Date as though made on or as of such date or
the Company shall have breached or failed in any material respect to
perform or comply with any material obligation, agreement or covenant
required by this Agreement to be performed or complied with by it except,
in each case, (i) for changes specifically permitted by this Agreement and
(ii) (A) those representations and warranties that address matters only as
of a particular date which are true and correct as of such date or (B)
where the failure of representations and warranties (without regard to
materiality qualifications therein contained) to be true and correct, or
the performance or compliance with such obligations, agreements or
covenants, do not, individually or in the aggregate, have a Company
Material Adverse Effect; or (y) the Board shall have withdrawn or modified
in a manner adverse to Praxair or Purchaser its approval or recommendation
of the Amended Offer, this Agreement or the Merger or the Board, upon
request by Praxair, shall fail to reaffirm such approval or recommendation
within 2 business days of such request, or shall have resolved to do any of
the foregoing.
9.4. Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, before or after the approval by stockholders of the Company
referred to in Sections 8.1(a) and 8.2(a) hereof by action of the Board if
(i) Praxair or Purchaser shall have failed to comply in any material
respect with any of the covenants or agreements contained in this Agreement
to be complied with or performed by Praxair or Purchaser at or prior to
such date of termination, or any representation or warranty made by Praxair
in this Agreement shall be untrue or incorrect in any material respect,
(ii) Praxair or Purchaser shall have failed to amend the Initial Offer
within the time required in Section 1.1 or (iii) the Company receives an
Acquisition Proposal on terms the Board (after consultation with its
financial advisors) determines to be more favorable to the
41
Company's stockholders than the terms of the Amended Offer and the Merger,
and the Board determines, as advised by outside counsel, that it is legally
required for the discharge of its fiduciary duties, (A) not to continue to
recommend that holders of Shares accept the Amended Offer and tender their
Shares pursuant to the Amended Offer, and (B) to accept such Acquisition
Proposal; provided, however, that the Company shall not be permitted to
terminate this Agreement pursuant to this Section 9.4(iii) unless it has
provided Praxair and Purchaser with two business days prior written notice
of this intent to so terminate this Agreement together with a detailed
summary of the terms and conditions (including proposed financing, if any)
of such Acquisition Proposal; provided, further, that Purchaser shall
receive the fee set forth in Section 9.5(b) immediately prior to any
termination pursuant to this Section 9.4(iii) by wire transfer in same day
funds.
9.5. Effect of Termination and Abandonment. (a) In the
event of termination of this Agreement and abandonment of the Merger
pursuant to this Article IX, no party hereto (or any of its directors or
officers) shall have any liability or further obligation to any other party
to this Agreement, except as provided in Section 9.5(b) below and Section
10.2 and except that nothing herein will relieve any party from liability
for any breach of this Agreement. Nothing herein shall limit the ability
of the Company upon termination of this Agreement in accordance with its
terms to make the Rights (or any similar rights issued under any new rights
agreement entered into by the Company) applicable to any proposal or offer
made by Praxair or any affiliate thereof.
(b) If (x) (i) the Amended Offer shall have remained open for a
minimum of at least 10 business days, (ii) after the date hereof any
corporation, partnership, person, other entity or group (as defined in
Section 13(d)(3) of the Exchange Act) other than Praxair or Purchaser or
any of their respective subsidiaries or affiliates (collectively, an
"Acquiring Person") shall have become the beneficial owner of 10% or more
of the outstanding Shares, and (iii) the Minimum Tender Condition (as
defined in Annex A) shall not have been satisfied and the Amended Offer is
terminated in accordance with this Agreement without the purchase of any
Shares thereunder, (y) Praxair shall have terminated this Agreement
pursuant to Section 9.3(y) hereof or (z) the Company shall have terminated
this Agreement pursuant to Section 9.4(iii) hereof, then the Company, if
requested by Praxair, shall promptly, but in no event later than two days
after the date of such request, pay Praxair a fee of $43,500,000 which
42
amount shall be payable in same day funds. The Company acknowledges that
the agreements contained in this Section 9.5(b) are an integral part of the
transactions contemplated in this Agreement, and that, without these
agreements, Praxair and Purchaser would not enter into this Agreement;
accordingly, if the Company fails to promptly pay the amount due pursuant
to this Section 9.5(b), and, in order to obtain such payment, Praxair or
Purchaser commences a suit which results in a judgment against the Company
for the fee set forth in this paragraph (b), the Company shall pay to
Praxair or Purchaser its costs and expenses (including attorneys' fees) in
connection with such suit, together with interest on the amount of the fee
at the prime rate of ▇▇▇▇▇▇ Guaranty Trust Company of New York on the date
such payment was required to be made.
ARTICLE X
Miscellaneous and General
10.1. Survival. This Article X and the agreements of the
Company, Praxair and Purchaser contained in Sections 5.2 (but only to the
extent that such Section relates to actions to be taken after the Effective
Time), 5.3, 5.4, 7.7 and 7.9 shall survive the consummation of the Merger.
This Article X and the agreements of the Company, Praxair and Purchaser
contained in the last two sentences of Section 7.7(c), Section 7.8 and
Section 9.5 shall survive the termination of this Agreement. All other
representations, warranties, agreements and covenants in this Agreement
shall not survive the consummation of the Merger or the termination of this
Agreement.
10.2. Modification or Amendment. Subject to the provisions
of applicable law and Section 1.3 hereof, at any time prior to the
Effective Time, the parties hereto may modify or amend this Agreement, by
written agreement executed and delivered by duly authorized officers of the
respective parties.
10.3. Waiver of Conditions. The conditions to each of the
parties' obligations to consummate the Merger are for the sole benefit of
such party and may be waived by such party in whole or in part to the
extent permitted by applicable law.
10.4. Counterparts. This Agreement may be executed in any
number of counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts shall together constitute
the same agreement.
43
10.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL
BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF
THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF. The parties hereby irrevocably submit to the jurisdiction of the
courts of the State of Delaware and the Federal courts of the United States
of America located in the State of Delaware solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of
the documents referred to in this Agreement, and in respect of the
transactions contemplated hereby, and hereby waive, and agree not to
assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is
not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this Agreement or any such document may not be
enforced in or by such courts, and the parties hereto irrevocably agree
that all claims with respect to such action or proceeding shall be heard
and determined in such a Delaware State or Federal court. The parties
hereby consent to and grant any such court jurisdiction over the Person of
such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 10.6 or in such other manner
as may be permitted by law, shall be valid and sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH
SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.5.
44
10.6. Notices. Any notice, request, instruction or other
document to be given hereunder by any party to the others shall be in
writing and delivered personally or sent by registered or certified mail,
postage prepaid:
if to Praxair or Purchaser
Praxair, Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
if to the Company
CBI Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other persons or addresses as may be designated in writing by
the party to receive such notice.
10.7. Entire Agreement. This Agreement (including any
exhibits hereto), the Company Disclosure Letter and the Praxair Disclosure
Letter constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties both written and
oral, among the parties, with respect to the subject matter hereof.
10.8. No Third Party Beneficiaries. Except as provided in
the last two sentences of Section 7.7(c) and in Section 7.9 hereof, this
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
10.9. Obligations of Praxair and of the Company. Whenever
this Agreement requires a Subsidiary of Praxair to
45
take any action, such requirement shall be deemed to include an undertaking
on the part of Praxair to cause such Subsidiary to take such action.
Whenever this Agreement requires a Subsidiary of the Company to take any
action, such requirement shall be deemed to include an undertaking on the
part of the Company to cause such Subsidiary to take such action and, after
the Effective Time, on the part of the Surviving Corporation to cause such
Subsidiary to take such action.
10.10. Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability or the other provisions
hereof. If any provision of this Agreement, or the application thereof to
any Person or any circumstance, is invalid or unenforceable, (a) a suitable
and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement
and the application of such provision to other Persons or circumstances
shall not be affected by such invalidity or unenforceability, nor shall
such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.
10.11. Interpretation. The table of contents and headings
herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of
the provisions hereof. Where a reference in this Agreement is made to a
Section or Exhibit, such reference shall be to a Section of or Exhibit to
this Agreement unless otherwise indicated. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation."
10.12. Assignment. This Agreement shall not be assignable by
operation of law or otherwise and is not intended to create any obligations
to, or rights in respect of, any persons other than the parties hereto;
provided, however, that Praxair may designate, by written notice to the
Company, another wholly-owned direct or indirect subsidiary to be a
Constituent Corporation in lieu of Purchaser, in the event of which, all
references herein to Purchaser shall be deemed references to such other
subsidiary except that all representations and warranties made herein with
respect to Purchaser as of the date of this Agreement shall be deemed
representations and warranties made with respect to such other subsidiary
as of the date of such designation.
46
10.13. Enforcement of the Agreement. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
10.14. Disclosure. The inclusion of any matter on the
Company Disclosure Letter does not constitute an admission by the Company
that any such matter is material. A disclosure of any item by the Company
in any section of the Company Disclosure Letter shall be deemed disclosure
of such item for all purposes of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the
date first written above.
CBI Industries, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
Praxair, Inc.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Chairman and CEO
PX Acquisition Corp.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
1
ANNEX A
Notwithstanding any other provision of the Initial Offer or the
Amended Offer and provided that Purchaser shall not be obligated to accept
for payment any Shares until expiration or termination of all applicable
waiting periods under the HSR Act and Investment Canada Act, Purchaser
shall not be required to accept for payment or pay for, or may delay the
acceptance for payment of or payment for, any tendered Shares, or subject
to the terms of the Merger Agreement may, in its sole discretion, terminate
or amend the Amended Offer as to any Shares not then paid for if:
(i) there is not tendered and not withdrawn prior to the Expiration
Date at least that number of Shares (the "Minimum Number of
Shares") that would represent a majority of all outstanding
Shares on a fully diluted basis on the date of purchase (the
"Minimum Tender Condition"). For purposes of the Amended
Offer, "on a fully diluted basis" means, as of any date, the
number of Shares outstanding together with Shares that the
Company is required to issue pursuant to obligations
outstanding at that date under convertible securities, stock
options or otherwise.
(ii) Purchaser is not, in its reasonable discretion, satisfied that
the Rights will not become exercisable upon consummation of the
Amended Offer;
(iii) Purchaser is not satisfied, in its reasonable discretion, that
after consummation of the Amended Offer, the restrictions
contained in Section 203 of the DGCL will not apply to the
Merger;
(iv) Purchaser is not satisfied, in its reasonable discretion, that
no supermajority vote will be required by Article Tenth or
Article Fifteenth of the Company Charter to approve the Merger
or that after consummation of the Amended Offer, Purchaser will
otherwise possess sufficient voting power to effect the Merger
without the affirmative vote of any person other than
Purchaser;
(v) On or after December 21, 1995 and at or before the time of
payment for any of such Shares any of the following shall
occur:
2
(a) there shall have occurred and be continuing (i) any
general suspension of, or limitation on prices for,
trading in securities on the NYSE or in the over-
the-counter market, (ii) a declaration of a banking
moratorium or any suspension of payments in respect
of banks in the United States, (iii) a commencement
or escalation of a war, armed hostilities or other
international or national calamity directly or
indirectly involving the United States (other than
the current action in Bosnia), (iv) any limitation
(whether or not mandatory) by any Governmental
Entity, on the extension of credit by banks or
other lending institutions, (v) any significant
adverse change in interest rates or major stock
indices in the United States or abroad, including,
without limitation, a decline of at least 15% in
either the Dow ▇▇▇▇▇ Average of Industrial Stocks
or the Standard & Poor's 500 index from that
existing at the close of business on December 21,
1995, (vi) a currency moratorium on or a suspension
of, the currency exchange markets in the United
States, or (vii) in the case of any of the
foregoing existing at the date hereof, a material
acceleration or worsening thereof;
(b) there shall be instituted or pending any action,
litigation, proceeding, investigation or other
application (hereinafter, an "Action") by any
Governmental Entity: (i) challenging the
acquisition by Praxair, Purchaser or any other
wholly-owned subsidiary of Praxair of Shares,
seeking to restrain or prohibit the consummation of
the transactions contemplated by the Agreement, the
Amended Offer or the Merger, seeking to obtain any
material damages or otherwise directly or
indirectly relating to the transactions con-
templated by the Agreement, the Amended Offer or
the Merger or other subsequent business com-
bination; (ii) seeking to prohibit, or impose any
3
material limitations on, Praxair's, Purchaser's or
any other wholly-owned subsidiary of Praxair's
ownership or operation of all or any portion of
their or the Company's business or assets
(including the business or assets of their
respective affiliates and subsidiaries), or to
compel Praxair or Purchaser to dispose of or hold
separate all or any portion of Praxair's or
Purchaser's or the Company's business or assets
(including the business or assets of their respec-
tive affiliates and subsidiaries) as a result of
the transactions contemplated by the Agreement, the
Amended Offer or the Merger or other subsequent
business combination; (iii) seeking to make the
acceptance for payment, purchase of, or payment
for, some or all of the Shares illegal or render
Purchaser unable to, or result in a delay in, or
restrict, the ability of Purchaser to accept for
payment, purchase or pay for some or all of the
Shares; (iv) seeking to impose material limitations
on the ability of Praxair or Purchaser effectively
to acquire or hold or to exercise full rights of
ownership of the Shares including, without
limitation, the right to vote the Shares purchased
by them on an equal basis with all other Shares on
all matters properly presented to the stockholders
of the Company; or (v) that, in any event, in the
reasonable judgment of Purchaser, is reasonably
likely to have a Company Material Adverse Effect
(other than litigation disclosed in the Company
Disclosure Letter);
(c) any statute, rule, regulation, order, judgment or
injunction shall be enacted or entered with respect
to the Amended Offer or the Merger, or any other
action shall have been taken by any court or other
Governmental Entity other than the application to
the Amended Offer or the Merger of waiting periods
under the HSR Act that, in the reasonable judgment
of Praxair or Purchaser, might, directly or
indirectly, reasonably be expected to
4
result in any of the effects of, or have any of the
consequences sought to be obtained or achieved in,
any Action referred to in clauses (i) through (v)
of paragraph (b) above;
(d) it shall have been publicly disclosed or Praxair
shall have learned that (i) any person, entity or
"group" (as defined in Section 13(d) of the
Exchange Act and the rules promulgated thereunder)
shall have become the beneficial owner (as defined
in Section 13(d) of the Exchange Act and the rules
promulgated thereunder) of more than ten percent of
the Shares (other than for bona fide arbitrage
purposes); or (ii) any person, entity or group
shall have entered into a definitive agreement or
an agreement in principle with the Company with
respect to the acquisition of more than 10% of the
Shares or a merger, consolidation or other business
combination with or involving the Company;
(e) any change shall have occurred or be threatened (or
any development shall have occurred or been
threatened involving a prospective change) in the
financial condition, businesses or results of
operations of the Company or any of its
Subsidiaries that is or is reasonably likely to be
materially adverse to the Company and its
Subsidiaries taken as a whole, or Praxair or
Purchaser shall have become aware of any fact
(including, but not limited to, any prior change)
that has or is reasonably likely to have a material
adverse effect on the value of the Shares or the
Company and its Subsidiaries taken as a whole to
Praxair or Purchaser;
(f) Purchaser or Praxair and the Company shall have
entered into an agreement that the Amended Offer be
terminated or amended; or
(g) the representations and warranties of the Company
set forth in the Agreement
5
shall not be true and correct in any respect as of
the Expiration Date of the Amended Offer as though
made on or as of such date or the Company shall
have breached or failed in any material respect to
perform or comply with any material obligation,
agreement or covenant required by this Agreement to
be performed or complied with by it except, in each
case, (i) for changes specifically permitted by
this Agreement and (ii) (A) those representations
and warranties that address matters only as of a
particular date which are true and correct as of
such date or (B) where the failure of
representations and warranties (without regard to
materiality qualifications therein contained) to be
true and correct, or the performance or compliance
with such obligations, agreements or covenants, do
not, individually or in the aggregate, have a
material adverse effect on the Company and its
subsidiaries, taken as a whole;
(h) the Board (or a majority of the Disinterested
Directors) shall have amended, modified or
withdrawn its recommendation in favor of the
Amended Offer or the Merger, or shall have failed
publicly to reconfirm such recommendation upon
request by Praxair or Purchaser, or shall have
endorsed, approved or recommended any other Acqui-
sition Proposal, or shall have resolved to do any
of the foregoing; or
(i) the Agreement shall have been terminated by the
Company or Praxair or Purchaser in accordance with
its terms, or Praxair or Purchaser shall have
reached an agreement or understanding in writing
with the Company providing for delay in payment for
the Shares;
which, in the reasonable judgment of Purchaser in any such case, and
regardless of the circumstances (including, without limitation, any action
or inaction by Purchaser, Praxair or any other affiliate of Praxair) giving
rise to any such condition, makes it
6
inadvisable to proceed with the Amended Offer or with acceptance for
payment or payment for Shares.
The foregoing conditions are for the sole benefit of Praxair and
Purchaser and their respective affiliates and may be asserted by Praxair
and Purchaser regardless of the circumstances (including, without
limitation, any action or inaction by Praxair, Purchaser or any of their
respective affiliates) giving rise to any such condition other than the
Minimum Tender Condition or may be waived by Praxair or Purchaser in whole
or in part at any time and from time to time in its sole discretion. The
failure by Praxair or Purchaser at any time to exercise any of the
foregoing rights will not be deemed a waiver of any such right, the waiver
of any such right with respect to particular facts and circumstances will
not be deemed a waiver with respect to any other facts and circumstances
and each such right will be deemed an ongoing right that may be asserted at
any time and from time to time.
i
Table of Contents
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
The Amended Offer; Actions by the Company; Directors . . . 2
1.1. The Amended Offer . . . . . . . . . . . . . . . . . . . 2
1.2. Actions by the Company . . . . . . . . . . . . . . . . 4
1.3. Directors . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
The Merger; Closing; Effective Time . . . . . . . . 6
2.1. The Merger . . . . . . . . . . . . . . . . . . . . . . 6
2.2. Closing . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3. Effective Time . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
Certificate of Incorporation and By-Laws
of the Surviving Corporation . . . . . . . . . 7
3.1. The Certificate of Incorporation . . . . . . . . . . . 7
3.2. The By-Laws . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
Officers and Directors
of the Surviving Corporation . . . . . . . . . 7
4.1. Directors . . . . . . . . . . . . . . . . . . . . . . . 7
4.2. Officers . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Further Assurances . . . . . . . . . . . . . . . . . . . 7
ARTICLE V
Conversion or Cancellation of Shares in the Merger . . . . 8
5.1. Conversion or Cancellation of Shares . . . . . . . . . 8
(a) Conversion of Shares; Merger
Consideration . . . . . . . . . . . . . . . . 8
(b) Cancellation of Shares . . . . . . . . . . . . . 9
(c) Conversion of Purchaser Common
Stock . . . . . . . . . . . . . . . . . . . . 9
(d) Convertible Preferred Stock . . . . . . . . . . 9
(e) Cumulative Preferred Stock . . . . . . . . . . . 9
5.2. Payment for Shares . . . . . . . . . . . . . . . . . 10
5.3. Dissenters' Rights . . . . . . . . . . . . . . . . . . 11
5.4. Transfer of Shares After the Effective
Time . . . . . . . . . . . . . . . . . . . . . . . . 11
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ARTICLE VI
Representations and Warranties . . . . . . . . . 11
6.1. Representations and Warranties of the
Company . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Organization, Good Standing and
Qualification . . . . . . . . . . . . . . . . 11
(b) Capital Structure . . . . . . . . . . . . . . . 12
(c) Corporate Authority; Approval and
Fairness . . . . . . . . . . . . . . . . . . 13
(d) Governmental Filings; No Violations . . . . . . 14
(e) Company Reports; Financial
Statements . . . . . . . . . . . . . . . . . 15
(f) Absence of Certain Changes . . . . . . . . . . . 16
(g) Litigation and Liabilities . . . . . . . . . . . 17
(h) Employee Benefits . . . . . . . . . . . . . . . 18
(i) Compliance with Laws . . . . . . . . . . . . . . 20
(j) Takeover Statutes . . . . . . . . . . . . . . . 21
(k) Voting Requirements; Company
Articles . . . . . . . . . . . . . . . . . . 21
(l) Environmental Matters . . . . . . . . . . . . . 21
(m) Taxes . . . . . . . . . . . . . . . . . . . . . 22
(n) Labor Matters . . . . . . . . . . . . . . . . . 23
(o) Information . . . . . . . . . . . . . . . . . . 24
(p) Brokers and Finders . . . . . . . . . . . . . . 24
6.2. Representations and Warranties of Praxair
and Purchaser . . . . . . . . . . . . . . . . . . . . 24
(a) Organization . . . . . . . . . . . . . . . . . . 24
(b) Authority . . . . . . . . . . . . . . . . . . . 25
(c) Governmental Filings; No Violations . . . . . . 25
(d) Information . . . . . . . . . . . . . . . . . . 26
(e) Financing . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII
Covenants . . . . . . . . . . . . . . 27
7.1. Interim Operations . . . . . . . . . . . . . . . . . . 27
7.2. Acquisition Proposals . . . . . . . . . . . . . . . . . 28
7.3. Stockholders Meeting . . . . . . . . . . . . . . . . . 30
7.4. Filings; Other Actions; Notification . . . . . . . . . 30
7.5. Access . . . . . . . . . . . . . . . . . . . . . . . . 32
7.6. Publicity . . . . . . . . . . . . . . . . . . . . . . . 33
7.7. Benefits. . . . . . . . . . . . . . . . . . . . . . . . 33
(a) Stock Options . . . . . . . . . . . . . . . . . 33
(c) Employee Benefits . . . . . . . . . . . . . . . 33
7.8. Expenses . . . . . . . . . . . . . . . . . . . . . . . 34
7.9. Indemnification; Directors' and Officers'
Insurance . . . . . . . . . . . . . . . . . . . . . . 34
7.10. Other Actions by the Company and Praxair . . . . . . . 37
(a) Rights . . . . . . . . . . . . . . . . . . . . . 37
(b) Takeover Statute . . . . . . . . . . . . . . . . 37
(c) Termination of Litigation . . . . . . . . . . . 37
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7.11. Notification of Certain Matters . . . . . . . . . . . . 38
ARTICLE VIII
Conditions . . . . . . . . . . . . . . 38
8.1. Conditions to Obligations of Praxair and
Purchaser . . . . . . . . . . . . . . . . . . . . . . 38
(a) Stockholder Approval . . . . . . . . . . . . . . 38
(b) Purchase of Shares . . . . . . . . . . . . . . . 38
(c) Governmental and Regulatory
Consents . . . . . . . . . . . . . . . . . . 39
(d) Litigation . . . . . . . . . . . . . . . . . . . 39
(e) Other Obligations . . . . . . . . . . . . . . . 39
8.2. Conditions to Obligations of the Company . . . . . . . 39
(a) Stockholder Approval . . . . . . . . . . . . . . 39
(b) Purchase of Shares . . . . . . . . . . . . . . . 39
(c) Governmental Consents . . . . . . . . . . . . . 39
(d) Order . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE IX
Termination . . . . . . . . . . . . . . 40
9.1. Termination by Mutual Consent . . . . . . . . . . . . . 40
9.2. Termination by Either Praxair or the
Company . . . . . . . . . . . . . . . . . . . . . . . 40
9.3. Termination by Praxair . . . . . . . . . . . . . . . . 40
9.4. Termination by the Company . . . . . . . . . . . . . . 41
9.5. Effect of Termination and Abandonment . . . . . . . . . 41
ARTICLE X
Miscellaneous and General . . . . . . . . . . 43
10.1. Survival . . . . . . . . . . . . . . . . . . . . . . . 43
10.2. Modification or Amendment . . . . . . . . . . . . . . . 43
10.3. Waiver of Conditions . . . . . . . . . . . . . . . . . 43
10.4. Counterparts . . . . . . . . . . . . . . . . . . . . . 43
10.5. GOVERNING LAW AND VENUE; WAIVER OF JURY
TRIAL . . . . . . . . . . . . . . . . . . . . . . . . 43
10.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . 44
10.7. Entire Agreement . . . . . . . . . . . . . . . . . . . 45
10.8. No Third Party Beneficiaries . . . . . . . . . . . . . 45
10.9. Obligations of Praxair and of the Company . . . . . . . 45
10.10. Severability. . . . . . . . . . . . . . . . . . . . . . 45
10.11. Interpretation . . . . . . . . . . . . . . . . . . . . 46
10.12. Assignment . . . . . . . . . . . . . . . . . . . . . . 46