EXHIBIT 2.1 EXECUTION COPY
Note: Pursuant to a request submitted to the Securities and Exchange
Commission for confidential treatment, portions of the Liquid Bulk
Supply Agreement included as Exhibit E-1 to the Asset Purchase Agreement
were omitted. The omitted information is marked with bolded brackets and
asterisks.
ASSET PURCHASE
AGREEMENT
Dated as of January 3, 2002
by and among
AIR PRODUCTS AND CHEMICALS, INC.,
AIRGAS, INC.
and
NATIONAL WELDERS SUPPLY COMPANY, INC.
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
SECTION 2. TRANSFER OF PURCHASED ASSETS; ASSUMPTION OF
LIABILITIES 11
SECTION 3. PURCHASE PRICE; ADJUSTMENT 18
SECTION 4. CLOSING 20
SECTION 5. REPRESENTATIONS AND WARRANTIES REGARDING
SELLER 22
SECTION 6. REPRESENTATIONS AND WARRANTIES REGARDING
PURCHASERS 31
SECTION 7. FURTHER COVENANTS 34
SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE PURCHASERS 48
SECTION 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
SELLER 53
SECTION 10.EMPLOYEES 54
SECTION 11.BROKERAGE 57
SECTION 12.EXPENSES 58
SECTION 13.TRANSFER TAXES AND RECORDING EXPENSES 58
SECTION 14 SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION 58
SECTION 15.TERMINATION OF AGREEMENT 68
SECTION 16.DISPUTE RESOLUTION 70
SECTION 17.BULK SALES LAW 72
SECTION 18.PUBLIC ANNOUNCEMENTS 72
SECTION 19.NOTICES 72
SECTION ▇▇.▇▇▇▇▇▇▇▇▇▇▇▇ 73
SECTION 21.EXTENSIONS AND WAIVERS 73
SECTION 22.ENTIRE AGREEMENT 73
SECTION 23.GOVERNING LAW 74
SECTION 24.TRANSFERABILITY; NO THIRD PARTY BENEFICIARIES 74
SECTION 25.COUNTERPARTS 74
(i)
List of Schedules
-----------------
Schedule Description
-------- -----------
1.9 Aligned Employees
1.9(b) Certain Aligned Employees
1.33 Dedicated Sites
1.36 Electronics Industry
1.47 Excluded Contracts
1.51 Excluded Permits
1.52 Excluded Real Property
1.60(a) Excluded Patents
1.60(b) Included Trademarks
1.60(c) Excluded Copyrights
1.60(d) Excluded Trade Secrets
1.60(e) Included Computer Software
1.60(f) Included Internet Assets
1.60(g) Excluded Intellectual Property
1.62(a) Knowledge of Airgas
1.62(b) Knowledge of NWS
1.63 Knowledge of the Seller
1.69 Management Employees
1.70 Mixed Use Sites
1.75 Owned Real Property
1.79 Permitted Liens
1.87(a)(i) Excluded Equipment
1.87(a)(ii) Purchased Equipment
1.88(a)(ii) Purchased Equipment (Carolina)
1.89(a) Excluded Inventory
1.89(b) Purchased Inventory
1.90(b) Purchased Inventory (Carolina)
1.93 Real Property Leases
1.98 Site Licenses
(ii)
2.1(g)(iii)(A)(i) Certain Purchased Contracts
2.1(g)(iii)(A)(ii) Certain Excluded Contracts
2.1(l) Covenants, Warranties, Rights of First Refusal
and First Option
2.3(a) Carolina Facilities
2.3(d) Carolina Acquired Contracts
2.3(h) Covenants, Warranties, Rights of First Refusal
and First Option Relating Exclusively to the
Carolina Assets
2.5(o) Certain Excluded Assets
5.3 No Violations
5.4 Seller Government Approvals
5.5(a) Purchased Assets
5.5(c) Tanks
5.5(d) Vehicles
5.6(a) Employee Benefit and Compensation Plans
5.6(d) Labor Issues
5.7(a) Acquired Contracts
5.7(b) Contract Termination or Defaults by Third
Parties
5.8 Intellectual Property Issues
5.9 Litigation and Proceedings
5.10 Environmental Issues
5.11 Compliance with Laws
5.12 Material Adverse Change
5.13 Conduct of the Packaged Gas Business
5.14 Permits
5.15(a) Pro-Forma Packaged Gas Business Statement of
Sales and Direct Profit
5.15(b) Financial Reconciliation
5.15(c) Field Selling and Division Direct Costs
5.15(d) Computers Unlimited Cost Detail
5.17 Purchased Inventory
5.19(a) Customers
5.19(b) Terminating Customers
(iii)
5.20(b) Defaults and Conditions under Real Property Leases
5.20(c) Real Property Options and Rights of First Refusal
6.4 Purchaser Government Approvals
7.4 Carolina Territory
7.12 Conduct of the Packaged Gas Business prior to Closing
7.19 Trademarks Imprinted on Containers
10.2 Terms of Reimbursement for Termination of
Certain Aligned Employees
14.4 Potential Environmental Liabilities To Which
Indemnification Minimum Amount Does Not Apply
(iv)
List of Exhibits
----------------
Exhibit Description
------- -----------
A Financial Documents
B Master Site License
C Packaged Gas and Equipment Distributor Agreement
D Purchaser Cylinder Product Supply Agreement
E Seller Gas Supply Agreements
E-1 Liquid Bulk Products Supply Agreement
E-2 Process Chemicals Supply Agreement
E-3 Cylinder Helium/Hydrogen Supply Agreement
F Intellectual Property License
G Transition Services Agreement
H Lease Assignment
I Credit Agreement
(v)
This ASSET PURCHASE AGREEMENT, dated as of January 3, 2002
(the "Agreement"), by and among AIR PRODUCTS AND CHEMICALS, INC.,
a Delaware corporation (the "Seller"), AIRGAS, INC, a Delaware
corporation ("Airgas"), and NATIONAL WELDERS SUPPLY COMPANY,
INC., a North Carolina corporation ("NWS," and sometimes referred
to herein, together with Airgas, as the "Purchasers").
WHEREAS, the Seller owns or leases all of the properties,
assets and goodwill used by the Seller in connection with the
Packaged Gas Business (as hereinafter defined);
WHEREAS, the Purchasers desire to purchase from the Seller,
and the Seller desires to sell to the Purchasers, the Purchased
Assets (as hereinafter defined), and the Purchasers desire to
assume certain liabilities of the Packaged Gas Business, upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
respective agreements hereinafter set forth, and intending to be
legally bound hereby, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
The terms defined in this Section 1 shall have the following
meanings for the purposes of this Agreement:
1.1 "Accounts Receivable" has the meaning set forth in Section 2.1(j)
hereof.
1.2 "Acquired Contracts" has the meaning set forth in
Section 2.1(g) hereto.
1.3 "Acquired Permits" has the meaning set forth in Section
2.1(h) hereto.
1.4 "Adjustment Statement" means the statement adjusting the
Base Purchase Price referred to in Section 3.2 hereof.
1.5 "Affiliate" of a Person means a Person that directly, or
indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such Person. For
purposes of this definition, the term "controls," "is controlled
by," or "is under common control with" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise; provided, that NWS shall not be considered to be an
Affiliate of Airgas, and Airgas shall not be considered an
Affiliate of NWS.
1.6 "Airgas Assets" has the meaning set forth in Section 2.2
hereof.
1.7 "Airgas Assumed Liabilities" has the meaning set forth in
Section 2.6 hereof.
1.8 "Airgas Subsidiary" means any wholly-owned direct or
indirect subsidiary of Airgas.
1.9 "Aligned Employees" means those employees of the Seller who
render services primarily with respect to the Packaged Gas
Business.
1.10 "Allocation" has the meaning set forth in Section 3.6(a)
hereof.
1.11 "Allocation Objection Notice" has the meaning set forth in
Section 3.6(b) hereof.
1.12 "Allocation Schedule" has the meaning set forth in Section
3.6(a) hereof.
1.13 "Assumed Liabilities" means the Airgas Assumed Liabilities
and the Carolina Assumed Liabilities.
1.14 "Audited Financial Documents" means the financial
information prepared by the Seller with respect to the Packaged
Gas Business, comprised of the Statement of Net Assets as of
September 30, 2001 and Statements of Direct Profit for the year
ended September 30, 2001, together with the notes thereto and
audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP.
1.15 "Base Purchase Price" has the meaning set forth in Section
3.1(b) hereof, and "Purchase Price" means the Base Purchase Price
as adjusted pursuant to Section 3.2.
1.16 "Bulk Gas Business" means the Seller's business of providing
certain industrial gases, notably hydrogen, oxygen, nitrogen,
argon, helium and compressed air to customers in tube trailers
and other high capacity pressure vessels.
1.17 "Business Day" means any day other than Saturday, Sunday, or
a day on which banks in the Commonwealth of Pennsylvania are
authorized or obligated by law or executive order to be closed.
1.18 "Business Material Adverse Effect" means any event, change
or effect that is or would reasonably be expected to be
materially adverse to the condition (financial or otherwise),
properties, liabilities or results of operations of the Packaged
Gas Business and the Purchased Assets, taken as a whole, or that
would materially impair or delay the Seller's obligations under
this Agreement or the other Transaction Documents or the
consummation of the transactions contemplated hereby and by the
other Transaction Documents.
1.19 "Carolina Acquired Contracts" has the meaning set forth in
Section 2.3(d) hereof.
1.20 "Carolina Assets" has the meaning set forth in Section 2.3
hereof.
1.21 "Carolina Assumed Liabilities" has the meaning set forth in
Section 2.7 hereof.
1.22 "Carolina Facilities" has the meaning set forth in Section
2.3(a) hereof.
1.23 "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. 9601 et seq.), as
amended, and rules, regulations and standards issued thereunder.
1.24 "Claim Notice" means the notice defined in Section 14.9(a)
hereof.
(2)
1.25 "Closing" means the closing defined in Section 4.1hereof.
1.26 "Closing Date" means the date of closing as provided in
Section 4.1 hereof.
1.27 "Closing Date Payment" has the meaning set forth in Section
3.1(b) hereof.
1.28 "Code" means the Internal Revenue Code of 1986, as amended,
including valid regulations and rulings issued with respect to
such Code.
1.29 "Condition" means a condition that results in or otherwise
relates to an Environmental Liability.
1.30 "Consent" means any consent, approval, order, authorization
or action of, or any filing, registration or declaration with, or
notice to any Person.
1.31 "Contracts" has the meaning set forth in Section 2.1(g)
hereof.
1.32 "Current Assets" means the sum of the amount of Accounts
Receivable plus the amount of Prepaid Expenses.
1.33 "Dedicated Sites" means the facilities of the Seller that
are used by the Seller exclusively in connection with the
Packaged Gas Business, each of which are set forth on
Schedule 1.33 hereto.
1.34 "Deposit" has the meaning set forth in Section 3.1(a)
hereof.
1.35 "Deposits and Prepayments" has the meaning set forth in
Section 2.1(d) hereof.
1.36 "Electronics Business" means the Seller's business of
manufacturing, purchasing, preparing, transfilling, packaging,
marketing, distributing, selling and/or supplying unique
products, in any physical state (for example, fluorine, hydride,
silane or organosilane compounds), where such products were, or
will be, originally developed for and sold for use in the
Electronics Industry. For the purpose of this definition, the
Electronics Industry shall be defined by the SIC codes listed on
Schedule 1.36, as such schedule may be amended from time to time
by the parties.
1.37 "Employee" means any Aligned Employee or Management
Employee.
1.38 "Employee Benefit and Compensation Plans" means all employee
benefit plans, arrangements, policies or programs (whether or not
an employee benefit plan within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), including all pension and profit sharing, stock based
incentive compensation, commission, severance, vacation, medical,
dental, life, disability or other group insurance, welfare
benefit, death benefit and other benefit or compensation plans
and all policies concerning holidays and salary continuation
during short absences for illness or other reasons, in each case
maintained by the Seller or its Affiliates for the benefit of the
Employees (including any maintained pursuant to collective
bargaining agreements).
(3)
1.39 "Enabling Agreements" means the Seller Gas Supply
Agreements, the Site Licenses, the Packaged Gas and Equipment
Distributor Agreement, the Purchaser Cylinder Product Supply
Agreement, the Intellectual Property Licenses and the Transition
Services Agreements.
1.40 "Environmental Laws" means Laws which address, or are
related to, the pollution or protection of the environment,
including animal and plant life, the protection of human health
as it may be affected by exposure to Hazardous Substances, or
other environmental issues (including occupational safety and
health).
1.41 "Environmental Liabilities" means all obligations or
liabilities (including obligations or liabilities arising out of
legal notices, claims, complaints, suits or other assertions of
obligation or liability) resulting or arising from (a) any
Environmental Law or (b) an enforceable judgment, order, writ,
decree, permit or injunction imposed by a Governmental Body under
or pursuant to an Environmental Law. The term "Environmental
Liabilities" includes (without limitation): (A) fines,
penalties, judgments, awards, settlements, losses, damages (but
not including special, indirect, consequential or punitive
damages of any kind, including business interruption, lost
profits or lost business opportunities, except to the extent
special, indirect, consequential or punitive damages are awarded
to a Third Party against an indemnified party in circumstances in
which such indemnified party is entitled to indemnification under
this Agreement), costs, fees, expenses and disbursements; (B)
costs of defense and other responses to any administrative or
judicial action; and (C) financial responsibility for (I) cleanup
costs and injunctive relief, including any Removal, Remedial or
other Response actions, and natural resource damages, and (II)
other compliance or remedial measures.
1.42 "Environmental Permit" means any Permit that is authorized
or required pursuant to an Environmental Law.
1.43 "ERISA" has the meaning set forth in Section 1.38 hereof.
1.44 "Excluded Assets" has the meaning set forth in Section 2.5
hereof.
1.45 "Excluded Businesses" means the MRI Business, the Home
Healthcare Business, the Electronics Business, the On-Site
Management Services (Outlookr) Business, the Bulk Gas Business as
well as any businesses that market new technologies and
applications that require the utilization of pressurized
industrial gases and specialty gases in pressurized cylinders
that are currently under development by the Seller but not
currently commercialized by the Seller.
1.46 "Excluded Containers" has the meaning set forth in
Section 2.5(k) hereof.
1.47 "Excluded Contracts" means all Contracts to which the Seller
is a party that are not included in the Acquired Contracts,
including the Contracts listed on Schedule 1.47 hereto.
1.48 "Excluded Equipment" means any and all tangible personal
property, including, without limitation, all cylinders, dewars,
other containers, furniture, appliances, fixtures, computer
hardware, data and voice telecommunications equipment,
furnishings, tools, machinery, spare parts, leasehold
improvements, equipment and motor vehicles, in each case, owned
or leased by the Seller that is not included in the Purchased
Equipment, including the tangible personal property listed on
Schedule 1.87(a)(i) hereto.
(4)
1.49 "Excluded Inventory" means all inventory, work-in-process,
components, finished goods, parts, supplies, raw materials and
other similar items, in each case, owned, leased or held for use
by the Seller or any subsidiary of the Seller that are not
included in the Purchased Inventory, including the inventory,
work-in-process, components, finished goods, parts, supplies, raw
materials and other similar items listed on Schedule 1.89(a)
hereto.
1.50 "Excluded Liabilities" has the meaning set forth in Section
2.9 hereof.
1.51 "Excluded Permits" means all Permits to which the Seller is
a party that are not included in the Acquired Permits, including
all Permits that relate to any Excluded Asset or any Excluded
Business and the Permits listed on Schedule 1.51 hereto.
1.52 "Excluded Real Property" shall mean all real property and
real property interests owned or leased by the Seller or any
subsidiary of the Seller that are not included in Owned Real
Property or Leased Real Property, including the real property and
real property interests listed on Schedule 1.52.
1.53 "Financial Documents" means the financial information
prepared by the Seller with respect to the Packaged Gas Business
attached hereto as Exhibit A, comprised of the Statement of Net
Assets as of September 30, 2001 and Statement of Direct Profit
for the year ended September 30, 2001.
1.54 "Governmental Body" and "Governmental Bodies" has the
meaning set forth in Section 5.4 hereof.
1.55 "Hazardous Substance" has the meaning defined in Section
101(14) of CERCLA, plus oil and petroleum (in any form or
derivative), asbestos, PCBs, and any other substance similarly
defined or classified as hazardous or toxic or potentially
hazardous or toxic under an Environmental Law.
1.56 "Home Healthcare Business" means the Seller's business of
purchasing, packaging, marketing, distributing, selling and
supplying pressurized industrial gases and specialty gases in
pressurized cylinders, in each case as component products
marketed in conjunction with healthcare services provided by the
Seller.
1.57 "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
1.58 "Independent Accounting Firm" means the Philadelphia office
of one of Deloitte & Touche, Ernst & Young or
PricewaterhouseCoopers, which shall be jointly engaged by, and
mutually agreeable to, Airgas and the Seller and is not
affiliated with Airgas or the Seller, or if the parties cannot so
mutually agree, then the Seller shall eliminate one firm, Airgas
shall eliminate another firm and the remaining firm shall be the
"Independent Accounting Firm."
1.59 "Information" has the meaning set forth in Section 7.3(a)
hereof.
(5)
1.60 "Intellectual Property" means all of the following whether
owned by, licensed to, or otherwise used by the Seller, to the
extent used by the Seller in connection with the Packaged Gas
Business:
(a) patents, patent applications and inventions, designs and
improvements described and claimed therein, patentable inventions
and other patent rights (including any divisions, continuations,
continuations-in-part, substitutions, or reissues thereof,
whether or not patents are issued on any such applications and
whether or not any such applications are modified, withdrawn, or
resubmitted) ("Patents"), unless listed on Schedule 1.60(a);
(b) trademarks, service marks, trade dress, trade names, brand
names, designs, logos, or corporate names, whether registered or
unregistered, and all registrations and applications for
registration thereof ("Trademarks"), which are listed on Schedule
1.60(b);
(c) copyrights and mask works, including all renewals and
extensions thereof, copyright registrations and applications for
registration thereof, and non-registered copyrights
("Copyrights"), unless listed on Schedule 1.60(c);
(d) trade secrets, confidential business information and other
proprietary information, concepts, ideas, designs, processes,
procedures, techniques, technical information, specifications,
operating and maintenance manuals, engineering drawings, methods,
know-how, technical data and databases, discoveries, inventions,
modifications, extensions, improvements, and other proprietary
rights (whether or not patentable or subject to copyright, mask
work, or trade secret protection) ("Trade Secrets"), unless
listed on Schedule 1.60(d);
(e) computer software programs, including all source code,
object code, and documentation related thereto ("Software"),
which are listed on Schedule 1.60(e);
(f) Internet addresses, domain names, web sites, web pages and
similar rights and items ("Internet Assets"), which are listed on
Schedule 1.60(f); and
(g) all licenses, sublicenses and other agreements or
permissions related to the property described in subsections (a)-
(f), unless listed on Schedule 1.60(g).
1.61 "Intellectual Property License" means, (a) in the case of
Airgas, the technology license between the Seller and Airgas,
pursuant to which, from and after the Closing Date, the Seller
will license to Airgas and the Airgas Subsidiaries the
Intellectual Property, substantially in the form of Exhibit F
hereto, and (b) in the case of NWS, the technology license
between the Seller and NWS, pursuant to which, from and after the
Closing Date, the Seller will license to NWS the Intellectual
Property, which technology license shall be substantially similar
to the form of Exhibit F hereto.
1.62 "Knowledge of Airgas" or "Knowledge of NWS" or "Knowledge"
with reference to Airgas or NWS, means the actual knowledge,
after reasonable inquiry, of those persons listed on Schedule
1.62(a) and Schedule 1.62(b), respectively.
1.63 "Knowledge of the Seller" means the actual knowledge, after
reasonable inquiry, of those persons listed on Schedule 1.63.
(6)
1.64 "Law" means any applicable federal, state, local or foreign
law (including principles of common law), statute, ordinance,
rule, regulation, standard, order, judgment or decree,
injunction, award, administrative or judicial decision, and any
other executive or legislative proclamation of any Governmental
Body.
1.65 "Leased Real Property" means the land, buildings,
structures, fixtures and other improvements covered by the Real
Property Leases.
1.66 "Liens" means any pledges, liens, conditional sales
contracts, mortgages, deeds of trust, charges, encumbrances,
transfer restrictions, security interests, restrictions and
claims of any kind or other encumbrances of any nature
whatsoever.
1.67 "Losses" has the meaning set forth in Section 14.2 hereof.
1.68 "Manage" and "Management" mean generation, production,
handling, arrangement for transportation or disposal,
distribution, processing, use, storage, treatment, operation,
transportation, recycling, reuse and/or disposal, as those terms
are defined and used in CERCLA, RCRA and other Environmental
Laws.
1.69 "Management Employees" means those employees of the Seller
who are not Aligned Employees and who are involved in the
management and administration of the Packaged Gas Business and
who are listed on Schedule 1.69.
1.70 "Mixed Use Sites" means the facilities of the Seller that
are used by the Seller both in connection with the Packaged Gas
Business and in connection with a business of the Seller other
than the Packaged Gas Business, each of which are set forth on
Schedule 1.70 hereto
1.71 "MRI Business" means the Seller's business of supplying
liquid helium, liquid nitrogen and associated other pressurized
industrial gases and specialty gases in pressurized cylinders as
well as services, including but not limited to KeepColdr
Services, in each case to manufacturers of and retail customers
using magnetic resonance imaging equipment and related equipment
in support of superconductivity applications.
1.72 "NWS Closing Date Payment" has the meaning set forth in
Section 3.1(b) hereof.
1.73 "On-Site Management Services (Outlookr) Business" means the
Seller's business of providing on-site supply and management of
cylinders, bulk and pipeline gases, wet chemicals, maintenance
services, engineering, and technical consulting to industrial
companies either currently served by Seller's Chemical Process
Industries Division or marketed in conjunction with any of the
Excluded Businesses.
1.74 "Ordinary Course of Business" an action taken by a Person
will be deemed to have been taken in the "Ordinary Course of
Business" only if that action: (a) is in the ordinary course of
business, (b) is not significantly outside the scope of
decisions, actions, measures, occurrences or other incidents
customary for the applicable business, and (c) does not require
authorization by the Board of Directors or shareholders of such
Person (or by any Person or group of Persons exercising similar
authority).
(7)
1.75 "Owned Real Property" means the real property listed on
Schedule 1.75, including all of the buildings, structures,
fixtures and other improvements located thereon.
1.76 "Packaged Gas Business" means the Seller's business in the
United States with respect to (a) the preparing, transfilling,
packaging, marketing, distribution, sale and supply (and in the
case of acetylene, also the manufacture) of pressurized
industrial gases and specialty gases in pressurized cylinders,
(b) the preparing, transfilling, packaging, marketing,
distribution, sale and supply of pressurized gas and liquid
process chemicals in pressurized cylinders, tube trailers and
other high capacity pressure vessels and (c) the distribution,
marketing, sale and supply as a reseller, distributor or lessor
(and in the case of specialty gas equipment, also the manufacture
and assembly) of equipment (including, without limitation,
welding equipment) and materials necessary for or related to the
use of packaged gases, in each case as currently conducted by the
Seller. Notwithstanding the foregoing, the Packaged Gas Business
shall not include the Excluded Businesses.
1.77 "Packaged Gas and Equipment Distributor Agreement" means the
agreement pursuant to which, from and after the Closing Date,
Airgas will be the Seller's exclusive packaged gas and associated
equipment supplier for those customer accounts referenced
therein, substantially in the form attached as Exhibit C hereto.
1.78 "Permits" has the meaning set forth in Section 5.14 hereof.
1.79 "Permitted Liens" means (a) mechanics', carriers', workers',
repairer's, purchase money security interest and other similar
Liens arising or incurred in the Ordinary Course of Business
(i) related to obligations as to which (A) there is no default on
the part of the Seller, and (B) the Seller has not received
written notice of the commencement of foreclosure actions with
respect thereto, and (ii) that are not substantial in amount;
(b) Liens listed in Schedule 1.79 hereto; (c) Liens for Taxes
that are not in default or delinquent or that are being contested
in good faith by appropriate proceedings; and (d) Permitted Owned
Real Property Exceptions.
1.80 "Permitted Owned Real Property Exceptions" means such Liens
that do not, individually or in the aggregate (i) interfere in
any material respect with the use, occupancy or operation of the
Owned Real Property as currently used, occupied and operated by
the Seller or (ii) materially reduce the fair market value of the
Owned Real Property below the fair market value the Owned Real
Property (as currently used, operated and occupied by the Seller)
would have had but for such encumbrances.
1.81 "Person" means an individual, a partnership, a joint
venture, a limited liability company, a corporation, a trust, a
firm, an association, an unincorporated organization, a
Governmental Body and any other entity whatsoever.
1.82 "Post-Closing Tax Period" shall mean (a) any Tax period
beginning on or after the Closing Date and (b) with respect to a
Tax period that commences before but ends after the Closing Date,
the portion of such period beginning on the Closing Date. In the
case of (b), should it be necessary to determine a proportionate
share of any Tax, the Post-Closing Tax Period Proportion shall be
the number of days in such Tax period from and after the Closing
Date divided by the total number of days in the Tax period.
(8)
1.83 "Pre-Closing Tax Period" shall mean (a) any Tax period
ending prior to the Closing Date and (b) with respect to a Tax
period that commences before but ends after the Closing Date, the
portion of such period up to (but not including) the Closing
Date. In the case of (b), should it be necessary to determine a
proportionate share of any Tax, the Pre-Closing Tax Period
proportion shall be the number of days in such Tax period up to
(but not including) the Closing Date divided by the total number
of days in the Tax period.
1.84 "Prepaid Expenses" has the meaning set forth in Section
2.1(e) hereof.
1.85 "Prime Rate" means the rate per annum equal to the rate
announced from time to time by The Chase Manhattan Bank, N.A.,
New York City Branch, as its prime rate or base rate. For
purposes of this Agreement, any change in the prime rate or base
rate shall be effective as of the opening of business on the date
such change is announced.
1.86 "Purchased Assets" has the meaning set forth in Section 2.1
hereof.
1.87 "Purchased Equipment" means (a) all tangible personal
property, including, without limitation, all cylinders, dewars,
other containers, furniture, appliances, fixtures, computer
hardware, data and voice telecommunications equipment,
furnishings, tools, machinery, spare parts, equipment and motor
vehicles, in each case, that is (i) used or held for use by the
Seller and either located at or, in the case of motor vehicles,
storage vessels, tube trailers and cylinders, based out of a
Dedicated Site or a Mixed Use Site, except as set forth on
Schedule 1.87(a)(i) hereto, or (ii) set forth on
Schedule 1.87(a)(ii) hereto, and (b) all field-based personal
computers and other tangible personal property owned or leased
by the Seller and used away from the office by any Transferred
Employee hired by any Purchaser in connection with the
performance of such Transferred Employee's duties to the Seller;
but, for the avoidance of doubt, does not include any part of the
Owned Real Property or the Leased Real Property.
1.88 "Purchased Equipment (Carolina)" means (a) all tangible
personal property, including, without limitation, all cylinders,
dewars, other containers, furniture, appliances, fixtures,
computer hardware, data and voice telecommunications equipment,
furnishings, tools, machinery, spare parts, equipment and motor
vehicles, in each case, that is (i) used or held for use by the
Seller and either located at or, in the case of motor vehicles,
storage vessels, tube trailers and cylinders, based out of a
Carolina Facility, except as set forth on Schedule 1.87(a)(i)
hereto, or (ii) set forth on Schedule 1.88(a)(ii) hereto, and (b)
all field-based personal computers and other tangible personal
property owned or leased by the Seller and used away from the
office by any Transferred Employee hired by NWS in connection
with the performance of such Transferred Employee's duties to the
Seller; but for the avoidance of doubt, does not include any part
of the Owned Real Property or the Leased Real Property.
1.89 "Purchased Inventory" means all inventory, work-in-process,
components, finished goods, parts, supplies, raw materials and
other similar items that are (a) used or held for use by the
Seller in connection with the Packaged Gas Business and either
located at a Dedicated Site or Mixed Use Site, or shipped from or
to a Dedicated Site or Mixed Use Site but in transit or located
at customers' premises, except as set forth on Schedule 1.89(a)
hereto, or (b) set forth on Schedule 1.89(b) hereto.
(9)
1.90 "Purchased Inventory (Carolina)" means all inventory,
work-in-process, components, finished goods, parts, supplies, raw
materials and other similar items that are (a) used or held for
use by the Seller in connection with the Packaged Gas Business
and either located at a Carolina Facility, or shipped from or to
a Carolina Facility but in transit or located at customers'
premises, except as set forth on Schedule 1.89(a) hereto, or
(b) set forth on Schedule 1.90(b) hereto.
1.91 "Purchaser Cylinder Product Supply Agreement" means the
agreement pursuant to which, from and after the Closing Date, the
Purchaser (itself or through one or more Airgas Subsidiaries)
shall support certain of the Excluded Businesses of the Seller,
substantially in the form of Exhibit D hereto.
1.92 "RCRA" means the Resource Conservation and Recovery Act (42
U.S.C. 6901 et seq.), as amended, and rules, regulations and
standards issued thereunder.
1.93 "Real Property Leases" means the leases, subleases, licenses
and other agreements, including all amendments thereto, listed on
Schedule 1.93.
1.94 "Release" means any releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, discarding, abandonment or disposing into the
environment.
1.95 "Removal," "Remedial" and "Response" actions are the types
of activities covered by those terms as defined and used in
CERCLA, RCRA and other Environmental Laws.
1.96 "Second Request" has the meaning set forth in Section 7.8(b)
hereof.
1.97 "Seller Gas Supply Agreements" means the agreements pursuant
to which, from and after the Closing Date, the Seller shall
supply certain liquid/bulk products and/or services to Airgas and
the Airgas Subsidiaries, substantially in the forms of Exhibits ▇-
▇ through E-3 hereto.
1.98 "Site Licenses" means the real property licenses, in each
case, between Airgas and the Seller, for the sites listed on
Schedule 1.98 pursuant to a Master Site License, substantially in
the form of Exhibit B hereto.
1.99 "Tax" shall mean any income, alternative or add-on minimum
tax, gross income, gross receipts, sales, use, ad valorem, value
added, transfer, franchise, profits, registration, recording,
documentary, conveyance, gains, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, whether or not measured in whole or in part by net
income, together with any interest, deficiency penalty, addition
to tax or additional amount imposed by any governmental authority
responsible for the imposition of any such tax (domestic or
foreign) and obligations under any tax sharing, tax allocation or
similar agreement to which the Seller is a party, and including
expenses associated with contesting any proposed adjustment
related to any of the foregoing.
(10)
1.100 "Tax Returns" means all federal, state, local, and
foreign tax returns, declarations, statements, reports,
schedules, forms, and information returns and any amended Tax
Returns relating to Taxes.
1.101 "Third Party" means any Person other than (i) the
parties to this Agreement, (ii) their Affiliates, successors and
assigns, and (iii) the officers, directors, employees, agents and
other representatives of all of the above, except in the case
where any such officer, director, employee or agent, in his or
her individual capacity and not as a representative of any of the
parties to this Agreement or their Affiliates, asserts a claim
seeking recovery for personal injury or property damage (other
than to any Owned Real Property, Leased Real Property or real
property that is subject to the Site Licenses) arising from a
chemical exposure or contamination occurring prior to the
Closing.
1.102 "Transaction Documents" has the meaning set forth in
Section 5.2 hereof.
1.103 "Transferred Employees" has the meaning set forth in
Section 10.2 hereof.
1.104 "Transition Services Agreement" means, (a) in the case
of Airgas, the agreement pursuant to which, from and after the
Closing Date, the Seller will provide certain services to Airgas
and the Airgas Subsidiaries in order to facilitate the transition
of the Packaged Gas Business to Airgas and the Airgas
Subsidiaries, substantially in the form of Exhibit G hereto, and
pursuant to which the Seller and Airgas (and the Airgas
Subsidiaries) may provide services to each other in the
collection or payment of certain receivables and payables which
are the subject of or excluded from this Agreement, and (b) in
the case of NWS, the agreement entered into by the Seller and NWS
at the Closing substantially in the form of Exhibit G hereto
pursuant to which, from and after the Closing Date, the Seller
will provide to NWS such services on which the Seller and NWS may
agree in order to facilitate the transition of the Carolina
Assets to NWS.
1.105 "Unreasonable Contact" means any contact or involvement
unless (i) required by Law, (ii) reasonably required to avoid a
government order, (iii) needed to prevent a significant threat to
human health or the environment, (iv) commercially reasonable for
a responsible chemical company to undertake with respect to a
site where such company bears the full risks and responsibility;
provided, however, that a response to an unsolicited inquiry
specifically concerning the particular matter at issue from a
representative of a Governmental Authority in his or her official
capacity, with respect to which inquiry there is a legal
obligation to respond to such inquiry, shall not be considered to
be an Unreasonable Contact, or (v) undertaken in connection with
the environmental investigation and due diligence (including
conducting Phase I and Phase II sampling, assessments and
reports) by a bona fide prospective purchaser, assignee or
sublessee of the Owned Real Property or the Leased Real Property
not affiliated with either Purchaser in connection with the sale
or transfer of such Property by a Purchaser.
1.106 "Unsegregable Receivables" has the meaning set forth in
Section 2.1(j) hereof.
SECTION 2. TRANSFER OF PURCHASED ASSETS; ASSUMPTION OF LIABILITIES
2.1 Purchased Assets. At the Closing, and upon the terms and
subject to the conditions set forth in this Agreement, the Seller
(11)
shall sell, transfer, convey, assign and deliver to the
Purchasers, free and clear of all liabilities, obligations and
Liens (other than the Permitted Liens and the Assumed
Liabilities), and the Purchasers shall purchase and receive from
the Seller, all of the Seller's right, title and interest in and
to the Purchased Assets in accordance with Sections 2.2 and 2.3.
The "Purchased Assets" shall mean the following:
(a) All of the Seller's right, title and interest in the Owned
Real Property and the Real Property Leases, including the
privileges, appurtenances, rights, easements and hereditaments
appurtenant to or for the benefit of such real property;
(b) All of the Seller's right, title and interest in and to the
Purchased Equipment, as well as all manufacturers' warranties
associated with such Purchased Equipment except to the extent
required by the Seller to pursue any claim the Seller may have
under any such warranty relating to the period prior to the
Closing;
(c) All of the Seller's right, title and interest in and to the
Purchased Inventory, as well as all manufacturers' warranties
associated with such Purchased Inventory and all rights of the
Seller against suppliers of such Purchased Inventory (except to
the extent required by the Seller to pursue any claim the Seller
may have under any such warranty or right relating to the period
prior to the Closing);
(d) All of the Seller's rights under, and interest in, all
deposits or prepayments of rents under cylinder leases to the
extent such deposits or prepayments relate to the Packaged Gas
Business or the Purchased Assets (collectively, the "Deposits and
Prepayments");
(e) All of the Seller's right, title and interest in and to
prepaid expenses to the extent such prepaid expenses relate to
the Packaged Gas Business or the Purchased Assets as of the
Closing Date (the "Prepaid Expenses");
(f) All of the Seller's right, title and interest in and to all
claims, causes of action and guarantee rights to the extent that
they relate to the Purchased Assets from and after the Closing
Date;
(g) Subject to Section 7.8, all of the Seller's rights under,
and interest in, all agreements, arrangements, contracts,
policies, leases (including operating leases), conditional sales
contracts, licenses, franchises, understandings, commitments and
other binding arrangements (collectively, "Contracts") to which
the Seller is a party or by or to which the Purchased Assets are
bound or subject (i) relating primarily to the Packaged Gas
Business, to the extent such Contracts relate to the Packaged Gas
Business, (ii) in the case of customer agreements, to the extent
relating to the Packaged Gas Business or (iii) as listed on
Schedule 2.1(g)(iii)(A)(i), but, in each case, excluding (A) all
Contracts of the types described on Schedule 2.1(g)(iii)(A)(ii)
except such specific Contracts of the types described in
paragraphs 1, 2 or 4 of Schedule 2.1(g)(iii)(A)(ii) as either
Purchaser shall designate in writing no later than ten (10)
Business Days prior to the Closing Date as a Contract to be
acquired by such Purchaser, and (B) all Contracts covered by or
subject to the Packaged Gas and Equipment Distributor Agreement
(collectively, the "Acquired Contracts");
(12)
(h) Subject to Section 7.8, all of the Seller's right, title and
interest in and to all Permits, to the extent transferable,
relating exclusively to the Packaged Gas Business or the
Purchased Assets ("Acquired Permits");
(i) Subject to Section 2.5(b), all of the Seller's right, title
and interest in and to (i) all customer and inventory information
contained or stored in the Seller's Computers Unlimited System,
and (ii) all books, records and other documents (whether on
paper, computer diskette, tape or other storage media) that are
(A) located at a Dedicated Site and related to the Packaged Gas
Business or the Purchased Assets or (B) located at other than a
Dedicated Site and related to the Packaged Gas Business or the
Purchased Assets, to the extent information related to the
Packaged Gas Business or the Purchased Assets is readily
segregable from information that is not related to the Packaged
Gas Business or the Purchased Assets, including in the case of
(ii), property records, production records, purchase and sales
records, credit data, labor relations records, accounting
records, financial reports, maintenance and production records,
environmental records and reports, fixed asset lists, customer
lists, customer records and information, supplier lists, parts
lists, manuals, technical and repair data, correspondence, files,
blueprints, specifications, maps, surveys, building and machinery
diagrams, and any items that are similar to any of the foregoing
(but excluding in any event all personnel files and records);
(j) All of the Seller's right, title and interest in and to all
accounts receivable (including any security or collateral for
such accounts receivable) arising from the Packaged Gas Business
other than (x) receivables that cannot be segregated from the
accounts receivable of the Seller's businesses other than the
Packaged Gas Business ("Unsegregable Receivables") and (y) inter-
company receivables (such receivables, net of the exclusions set
forth in clauses (x) and (y), the "Accounts Receivable");
(k) All of the Seller's right, title and interest in and to all
goodwill associated with the Packaged Gas Business or the
Purchased Assets;
(l) To the extent transferable, all of the Seller's right, title
and interest in and to (i) the benefit of and the right to
enforce covenants and warranties (including, without limitation,
any covenants not to compete), if any, which the Seller is
entitled to enforce with respect to the Purchased Assets and
(ii) any rights of first refusal, rights of first option and
similar rights relating exclusively to the Packaged Gas Business,
in the case of (i) and (ii) of this subsection (l) which
covenants, warranties, rights of first refusal, rights of first
option and similar rights are set forth on Schedule 2.1(l) or
Schedule 5.20(c);
(m) All of the Seller's rights, title and interest in and to all
other properties and assets used or held for use by the Seller
exclusively in connection with the Packaged Gas Business, except
for the Excluded Assets; and
(n) All of the Seller's rights, title and interest in and to all
equity interests in any limited liability company to which the
Seller may transfer any of the items listed in the foregoing
subsections (a) through (m) prior to the Closing.
2.2 Airgas Assets. At the Closing, and upon the terms and
subject to the conditions set forth in this Agreement, and
(13)
subject in any event to Section 7.18, the Seller shall sell,
transfer, convey, assign and deliver to Airgas, free and clear of
all liabilities, obligations and Liens (other than Permitted
Liens and the Assumed Liabilities), and Airgas shall purchase and
receive from the Seller, all of the Seller's right, title and
interest in and to all of the Purchased Assets other than the
Carolina Assets (the "Airgas Assets"). Notwithstanding anything
herein to the contrary, but subject to Section 7.18, the term
"Airgas Assets" shall not include any of the Carolina Assets.
2.3 Carolina Assets. At the Closing, and upon the terms and
subject to the conditions set forth in this Agreement, the Seller
shall sell, transfer, convey, assign and deliver to NWS, free and
clear of all liabilities, obligations and Liens (other than the
Permitted Liens and the Carolina Assumed Liabilities), and NWS
shall purchase and receive from the Seller, all of the Seller's
right, title and interest in and to the Carolina Assets. The
"Carolina Assets" shall mean the following:
(a) All of the Seller's right, title and interest in the Owned
Real Property and the Real Property Leases listed on Schedule
2.3(a), including the privileges, appurtenances, rights,
easements and hereditaments appurtenant to or for the benefit of
such real property (the facilities located on such Owned Real
Property or subject to such Real Property Leases are referred to
herein individually as a "Carolina Facility" and collectively as
the "Carolina Facilities");
(b) All of the Seller's right, title and interest in and to the
Purchased Equipment (Carolina), as well as all manufacturers'
warranties associated with such Purchased Equipment (Carolina)
except to the extent required by the Seller to pursue any claim
the Seller may have under any such warranty relating to the
period prior to the Closing;
(c) All of the Seller's right, title and interest in and to the
Purchased Inventory (Carolina), as well as all manufacturers'
warranties associated with such Purchased Inventory (Carolina)
and all rights of the Seller against suppliers of such Purchased
Inventory (Carolina) (except to the extent required by the Seller
to pursue any claim the Seller may have under any such warranty
or right relating to the period prior to the Closing);
(d) Subject to Section 7.8, all of the Seller's rights under,
and interest in the Acquired Contracts described on Schedule
2.3(d) hereto (the "Carolina Acquired Contracts"),
(e) Subject to Section 7.8, all of the Seller's right, title and
interest in and to all Permits, to the extent transferable, to
the extent that the same relate to the Carolina Facilities (the
"Carolina Acquired Permits");
(f) Subject to Section 2.5(b), all of the Seller's right, title
and interest in and to (i) all customer and inventory information
contained or stored in the Seller's Computers Unlimited System
related to the Carolina Assets, and (ii) all books, records and
other documents (whether on paper, computer diskette, tape or
other storage media) that are (A) located at any of the Carolina
Facilities and relate to the Packaged Gas Business or the
Carolina Assets, or (B) not located at a Carolina Facility but
related to the ownership and operation of the Carolina Assets, to
the extent information related to the ownership and operation of
the Carolina Assets is readily segregable from information that
is not so related, including in the case of (ii), property
(14)
records, production records, purchase and sales records, credit
data, labor relations records, accounting records, financial
reports, maintenance and production records, environmental
records and reports, fixed asset lists, customer lists, customer
records and information, supplier lists, parts lists, manuals,
technical and repair data, correspondence, files, blueprints,
specifications, maps, surveys, building and machinery diagrams,
and any items that are similar to any of the foregoing (but
excluding in any event all personnel files and records);
(g) All of the Seller's right, title and interest in and to all
goodwill associated with the Carolina Assets;
(h) To the extent transferable, all of the Seller's right, title
and interest in and to (i) the benefit of and the right to
enforce covenants and warranties (including, without limitation,
any covenants not to compete), if any, which the Seller is
entitled to enforce with respect to the Carolina Assets and
(ii) any rights of first refusal, rights of first option and
similar rights relating exclusively to the Carolina Assets, in
the case of (i) and (ii) of this subsection (h) which covenants,
warranties, rights of first refusal, rights of first option and
similar rights are set forth on Schedule 2.3(h); and
(i) All of the Seller's right, title and interest in and to such
other Purchased Assets as are to be transferred to NWS pursuant
to the Inter-Purchaser Agreement and described in a joint
instruction letter executed and delivered by the Purchasers to
the Seller at least five (5) Business Days prior to the Closing.
2.4 Division of Purchased Assets. The parties acknowledge and
agree that the division of the Purchased Assets into Airgas
Assets and Carolina Assets has been determined solely by the
Purchasers, and not by the Seller, and that any dispute,
obligation or liability relating to such division shall be a
matter to be resolved between the Purchasers and the Seller shall
have no obligation or liability with respect thereto and shall be
indemnified by Airgas under Section 14.5(e) with respect thereto.
2.5 Excluded Assets. Notwithstanding any other provision of this
Agreement, the Purchasers are purchasing only the Purchased
Assets, and are not purchasing any asset of the Seller or any of
its Affiliates not included in the Purchased Assets pursuant to
Section 2.1 (all such assets not included in the Purchased Assets
being herein referred to as the "Excluded Assets"). The Excluded
Assets shall include the following assets of the Seller, none of
which Excluded Assets shall be transferred, conveyed, set over,
delivered or assigned to the Purchasers:
(a) Cash on hand or in banks, cash equivalents and notes
receivable relating to the operation of the Packaged Gas Business
as of the Closing Date, except amounts referred to in
Section 2.1(d);
(b) All books and records that would otherwise constitute
Purchased Assets but for the fact that the Seller is required to
retain such books and records pursuant to applicable Laws (in
which case copies of such books and records shall be included in
the Purchased Assets);
(c) Originals and copies of Tax Returns of the Seller. In those
cases where any Tax Return is reasonably requested by a
(15)
Purchaser, the Seller shall provide to such Purchaser as the
Seller determines in its reasonable discretion either (i) such
Tax Returns, (ii) copies of such Tax Returns or (iii) the
information contained on such Tax Returns, in each case subject
in any event to the protection of the Seller's confidential
information, or the Seller may provide such information to such
Purchaser's independent certified public accountants, in
confidence, and subject to a duty on the part of such independent
certified public accountant of non-disclosure to such Purchaser
and to third parties;
(d) All assets related to the Employee Benefit and Compensation
Plans;
(e) The Excluded Real Property (other than the rights of a
Purchaser created under the Site Licenses);
(f) The Excluded Equipment (other than the rights of a Purchaser
created under the applicable Transition Services Agreement);
(g) The Excluded Inventory;
(h) The Intellectual Property (other than the rights of a
Purchaser created under the applicable Intellectual Property
License);
(i) The Excluded Contracts;
(j) The Excluded Permits;
(k) Any cylinders, dewars, lecture bottles or other containers
containing gases or liquids the identity of which cannot be
readily and accurately determined by a visual examination of such
container or from Seller's books and records, and any such
cylinders, dewars, lecture bottles or other containers containing
gases not sold in the Ordinary Course of Business consistent with
the Seller's past practice in the previous 12 months of the
Packaged Gas Business (collectively, the "Excluded Containers");
(l) All insurance policies of the Seller and the right to
receive the proceeds thereof;
(m) All of the Seller's hardware and software associated with
the SPOC/CU system, other than (i) as set forth on Schedule
1.87(a)(ii) hereto or (ii) all field-based personal computers (A)
located at Dedicated Sites or at Mixed Use Sites and used by the
Seller in connection with the Packaged Gas Business, or (B) used
away from the office by any Transferred Employee hired by any
Purchaser in connection with the performance of such Transferred
Employee's duties to the Seller, which personal computers (but,
for avoidance of doubt, not including the Seller's proprietary or
non-transferable software connected thereto) shall be included in
the Purchased Equipment;
(n) All of the Seller's right, title and interest in and to all
claims, causes of action and guarantee rights to the extent that
they relate to the operation of the Packaged Gas Business or the
Purchased Assets prior to the Closing Date;
(o) All assets listed on Schedule 2.5(o) hereof; and
(16)
(p) All properties, assets and rights of the Seller that are
related to the Excluded Businesses, except to the extent such
properties, assets and rights are included in the Purchased
Assets.
2.6 Airgas Assumed Liabilities. At the Closing, and upon the
terms and subject to the conditions set forth in this Agreement,
the Seller shall transfer to Airgas, and Airgas shall assume only
the following liabilities of the Seller (collectively, the
"Airgas Assumed Liabilities"):
(a) All executory liabilities, obligations and expenses arising
on or after the Closing Date under the Acquired Contracts,
including all purchase orders issued by the Seller prior to the
Closing Date (other than liabilities, obligations and expenses
arising out of or relating to any breach or default by the Seller
prior to the Closing Date of any of its obligations under the
Acquired Contracts); and
(b) All liabilities, obligations and expenses associated with
customer orders (including Deposits and Prepayments made by
customers) received by the Seller under an Acquired Contract
prior to the Closing Date that remain unfulfilled on and as of
the Closing Date, except to the extent of any breach or default
by the Seller prior to the Closing Date of any of its obligations
under such customer orders.
Notwithstanding anything herein to the contrary, but subject
to Section 7.18, the Airgas Assumed Liabilities shall not include
any of the Carolina Assumed Liabilities.
2.7 Carolina Assumed Liabilities. At the Closing, and upon the
terms and subject to the conditions set forth in this Agreement,
the Seller shall transfer to NWS, and NWS shall assume only the
following liabilities of the Seller (collectively, the "Carolina
Assumed Liabilities"):
(a) All executory liabilities, obligations and expenses arising
on or after the Closing Date under the Carolina Acquired
Contracts, including all purchase orders issued by the Seller
prior to the Closing Date (other than liabilities, obligations
and expenses arising out of or relating to any breach or default
by the Seller prior to the Closing Date of any of its obligations
under the Carolina Acquired Contracts);
(b) All liabilities, obligations and expenses associated with
customer orders received by the Seller under any Carolina
Acquired Contract prior to the Closing Date that remain
unfulfilled on and as of the Closing Date, except to the extent
of any breach or default by the Seller prior to the Closing Date
of any of its obligations under such customer orders; and
(c) Any other Assumed Liabilities as are to be transferred to
NWS pursuant to the Inter-Purchaser Agreement and described in a
joint instruction letter executed and delivered by the Purchasers
to the Sellers at least five (5) Business Days prior to the
Closing.
2.8 Division of Assumed Liabilities. The parties acknowledge and
agree that the division of the Assumed Liabilities between Airgas
Assumed Liabilities and the Carolina Assumed Liabilities has been
determined solely by the Purchasers, and not by the Seller, and
that any dispute, obligation or liability relating to such
(17)
division shall be a matter to be resolved between the Purchasers
and the Seller have no obligation or liability with respect
thereto, and shall be indemnified by Airgas under Section 14.5(e)
with respect thereto.
2.9 Excluded Liabilities. Notwithstanding any other provision
in this Agreement but subject to Section 7.18 hereof, (a) Airgas
is assuming only the Airgas Assumed Liabilities and NWS is
assuming only the Carolina Assumed Liabilities and (b) neither
Purchaser is assuming any other liability or obligation of the
Seller or any of its Affiliates of any nature or kind, known or
unknown, fixed, accrued, absolute or contingent, whether
presently in existence or arising hereafter (all such liabilities
and obligations not being assumed being herein referred to as the
"Excluded Liabilities").
SECTION 3. PURCHASE PRICE; ADJUSTMENT
3.1 Purchase Price. The purchase price shall consist of the sum
of the Deposit and the Closing Date Payments, as adjusted
pursuant to Section 3.2. Each Closing Date Payment shall be made
by the applicable Purchaser to the Seller in immediately
available funds by wire transfer to such account as the Seller
shall designate in writing prior to the date payment is due.
(a) Deposit. (i) NWS agrees to pay to the Seller upon execution
of this Agreement $300,000, and (ii) Airgas agrees to pay to the
Seller upon execution of this Agreement $5,000,000 less the
amount paid by NWS upon execution of this Agreement (the
aggregate amount of $5,000,000 hereinafter referred to as, the
"Deposit"). The Deposit shall be made by the Purchasers to the
Seller by wire transfer to such account as designated by the
Seller in writing, which account shall be a segregated, interest
bearing account. All interest or other income earned on the
Deposit (the "Income") shall be paid to or applied for the
benefit of the Seller if the Closing occurs or if the Seller is
otherwise entitled to the Deposit pursuant to Section 15.2(b).
In all other events, the Income shall be paid to or applied to
the benefit of the Purchasers on a pro rata basis (based upon
each Purchaser's contribution to the Deposit). Any party
receiving any part of the Income or having the same applied for
its benefit shall be responsible for paying any Taxes thereon.
The Deposit and any Income will be retained by the Seller or
returned to the Purchasers in accordance with Section 15.2(b).
(b) Closing Date Payment. (i) NWS agrees to pay to the Seller on
the Closing Date $17,600,000 (the "NWS Closing Date Payment") and
(ii) Airgas agrees to pay to the Seller on the Closing Date
$265,000,000 less the amount paid by NWS at the Closing (each, a
"Closing Date Payment" and, together with the Deposit, the "Base
Purchase Price"), as payment for the Purchased Assets, pending
determination of the adjustment referred to in Section 3.2
hereof, and to assume their respective Assumed Liabilities
pursuant to Sections 2.6 and 2.7 hereof. For avoidance of doubt,
in the event that NWS does not for any reason pay the NWS Closing
Date Payment at the Closing, Airgas shall pay to the Seller at
the Closing the full amount of the Closing Date Payments without
deduction except pursuant to the next sentence of this paragraph.
The amount of the Closing Date Payment to be paid by Airgas shall
be reduced by $16,200,000, which represents the amount of the
Unsegregable Receivables as of September 30, 2001.
3.2 Current Assets Adjustment Statement. Within 45 days after
the Closing Date, the Seller will prepare and deliver to Airgas a
statement of the Current Assets as of the Closing Date (the
(18)
"Adjustment Statement") setting forth calculations showing the
determination of the amount of the post-closing adjustment
payable by Airgas to the Seller, or by the Seller to Airgas, as
the case may be. The Adjustment Statement shall be prepared in
accordance with the accounting methodologies used to prepare the
Financial Documents. The amount of such post-closing adjustment
shall be determined and paid as follows: either (a) Airgas shall
pay to the Seller the amount by which the Current Assets on the
Adjustment Statement exceed $16,600,000, or (b) the Seller shall
pay to Airgas the amount by which the Current Assets on the
Adjustment Statement is less than $16,600,000. The Purchasers
shall determine the allocation, if any, between them of any such
payments or amounts received, and the Seller shall have no
obligation or liability with respect thereto and shall be
indemnified by Airgas under Section 14.5(e) with respect thereto.
3.3 Cooperation. The Purchasers will fully cooperate with the
Seller with respect to the Seller's preparation of the statements
referred to in Section 3.2, and will give the Seller, its
employees, representatives and agents access to such books and
records of the Packaged Gas Business and the assistance of such
Packaged Gas Business personnel as the Seller reasonably requests
in connection therewith.
3.4 Objections. If the Purchasers have objections to the
Adjustment Statement, then Airgas shall submit such objections in
writing, stating in reasonable detail the reason and basis for
the Purchasers' objections, within 20 Business Days after
delivery to the Purchasers of such statement ("Objection
Period"). If Airgas and the Seller are unable to resolve such
objection within 20 Business Days after delivery to the Seller of
such written objection, the matter or matters in dispute will be
submitted to the Independent Accounting Firm for resolution
within 20 Business Days of their engagement. The decision of the
Independent Accounting Firm will be binding on both the
Purchasers and the Seller. The cost of the Independent
Accounting Firm shall be paid as follows: (i) the cost of the
Independent Accounting Firm shall be fully payable by Airgas if
the adjustment determined by the Independent Accounting Firm
shall not be in an amount at least $100,000 more favorable to the
Purchasers than the proposed adjustment set forth in the
Adjustment Statement and (ii) the cost of the Independent
Accounting Firm shall be fully payable by the Seller if the
adjustment determined by the Independent Accounting Firm is an
amount at least $100,000 more favorable to the Purchasers than
the proposed adjustment set forth in the Adjustment Statement.
3.5 Payment. Within three (3) Business Days after the
expiration of the Objection Period (or the date upon which any
disputes are resolved as provided above), Airgas will pay to the
Seller or the Seller will pay to Airgas the amount of the
adjustment shown in the Adjustment Statement, as modified by any
actions pursuant to Section 3.4, in immediately available funds
by wire transfer to an account designated in writing by the
Seller or Airgas, as the case may be, together with interest on
such amount at the Prime Rate from and including the Closing
Date. The Purchasers shall determine the allocation between them
of any such payments or amounts received pursuant to this Section
3.5, and the Seller shall have no obligation or liability with
respect thereto and shall be indemnified by Airgas under Section
14.5(e) with respect thereto.
3.6 Allocation.
(a) Within one hundred twenty (120) days of the Closing Date,
the Purchasers shall jointly prepare and deliver to Seller a
schedule (the "Allocation Schedule") allocating the Purchase
(19)
Price and Assumed Liabilities among the Purchased Assets and the
non-competition covenant provided for in Section 7.4, in such
amounts as are consistent with the valuation and techniques and
practices of the Purchasers and are reasonably determined by the
Purchasers to be consistent with Section 1060 of the Code (the
"Allocation").
(b) The Seller shall have a period of twenty (20) Business Days
after the delivery of the Allocation Schedule to present in
writing to the Purchasers notice of any objections the Seller may
have to the allocations set forth therein (an "Allocation
Objection Notice"). Unless the Seller timely objects, such
Allocation Schedule shall be final, absent manifest error. In
the event that the Purchasers do not deliver to the Seller the
Allocation Schedule within the time period specified in Section
3.6(a), the Seller shall be free to allocate the Purchase Price
and the Assumed Liabilities in such manner as the Seller shall
determine in its sole discretion.
(c) If the Seller presents an Allocation Objection Notice to the
Purchasers within the applicable twenty-Business Day period, the
Purchasers and the Seller agree to use commercially reasonable
efforts to agree on the Allocation Schedule as soon as
practicable after the Closing in a manner consistent with the
requirements and methods that apply to Section 1060 of the Code;
provided, however, that if the Purchasers and the Seller shall
not have agreed on the Allocation Schedule by the twentieth
Business Day following the delivery of such Allocation Objection
Notice, the Allocation Schedule shall be made in accordance with
the appraisals of an Independent Accounting Firm, which shall be
instructed by the parties to determine an allocation in a manner
consistent with the requirements and methods that apply to
Section 1060 of the Code. The fees and expenses of such
Independent Accounting Firm shall be paid one-half by the
Purchasers and one-half by the Seller unless the Independent
Accounting Firm shall determine that the allocation suggested by
the Purchasers or the Seller, as the case may be, shall be used
in its entirety, in which case, the other party shall pay all of
such fees and expenses.
(d) The Purchasers and the Seller each agree to (i) file any
additional information return required to be filed pursuant to
Section 1060 of the Code, (ii) be bound by the Allocation
Schedule, (iii) act in a manner consistent with the Allocation
Schedule in the preparation of financial statements and filing of
all state and United States federal income tax returns
(including, without limitation, providing the other parties for
their review a draft of Form 8594 and thereafter filing Form 8594
with their United States federal income tax return for the
taxable year that includes the Closing Date) and in the course of
any Tax audit, Tax review or Tax litigation relating thereto, and
(iv) take no position and cause their Affiliates to take no
position inconsistent with the Allocation Schedule for any Tax
purposes.
(e) The Seller's employer identification number is ▇▇-▇▇▇▇▇▇▇.
Airgas' employer identification number is ▇▇-▇▇▇▇▇▇▇. NWS'
employer identification number is ▇▇-▇▇▇▇▇▇▇.
SECTION 4. CLOSING
4.1 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 1285 Avenue of the
Americas, New York, New York, at 10:00 a.m. Eastern Standard Time
on the date that is the earlier of (i) February 28, 2002
(20)
(provided that all of the conditions to Closing set forth in
Section 8 and Section 9 hereof have been satisfied or waived not
less than the greater of five Business Days or eight days prior
to February 28, 2002), and (ii) the first Business Day of the
month immediately following satisfaction or waiver of all of the
conditions to Closing set forth in Section 8 and Section 9
hereof, provided, however, that if such first Business Day is
after February 28, 2002 and less than the greater of five
Business Days or eight days following satisfaction or waiver of
all such conditions to Closing, the Closing shall take place on
the first Business Day of the next succeeding month, or at such
other time, place or date as Airgas and the Seller may mutually
agree. The date upon which the Closing actually occurs is
referred to herein as the "Closing Date." The Closing shall be
effective as of the opening of business on the Closing Date;
provided, however, that if the Closing occurs on February 28,
2002 or any other day that is the last Business Day of any month,
the Closing shall be effective as of the close of business on the
Closing Date, and all references in this Agreement that provide
that the Seller shall have rights and obligations prior to the
Closing Date shall be deemed to provide that the Seller shall
have such right prior to and including the Closing Date, and all
references in this Agreement that provide that the Purchasers
shall have rights and obligations on and after the Closing Date
shall be deemed to provide that the Purchasers shall have such
rights and obligations after the Closing Date.
4.2 Certain Closing Deliveries by the Seller. At the Closing,
the Seller shall deliver, or cause to be delivered, to each of
the Purchasers as applicable (except as specified below) the
following:
(a) the officers' certificates required by Sections 8.1(c) and 8.2(c);
(b) a receipt for the applicable Closing Date Payment, executed
by an authorized representative of the Seller;
(c) one or more Bills of Sale, in form and substance reasonably
satisfactory to the parties hereto (the "Bills of Sale"), which
Bills of Sale shall be executed by an authorized representative
of the Seller and delivered by the Seller to the applicable
Purchaser, or in the case of Airgas one or more Airgas
Subsidiaries (as designated at least ten Business Days prior to
the Closing);
(d) deeds for the Owned Real Property, in form and substance
reasonably satisfactory to the parties hereto, which deeds shall
be prepared by the applicable Purchaser and executed by an
authorized representative of the Seller and delivered by the
Seller to the applicable Purchaser or in the case of Airgas one
or more Airgas Subsidiaries (as designated at least ten Business
Days prior to the Closing);
(e) assignments of the Real Property Leases, substantially in
the form attached hereto as Exhibit H, with such modifications as
may be necessary to conform to applicable Law, delivered by the
Seller to the applicable Purchaser or in the case of Airgas one
or more Airgas Subsidiaries (as designated at least ten Business
Days prior to the Closing);
(f) an assignment and assumption agreement, in form and
substance reasonably satisfactory to the parties hereto, executed
by an authorized representative of the Seller;
(21)
(g) counterparts of each of the Enabling Agreements to which
such Purchaser is a party;
(h) an officer's incumbency certificate of the Seller;
(i) the Audited Financial Documents; and
(j) all other documents, instruments and writings required to be
delivered by the Seller at or prior to the Closing pursuant to
this Agreement.
4.3 Certain Closing Deliveries by the Purchasers. At the
Closing, each Purchaser shall deliver, or cause to be delivered,
to the Seller the following:
(a) the officers' certificates required by Section 9.3;
(b) payment of the applicable Closing Date Payment;
(c) an assignment and assumption agreement, in form and
substance reasonably satisfactory to such Purchaser and the
Seller, executed by an authorized representative of such
Purchaser;
(d) counterparts of each of the Enabling Agreements to which
such Purchaser is a party;
(e) an officer's incumbency certificate of such Purchaser; and
(f) all other documents, instruments and writings required to be
delivered by such Purchaser at or prior to the Closing pursuant
to this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES REGARDING SELLER
The Seller represents and warrants to the Purchasers as of
the date hereof as follows (provided that Section 5.10 shall be
the exclusive representation and warranty of the Seller with
respect to Environmental Laws, Environmental Liabilities,
Environmental Permits and any other matters related thereto):
5.1 Corporate Organization. The Seller is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power to
own, lease and operate its properties and the Purchased Assets
and to carry on the Packaged Gas Business as now being conducted.
The Seller is duly qualified or licensed to do business as a
foreign corporation and is in good standing in every jurisdiction
where the ownership, leasing or operation of its properties and
the Purchased Assets or the conduct of the Packaged Gas Business
require such qualification or licensing other than jurisdictions
where failure to be so qualified or licensed would not have a
Business Material Adverse Effect.
5.2 Corporate Authority. The Seller has all requisite corporate
power and authority (a) to enter into, execute and deliver this
Agreement and the other agreements and instruments to be executed
and delivered by it pursuant hereto and the Enabling Agreements
(22)
(collectively, the "Transaction Documents"), (b) to consummate
the transactions contemplated by the Transaction Documents and
(c) to perform fully its obligations under the Transaction
Documents. All corporate acts and other proceedings required to
be taken by or on the part of the Seller to authorize it to
execute, deliver and perform the Transaction Documents and the
transactions contemplated thereby have been duly and properly
taken, and no other corporate action by the Seller or its
stockholders is required for the due execution, delivery or
performance of this Agreement or the other Transaction Documents.
This Agreement has been duly authorized, executed and delivered
by the Seller and constitutes, and each of the other Transaction
Documents has been duly authorized by the Seller and when duly
executed and delivered by the Seller will constitute, valid and
binding obligations of the Seller enforceable against the Seller
in accordance with their respective terms, assuming due execution
and delivery hereof and thereof by each of the Purchasers, and
except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
rights of creditors generally or by general principles of equity
(regardless of whether such enforcement is considered in a
proceeding at law or in equity).
5.3 No Violation. Except for the consents and approvals to be
obtained under Sections 5.4 and 7.8, the execution and delivery
by the Seller of the Transaction Documents and the consummation
of the transactions contemplated thereby will not (a) violate the
certificate of incorporation or bylaws of the Seller; (b) violate
any Law or binding arbitration ruling or order applicable to the
Seller or by which the Packaged Gas Business, the Purchased
Assets or the Leased Real Property are bound or subject, (c)
result in the creation of a Lien (other than a Permitted Lien) on
any of the Purchased Assets, (d) violate or result in the
revocation or suspension of any Permit (as hereinafter defined),
or (e) except as set forth on Schedule 5.3, violate, conflict
with or result in any breach of any provision of, or constitute,
whether after the giving of notice or lapse of time or both, a
default under any Contract to which the Seller is a party or by
which it or the Purchased Assets or Leased Real Property may be
bound or subject, excluding, in the case of the foregoing clauses
(b), (d) and (e), violations, breaches and defaults which, either
individually or in the aggregate, would not have a Business
Material Adverse Effect.
5.4 Approvals. Except with respect to Environmental Laws,
Environmental Permits, Environmental Liabilities and any other
matters related thereto (which are covered exclusively by Section
5.10), no Consent of any government or political subdivision
thereof, whether federal, state, local or foreign, or any agency
or instrumentality of any such government or political
subdivision, or any court or arbitrator (each a "Governmental
Body," and collectively, "Governmental Bodies") is required in
connection with the execution and delivery by the Seller of the
Transaction Documents or its consummation of the transactions
contemplated thereby or its performance of any of the provisions
thereof on or after the Closing Date, except (a) filing by the
Seller with the Antitrust Division of the Department of Justice
and the Federal Trade Commission pursuant to the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Antitrust Improvements Act of 1976, and the expiration or
termination of all waiting periods associated therewith and (b)
those set forth in Schedule 5.4.
(23)
5.5 Purchased Assets.
(a) Set forth on Schedule 5.5 is a list, prepared from the
Seller's general asset ledger as of September 30, 2001, of all
Purchased Equipment material to the operation of the Packaged Gas
Business as currently conducted by the Seller, except for such
additions or subtractions of such Purchased Equipment as have
occurred in the Ordinary Course of Business consistent with the
Seller's past practice in the previous 12 months. The Seller
owns at least 95% of the total number of cylinders referenced in
Schedule 5.5. Except as set forth on Schedule 5.5 and except for
Permitted Liens, the Seller has good title to all the properties
and assets, real, personal and fixed, comprising any part of the
Purchased Assets, free and clear of all Liens or has a license to
use such properties and assets, real, personal and fixed,
comprising any part of the Purchased Assets for the benefit of
the Packaged Gas Business. Except as set forth on Schedule 5.5,
all property and assets comprising any part of the Purchased
Assets or the Leased Real Property are, in all material respects,
in good operating condition and repair, normal wear and tear
excepted. The Purchased Assets constitute all of the assets
(real or personal), Permits, Contracts, properties and rights
(other than the Excluded Assets) which are necessary for the
continued conduct of the Packaged Gas Business after the Closing
in substantially the same manner as conducted by the Seller prior
to the Closing when supported by the Enabling Agreements, except
to the extent that the conduct of the Packaged Gas Business
requires general and administrative support services, including,
but not limited to, general information technology services
wherever provided and other support services currently provided
by the Seller through its Trexlertown, PA headquarters location.
All of the assets reflected in the Financial Documents are
included in the Purchased Assets.
(b) Except as set forth on Schedule 5.5, all cylinders that are
included as Purchased Equipment are in the possession of the
Seller, or if in the possession of any Person other than the
Seller, are held pursuant to a binding agreement obligating such
Person to return to the Seller, or to reimburse the Seller for,
such cylinders. The Seller's holding records relating to such
cylinders that are in the possession of any Person other than the
Seller have been kept and managed by the Seller in the Ordinary
Course of Business consistent with the Seller's past practice in
the previous 12 months and in accordance with good industry
practice.
(c) Set forth on Schedule 5.5(c) is a list of tanks currently
used by the Seller in the Packaged Gas Business. The Purchased
Equipment sold or transferred (through the assumption of
equipment leases) to the Purchasers will include at least 95% of
the tanks listed on Schedule 5.5(c).
(d) Set forth on Schedule 5.5(d) is a list of vehicles currently
used by the Seller in the Packaged Gas Business. The Purchased
Equipment sold or transferred (through the assumption of
equipment leases) to the Purchasers will include at least 95% of
the vehicles listed on Schedule 5.5(d).
5.6 Employees
(a) Schedule 5.6(a) hereto lists all material Employee Benefit
and Compensation Plans.
(24)
(b) The transactions contemplated by this Agreement will not
cause a Purchaser to incur any liability with respect to the PBGC
or otherwise under ERISA, including any multiemployer plan
withdrawal liability, with respect to any Employee Benefit and
Compensation Plan or otherwise. The transactions contemplated by
this Agreement will not cause a Purchaser to incur any liability
or expense with respect to benefits or compensation due Employees
under any Employee Benefit and Compensation Plan, except as
provided in Section 10.
(c) Neither the Seller nor any Affiliate has terminated an
employee pension plan (within the meaning of Section 3(2) of
ERISA) or taken any other action with respect to any Employee
Benefit and Compensation Plan that could result in a Lien (other
than a Permitted Lien) on any of the Purchased Assets under Title
IV of ERISA.
(d) With respect to the Employees and the Packaged Gas Business,
except as set forth on Schedule 5.6(d): (i) no collective
bargaining or other agreement exists or, since January 1, 1999,
has existed, between the Seller and any labor organization, and
no oral or written employment agreement exists, or since
January 1, 1999, has existed, between the Seller and any
Employee; (ii) the Seller has not received written notice that
any representation question presently exists, and no petition
concerning representation under the National Labor Relations Act,
as amended, is or, since January 1, 1999, has been pending or to
the Knowledge of the Seller, threatened; (iii) no unfair labor
practice charge or complaint is or, since January 1, 1999, has
been pending or to the Knowledge of the Seller, threatened,
before the National Labor Relations Board; (iv) no labor dispute,
strike, picketing, handbilling, work slowdown, or work stoppage
is or, since January 1, 1999, has been pending or to the
Knowledge of the Seller, threatened; (v) no decision, order,
judgment, decree, or award has been rendered or issued by any
Governmental Body, and no settlement or agreement has been
entered into or executed, since January 1, 1999 regarding any
matter set forth in this Section 5.6.
(e) Schedule 1.9 contains a true, complete and correct list of
all of the Aligned Employees or full time equivalents who are
dedicated primarily to the Packaged Gas Business, including the
time in position of each Aligned Employee, together with any
vacancies as of September 30, 2001.
(f) The employee information provided to Airgas at a meeting
between the Human Resources staffs of the Seller and Airgas on
December 7, 2001 contained a list of employee salaries as of September 1,
2001, each of which salaries is correct in all material respects.
Since September 1, 2001, no salary changes have been implemented
by the Seller except for scheduled or contractual annual salary
increases and promotions made in the Ordinary Course of Business
consistent with the Seller's past practice in the previous 12
months.
5.7 Agreements.
(a) Schedule 5.7(a) hereto lists all written Acquired Contracts
in effect on the date hereof except (i) those required to be
listed on Schedule 5.8 or Schedule 5.20(b) and (ii) any Contract
that involves executory obligations in an amount of less than
$175,000. True, correct and complete copies of the Acquired
(25)
Contracts listed in Schedule 5.7(a), in each case as amended to
date, have been, or prior to Closing will be, made available for
inspection by the Purchasers.
(b) All Acquired Contracts listed in Schedule 5.7(a) constitute
legal, valid and binding obligations of the Seller, are in full
force and effect, and are enforceable in accordance with their
respective terms except as enforcement may be limited by (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors' rights
generally and (ii) general principles of equity. The Seller is
not in material default under any of such Acquired Contracts, nor
does any condition exist that, with notice or lapse of time or
both, would constitute a material default by the Seller
thereunder. To the Knowledge of the Seller, no other party to
any such Acquired Contract is in material default thereunder, nor
does any condition exist that, with notice or lapse of time or
both, would constitute a material default thereunder. Except as
set forth on Schedule 5.7(b), the Seller has not received written
notice that any Person intends to terminate (whether for cause or
convenience) or default under any Acquired Contract listed on
Schedule 5.7(a) before its stated term, if any.
5.8 Intellectual Property. Except as set forth on Schedule 5.8
and subject to the terms of any licenses included therein:
(a) the Intellectual Property constitutes all of the
intellectual property rights necessary to operate the Packaged
Gas Business as presently conducted by the Seller;
(b) the Seller owns (or otherwise has the right to use) the
Intellectual Property pursuant to a valid license, sublicense or
other agreement, and has the right to use all of the Intellectual
Property in connection with the operation of the Packaged Gas
Business and to grant the licenses contained in the Intellectual
Property Licenses, free and clear of all Liens as to the
Purchasers;
(c) to the Knowledge of the Seller, none of the Intellectual
Property infringes upon or otherwise violates any intellectual
property rights within the United States of any third Person;
(d) to the Knowledge of the Seller, no Person is infringing upon
or otherwise violating the rights of the Seller in the
Intellectual Property within the United States; and
(e) no litigation is pending and no written claim has been made
against the Seller, or, to the Knowledge of the Seller, is
threatened, contesting (i) the Seller's ownership of, (ii) the
validity of the Seller's rights in, or (iii) the Seller's rights
to use, sell or license, the Intellectual Property within the
United States.
5.9 Litigation and Proceedings. Except (i) with respect to
Environmental Laws, Environmental Permits, Environmental
Liabilities and any other matters related thereto (which are
covered exclusively by Section 5.10), and (ii) as set forth in
Schedule 5.8 or Schedule 5.9 hereto:
(a) the Seller is not a party to, or, to the Knowledge of the
Seller, threatened with, any legal action or other proceeding
(26)
before any court, administrative agency or arbitral panel
pertaining to the Packaged Gas Business, the Purchased Assets or
the Leased Real Property, in each case, that reasonably appears,
based on a review of the pleadings, to involve damages in excess
of $100,000 or which challenges or seeks to enjoin or prevent any
of the transactions contemplated by the Transaction Documents;
(b) there are no outstanding orders, judgments, injunctions,
awards or decrees of any Governmental Body that specifically
names the Seller relating to the Packaged Gas Business, the
Purchased Assets or the Leased Real Property; and
(c) the Seller is not in default of any order, judgment,
injunction, award or decree of any Governmental Body that
specifically names the Seller relating to the Packaged Gas
Business, the Purchased Assets or the Leased Real Property.
5.10 Environmental. With respect to the Packaged Gas Business and
all operations conducted by Seller or its Affiliates on the Owned
Real Property, the Leased Real Property and the real property
that is subject to the Site Licenses (to the extent related to
the Purchased Assets, and excluding in any event the Seller's
sites at Marlborough, MA, Phoenix, AZ, Shakopee, MN, Mountain
View, CA and Iselin, NJ with the exception of Purchased Equipment
on such sites included in the definition of Purchased Assets),
except as set forth in Schedule 5.10:
(a) the Packaged Gas Business, the Purchased Assets and the
Leased Real Property are in all material respects in compliance
with Environmental Laws;
(b) since January 1, 2000, the Seller has not received from any
Governmental Body written notice of any action, suit, demand,
claim, investigation or other legal proceeding pursuant to an
Environmental Law where the potential liability could be
reasonably expected to exceed $100,000;
(c) there are no pending actions or proceedings of which the
Seller has received written notice, or to the Knowledge of the
Seller, threatened actions, suits, demands, claims,
investigations or other legal proceedings pursuant to an
Environmental Law;
(d) there are no outstanding orders, judgments, injunctions,
awards or decrees of any Governmental Body pursuant to an
Environmental Law where the potential liability could be
reasonably expected to exceed $100,000;
(e) the Seller is not in material default of any order,
judgment, injunction, award or decree of any Governmental Body
pursuant to an Environmental Law;
(f) the Seller has obtained and is in material compliance with
all Environmental Permits necessary for the operation of the
Packaged Gas Business and the Purchased Assets as currently
conducted by the Seller;
(g) to the Knowledge of the Seller, there is no Condition on,
under or about the Owned Real Property, the Leased Real Property
or the real property that is subject to the Site Licenses (to the
extent related to the Purchased Assets) for which there is a
legal obligation to perform any Remedial Action;
(27)
(h) there are no pending actions or proceedings of which the
Seller has received written notice, or to the Knowledge of the
Seller, threatened actions, suits, demands, claims,
investigations or other legal proceedings to revoke or limit any
Environmental Permits;
(i) Section (i) of Schedule 5.10 includes a list of all
Environmental Permits related to the operation of the Packaged
Gas Business or the ownership or possession of the Owned Real
Property, the Leased Real Property or the real property that is
subject to the Site Licenses that are currently held or being
applied for by the Seller and that are material to or necessary
to carry on the Packaged Gas Business as presently conducted or
material to the Seller's current use of the Purchased Assets; and
(j) all material environmental reports relating to the Owned
Real Property, the Leased Real Property or real property that is
subject to the Site Licenses (to the extent related to the
Purchased Assets) have been made available to Airgas and, to the
extent related to the Carolina Assets to NWS.
5.11 Compliance with Laws. Except as set forth in Schedule 5.11
and except with respect to Environmental Laws, Environmental
Permits, Environmental Liabilities and any other matters related
thereto (which are covered exclusively by Section 5.10), the
Seller is in all material respects in compliance with all Laws
pertaining to the Packaged Gas Business, the Purchased Assets or
the Leased Real Property. The Seller has not received written
notice of or been charged with any material violation of any Law
pertaining to the Packaged Gas Business, the Purchased Assets or
the Leased Real Property, except as set forth in Schedule 5.11.
5.12 No Material Adverse Change. Except as set forth in
Schedule 5.12, since September 30, 2001 there has not been any
event, change or effect that is or would reasonably be expected
to be materially adverse to the condition (financial or
otherwise), properties, liabilities or results of operations of
the Packaged Gas Business, the Purchased Assets and the Leased
Real Property, taken as a whole; provided, however, that any such
event, change or effect shall not include (i) the impact of a
decline in the market price of the products of the Packaged Gas
Business, (ii) the impact of an increase in the price of raw
materials consistent with the market generally, or (iii) the
impact of changes in general economic and/or financial market
conditions; and to the Knowledge of the Seller, no such event,
change or effect is threatened. Except as set forth in
Schedule 5.12, since September 30, 2001, the Seller has not:
(a) sold, leased, abandoned or otherwise transferred (or
contracted to sell, lease or otherwise transfer) any of its
assets or properties of the Packaged Gas Business, except in the
Ordinary Course of Business consistent with the Seller's past
practice in the previous 12 months;
(b) suffered or incurred any damage, destruction or other
casualty loss, individually or in the aggregate in excess of
$100,000, to any of the Purchased Assets or Leased Real Property,
normal wear and tear excepted; or
(c) agreed, whether in writing or otherwise, to take an action
described in the foregoing clauses (a) and (b).
(28)
5.13 Conduct of the Packaged Gas Business. Except as set forth
on Schedule 5.13, since September 30, 2001, the Seller has
conducted the Packaged Gas Business in the Ordinary Course of
Business consistent with the Seller's past practice in the
previous 12 months.
5.14 Permits. Schedule 5.14 includes a list of all licenses,
permits, authorizations, orders, registrations and approvals of
any Governmental Body currently held or being applied for by the
Seller which are material to or necessary to carry on the
Packaged Gas Business as presently conducted or material to the
Seller's current use of the Purchased Assets (collectively, the
"Permits"). Except as set forth in Schedule 5.14, and except
with respect to Environmental Permits (which are covered
exclusively by Section 5.10), the Seller has not received written
notice that any material Acquired Permits are not in full force
and effect, and no claim of which the Seller has received written
service is pending or, to the Knowledge of the Seller, threatened
to revoke or limit any such Acquired Permit.
5.15 Financial Documents.
(a) The Financial Documents have been prepared from financial
statements or records used by the management of the Seller in the
operation of the Packaged Gas Business. The Financial Documents
fairly present in all material respects the financial condition
of the Packaged Gas Business as of the dates thereof and for the
periods referred to therein. The Pro-forma Packaged Gas Business
Statement of Sales and Direct Profit included as Schedule 5.15(a)
hereto has been prepared specifically for the Purchasers from
financial systems used by the management of the Seller in the
operation of the Packaged Gas Business and fairly presents in all
material respects the direct profit of the Packaged Gas Business
and does not differ from the Financial Documents except in the
following respects: (1) it does not include the cost of certain
services provided from Seller's corporate units as described in
the unaudited Statement of Direct Profit (footnote 4) included in
the Financial Documents, (2) it includes the cost for gases using
the prices in the proposed Enabling Agreements between the Seller
and Purchaser(s) rather than arms-length pricing for Seller's
average customer and (3) it includes certain other reductions in
costs for on-going operations which cost reductions were agreed
between Seller and Purchasers and are reflected on Schedule
5.15(b)(iii). Schedule 5.15(b) reconciles the difference in the
Direct Profit included in the Financial Documents and that set
forth on Schedule 5.15(a).
(b) The "full time equivalents" reflected in the first column on
Schedule 5.15(c), are sufficient to support those activities
specified on such Schedule as such activities have been conducted
by the Seller in the Packaged Gas Business for the 12 month
period ended September 30, 2001. Other activities involving
general, administrative and other corporate and group services
substantially based in the Allentown, PA area, would be necessary
to operate the Packaged Gas Business on a standalone basis. The
average salaries and fringe benefit percentage reflected in the
second and third columns, respectively, on Schedule 5.15(c) are
correct in all material respects for the 12 month period ended
September 30, 2001. The amounts reflected in the fourth and
fifth columns on Schedule 5.15(c) represent estimates agreed upon
by the Seller and the Purchasers, and the Seller is not making
any representation or warranty with respect thereto. The sixth
column on Schedule 5.15(c) represents the sum of the amounts in
the first through fifth columns on Schedule 5.15(c).
(29)
(c) The Seller's costs of operating the Computers Unlimited
administrative billing system with respect to the Packaged Gas
Business as represented on Schedule 5.15(d) were approximately
$4.474 million in fiscal year 2001, which costs included
reasonable allocations for cost elements such as facility
expenses made by the Seller to such operation. The Seller is not
making any representation or warranty with respect to any
information contained on Schedule 5.15(d) other than the $4.474
million aggregate number.
5.16 Accounts Receivable. The Accounts Receivable arose in the
Ordinary Course of Business of the Packaged Gas Business. There
are no setoffs, counterclaims or disputes asserted in writing or
conditions precedent to payment therefor with respect to any such
Accounts Receivable, and no discount or allowance from any such
Accounts Receivable has been made or agreed to, other than such
setoffs, counterclaims, disputes, discounts or allowances that
are usual and customary in the packaged gas industry.
5.17 Purchased Inventory. Set forth on Schedule 5.17 is a list
of the material Purchased Inventory as of September 30, 2001.
The Purchased Inventory is reflected in the Financial Documents
in all material respects and have been valued in accordance with
the notes contained therein. The Purchased Inventory has been
purchased or maintained by the Seller in the Ordinary Course of
Business. After taking into account the reserves on the
Financial Documents, the Purchased Inventory is usable or salable
in the Ordinary Course of Business and meets accepted industry
standards for quality.
5.18 Taxes. There are no Liens (other than Permitted Liens) for
Taxes (other than Taxes not yet due and payable) upon the
Purchased Assets.
5.19 Customers. Schedule 5.19(a) lists, by dollar volume paid
for the twelve (12) months ended on September 30, 2001, each of
the customers of the Packaged Gas Business that accounted for
more than 2% of the Seller's revenues from the Packaged Gas
Business during such period. Except as set forth on Schedule
5.19(b), no customer listed on Schedule 5.19(a) has, within the
last twelve (12) months, to the Knowledge of the Seller,
threatened in writing to cancel or otherwise terminate, the
relationship of such customer with the Seller or materially to
decrease or limit its purchase of the services or products of the
Packaged Gas Business, which cancellation, termination, decrease
or limitation would have a Business Material Adverse Effect.
5.20 Real Property.
(a) Ownership of Premises. The Seller is the owner of good,
marketable and insurable fee title to the Owned Real Property,
free and clear of all Liens except for Permitted Liens.
(b) Leased Properties. The Seller has heretofore made available
to Airgas, and to the extent related to the Carolina Assets, to
NWS, true, correct and complete copies of all Real Property
Leases (including all modifications, amendments and supplements
thereto). Except as set forth on Schedule 5.20(b), each Real
Property Lease is valid, binding and in full force and effect,
(30)
and all rent and other sums and charges due and payable by the
Seller as tenant thereunder are current; no written notice of any
default or termination under any Real Property Lease is
outstanding; no termination event or condition or uncured default
on the part of the Seller or, to the Knowledge of the Seller, the
landlord, exists under any Real Property Lease; and to the
Knowledge of the Seller, no event has occurred and no condition
exists which, with the giving of notice or the lapse of time or
both, would constitute such a material default or termination
event or condition. The Seller has no ownership, financial or
other interest in the landlord under any Real Property Lease.
(c) No Options. Except as set forth in Schedule 5.20(c) and as
set forth in the Real Property Leases, the Seller does not own or
hold, and is not obligated under or a party to, any option, right
of first refusal or other contractual right to purchase, acquire,
sell or dispose of any of the Owned Real Property or the Leased
Real Property or any portion thereof or interest therein.
(d) Condemnation. There are no pending, and the Seller has not
received written notice and has no Knowledge of any threatened or
contemplated, condemnation proceeding affecting any part of the
Owned Real Property or the Leased Real Property or of any sale or
other disposition of any part of the Owned Real Property or the
Leased Real Property in lieu of condemnation.
(e) Casualty. No portion of the Owned Real Property or the
Leased Real Property has suffered any material damage by fire or
other casualty which has not been repaired and substantially
restored to its original condition.
5.21 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN
THIS Section 5 (INCLUDING THE SCHEDULES ATTACHED HERETO), THE
SELLER MAKES NO WARRANTY OR REPRESENTATION, WHETHER ORAL OR
WRITTEN, EXPRESS OR IMPLIED, CONCERNING THE PURCHASED ASSETS OR
THE PACKAGED GAS BUSINESS, OR THE MERCHANTABILITY OR FITNESS
THEREOF FOR ANY PURPOSE. IT IS UNDERSTOOD AND AGREED THAT ANY
COST ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS CONTAINED OR
REFERRED TO IN ANY OTHER MATERIAL THAT HAS BEEN PROVIDED TO A
PURCHASER OR ANY OF ITS AFFILIATES, AGENTS OR REPRESENTATIVES
(INCLUDING WITHOUT LIMITATION ANY DUE DILIGENCE PRESENTATIONS OR
DOCUMENTS) ARE NOT AND SHALL NOT BE DEEMED TO BE REPRESENTATIONS
OR WARRANTIES OF THE SELLER OR ANY OF ITS AFFILIATES, AGENTS,
EMPLOYEES OR REPRESENTATIVES.
SECTION 6. REPRESENTATIONS AND WARRANTIES REGARDING PURCHASERS
Each Purchaser represents and warrants (as to itself only,
subject in any event to Sections 7.18(a) and 14.5) to the Seller
as of the date hereof as follows; provided, however, that NWS
makes no representation or warranty as to Section 6.5(a) below:
6.1 Corporate Organization. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws
of the state of its incorporation. It has all requisite
corporate power to own, lease and operate its properties and to
carry on its business as now being conducted.
(31)
6.2 Corporate Authority. The Purchaser has all requisite
corporate power and authority (a) to enter into, execute and
deliver the Transaction Documents to which it is or shall be a
party, (b) to consummate the transactions contemplated by the
Transaction Documents to which it is or shall be a party, and (c)
to perform fully its obligations under the Transaction Documents
to which it is or shall be a party. All corporate acts and other
proceedings required to be taken by or on the part of the
Purchaser to authorize it to execute, deliver and perform the
Transaction Documents to which it is or shall be a party and the
transactions contemplated thereby have been duly and properly
taken, and no other corporate action by the Purchaser or its
stockholders is required for the due execution, delivery or
performance of this Agreement or the other Transaction Documents
to which it is or shall be a party. This Agreement has been duly
authorized, executed and delivered by the Purchaser and
constitutes, and each of the other Transaction Documents to which
it is or shall be a party has been duly authorized by the
Purchaser and when duly executed and delivered by the Purchaser
will constitute, valid and binding obligations of the Purchaser,
enforceable against the Purchaser in accordance with their
respective terms, assuming due execution and delivery hereof and
thereof by the Seller, and except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally or by
general principles of equity (regardless of whether such
enforcement is considered in a proceeding at law or in equity).
6.3 No Violation. Except for the consents and approvals to be
obtained under Sections 6.4 and 7.8, the execution and delivery
by the Purchaser of the Transaction Documents and its
consummation of the transactions contemplated thereby will not
(a) violate the certificate of incorporation or bylaws of the
Purchaser, (b) violate any Law or binding arbitration ruling or
order by which the Purchaser is bound or subject, (c) result in
the creation of a Lien on the assets of the Purchaser or (d)
violate, conflict with or result in any breach of any provision
of, or constitute, whether after the giving of notice or lapse of
time or both, a default under any Contract to which the Purchaser
is a party, excluding, in the case of the foregoing clauses (b)
and (d), violations, breaches and defaults which, either
individually or in the aggregate, would not have a material
adverse effect on the Purchaser's ability to consummate the
transactions contemplated by the Transaction Documents to which
it is or shall be a party.
6.4 Approvals. No Consent of any Governmental Body is required
in connection with the execution and delivery by the Purchaser of
the Transaction Documents or its consummation of the transactions
contemplated thereby or its performance of any of the provisions
thereof on or after the Closing Date, except (a) filing by the
Purchaser with the Antitrust Division of the Department of
Justice and the Federal Trade Commission pursuant to the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, and the
expiration or termination of all waiting periods associated
therewith and (b) those set forth in Schedule 6.4.
6.5 Financing.
(a) Airgas has delivered to the Seller a copy of the First
Amendment (the "Amendment") to the Tenth Amended and Restated
Credit Agreement dated as of July 30, 2001 among Airgas and
certain other parties (such Tenth Amended and Restated Credit
Agreement, as amended by the Amendment, shall be herein referred
(32)
to as the "Credit Agreement"), a copy of which is attached hereto
as Exhibit I, which, after giving pro forma effect to the
purchase of the Purchased Assets based on the financial
information regarding the Purchased Assets contained in the
Financial Documents, will enable Airgas to obtain the financing
necessary to fulfill its obligations under Article 3 hereof. The
Credit Agreement is in full force and effect, and is enforceable
in accordance with its terms, and the Amendment is effective
pursuant to Part III of the Amendment. Airgas is not in default
under the Credit Agreement, nor does any condition exist that,
with notice or lapse of time or both, would constitute a material
default by Airgas thereunder. To the Knowledge of Airgas, no
other party to the Credit Agreement is in material default
thereunder, nor does any condition exist that, with notice or
lapse of time or both, would constitute a material default
thereunder. Each of the Credit Parties' (as defined in the
Credit Agreement) representations and warranties in the Credit
Agreement is true and correct in all material respects, and
Airgas is not aware of any event, occurrence or circumstance that
would make any such representation and warranty not true and
correct in all material respects as of the Closing Date. To the
Knowledge of Airgas, assuming the Audited Financial Documents are
consistent with the Financial Documents, there is no reason why
the financing contemplated by the Amendment will not be
consummated on the Closing Date. As of the date hereof, the
United States dollar equivalent of the maximum amount of funds
available under the Credit Agreement is $400,000,000, the amount
drawn by the Credit Parties under the Credit Agreement is
$176,565,147, and the amount of additional commitments received
by the Credit Parties under the Amendment is $100,000,000. Upon
the satisfaction of the "Willow Acquisition Conditions" in the
Amendment, the transactions contemplated under this Agreement
will constitute a Permitted Acquisition, as defined in the Credit
Agreement. Upon giving pro forma effect to the purchase of the
Purchased Assets and assuming the Audited Financial Documents are
consistent with the Financial Documents, the Credit Parties would
be in compliance with the financial covenants in the Credit
Agreement.
(b) None of the individuals listed on Schedule 1.62(b) possess
any information that would reasonably be expected to result in
NWS being unable to obtain the financing necessary for NWS to
consummate the acquisition of the Carolina Assets.
6.6 Purchaser's Investigation. In connection with the execution
of this Agreement, the Purchaser has relied solely upon its due
diligence and those representations and warranties made by the
Seller in Section 5 hereof. The Purchaser acknowledges that
neither the Seller nor any of its officers, directors, Affiliates
or agents assumes any responsibility for the accuracy or adequacy
of any information heretofore or hereafter furnished to the
Purchaser by or on behalf of the Seller with respect to the
Packaged Gas Business or the Purchased Assets, except as
otherwise expressly provided in this Agreement (including the
Schedules to this Agreement). Without limiting the generality of
the foregoing, the Purchaser understands that any cost estimates
(other than such cost estimates as may be contained in the
Financial Documents or in Schedule 5.15(a), 5.15(b) or 5.15(c)
(with the exception of the cost estimates referred to in the
second to last sentence of Section 5.15(b)) as they relate to the
Seller's representation and warranty in Section 5.15),
projections or other predictions provided to the Purchaser by or
on behalf of the Seller are not and shall not be deemed to be
representations or warranties of the Seller. The Purchaser
acknowledges that (a) there are uncertainties inherent in
attempting to make such estimates, projections and other
predictions, (b) the Purchaser is familiar with such
uncertainties, (c) the Purchaser is taking full responsibility
for making its own evaluation of the adequacy and accuracy of all
estimates, projections and other predictions so furnished to it,
and (d) the Purchaser shall have no claim against the Seller or
any of its officers, directors, Affiliates or agents with respect
thereto.
(33)
SECTION 7. FURTHER COVENANTS
The parties hereto hereby further covenant and agree as
follows:
7.1 Access to Information and Documents; Post-Closing Cooperation.
(a) From and after the date hereof until the Closing, the Seller
shall give the officers, employees, representatives, financing
sources, accountants and other designees of each of the
Purchasers reasonable access, during reasonable business hours
following reasonable prior notice, to the offices, production
facilities, plants, properties, written Acquired Contracts and
other assets, books and records, officers, employees,
representatives and accountants of the Packaged Gas Business and
shall cause its officers, employees, representatives and
accountants to furnish to each of the Purchasers and its
aforesaid representatives such financial, technical, operating
and other information pertaining to the Packaged Gas Business and
the Purchased Assets as the Purchasers shall from time to time
reasonably request and to discuss such information with such
representatives; provided, however, that each such officer,
employee, representative, financing source, accountant or other
designee shall be subject to a duty to maintain the
confidentiality of any information so received in accordance with
the terms of the Mutual Confidential Disclosure Agreement between
Airgas and the Seller, dated as of February 15, 2001, as amended,
or the letter agreement dated August 17, 2001 between NWS and the
Seller, as applicable. No investigation by the Purchaser shall
diminish or obviate any of the representations, warranties,
covenants or agreements of the Seller contained in this
Agreement. Except as otherwise provided in Section 2.5(c),
nothing in this Section 7.1 shall permit the Purchasers or any of
their respective officers, employees, representatives, financing
sources, accountants or other designees to have access to any of
the Seller's Tax Returns.
(b) From and after the Closing Date, the Seller shall provide
the officers, employees, representatives and accountants of each
Purchaser and each Purchaser shall provide the officers,
employees, representatives and accountants of the Seller,
reasonable access, during reasonable business hours following
reasonable prior notice, to any books and records relating to the
Packaged Gas Business and the Purchased Assets (including the
provision by the Seller to each Purchaser of access to any books
and records relating to the Packaged Gas Business or the
Purchased Assets that are not included in the books and records
transferred to such Purchaser pursuant to Section 2.1(i) or
Section 2.3(f), as the case may be), and to discuss the
information contained in such books and records, as the other
party may reasonably request. The Purchasers shall cause to be
preserved and kept all records relating to the Purchased Assets
that are included in the assets transferred to such Purchaser for
such period from and after the Closing as may be required by or
needed for compliance with applicable Law or, in the case of Tax
records, the Seller's Tax records retention policy. The Seller
shall cause to be preserved and kept all records retained by it
relating to the Purchased Assets for such period from and after
the Closing as may be required by or needed for compliance with
applicable Law. The Seller's Tax records retention policy
requires all financial and Tax records be maintained for a period
of seven (7) years following expiration of the applicable federal
tax statute of limitations (including any extensions) for such
year. If a Purchaser wishes to destroy such records after the
time prescribed in the preceding sentence, it shall first give
sixty days' prior written notice to the Seller, and the Seller
shall have the right at its option, upon written notice given to
such Purchaser within said sixty day period, to take possession
of such records, to the extent permitted by applicable Law.
(34)
From and after the Closing Date, each Purchaser shall provide to the
Seller and its officers, employees, representatives, accountants
and other designees reasonable access, during reasonable business
hours following reasonable prior notice, to the offices,
production facilities, plants, properties and other assets, books
and records, officers, employees, representatives and accounts of
such Purchaser, and shall cause its officers, employees,
representatives and accountants to furnish to and to discuss with
the Seller and its aforesaid representatives such information as
the Seller may reasonably request in connection with the
preparation of reports required by applicable Law and of
financial statements or filing of any Tax Returns or the
prosecution, defense or settlement of any claims, suits,
proceedings, costs, damages (including but not limited to claims
for natural resource damages, remediation, response and
investigation), losses, expenses, obligations or other
liabilities arising out of or related to the Excluded
Liabilities.
(c) If at any time after the Closing the parties determine that
certain assets (including the Excluded Assets) were
definitionally excluded from or included within (as the case may
be) the Purchased Assets to be transferred hereunder, but were
nonetheless intended to be included in, or made available to a
Purchaser or its Affiliates in their operation of, the Purchased
Assets, or excluded from the Purchased Assets and retained by the
Seller and its Affiliates, and such assets are necessary to the
operation of the Purchased Assets by the Purchaser or its
Affiliates or the businesses or operations of the Seller or its
Affiliates, as the case may be, the Seller and such Purchaser
shall cooperate in good faith to determine a mutually acceptable
method for providing such Purchaser or the Seller, and their
respective Affiliates, as the case may be, with timely access to
such assets, taking into account the continued need by the Seller
or such Purchaser or their respective Affiliates for the use of
such assets.
(d) Each of the parties shall use reasonable commercial efforts
to cooperate with each other party as such other party may
reasonably request in connection with any claim that such other
party may desire to make against a third party under any warranty
or other right relating to any of the Purchased Assets.
7.2 Exercise of Rights of First Refusal. In the event that the
Seller has the right to exercise any right of first refusal
relating to the Packaged Gas Business that is not included in the
Purchased Assets, and the Seller has determined that it does not
wish to exercise such right, the Seller shall consult with the
applicable Purchaser. If such Purchaser shall so request, the
Seller shall use reasonable commercial efforts to cooperate with
such Purchaser to exercise such right for the benefit of such
Purchaser.
7.3 Confidentiality Agreements.
(a) Unless and until the Purchasers shall have purchased the
Purchased Assets, for a period of five (5) years from the date
hereof, each Purchaser shall not use for its own purposes or
advantages (other than in connection with such Purchaser's due
diligence review and in preparation for the orderly transition of
operational control of the Purchased Assets to such Purchaser) or
publish or disclose to any third Person (other than legal and
financial consultants of such Purchaser who are subject to a duty
to maintain the confidentiality of the Information) any
confidential or proprietary information, know-how, formulae or
trade secret obtained from the Seller, including business and
(35)
financial information, no matter how obtained (orally, in writing
or observed) (collectively, "Information"), unless and until such
Information (i) is or becomes a matter of public knowledge
through no breach by such Purchaser, (ii) is lawfully acquired
from a third Person without restrictions of confidentiality, or
(iii) such Purchaser is required to disclose such Information by
Law or is required to disclose such Information in order to
enforce the terms of this Agreement; provided that, in case of
any potential disclosure under this subclause (iii), such
Purchaser shall provide the Seller with prompt notice of any
request or order, including copies of subpoenas or orders
requesting or requiring such Information, cooperate reasonably
with the Seller in resisting the disclosure of such Information
via a protective order or other appropriate legal action, and
shall not make disclosure pursuant thereto until the Seller has
had a reasonable opportunity to resist such disclosure, unless
such Purchaser is required to make such disclosure by Law. If the
Purchasers do not purchase the Purchased Assets, as contemplated
by this Agreement, the Purchasers shall not keep or take, and
shall promptly return or destroy, any and all Information, and
shall not keep or take, and shall promptly return or destroy, any
document or other thing embodying any such Information. With
respect to any Information that a Purchaser destroys pursuant to
the foregoing sentence, such Purchaser shall promptly provide the
Seller with a certificate, signed by an appropriate officer of
such Purchaser, certifying the destruction of such Information.
(b) Regardless of whether the Purchasers shall purchase the
Purchased Assets, no Purchaser shall use for its own purposes or
advantages or publish or disclose to any third Person (other than
its legal and financial consultants who are subject to a duty to
maintain the confidentiality of the Information) any Information
to the extent relating to any part of the business of the Seller
other than the Packaged Gas Business, unless and until such
Information (i) is or becomes a matter of public knowledge
through no breach by a Purchaser, (ii) is lawfully acquired from
a third Person without restrictions of confidentiality, (iii) is
reliably demonstrated by the applicable Purchaser to already have
been in its possession at the time such Information is disclosed
to the applicable Purchaser hereunder, or (iv) the applicable
Purchaser is required to disclose such Information by Law or is
required to disclose such Information in order to enforce the
terms of this Agreement; provided that, in case of any potential
disclosure under this subclause (iv), such Purchaser shall
provide the Seller with prompt notice of such request or order,
including copies of subpoenas or orders requesting or requiring
such Information, cooperate reasonably with the Seller in
resisting the disclosure of such Information via a protective
order or other appropriate legal action, and shall not make
disclosure pursuant thereto until the Seller has had a reasonable
opportunity to resist such disclosure, unless the Purchaser is
required to make such disclosure by Law.
(c) In the event the transactions contemplated hereby are
consummated, each Purchaser's use of and right to disclose any
Information that is contained in or relates to any Intellectual
Property shall be subject to the terms and conditions set forth
in the applicable Intellectual Property License.
(d) For a period of five (5) years from the Closing Date, in the
event the transactions contemplated by the Transaction Documents
are consummated, the Seller shall keep, and shall cause its
employees to keep, any and all confidential and proprietary
information to the extent relating to the Packaged Gas Business
or the Purchased Assets (including, but not limited to, customer
lists and related information) confidential and shall not
disclose such information to any Person unless and until such
(36)
information (i) is or becomes a matter of public knowledge
through no breach by the Seller, (ii) is lawfully acquired from a
third Person without restrictions of confidentiality or (iii) the
Seller is required to disclose such Information by Law or is
required to disclose such Information in order to enforce the
terms of this Agreement; provided that, in case of any potential
disclosure under this subclause (iii), the Seller shall provide
the applicable Purchaser with prompt notice of such request or
order, including copies of subpoenas or orders requesting or
ordering such Information, cooperate reasonably with such
Purchaser in resisting the disclosure of such Information via a
protective order or other appropriate legal action, and shall not
make disclosure pursuant thereto until such Purchaser has had a
reasonable opportunity to resist such disclosure, unless the
Seller is required to make such disclosure by Law.
Notwithstanding the foregoing, nothing in this Agreement shall
preclude the Seller or its Affiliates from using or disclosing
any proprietary or confidential information related to the
Excluded Businesses or any business of a Purchaser other than the
Packaged Gas Business.
7.4 Non-Competition. In order that Airgas may have and enjoy
the full benefit of the Packaged Gas Business, the Seller hereby
agrees that, except as otherwise provided or contemplated in any
of the Enabling Agreements, it will not, nor will any of its
Affiliates, directly or indirectly, engage in the Packaged Gas
Business in the United States for a period of five (5) years from
the Closing Date (the "Non-Competition Period"). In order that
NWS may have and enjoy the full benefit of that portion of the
Packaged Gas Business it is purchasing, the Seller hereby agrees
that, except as otherwise provided or contemplated in any of the
Enabling Agreements, it will not, nor will any of its Affiliates,
directly or indirectly, engage in the Packaged Gas Business in
North Carolina, South Carolina or that portion of Virginia as
outlined in Schedule 7.4 (collectively, the "Carolina Territory")
for the Non-Competition Period. Notwithstanding the foregoing
two sentences, the Seller and any of its Affiliates shall have
the right to engage in (a) any of the Excluded Businesses at any
time, (b) the Packaged Gas Business outside of the United States
at any time and (c) the Packaged Gas Business in the United
States at any time through any Person (or business thereof)
acquired by the Seller or any of its Affiliates, or if the Seller
or any of its Affiliates is acquired by any Person, in each case
by merger, acquisition or a purchase of substantially all of the
assets of the Seller, any Affiliate or such other Person, after
the date of this Agreement, if, (i) in the case of any such
acquisition in the first twelve (12) months following the
Closing, such other Person was already engaged in such business
at the time of such acquisition, and the annual revenues of such
Person attributable to such business for the most recent fiscal
year of such Person did not exceed ten million dollars
($10,000,000), or (ii) in the case of any such acquisition after
the first twelve (12) months following the Closing through the
expiration of the Non-Competition Period, such other Person was
already engaged in such business at the time of such acquisition,
and the annual revenues of such Person attributable to such
business for the most recent fiscal year of such Person did not
exceed fifty million dollars ($50,000,000) and does not
constitute more than 35% of the aggregate annual revenues of all
of the businesses or operations acquired from such Person for the
most recent fiscal year of such Person. In the event of any
acquisition of or by the Seller or any Affiliate by or of any
Person, the Packaged Gas Business-related revenues of which
exceed the threshold set forth in clause (ii) of the preceding
sentence, it shall not be deemed to be a breach of this Section
7.4 if the surviving entity in such acquisition, within a period
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of eighteen (18) months after the closing of such acquisition,
causes such Packaged Gas Business to be sold to one or more Third
Parties or to be discontinued. Notwithstanding the foregoing,
the limitations set forth in this Section 7.4 shall not apply to
(a) the surviving entity in any bona fide transaction pursuant to
which the Seller (i) is acquired by any other Person or (ii)
merges with any other Person and the shareholders of the Seller
immediately prior to such merger do not hold voting securities
representing at least a majority of the outstanding voting power
of the surviving entity immediately following such merger or (b)
in the event that, as set forth in Section 7.18(c), a Purchaser
does not acquire the Carolina Assets, the Seller's operation and
use of the Carolina Assets in the Packaged Gas Business in
accordance with Section 7.18(c)(B).
7.5 Non-Solicitation by the Seller of the Purchasers' Employees.
The Seller hereby covenants and agrees that, from and after the
date hereof until the fifth anniversary of the later of the date
hereof or the Closing Date, neither it nor any of its Affiliates
will, directly or indirectly, solicit for employment any
Transferred Employee or any employee of either Purchaser involved
in the transactions contemplated hereby with whom the Seller
first had contact in connection with the negotiation and
preparation of the transactions contemplated hereby; provided,
that this Section 7.5 shall not apply (i) if any such employee
has been terminated by the applicable Purchaser or its Affiliates
for any reason or (ii) if any such employee contacts the Seller
or its Affiliates (x) in response to a general solicitation for
employment in newspapers or other periodicals or (y) on his or
her own initiative without any encouragement by the Seller.
7.6 Enforcement of Certain Provisions. The Seller and each
Purchaser acknowledges and agrees that if such party breaches any
provision of Section 7.3, 7.4, 7.5 or 10.5 applicable to such
party, any remedy at law would be inadequate and insufficient and
would cause the non-breaching party irreparable harm and that the
non-breaching party, in addition to seeking monetary damages in
connection with any such breach, shall be entitled to specific
performance and injunctive and other equitable relief to prevent
or restrain a breach of Section 7.3, 7.4, 7.5 or 10.5 or to
enforce the provisions thereof without the requirement of posting
bond or other security. If any of the covenants contained in any
of Sections 7.3, 7.4, 7.5 or 10.5, or any part thereof, is
hereafter construed to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants,
which shall be given full force and effect, without regard to the
invalid portions. If any of the covenants contained in any of
Sections 7.3, 7.4, 7.5 or 10.5, or any part thereof, is held by a
court of competent jurisdiction to be unenforceable because of
the duration of such provision or the geographic area covered
thereby or for any other reason, the parties agree that the court
making such determination shall have the power to reduce the
duration and/or geographic area of such provision or otherwise
modify the terms of any such covenant and, in its reduced form,
said provision shall then be enforceable; provided, however, that
any such reduction or modification shall apply only with respect
to the operation of such Section in the jurisdiction of such
court.
7.7 Closing Conditions. Subject to Section 7.8(b), the Seller,
on the one hand, and each Purchaser, on the other hand, agree to
use their commercially reasonable efforts to cause all of the
conditions to its obligations and the obligations of the other
parties hereto to consummate the transactions contemplated hereby
to be satisfied as soon as practicable after the date of this
Agreement.
7.8 Consents and Approvals, etc.
(a) Subject to Section 7.8(b), the Seller and each of the
Purchasers agree to use their commercially reasonable efforts to
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obtain all necessary consents and approvals of all Governmental
Bodies and other Persons required in connection with the
transactions contemplated hereby, including, without limitation,
for execution, delivery and performance of this Agreement and
transfer of the Purchased Assets to be acquired hereunder by the
Purchasers. The Seller agrees to use all commercially reasonable
efforts to obtain the Consent of any other party or parties to
any Acquired Contract or Real Property Lease to the transfer or
assignment thereof to the applicable Purchaser in all cases in
which such Consent is required for assignment and has heretofore
not been obtained. To the extent that any of the Acquired
Contracts or Real Property Leases are not assignable without the
Consent of another party, this Agreement shall not constitute an
assignment or an attempted assignment if such assignment or
attempted assignment would constitute a breach thereof. If,
after the Seller uses its commercially reasonable efforts to
obtain any such Consent, such Consent is not obtained, the
parties agree to cooperate in any reasonable arrangements (not
including the payment by the Seller of additional sums of money
to any person) designed to provide for the applicable Purchaser
the rights and obligations under any such Acquired Contract or
Real Property Lease, including but not limited to the
subcontracting thereof to the applicable Purchaser and
enforcement at the cost and for the account of such Purchaser of
any and all rights of the Seller against the other party thereto
arising out of the breach or cancellation thereof by such other
party or otherwise. If and to the extent such arrangements
cannot be made, the applicable Purchaser shall have no obligation
with respect to any such Acquired Contract or Real Property
Lease. To the extent that any Permit (including any
Environmental Permit) is not transferable by the Seller to the
applicable Purchaser, the Seller agrees to use commercially
reasonable efforts to cooperate with such Purchaser, at such
Purchaser's reasonable request, to assist such Purchaser in its
efforts to obtain a substantially equivalent permit.
(b) The Seller, Airgas and, if required, NWS, shall duly file
with the Federal Trade Commission ("FTC") and Department of
Justice ("DOJ") the notification and report form (the "HSR
Filing") required under the HSR Act with respect to the
transactions contemplated hereby no later than the 5th Business
Day following the date hereof. The HSR Filing shall be in
substantial compliance with the requirements of the HSR Act. Each
party shall cooperate with the other parties to the extent
necessary to assist any other party in the preparation of its HSR
Filing, to request early termination of the waiting period
required by the HSR Act and, if requested by the FTC or Antitrust
Division, to promptly amend the HSR Filing or furnish additional
information, including without limitation any information
required by a request ("Second Request") for additional
information pursuant to 15 U.S.C. 18a(e). Each party shall
promptly inform the other parties of any material communication
made by such party to, or received by such party from, the FTC or
DOJ and any requests for additional information from any
Governmental Body with respect to the transactions contemplated
by this Agreement. Each of the Purchasers shall cooperate with
the Seller to secure the expeditious termination or expiration of
the HSR waiting period; provided, however, that if (i) the FTC or
DOJ staff indicates that it is likely to recommend a challenge to
the proposed transaction unless the parties divest assets or
agree to any other obligation, covenant or commitment, or (ii)
the FTC or DOJ imposes or attempts to impose any terms or
conditions, including without limitation any obligations,
covenants, commitments or divestitures, upon NWS, as a condition
to obtaining the termination or expiration of the HSR waiting
period or otherwise in connection with such proceedings or the
consummation of the transactions contemplated hereby, NWS may
(A) determine, in its sole discretion, not to comply with such
terms or conditions and (B) upon making such determination,
deliver a NWS Termination Notice (as defined in Section 15.3(a))
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in accordance with Section 15.3(a) (and with the effects
described in Sections 7.18 and 15.3). Airgas agrees to make all
divestments or commitments (if any) required, and to comply with
all conditions and obligations imposed by the FTC or DOJ in
connection with such proceedings; provided, however, that Airgas
shall have no obligation to hold separate or to make any
divestments of any asset(s) that represents more than $40 million
of revenues in calendar year 2001.
(c) In the event the FTC or DOJ serves a Second Request upon the
parties in connection with the parties' filings under the HSR
Act, and the Seller does not elect to terminate this Agreement
pursuant to Section 15.1(e), the parties shall attempt to agree
on a mutually acceptable approach to such Second Request;
provided, however, that the Seller shall have no obligation to
continue furnishing additional information to the FTC or DOJ
required by a Second Request if Airgas does not promptly attempt
to extend (and continue to proceed toward extending) its
financing arrangement for a period of time reasonably
anticipated to permit the parties to comply with such Second
Request.
7.9 Collections and Payments.
(a) (i) From and after the Closing Date, the Seller hereby
constitutes and appoints Airgas, its successors and assigns, the
true and lawful attorneys of the Seller with full power of
substitution, in the name of the Seller or otherwise, and on
behalf of and for the benefit of Airgas, to demand and receive
from time to time any and all Accounts Receivable, to give
receipts, releases or acquittances for or in respect of the same
or any part thereof; to collect, for the account of Airgas, all
Accounts Receivable transferred to Airgas as provided herein, and
to endorse with the name of the Seller any check received on
account of any Accounts Receivable transferred to Airgas; from
time to time to institute and prosecute in the name of the Seller
or otherwise any and all proceedings at law, in equity or
otherwise, which Airgas, its successors and assigns, may deem
proper to collect, assert or enforce any claim, right, title,
debt or account hereby assigned or transferred with respect to
the Accounts Receivable; and to take any action necessary to
effect the transfer to Airgas of full legal title in and
beneficial ownership of any of the Accounts Receivable. The
Seller declares that the foregoing powers are coupled with an
interest and shall not be revocable by it except as set forth in
Section 7.9(a)(ii).
(ii) Airgas shall exercise at least the level of care and
diligence with respect to the collection of the Accounts
Receivable as Airgas exercises with respect to its own
receivables. Any amounts received by Airgas or NWS from any
customer for whom Accounts Receivable have been transferred to
Airgas in connection with the transactions contemplated by this
Agreement shall be applied first to the oldest outstanding
invoice for such customer. Airgas shall have the right to
require, by written notice delivered to the Seller no later than
85 days following the Closing Date, that the Seller pay to Airgas
on the 90th day following the Closing Date the amount of any
outstanding Accounts Receivable specified in such notice that
have not been collected by Airgas as of such date, minus
$300,000. Upon payment of such amount by the Seller, Airgas
shall transfer to the Seller all of Airgas' right, title and
interest in and to any such remaining outstanding Accounts
Receivable (including any security or collateral associated
therewith) and shall thereafter use commercially reasonable
efforts to cooperate with the Seller in connection with the
collection of such Accounts Receivable. Simultaneously with the
consummation of such transfer, the Seller shall be deemed to have
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revoked the power of attorney provided for in Section 7.9(a)(i)
in connection with such Accounts Receivable.
(b) The Seller agrees that it shall promptly transfer or deliver
to Airgas any cash or other property that the Seller may receive
on or after the Closing Date in respect of any Acquired
Contracts, Acquired Permits, Accounts Receivable or other items
related to the Purchased Assets that are being transferred or are
intended to be transferred to the Purchasers as provided in this
Agreement. Each Purchaser agrees upon receipt of any invoice or
demand for payment related to any payables retained by the Seller
to promptly forward such invoice or demand for payment to the
Seller or, upon consent of the Seller, to pay such amounts and to
be promptly reimbursed by the Seller upon proof of payment.
(c) Each Purchaser shall promptly transfer or deliver to the
Seller that portion of all rebates, discounts or similar amounts
that such Purchaser may receive on or after the Closing Date that
relate to the operation of the Packaged Gas Business or the
purchase of goods and services, in each case, by the Seller prior
to the Closing Date. The Seller shall promptly transfer or
deliver to Airgas that portion of all rebates, discounts or
similar amounts that the Seller may receive on or after the
Closing Date that relate to the purchase of goods and services by
the Purchasers on or after the Closing Date.
(d) From and after the Closing, each Purchaser shall honor any
discount certificates submitted by any customer that were issued
pursuant to the order in the case entitled ▇▇▇▇▇▇, ▇▇▇▇, d/b/a/
▇▇▇▇▇ Portable Welding vs. APCI, et al. The Seller shall
reimburse each Purchaser for the face value of any discount
certificates delivered to the Seller by such Purchaser.
7.10 Instruments of Transfer to the Purchasers. On the Closing
Date, the Seller shall deliver to the Purchasers or any Airgas
Subsidiary to which Airgas assigns its rights hereunder, one or
more executed Bills of Sale, gap indemnitees and lien affidavits,
and such other good and sufficient instruments of assignment,
transfer and conveyance, in form and substance reasonably
satisfactory to the Purchasers and their counsel, as the
Purchasers shall reasonably request to vest in the applicable
Purchaser or such Airgas Subsidiary all of the Seller's title to
the Purchased Assets. With respect to the Owned Real Property,
the Seller shall convey such Owned Real Property to the
applicable Purchaser by recordable special warranty deed or its
equivalent under applicable state laws. Simultaneously with such
delivery, the Seller shall take all actions necessary to put the
applicable Purchaser or such Airgas Subsidiary in actual
possession and operating control of the Purchased Assets. From
and after the Closing Date, upon request of a Purchaser, the
Seller shall execute, acknowledge and deliver all such further
assignments, transfers, conveyances and other instruments as such
Purchaser shall reasonably request to assign, transfer and convey
to and vest in such Purchaser its right, title and interest in
the Purchased Assets, and as otherwise may be appropriate to
carry out the transactions contemplated by this Agreement.
7.11 Assumption of Liabilities by the Purchaser. On the Closing
Date, each Purchaser shall deliver to the Seller an executed
assignment and assumption agreement and such other good and
sufficient instruments of assumption, transfer and conveyance, in
form and substance reasonably satisfactory to the Seller and its
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counsel, as the Seller shall reasonably request to vest in the
Purchasers all of their respective Assumed Liabilities. From and
after the Closing Date, upon request of the Seller, each
Purchaser shall execute, acknowledge and deliver all such further
instruments as the Seller shall reasonably request to vest in the
Purchasers their respective Assumed Liabilities, and as otherwise
may be appropriate to carry out the transactions contemplated by
this Agreement.
7.12 Conduct of Packaged Gas Business Prior to the Closing Date.
Except as contemplated by this Agreement, during the period from
the date hereof to the Closing Date, the Seller shall conduct the
Packaged Gas Business in the Ordinary Course of Business
consistent with the Seller's past practice in the previous 12
months except as described in Schedule 7.12, and shall use its
commercially reasonable efforts to preserve its relationships
with customers, suppliers, distributors, employees and other
Persons in connection with the Packaged Gas Business. Without
limiting the generality of the foregoing, except as contemplated
by this Agreement, during the period from the date hereof to the
Closing Date, without the prior written consent of Airgas, with
respect to the Airgas Assets, or of NWS, with respect to the
Carolina Assets, the Seller shall not:
(a) sell, lease, license, transfer, pledge, mortgage, encumber,
grant, allocate to any other business unit, or otherwise dispose
of any Purchased Asset, except dispositions in the Ordinary
Course of Business of Purchased Inventory and of Purchased
Equipment that is obsolete or in unusable condition and not
necessary for the operation of the Packaged Gas Business as
currently conducted by the Seller;
(b) increase the rate of compensation of, or pay or agree to pay
any benefit or incentive to, any of the Employees, except in the
Ordinary Course of Business consistent with the Seller's past
practice in the previous 12 months;
(c) alter the procedures of the Packaged Gas Business regarding
the collection of accounts receivable;
(d) take any action, other than in the Ordinary Course of
Business consistent with the Seller's past practice in the
previous 12 months, with respect to the accounting policies or
procedures of the Packaged Gas Business;
(e) terminate or materially amend or modify, assign any material
rights relating to, any Acquired Contract, or enter into any new
Contract, other than in the Ordinary Course of Business
consistent with the Seller's past practice in the previous 12
months;
(f) make any capital expenditure or commitment pertaining to the
Packaged Gas Business in excess of $200,000 individually or
$600,000 in the aggregate; or
(g) agree, directly or indirectly, whether in writing or
otherwise, to do any of the foregoing.
Notwithstanding anything herein to the contrary, no
Purchaser shall have a claim against the Seller or any of its
Affiliates, and no right to indemnification pursuant to Section
14 with respect to any claim, based upon or arising out of the
Seller's failure to take any of the actions set forth in this
Section 7.12 to the extent that the Seller has requested in
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writing the consent of Airgas, with respect to the Airgas Assets,
or NWS, with respect to the Carolina Assets, to take such action,
and such Purchaser has not granted such consent.
7.13 Maintenance of Financing. Airgas and its Affiliates shall
take all actions required to be taken by each of them under the
terms of the Credit Agreement in order to obtain the financing
thereunder so as to permit Airgas to fulfill its obligations
under Section 3 hereof. Neither Airgas nor any of its Affiliates
shall take any action, including but not limited to amending or
modifying the Credit Agreement, that would reasonably be expected
to impair Airgas' ability to borrow under the Credit Agreement
the amount necessary to fulfill its obligations under Section 3
hereof. Airgas shall notify promptly the Seller of any event,
occurrence or circumstance which may reasonably be expected to
have an adverse effect on Airgas' ability to borrow under the
Credit Agreement the amount necessary to fulfill its obligations
under Section 3 hereof.
7.14 Exclusivity. As an inducement to the Purchasers to enter
into this Agreement, and in consideration of the time and expense
which it has devoted and will devote to the transactions
contemplated hereby during such period, except as between the
Seller and any Purchaser pursuant to this Agreement, until the
earlier of (x) the Closing Date and (y) termination of this
Agreement in accordance with Section 15.1 hereof, the Seller
shall not, and the Seller shall cause its officers, directors,
employees, agents and representatives (including any investment
banker, attorney or accountant retained or acting on behalf of
the Seller or any shareholder, director, officer or employee of
the Seller) not to directly or indirectly (a) initiate, solicit,
encourage or entertain proposals, inquiries, indications of
interest, or offers (including by way of furnishing information)
with respect to a merger, consolidation, share exchange or
business combination (unless such transaction shall be structured
in a manner that is consistent with, and does not adversely
affect or delay, the Purchasers' rights under this Agreement) or
with respect to an investment in, acquisition, or purchase of all
or a portion of the Purchased Assets (an "Acquisition Proposal"),
or (b) enter into any discussions, negotiations, agreements,
arrangements or commitments with respect an Acquisition Proposal
with any Person; provided, however, that the foregoing shall not
restrict the Seller from dispositions in the Ordinary Course of
Business of Purchased Inventory and of Purchased Equipment that
is obsolete or in unusable condition and not necessary for the
operation of the Packaged Gas Business as currently conducted by
the Seller. The Seller will immediately cease any existing
discussions with any Persons concerning any Acquisition Proposal
and will notify the Purchasers promptly after it receives any
Acquisition Proposal.
7.15 Agreements. From the date hereof through the Closing Date,
the Seller shall use commercially reasonable efforts to notify
Airgas, and in the case of such Contract that is included in the
Carolina Assets, NWS, of its receipt of any written notice that a
party to any Contract listed on Schedule 5.7(a) has terminated or
declined to renew or intends to terminate or decline to renew any
such Contract or that any party has asserted or intends to assert
any claim under any such Contract.
7.16 Excluded Containers. Prior to the Closing Date, or
immediately upon written notice from a Purchaser if any Excluded
Containers are discovered by such Purchaser within two years
after the Closing Date, the Seller, at its sole cost and expense,
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shall remove any Excluded Containers from such Purchaser's
property or otherwise and properly dispose of all such Excluded
Containers.
7.17 Removal of Excluded Assets. Prior to the Closing, the
Seller shall segregate, remove or, with the written consent of
the applicable Purchaser, abandon any Excluded Equipment (other
than Excluded Containers, which are addressed in Section 7.16)
from those assets and operations of the Seller that are to become
Purchased Assets, except to the extent otherwise contemplated by
any of the Enabling Agreements.
7.18 Sale of the Carolina Assets.
(a) Airgas and NWS shall be jointly and severally liable for all
obligations and liabilities of NWS to the Seller arising under
this Agreement. Notwithstanding anything herein to the contrary,
NWS shall not be liable for any representation, warranty,
covenant, obligation or liability of Airgas arising under this
Agreement or any of the other Transaction Documents or otherwise
in connection with the transactions contemplated hereby.
(b) In the event that (i) all of the conditions in Sections 8.1
and Section 9 hereof shall have been satisfied or waived and NWS
does not consummate the acquisition of the Carolina Assets at the
Closing for any reason or (ii) the Seller determines in its sole
discretion that the participation by NWS as a party to this
Agreement is in any manner or for any reason delaying or
otherwise hindering the expeditious consummation of the
transactions contemplated by this Agreement, then, in either case
(i) or (ii), at the Seller's election, exercisable by delivery of
a written notice (a "Seller Termination Notice") thereof to the
other parties hereto, NWS will, with the effects provided in
Section 15.3(b), no longer be a party to this Agreement or any
other Transaction Document. Effective immediately upon delivery
of a Seller Termination Notice or a NWS Termination Notice,
Airgas shall, without any further action required on the part of
any party hereto, automatically be deemed to have assumed all of
the obligations and liabilities of NWS under this Agreement and
any other Transaction Document. In such event, subject to
Section 7.18(c), Airgas shall be obligated to purchase all of the
Purchased Assets at the Closing, to pay to the Seller at the
Closing the full amount of the Closing Date Payment and to assume
all of the Assumed Liabilities. For the avoidance of doubt,
neither (i) the consummation of the sale of the Carolina Assets
to NWS nor (ii) the failure to consummate such sale shall be a
condition precedent to Airgas' obligations to consummate the
transactions contemplated by this Agreement and the other
Transactions Documents or shall excuse the performance by Airgas
of its obligations under this Agreement and the other Transaction
Documents.
(c) Upon the delivery of a Seller Termination Notice in
accordance with Section 7.18(b) or a NWS Termination Notice in
accordance with Section 15.3(a), Airgas may elect (i) to request
that the Seller transfer the Carolina Assets to a business trust
or other independent entity or to one or more Third Party
purchasers, or (ii) to request that the Seller retain the
Carolina Assets, and the Seller shall comply with either such
request.
(A) In the event that Airgas elects either (i) or
(ii) above, Airgas shall pay to the Seller at the Closing the
full amount of the Closing Date Payments.
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(B) In the event that Airgas elects (ii) above,
from and after the Closing Date, the Seller shall hold the
Carolina Assets, all customer contracts served by the Carolina
Facilities and if instructed by Airgas, any other customer
contracts to the extent such customer contracts can reasonably be
served by the Carolina Assets, and such other Contracts to the
extent necessary to support the operation of the Carolina Assets,
and shall operate the Carolina Assets, subject to applicable
regulatory requirements, for Airgas' account, in good faith in
accordance with the terms and conditions set forth in the
applicable Transition Services Agreement, and, subject to
applicable regulatory requirements, Airgas shall be entitled to
any profits or losses resulting from the operation thereof;
provided that Airgas shall pay to the Seller on a monthly basis
an amount equal to 110% of the Seller's direct costs incurred in
operating the Carolina Assets. The Seller shall use its
commercially reasonable efforts to preserve its relationships
with customers, suppliers, distributors, employees and other
Persons in connection with the operation of such Carolina Assets.
As soon as practicable following the Closing Date, but in no
event later than 120 days following the Closing Date, Airgas
shall designate a Third Party purchaser or other Third Party
entity to which the Seller shall, subject to applicable
regulatory requirements, transfer the Carolina Assets, with such
Third Party purchaser or other Third Party entity paying directly
to Airgas the purchase price for such Carolina Assets at the
closing of such transfer, which closing shall occur no later than
180 days following the Closing Date. In the event that Airgas
does not so designate such a Third Party purchaser or other Third
Party entity prior to 120 days following the Closing Date, or if
the closing of the transfer of the Carolina Assets does not occur
prior to 180 days following the Closing Date, the Seller may
dispose of such Carolina Assets in such manner as it deems
necessary, and shall transfer to Airgas any proceeds it receives
in connection with such disposition; provided that the Seller
shall not be obligated to pay to Airgas more than $17.9 million
minus the amount of the Seller's expense incurred in connection
with such transaction.
(C) The Seller shall use commercially reasonable
efforts to cooperate with Airgas in connection with the transfer
of the Carolina Assets to a Third Party, provided that in no
event shall the Seller have any obligation or liability to any
such Third Party.
7.19 The Seller's Trademarks on Cylinders.
(a) The Seller and the Purchasers acknowledge that certain
cylinders, dewars and other containers that are included in the
Purchased Assets are stamped with certain trademarks owned or
used by the Seller, including those described on Schedule 7.19
(such trademarks, the "Marks" and such cylinders, dewars and
other containers, the "Imprinted Containers"). In order to
obviate the need for the Purchasers to remark such Imprinted
Containers, each of the Purchasers shall have the right to use
such Imprinted Containers in operating the Packaged Gas Business
in the Ordinary Course of Business on and after the Closing Date
and shall not be required to remove the Marks from such Imprinted
Containers. Notwithstanding the foregoing, no Purchaser shall
have any right to use the Marks other than as specifically set
forth above and, among other things, no Purchaser shall (i) claim
any right, title or interest in or to any ▇▇▇▇ by registration or
otherwise; (ii) use any ▇▇▇▇ or the Seller's name in any
marketing activity; (iii) apply any ▇▇▇▇ to any product, package
or container other than as provided herein; or (iv) except to the
extent that the Marks remain on the Imprinted Containers in
accordance with this Section 7.19, use any ▇▇▇▇ as a corporate
(45)
name or trademark in whole or in part. Each Purchaser hereby
assigns to the Seller any rights it might acquire in or to each
▇▇▇▇ through use or otherwise. Nothing in this Section 7.19(a)
shall restrict the ability of a Purchaser to transfer to a third
party or otherwise dispose of any Imprinted Container; provided,
however, that any subsequent acquirer of any Imprinted Container
shall have only such rights with respect to the Marks as granted
to such Purchaser pursuant to this Section 7.19(a) and shall be
subject to all limitations imposed hereunder on such Purchaser
with respect to the use or transfer of the Marks.
(b) By the date that is no later than ninety (90) days following
the Closing Date, the Seller shall either remove or replace the
Marks from any of Seller's cylinders, dewars and other containers
that are not part of the Purchased Assets.
7.20 Access and Cooperation. From and after the Closing Date,
the parties shall take the following measures in order to
facilitate the timely and cost-effective performance of their
obligations pursuant to either (x) any environmental transfer
Laws ("Transfer Obligations") or (y) the Seller's Remediation
pursuant to Section 14.4(b)(C)(ii) ("Seller's Remediation"), in
each case concerning any particular property that is either Owned
Real Property or Leased Real Property ("Subject Property"):
(a) The Seller, and those persons and entities acting at the
direction of the Seller, may enter upon and use the Subject
Property, at reasonable times and with reasonable notice,
including use of roads and driveways, for the purpose of
complying with the Seller's Transfer Obligations or performing
Seller's Remediation.
(b) The Seller may undertake on the Subject Property such
Remediation as the Seller, in the Seller's judgment reasonably
exercised, deems necessary for the purpose of complying with the
Seller's Transfer Obligations or performing Seller's Remediation,
provided that such Remediation is in accordance with the
standards set forth Sections 14.4(b)(B)(i) and (iii) hereof, and
provided that the Seller gives the applicable Purchaser
reasonable advance notice of such Remediation.
(c) The Seller shall perform all Remediation at the Subject
Property in compliance with all Laws, including without
limitation, Environmental Laws and in such a manner as to
minimize, to the extent practicable, damage to the Subject
Property (including to the improvements, fixtures and
appurtenances thereon) and the disruption of or interference with
the applicable Purchaser's use of the Subject Property (including
the improvements, fixtures and appurtenances thereon).
(d) To the extent reasonably requested by the Seller, the
applicable Purchaser shall: (i) reasonably cooperate with the
Seller in all Remediation; (ii) provide reasonable on-site
services and support to the Seller's Remediation; (iii) make
officers and employees of such Purchaser reasonably available to
meet on- or off-site with the Seller and its environmental
consultants and other representatives on matters relating to
Remediation; (iv) make officers and employees of such Purchaser
available to meet with federal, state and local environmental
regulatory officials when and as requested by such officials or
as reasonably requested by the Seller; (v) provide the Seller
reasonable access to and copies of such documents, records and
other data of such Purchaser as the Seller may reasonably require
(46)
in connection with Remediation; (vi) otherwise use its
commercially reasonable efforts to minimize Remediation costs;
provided, however, such Purchaser shall not be required to incur
any out-of-pocket expense and such cooperation will not diminish
materially such Purchaser's use of the Purchased Assets as a
result of such efforts; and (vii) sign and otherwise execute such
documents as are necessary for the Seller's performance of its
Transfer Obligations or Remediation, provided, however, such
Purchaser shall not be required as a result of the execution of
any document pursuant to this subsection to incur any cost or
expense or otherwise be bound by any affirmative or negative
covenant by which such Purchaser is not otherwise bound pursuant
to this Section 7.20.
(e) The Seller shall be responsible for the cost of any repairs,
replacements or damages to each Purchaser's improvements,
fixtures and appurtenances within the Subject Property to the
extent caused by the act or omission of the Seller or caused by
any Seller's Remediation. Each Purchaser shall be responsible
for the cost of any repairs, replacements or damages to the
Seller's improvements, fixtures and appurtenances within the
Subject Property to the extent caused by the act or omission of
such Purchaser.
(f) The Seller may connect to any utility lines which serve the
Subject Property, in order to provide water, electric, telephone,
sanitary sewer, storm sewer and other utility services to the
Seller in connection with the Seller's Remediation; provided, the
Seller shall obtain all necessary utility approvals prior to
making any connections; and provided further, the Seller shall
reimburse the applicable Purchaser for all costs which such
Purchaser incurs as a result of the Seller's use of such
utilities.
(g) With the reasonable consent of the applicable Purchaser, the
Seller, at its sole cost, may make such alterations, additions
and improvements in and to the Subject Property as are necessary
in order for the Seller to comply with its Transfer Obligations
or to perform Seller's Remediation, including the removal of
water, soil or subsoil from the Subject Property. The applicable
Purchaser shall cooperate with the Seller in securing (at the
Seller's cost) any Permits that are required with respect to such
alterations.
7.21 Litigation. From the date hereof through the Closing Date,
the Seller shall notify promptly the Purchasers of any material
actions or proceedings of the type described in Section 5.9(a)
that from and after the date hereof are commenced or, to the
Knowledge of the Seller, threatened, against the Seller. From
the date hereof to the Closing Date, each party shall promptly
notify the other party of any actions or proceedings commenced
or, to the Knowledge of such party, threatened that, if adversely
determined, would impair the ability of such party to consummate
the transactions contemplated hereby.
7.22 Technology Cooperation Agreement. Upon the written request
of either or both Purchasers within 90 days of the Closing, the
Seller will use commercially reasonable efforts to negotiate an
agreement with such Purchaser(s) pursuant to which the Seller
will provide to such Purchaser(s) and, in the case of Airgas, the
Airgas Subsidiaries, access to the technology and know-how
produced by the Seller's Packaged Gas Center of Excellence and
such Purchaser(s) will pay the Seller a royalty, all on the terms
set forth in the Finalized Term Sheet for Sycamore Acquisition,
dated August 17, 2001 between the Seller and Airgas.
(47)
7.23 Delivery of Customer and Inventory Data. The Seller shall
deliver to Airgas at least ten (10) days prior to the Closing
Date (provided that the HSR waiting period has expired or been
terminated prior to such date), in such other format as is agreed
among the representatives of the Seller and of Airgas who are
responsible for the transfer of such customer and inventory
information and in a manner consistent with the post-Closing
obligations contemplated by the applicable Intellectual Property
License and Transition Services Agreement, all customer and
inventory information relating to the Packaged Gas Business
contained or stored in the Seller's Computers Unlimited System
and on the Seller's SPOC system, to the extent that such
information is part of the Purchased Assets. The Seller shall
deliver to NWS at least ten (10) days prior to the Closing Date
(provided that the HSR waiting period has expired or been
terminated prior to such date), in such other format as is agreed
among the representatives of the Seller and of NWS who are
responsible for the transfer of such customer and inventory
information and in a manner consistent with the post-Closing
obligations contemplated by the applicable Intellectual Property
License and Transition Services Agreement, all customer and
inventory information relating to the Packaged Gas Business
contained or stored in the Seller's Computers Unlimited System
and on the Seller's SPOC system, to the extent that such
information is part of the Carolina Assets.
7.24 Non-Compete Payments. From and after the Closing Date,
Airgas shall be responsible for paying any outstanding amounts
required to be paid under any covenants not to compete
transferred to the Purchasers as part of the Purchased Assets, up
to a maximum amount of $450,000. The Seller shall reimburse
Airgas for any payments required to be made by Airgas under such
covenants in excess of $450,000.
7.25 Acquisition Agreements. In the event that, from time to
time, a Purchaser has suffered losses in connection with any
matter with respect to which such Purchaser is not entitled to
indemnification by the Seller hereunder, at the written request
of such Purchaser, the Seller shall cooperate with such Purchaser
to enforce for the benefit of such Purchaser, at such Purchaser's
expense, any indemnification rights the Seller may have under any
Contract pursuant to which the Seller acquired any of the
Purchased Assets, to the extent indemnification with respect to
such matter is available under such Contract, or assign such
rights to such Purchaser to the extent of the applicable claim.
SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASERS
8.1 Airgas Condition Precedents. The obligation of Airgas to
proceed with the Closing hereunder is subject to the satisfaction
of the following conditions on the Closing Date, any of which may
be waived by Airgas by executing a writing at or prior to the
Closing:
(a) Representations and Warranties. The representations and
warranties of the Seller contained in this Agreement that are not
qualified by materiality or a Business Material Adverse Effect
requirement shall be true and correct in all material respects
and the representations and warranties that are qualified by
materiality or a Business Material Adverse Effect requirement
shall be true and correct, in each case, at the date hereof and
at and as of the Closing Date.
(48)
(b) Covenants and Agreements. All the terms, covenants,
agreements and conditions of this Agreement to be complied with
and performed by the Seller on or before the Closing Date shall
have been complied with and performed in all material respects.
(c) Officer's Certificate. Airgas shall have received
certificates of an appropriate officer of the Seller to the
effect of Sections 8.1(a) and 8.1(b) hereof.
(d) Litigation.
(A) No action, suit, proceeding or investigation
by or before any Governmental Body of competent jurisdiction
shall have been instituted or threatened that has a reasonable
likelihood of success and (1) that would have a material adverse
effect on Airgas' ability to consummate the transactions
contemplated by this Agreement, (2) that seeks to prohibit or
materially limit the ownership or operation by Airgas of the
Packaged Gas Business or the Purchased Assets or (3) that relates
to or arises out of the Packaged Gas Business or the Purchased
Assets and seeks to obtain from Airgas any damages in excess of
$3,000,000; provided, that this Section 8.2(d)(A) shall not apply
to any action, suit or proceeding (i) in which allegations are
made related to Airgas' ownership interest in NWS or
(ii) instituted by, against or involving NWS.
(B) There shall not be any statute, rule,
regulation, order, writ, injunction or decree of any Governmental
Body in effect which restrains or prohibits the consummation of
the transactions contemplated by this Agreement and the other
Transaction Documents.
(e) Regulatory Consents. There shall have been received all
Consents of all Governmental Bodies necessary for the
consummation by Airgas of the transactions contemplated by this
Agreement and the other Transaction Documents, all required
notice periods and waiting periods with respect thereto shall
have expired or terminated, and all conditions contained in any
such Consents required to have been satisfied prior to
consummation by Airgas of the transactions contemplated by this
Agreement and the other Transaction Documents shall have been
satisfied.
(f) Enabling Agreements. The Seller shall have executed the
Enabling Agreements to which Airgas is a party.
(g) Real Property; Closing Documentation. Airgas shall have
received such executed deeds, assignments and other documents in
form reasonably satisfactory to Airgas as Airgas' counsel shall
deem necessary or appropriate to carry out the transfers of real
property interests contemplated hereby, and Airgas shall have
received the Seller's originals of all Real Property Leases
included in the Airgas Assets.
(h) FIRPTA Affidavit. Airgas shall have received an affidavit
of an officer of the Seller, sworn to under penalty of perjury,
setting forth the Seller's name, address and Federal tax
identification number and stating that the Seller is not a
"foreign person" within the meaning of Section 1445 of the Code.
If, on or before the Closing Date, Airgas shall not have received
(49)
such affidavit, Airgas may withhold from its Closing Date Payment
such sums as are required to be withheld therefrom under Section
1445 of the Code.
(i) Environmental Transfer Laws. The Seller shall have
fulfilled its obligations (if any) under applicable environmental
transfer laws, including without limitation the New Jersey
Industrial Site Recovery Act, to the extent such laws require
those obligations to be fulfilled as a condition precedent to the
consummation of this Agreement and the other Transaction
Documents and to the performance of the transactions contemplated
hereunder and thereunder, it being understood that if any
investigation, Removal, Remedial or Response action is required
as a result of the application of any applicable environmental
transfer law, the Seller shall be responsible for all costs,
expenses and liabilities necessary to accomplish such
investigative, Removal, Remedial or Response action.
(j) Closing Deliverables. The Seller shall have delivered, or
caused to be delivered, to Airgas, each of the documents required
to be delivered by the Seller to Airgas pursuant to Section 4.2
hereof.
(k) Financing. All of the conditions set forth (i) in Section
5.2 of the Credit Agreement and (ii) in the definition of "Willow
Acquisition Conditions" in the Amendment shall have been
satisfied and the lenders under the Credit Agreement shall have
provided funding thereunder in connection with the Closing,
except where the failure of this condition to be satisfied is the
result of a breach by Airgas of any of its obligations under the
Credit Agreement or Section 7.13 hereof.
(l) When delivered to Airgas, the Audited Financial Documents
will have been prepared from financial statements or records used
by the management of the Seller in the operation of the Packaged
Gas Business. The Audited Financial Documents shall have been
delivered to Airgas, together with the audit report thereon of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇") (which report shall be without
exception or qualification except as reflected in the Financial
Documents) and the Audited Financial Documents shall be
consistent with the Financial Documents. Further, Airgas shall
have received the report from ▇▇▇▇▇▇▇▇ as set forth in the letter
agreement among Seller, Airgas and ▇▇▇▇▇▇▇▇ dated as of December
17, 2001 (the "Letter"), which report shall confirm the accuracy
of the costs that are specified in the Sycamore Agreed Upon
Procedures for SG&A attached to the Letter and be without
exception or qualification.
8.2 Conditions Precedent to the Obligations of NWS. The
obligation of NWS to proceed with the Closing hereunder is
subject to the satisfaction of the following conditions on the
Closing Date, any of which may be waived by NWS by executing a
writing at or prior to the Closing.
(a) Representations and Warranties. The representations and
warranties of the Seller contained in this Agreement that are
relevant to any of the Carolina Factors (as defined below) that
are not qualified by materiality or a Business Material Adverse
Effect requirement shall be true and correct in all material
respects and the representations and warranties that are relevant
to any of the Carolina Factors that are qualified by materiality
or a Business Material Adverse Effect requirement shall be true
(50)
and correct, in each case, at the date hereof and at and as of
the Closing Date. As used herein, the term "Carolina Factors"
shall mean (i) NWS' purchase of the Carolina Assets and (ii) NWS'
assumption of the Carolina Assumed Liabilities and the
satisfaction and discharge by NWS of its obligations and
liabilities under this Agreement.
(b) Covenants and Agreements. All the terms, covenants,
agreements and conditions of this Agreement that are relevant to
any of the Carolina Factors to be complied with and performed by
the Seller on or before the Closing Date shall have been complied
with and performed in all material respects.
(c) Officer's Certificate. NWS shall have received certificates
of an appropriate officer of the Seller to the effect of Sections
8.2(a) and 8.2(b) hereof.
(d) Litigation.
(A) No action, suit, proceeding or investigation
by or before any Governmental Body of competent jurisdiction
shall have been instituted or threatened (i) that would have a
material adverse effect on NWS' ability to consummate the
transactions contemplated by this Agreement, (ii) that seeks to
prohibit or materially limit the ownership or operation by NWS of
the Carolina Assets or (iii) that relates to or arises out of the
Carolina Assets and seeks to obtain from the Purchaser any
damages in excess of three hundred fifty thousand dollars
($350,000), provided, that this Section (A) shall not apply to
any action, suit or proceeding in which allegations are made
related to Airgas' ownership interest in NWS.
(B) There shall not be any statute, rule,
regulation, order, writ, injunction or decree of any Governmental
Body in effect which restrains or prohibits the consummation of
the transactions contemplated by this Agreement and the other
Transaction Documents.
(e) Regulatory Consents. There shall have been received all
Consents of all Governmental Bodies necessary for the
consummation by NWS of the transactions contemplated by this
Agreement and the other Transaction Documents, all required
notice periods and waiting periods with respect thereto shall
have expired or terminated, and all conditions contained in any
such Consents required to have been satisfied prior to
consummation by NWS of the transactions contemplated by this
Agreement and the other Transaction Documents shall have been
satisfied.
(f) Enabling Agreements. The Seller and NWS shall have agreed
on the services to be provided by the Seller to NWS pursuant to
the Transition Services Agreement and the Seller shall have
executed the Transition Services Agreement and the Intellectual
Property License to which NWS is a party.
(g) Real Property; Closing Documentation. NWS shall have
received such executed deeds, assignments and other documents in
form reasonably satisfactory to NWS as NWS' counsel shall deem
necessary or appropriate to carry out the transfers of real
property interests contemplated hereby, and NWS shall have
received the Seller's originals of all Real Property Leases
included in the Carolina Assets.
(51)
(h) FIRPTA Affidavit. NWS shall have received an affidavit of
an officer of the Seller, sworn to under penalty of perjury,
setting forth the Seller's name, address and Federal tax
identification number and stating that the Seller is not a
"foreign person" within the meaning of Section 1445 of the Code.
If, on or before the Closing Date, NWS shall not have received
such affidavit, NWS may withhold from its Closing Date Payment
such sums as are required to be withheld therefrom under Section
1445 of the Code.
(i) Environmental Transfer Laws. The Seller shall have
fulfilled its obligations (if any) under applicable environmental
transfer laws, including without limitation the New Jersey
Industrial Site Recovery Act, to the extent such laws require
those obligations to be fulfilled as a condition precedent to the
consummation of this Agreement and the other Transaction
Documents and to the performance of the transactions contemplated
hereunder and thereunder, it being understood that if any
investigation, Removal, Remedial or Response action is required
as a result of the application of any applicable environmental
transfer law, the Seller shall be responsible for all costs,
expenses and liabilities necessary to accomplish such
investigative, Removal, Remedial or Response action.
(j) Closing Deliverables. The Seller shall have delivered, or
caused to be delivered, to NWS, each of the documents required to
be delivered by the Seller to NWS pursuant to Section 4.2 hereof.
(k) Financing. NWS shall have obtained, on terms and conditions
satisfactory to NWS the financing necessary for it to consummate
the acquisition of the Carolina Assets.
(l) Airgas Consummation. The consummation of the acquisition by
Airgas of the Airgas Assets shall have occurred or shall be
occurring contemporaneously with the consummation of the
acquisition by NWS of the Carolina Assets.
(m) Due Diligence. NWS shall have been satisfied in its
discretion, exercised in good faith, with the results of its due
diligence investigation and evaluation in connection with its
acquisition of the Carolina Assets, its assumption of the
Carolina Assumed Liabilities and the other transactions
contemplated hereby. None of the other conditions contained in
this Section 8.2 shall, by implication or otherwise, limit,
modify or otherwise affect the generality of the condition
contained in this Subsection 8.2(m).
(n) Inter-Purchaser Agreement. NWS and Airgas shall have
executed and delivered an agreement entitled Inter-Purchaser
Agreement (the "Inter-Purchaser Agreement") in form and substance
satisfactory to NWS. Airgas shall not have breached such Inter-
Purchaser Agreement, and such Inter-Purchaser Agreement shall not
have been terminated. The representations and warranties of
Airgas contained in such Inter-Purchaser Agreement that are not
qualified by materiality shall be true and correct in all
material respects and the representations and warranties of
Airgas contained in such Inter-Purchaser Agreement that are
qualified by materiality shall be true and correct, in each case,
at the date thereof and at and as of the Closing Date. All the
terms, covenants, agreements and conditions of such Inter-
Purchaser Agreement to be complied with and performed by Airgas
on or before the Closing Date shall have been complied with and
performed in all material respects.
(52)
(o) Landlord Consents. The consents required for the assignment
to NWS of each of the Real Property Leases included within the
Carolina Assets shall have been received by NWS and be in full
force and effect.
(p) Material Adverse Effect. Since the date of this Agreement,
there shall not have occurred any event, change or effect that is
or would reasonably be expected to be materially adverse to the
condition (financial or otherwise), properties, liabilities or
results of operations of the Carolina Assets or the business
conducted in connection therewith, taken as a whole, or that
would materially impair or delay the Seller's obligations under
this Agreement or the other Transaction Documents or the
consummation of the transactions contemplated hereby and by the
other Transaction Documents or the ability of NWS to operate the
Carolina Assets in substantially the same manner as used prior to
the Closing Date; provided, however, that (i) the impact of a
decline in the market price of the products of the Carolina
Facilities, (ii) the impact of an increase in the price of raw
materials consistent with the market generally, or (iii) the
impact of changes in general economic and/or financial market
conditions shall not constitute a materially adverse event,
change or effect under this Subsection 8.2(p).
SECTION 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
The obligation of the Seller to proceed with the Closing
hereunder is subject to the satisfaction of the following
conditions on the Closing Date (in each case, with respect to
NWS, in the event that NWS remains a Purchaser at the Closing),
any of which may be waived by the Seller by executing a writing
at or prior to the Closing:
9.1 Representations and Warranties. The representations and
warranties of the Purchasers contained in this Agreement that are
not qualified by materiality or a material adverse effect
requirement shall be true and correct in all material respects
and the representations and warranties that are qualified by
materiality or a material adverse effect requirement shall be
true and correct, in each case, at the date hereof and at and as
of the Closing Date, with the same force and effect as if made at
and as of the Closing Date.
9.2 Covenants and Agreements. All the terms, covenants,
agreements and conditions of this Agreement to be complied with
and performed by the Purchasers on or before the Closing Date
shall have been complied with and performed in all material
respects.
9.3 Officer's Certificate. The Seller shall have received
certificates of an appropriate officer of each Purchaser to the
effect of Sections 9.1 and 9.2 hereof.
9.4 Litigation.
(a) No action, suit, proceeding or investigation by or before
any Governmental Body of competent jurisdiction shall have been
instituted or threatened that has a reasonable likelihood of
success and (i) that would have a material adverse effect on the
Seller's ability to consummate the transactions contemplated by
this Agreement or (ii) that relates to or arises out of the
Packaged Gas Business or the Purchased Assets and seeks to obtain
from the Seller any damages in excess of three million dollars
($3,000,000).
(53)
(b) There shall not be any statute, rule, regulation, order,
writ, injunction or decree of any Governmental Body in effect
which restrains or prohibits the consummation of the transactions
contemplated by this Agreement and the other Transaction
Documents.
9.5 Consents. There shall have been received all Consents of all
Governmental Bodies and all other Persons (except for Consents
relating to Acquired Contracts that have been waived by the
applicable Purchaser) necessary for the consummation by the
Seller of the transactions contemplated by this Agreement and the
other Transaction Documents, all required notice periods and
waiting periods with respect thereto shall have expired or
terminated, and all conditions contained in any such Consents
required to have been satisfied prior to consummation by the
Seller of the transactions contemplated by this Agreement and the
other Transaction Documents shall have been satisfied.
9.6 Enabling Agreements. Each Purchaser shall have executed and
delivered each of the Enabling Agreements to which it is a party.
9.7 Environmental Transfer Laws. Each Purchaser shall have
fulfilled its obligations (if any) under applicable environmental
transfer laws, including without limitation the New Jersey
Industrial Site Recovery Act, to the extent such laws require
those obligations to be fulfilled as a condition precedent to the
consummation of this Agreement and the other Transaction
Documents and to the performance of the transactions contemplated
hereunder and thereunder.
9.8 Inter-Purchaser Agreement. Unless a NWS Termination Notice
or a Seller Termination Notice has been delivered, the Purchasers
shall have entered into and delivered to the Seller an Inter-
Purchaser Agreement, the terms and conditions of which do not
have the effect of enlarging or expanding in any manner any of
the Seller's obligations or liabilities under any Transaction
Document beyond those obligations or liabilities that the Seller
would have absent the Inter-Purchaser Agreement.
9.9 Closing Deliverables. Each Purchaser shall have delivered,
or caused to be delivered, to the Seller, each of the documents
required to be delivered by such Purchaser to the Seller pursuant
to Section 4.3 hereof.
SECTION 10. EMPLOYEES
10.1 Transfer of Employees. The Purchasers shall make offers of
employment to and hire the Employees pursuant to the procedures
set forth in this Section 10.1:
(a) Aligned Employees. One of the Purchasers shall make offers
of employment to each of the Aligned Employees; provided however,
that the Purchasers, in their sole discretion, may decline to
offer employment to up to an aggregate of 100 Aligned Employees.
The Purchasers shall use their respective best efforts to
identify in writing to the Seller within thirty (30) days after
the date of this Agreement, the Aligned Employees that the
Purchasers decline to hire.
(54)
(b) Management Employees. Airgas shall make offers of
employment to each of the Management Employees that Airgas
identifies to the Seller in writing prior to the Closing Date.
NWS shall make offers of employment to each of the Management
Employees that NWS identifies to the Seller in writing prior to
the Closing Date. The Purchasers shall use their respective best
efforts to identify in writing to the Seller within thirty (30)
days after the date of this Agreement, the Management Employees
that the Purchasers wish to hire.
(c) Notice. The Purchasers shall periodically notify the Seller
in writing as to which Employees have or have not accepted such
offers.
(d) Responsibility for Certain Employees.
(A) If a Purchaser makes an offer of employment
on the terms described in the last sentence of Section 10.2 to
any Employee and such Employee does not accept such offer prior
to the Closing Date, such Purchaser shall have no obligation to
hire the Employee. Unless otherwise agreed by the parties, the
Seller shall cease to employ any Aligned Employee that does not
accept an offer of employment made to such Aligned Employee that
complies with the terms described in Section 10.2 hereof, and
shall not rehire any such Aligned Employee for a period of at
least twelve months without the prior written consent of the
applicable Purchaser.
(B) If a Purchaser makes an offer of employment
to any Employee that does not comply with the terms described in
Section 10.2, and such Employee does not accept such offer prior
to the Closing Date, such Purchaser shall be responsible for any
costs associated with the termination of such Employee.
(C) If the number of Aligned Employees to whom
the Purchasers decline to offer employment is greater than 50
(each such Aligned Employee, an "Excess Aligned Employee"), the
Purchasers shall pay to the Seller the costs associated with the
termination of each such Excess Aligned Employee in accordance
with this Section 10.1(d)(C). If the Purchasers notify the
Seller pursuant to Section 10.1(a) that they plan to decline to
offer employment to any Excess Aligned Employee, the Seller shall
provide to the Purchasers the Seller's good faith estimate of the
Seller's costs described on Schedule 10.2 associated with the
termination of each such Excess Aligned Employee. The Purchasers
shall either pay to the Seller on the Closing Date the amount of
the Seller's estimate of termination costs for each Excess
Aligned Employee, or the Purchasers shall hire such Aligned
Employee in accordance with this Section 10. A Purchaser may
make, as a condition of employment of any Employee, the transfer
of such Employee to another facility of such Purchaser within a
reasonable commuting distance from the facility of the Seller at
which the Employee is currently employed.
10.2 Terms of Employment. Each Employee who accepts a
Purchaser's offer of employment shall become employed by such
Purchaser (i) as of the Closing Date, (ii) in the event any such
Employee is on long-term or short-term disability leave on the
Closing Date, as of the date that such Employee is no longer on
any disability leave, provided that the Employee reports to work
with such Purchaser within 30 days after the end of any
disability leave and in no event later than 180 days following
the Closing Date, (iii) in the case of any Aligned Employee
identified on Schedule 1.9(b) (unless such Aligned Employee is
(55)
included in the 100 Aligned Employees to whom the Purchasers may
decline to make offers of employment pursuant to Section
10.1(a)), on the first Business Day of the month following the
date in which such Aligned Employee turns 55 years of age, or
(iv) with respect to Aligned Employees referenced in Section C of
Schedule A of the Transition Services Agreement between Airgas
and the Seller, in accordance with the terms and conditions of
such Transition Services Agreement. Employees who are employed
by a Purchaser in accordance with the foregoing sentence shall be
"Transferred Employees" from and after their first date of
employment with such Purchaser. Each Purchaser shall have the
right to administer a standard drug test (as administered to all
new employees hired by such Purchaser in the Ordinary Course of
Business) to each Employee that accepts such Purchaser's offer of
employment, and the failure of any such Employee to take or pass
such drug test shall be considered cause for termination by such
Purchaser. Any Employee who fails to take or pass such drug test
shall not be deemed a "Transferred Employee" for purposes of this
Agreement. Upon the Closing Date, all Transferred Employees
shall receive a base salary or hourly wage at least equal to his
or her base salary or hourly wage level in effect immediately
prior to the Closing Date.
10.3 Employee Benefits.
(a) Each Purchaser shall extend, on the Closing Date, such
Purchaser's then-existing employee welfare benefit plans and
employee pension benefit plans, both as defined in Section 3 of
ERISA, to the Transferred Employees employed by such Purchaser on
the same terms on which similarly situated employees of such
Purchaser participate in such plans, except as provided below in
this Section 10.3. For all purposes of such employee welfare
benefit plans and employee pension benefit plans (other than for
benefit accrual for any defined benefit pension plan), each
Purchaser shall credit Transferred Employees employed by such
Purchaser for prior service with the Seller and its Affiliates to
the extent the Seller recognized such service for the purpose of
its similar plans. Each Purchaser shall allow Transferred
Employees employed by such Purchaser with vacation earned for
2002 but unused as of the Closing Date to use such vacation prior
to the end of the year. Each Purchaser shall (a) cause its group
health plans to cover Transferred Employees employed by such
Purchaser and dependents of such Transferred Employees who are
covered under the Seller's Air Products Medical Plan as of the
Closing Date and to be responsible (in accordance with such
Purchaser's employee welfare benefit plans and employee pension
benefit plans) for expenses incurred by such Transferred
Employees and dependents on or after the Closing Date; (b) waive
proof of insurability requirements for initial extension of both
basic and optional benefit coverage under its group health plans
or other group insurance welfare benefit plans; (c) credit
deductible payments and co-insurance payments made in 2002 by
such Transferred Employees and their dependents under the
Seller's group health plans for expenses incurred on or prior to
the Closing Date towards deductibles and stop losses in effect
for its group health plans for 2002; (d) waive all pre-existing
condition clauses in its group health plans for such Transferred
Employees and their dependents; and (e) waive eligibility waiting
periods for such Transferred Employees and their dependents for
any employee benefit plans maintained by such Purchaser as of the
Closing Date. For purposes of the preceding sentence, "group
health plan" shall have the meaning proscribed in Section
5000(b)(1) of the Internal Revenue Code of 1986, as amended.
(b) If the employment of a Transferred Employee is terminated
within 12 months of the Closing Date (other than for cause), the
(56)
Purchaser that hired such Transferred Employee shall pay such
Transferred Employee as severance an amount equal to one week of
such Transferred Employee's salary at the time of such
termination for each year of such Transferred Employee's service
with the Seller (to the extent the Seller recognized such service
for the purposes of severance benefits), such Purchaser or any of
their respective Affiliates, provided, however, that such
Purchaser shall have no obligation to pay any amount pursuant to
this Section 10.3(b) in excess of 26 weeks' salary of such
Transferred Employee.
10.4 COBRA. The Seller shall be responsible for providing such
continuation coverage within the meaning of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA")
as is required pursuant to COBRA in respect of any Employee or
dependent of an Employee who incurs a "qualifying event" prior to
the Closing Date or any Employee who does not become a
Transferred Employee in accordance with Section 10.2. Each
Purchaser shall be responsible for providing such continuation
coverage as is required under COBRA in respect of any Transferred
Employee employed by such Purchaser or dependent who incurs a
qualifying event on or after the Closing Date.
10.5 Non-Solicitation by the Purchasers of the Seller's
Employees. Each Purchaser hereby covenants and agrees that,
except as provided in this Section 10, from and after the date
hereof until the fifth anniversary of the later of the date
hereof or the Closing Date, neither it nor any of its Affiliates
will, directly or indirectly, solicit for employment any
employees of the Seller involved in the transactions contemplated
hereby with whom the Purchaser first had contact, or of whom such
Purchaser first learned, in connection with the negotiation and
preparation of the transactions contemplated hereby; provided,
that this Section 10.5 shall not apply (i) if any such employee
has been terminated by the Seller or its Affiliates for any
reason or (ii) if such employee contacts such Purchaser or its
Affiliates (x) in response to a general solicitation for
employment in newspapers or other periodicals or (y) on his or
her own initiative without any encouragement by such Purchaser.
10.6 Unemployment Insurance. At the request of the applicable
Purchaser, the Seller, to the extent permitted by relevant state
unemployment insurance law, agrees to a total or partial transfer
of experience rating, and/or transfer of applicable reserve
balances, relating to Aligned Employees, whichever is applicable.
The Seller will provide to the applicable Purchaser information
reasonably requested by the applicable Purchaser to effectuate
such transfer.
10.7 NWS Obligations. Notwithstanding anything contained herein
to the contrary, NWS' rights, responsibilities, obligations and
liabilities hereunder with respect to the Employees shall be
limited to only those Employees exclusively employed at the
Carolina Facilities, and NWS' responsibilities, obligations and
liabilities hereunder with respect to Transferred Employees shall
be limited to only those Transferred Employees hired by NWS.
SECTION 11. BROKERAGE
The Seller, on the one hand, and the Purchasers, on the
other hand, shall indemnify and hold harmless the other against
and in respect of any liability, cost or expense resulting from
any agreement, arrangement or understanding made by such party
with any third party for brokerage or finders fees or other
commissions relative to this Agreement or the transactions
contemplated hereby.
(57)
SECTION 12. EXPENSES
Except as otherwise provided herein or therein, each party
hereto shall bear all expenses incurred by it in connection with
this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby,
including all compensation and expenses of their respective
counsels, actuaries and accountants.
SECTION 13. TRANSFER TAXES AND RECORDING EXPENSES
13.1 The parties understand and agree that there will be added to
the Purchase Price any excise, use, privilege, value added or
sales tax, or any other tax or assessment (other than those based
upon the net income or the net worth of the Seller) now or
hereafter imposed by or under the authority of any federal, state
or local law, rule or regulation with respect to the purchase of
the Purchased Assets by the Purchasers. Each Purchaser expressly
authorizes the Seller to collect and remit such taxes as may be
required by any applicable laws. If the purchase of any
Purchased Assets is exempt from sales or use tax, then where
required by applicable Law the applicable Purchaser shall furnish
the Seller with a valid exemption certificate in form and content
acceptable to the Seller.
13.2 The applicable Purchaser shall be responsible for and shall
pay any and all transfer, stamp, documentary, title, registration
and recording taxes or fees applicable to the transfer of its
respective Purchased Assets under this Agreement; provided,
however that the applicable Purchaser and the Seller shall each
be responsible for one-half of any real estate transfer taxes
applicable to the transfer of the Owned Real Property.
13.3 Real and personal property taxes applicable to any of the
Purchased Assets, including but not limited to any payments made
under an Industrial District Agreement or any similar agreement
under which amounts are paid to a governmental body in lieu of
property taxes, shall be prorated between the Seller, on the one
hand, and the applicable Purchaser, on the other hand, as of the
Closing Date.
SECTION 14. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
14.1 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements contained
in this Agreement and the certificates and other documents
delivered pursuant to this Agreement shall survive the Closing,
but shall be subject to all limitations and other provisions
relating thereto contained in this Agreement. Such
representations, warranties, covenants and agreements contained
herein are exclusive, and the parties hereto confirm that they
have not relied upon any other representations, warranties,
covenants and agreements as an inducement to enter into this
Agreement or otherwise. Following the Closing (other than with
respect to the Enabling Agreements and the remedies provided
therein and claims of, or causes of action arising from, fraud),
the remedies provided in this Section 14 shall be the sole
recourse of all parties hereto for all claims, liabilities,
losses, damages, costs and expenses related to or arising, at
law, under any statute or in equity (including but not limited to
those arising under any Environmental Laws), or otherwise,
directly or indirectly, out of this Agreement or the transactions
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contemplated hereby. In furtherance of the foregoing, each party
hereto waives, from and after the Closing, to the fullest extent
permitted by law, any and all rights, claims, actions or causes
of actions (other than with respect to the Enabling Agreements
and the remedies provided therein and claims of, or causes of
action arising from, fraud) it may have against the other parties
hereto relating to the subject matter of this Agreement other
than the remedies expressly provided in this Section 14.
14.2 Indemnification of the Purchasers. Subject to the last
sentence of Section 7.12 and to Sections 14.3, 14.4 and 14.9
hereof, the Seller agrees to defend, indemnify and hold harmless
the Purchasers and their respective Affiliates and the officers
and directors and the respective successors and permitted assigns
of each of the foregoing (collectively, the "Purchaser
Indemnitees") against and in respect of any costs, damages
(including but not limited to claims for natural resource
damages, remediation, response and investigation), losses,
expenses, claims, obligations or other liabilities (including
legal and other expenses incurred in investigating and defending
or enforcing any claims or deficiencies), but not including
special, indirect, consequential or punitive damages of any kind
(including without limitation business interruption, lost profits
or lost business opportunities), except to the extent special,
indirect, consequential or punitive damages are awarded to a
third party against an indemnified party in circumstances in
which such indemnified party is entitled to indemnification
hereunder (collectively, "Losses"), incurred by the Purchaser
Indemnitees to the extent resulting or arising from:
(a) except for matters relating to Environmental Laws,
Environmental Permits, Environmental Liabilities and any other
matters related thereto, which are covered exclusively by Section
14.2(c) and Section 14.2(d) below, a breach of any of the
representations or warranties made by the Seller in Section 5 of
this Agreement or in any certificate, agreement or document or
instrument delivered pursuant hereto;
(b) except for matters relating to Environmental Laws,
Environmental Permits, Environmental Liabilities and any other
matters related thereto, which are covered exclusively by Section
14.2(c) and Section 14.2(d) below, a breach of any of the
covenants or agreements (other than the Enabling Agreements) made
or to be performed by the Seller pursuant to this Agreement or in
any certificate, agreement or document or instrument delivered
pursuant hereto;
(c) all Environmental Liabilities arising without any
Unreasonable Contact by any Purchaser Indemnitees, but only to
the extent such Environmental Liabilities are based upon:
(A) a breach of any of the representations or
warranties made by the Seller in Section 5.10 of this Agreement
or in any certificate, agreement or document or instrument
delivered pursuant hereto with respect to Section 5.10; or
(B) a breach of any of the covenants or
agreements (other than the Enabling Agreements) made or to be
performed by the Seller pursuant to this Agreement or in any
certificate, agreement, document or instrument delivered pursuant
hereto;
(d) all Environmental Liabilities arising out of any claim,
demand, notice, suit or order asserted or brought by a Third
(59)
Party on or after the Closing Date without any Unreasonable
Contact by any Purchaser Indemnitees (except that the requirement
that the claim, demand, notice, suit or order be without
Unreasonable Contact shall not apply with respect to the Miami,
FL matter described in paragraph (g) of Schedule 5.10 or the
first sub-paragraph in paragraph (c) of Schedule 14.4), but in
any case only to the extent such Environmental Liabilities are
based upon:
(A) any Condition at any Owned Real Property or
any Leased Real Property, which Condition exists at the Closing
Date; provided, however, if a responsible chemical company acting
in a commercially reasonable manner with respect to a site where
such company bears the full risks and responsibilities would
perform immediately Remediation of a Condition identified in this
subsection in the absence of a Third Party claim, demand, notice,
suit or order, then the similar performance by a Purchaser
Indemnitee of such Remediation shall be subject to the Seller's
indemnification hereunder notwithstanding the absence of any
Third Party claim, demand, notice, suit or order;
(B) any action or failure to act by the Seller
related to the Packaged Gas Business or to any Purchased Asset,
which action or failure to act occurs prior to the Closing Date;
(C) any Release or threatened Release of a
Hazardous Substance at or from any Owned Real Property or any
Leased Real Property, which Release or threatened Release occurs
prior to the Closing Date and at or after the date when the
Seller first owned or leased the particular Owned or Leased Real
Property; or
(D) the Management by the Seller of any Hazardous
Substance (i) in connection with the Packaged Gas Business, or
(ii) to, at or from any Owned Real Property or any Leased Real
Property, in each case which Management occurs prior to the
Closing Date.
(e) the Excluded Liabilities, it being understood that matters
relating to Environmental Laws or Environmental Liabilities are
covered exclusively by Section 14.2(c) or 14.2(d) above and are
not to be treated as Excluded Liabilities, and that this Section
14.2(e) shall not apply to Assumed Liabilities;
(f) any failure to comply with the "bulk sales" laws applicable
to the transactions contemplated by this Agreement;
(g) any Tax liability imposed or incurred with respect to the
Packaged Gas Business or the Purchased Assets for all Pre-Closing
Tax Periods (or any portion thereof), except any liability,
obligation or expense for Taxes related to this transaction which
constitute liabilities, obligations or expenses of the Purchaser
pursuant to the Transaction Documents; or
(h) any mechanics', carriers', workers', repairer's, purchase
money security interest or other similar Liens on any of the
Purchased Assets arising or incurred prior to the Closing Date.
The obligations of the Seller hereunder shall bind the
successors and assigns of the Seller. The Seller's obligation to
indemnify NWS, its Affiliates and their respective officers and
(60)
directors and their respective successors and permitted assigns
under this Section 14.2 shall only apply to the extent the
indemnification obligation is relevant to any of the Carolina
Factors; provided, however, that the Seller shall not have any
obligation to indemnify NWS with respect to any Loss if the
effect of any such obligation would be to enlarge or expand the
Seller's obligations to any extent greater than the Seller's
indemnification obligations would be if Airgas had purchased all
of the Purchased Assets, assumed all of the Assumed Liabilities
and otherwise consummated all of the transactions contemplated
hereby without the participation of NWS, and Airgas had incurred
the same Loss.
14.3 Duration of Indemnification of the Purchasers. The Seller's
obligations to defend, indemnify and hold harmless the Purchaser
Indemnitees under Section 14.2 shall apply only to any Claim
Notice (as hereinafter defined) given pursuant to Section 14.9
within the following periods:
Sections 14.2(a) 18 months after the Closing Date,
and 14.2(c)(A) except that the Seller's
indemnification obligation with respect
to a breach of any representation or
warranty contained in Section 5.18, in
the first sentence of Section 5.20(a)
or in the third sentence of Section
5.5(a) shall survive until the
expiration of the applicable statute of
limitations.
Sections 14.2(b) 18 months after the Closing Date with
and 14.2(c)(B) respect to covenants and agreements of
the Seller other than those enumerated
in the succeeding three paragraphs.
No time limit (except to the extent
otherwise provided in the relevant
Section) with respect to covenants and
agreements of the Seller set forth in
Sections 7.1(b), 7.1(d), 7.3(d), 7.4,
7.5, 7.6, 7.8(a), 7.9(a), 7.9(b),
7.9(c), 7.9(d), 7.10, 7.16, 7.18(c),
7.19(b), 7.20, 7.24, 7.25, Section 13
and Section 16 ("Seller Post-Closing
Covenants"); provided, however, that
any notice to the Seller with respect
to any indemnification claim based upon
or arising out of a breach of a Seller
Post-Closing Covenant shall be
delivered to the Seller no later than
90 days following the date on which any
employee of a Purchaser in a position
with managerial responsibility becomes
aware of such claim.
The period of the applicable right of
first refusal with respect to the
covenants and agreements of the Seller
set forth in Section 7.2.
The covenants and agreements of the
Seller set forth in Sections 7.1(a),
7.7, 7.8(b), 7.8(c) and 7.14 shall
extinguish at the Closing, and the
Seller shall have no indemnification
obligations with respect thereto under
this Agreement.
(61)
Sections 10 years after the Closing Date.
14.2(d)(A), (B),
(C), and (D)
Sections 14.2(e), 5 years after the Closing Date.
14.2(f), 14.2(g)
and 14.2(h)
14.4 Limitations on Indemnification of the Purchasers.
(a) The Seller's obligations to defend, indemnify and hold
harmless the Purchaser Indemnitees (i) under Sections 14.2 shall
apply only after the Purchaser Indemnitees have suffered Losses
under Section 14.2 in excess of an aggregate of three million
dollars ($3,000,000), after which the Seller shall only be
obligated to indemnify Losses in excess of such amount, provided,
however, that solely for purposes of determining whether the
amount of the Seller's indemnification obligations exceed three
million dollars ($3,000,000) in the aggregate (the "Minimum
Amount"), a breach of the Seller's representations or warranties
shall be determined without regard to any limitation or
qualification as to materiality or Business Material Adverse
Effect set forth in such representation or warranty, and provided
further that the Minimum Amount shall not apply to the Seller's
indemnification obligation under Section 14.2(f), 14.2(g) or
14.2(h), or to any matter described in Schedule 5.10 or Schedule
14.4, and (ii) in any case shall apply only after the amount of
any individual Loss or any series of related Losses indemnified
against hereunder shall exceed twenty-five thousand dollars
($25,000) and then shall apply to the entire amount of such Loss.
In any event, the Seller will be obligated only to indemnify
Losses in excess of the Minimum Amount and up to an aggregate
amount equal to sixty million dollars ($60,000,000) (the "Maximum
Amount"). Any claim which is within the description of Section
14.2(a) or 14.2(b) and which is also within the description of
any of Sections 14.2(c) through 14.2(h), shall be deemed to be
asserted and treated hereunder for all purposes as a claim
arising out of Section 14.2(c) through 14.2(h), as appropriate.
Notwithstanding anything to the contrary herein, the minimum
thresholds set forth in clauses (i) and (ii) of this Section
14.4(a) shall not apply to any Losses suffered as a result of a
breach by the Seller of Section 3.2, 3.3, 3.4, 3.5, 3.6, 7.1(b),
7.1(d), 7.2, 7.3(d), 7.4, 7.5, 7.6, 7.8(a), 7.9(a), 7.9(b),
7.9(c), 7.9(d), 7.10, 7.16, 7.18(c), 7.19(b), 7.20, 7.24, 7.25,
Section 11, Section 13, Section 16 or Section 18.
(b) Remediation of Particular Matters. The Seller's obligation
to indemnify the Purchaser Indemnitees pursuant to Section
14.2(c) with respect to any Removal, Remedial or Response action
("Remediation") shall be subject to and limited by the following
conditions:
(A) The applicable Purchaser shall perform such
Remediation in material compliance with all applicable Laws,
including without limitation, Environmental Laws;
(B) Such Remediation shall be only that which (i)
is necessary to resolve and discharge the Environmental Liability
that is the subject of the Seller's obligation to indemnify the
Purchaser Indemnitees, (ii) employs the most cost-effective means
available that is acceptable to the relevant Governmental Body,
(62)
and (iii) results in Remediation of the affected environmental
media (e.g., soil, groundwater) to an extent necessary for use of
the affected Owned Real Property or Leased Real Property in the
manner that such property was used by the Seller at the Closing
Date; and
(C) Prior to a Purchaser's performing any
particular Remediation at a Subject Property:
(i) Such Purchaser shall provide to the Seller,
for the Seller's review and comment, such Purchaser's proposed
Remediation plan, which shall include (as reasonably requested by the
Seller) the data, evaluations, reports and other information upon which
such Purchaser relied in preparing its proposed Remediation plan; and
(ii) The Seller shall either (I) provide comments
to the applicable Purchaser on the proposed Remediation plan within 60
days (or, in the event that submission of the Remediation plan is
required in less than 60 days under applicable Environmental Law,
then within a reasonable time prior to the submission of the
Remediation plan, provided that such Purchaser shall use
commercially reasonable efforts to obtain an extension of time
for submission of such plan) of the receipt thereof (it being
understood that if the Seller does not provide any such comments,
such Purchaser may proceed with performance of such Remediation),
after which such Purchaser shall provide the final Remediation
plan to the Seller for the Seller's approval, which approval may
not be unreasonably withheld or delayed, or (II) if the Seller
does not approve such Purchaser's final Remediation plan, assume
responsibility for such Remediation as is necessary to resolve
and discharge the Environmental Liability that is the subject of
the Seller's obligation to indemnify the Purchaser Indemnitees.
(c) Notwithstanding anything to the contrary in this Agreement,
the Seller makes no representation or warranty, and shall have no
indemnification obligation, with respect to any Environmental
Liability relating to compliance with the U.S. Environmental
Protection Agency's Risk Management Plan Regulations (pursuant to
Section 112(r) of the Clean Air Act) relating to the storage of
gas cylinders where an individual cylinder contains less than the
threshold quantity of a regulated substance; provided, however,
that the Seller shall reimburse the applicable Purchaser for any
fines or penalties paid by such Purchaser in connection with the
foregoing to the extent that such fines or penalties are
identified by the U.S. Environmental Protection Agency in a
notice of violation or similar notification document as relating
to periods prior to the Closing Date.
14.5 Indemnification of the Seller by Airgas. Subject to
Sections 14.7, 14.8 and 14.9 hereof, Airgas agrees to defend,
indemnify and hold harmless the Seller and its Affiliates and
their respective officers and directors and the respective
successors and permitted assigns of each of them (the "Seller
Indemnitees") against and in respect of any Losses incurred by
the Seller Indemnitees to the extent resulting or arising from:
(a) except for matters relating to Environmental Laws,
Environmental Permits, Environmental Liabilities, and any other
matters related thereto, which are covered exclusively by Section
14.5(c) below, a breach of any of the representations or
warranties made by the Purchasers in Section 6 of this Agreement
or in any certificate, agreement or document or instrument
delivered pursuant hereto;
(63)
(b) except for matters relating to Environmental Laws,
Environmental Permits, Environmental Liabilities, and any other
matters related thereto, which are covered exclusively by Section
14.5(c) below, a breach of any of the covenants or agreements
(other than the Enabling Agreements) made or to be performed by a
Purchaser or its successors pursuant to this Agreement or in any
certificate, agreement or document or instrument delivered
pursuant hereto;
(c) except to the extent that the Seller is required to
indemnify a Purchaser for a particular Environmental Liability
pursuant to Section 14.2(c) or 14.2(d), any Environmental
Liabilities that are related to the Packaged Gas Business or to
any Purchased Asset to the extent such Environmental Liability
arises out of events, actions or conditions occurring on or after
the Closing Date, specifically including (but not limited to) the
Management of any Hazardous Substance to, at or from any Owned
Real Property or any Leased Real Property, which Management
occurs on or after the Closing Date;
(d) except to the extent that a claim seeks relief under any
Employee Benefit and Compensation Plan, any claim of wrongful
termination, constructive discharge or wrongful discharge or any
other employment-related claim asserted by an employee hired by a
Purchaser in connection with the transactions contemplated by
this Agreement who is terminated or severed by a Purchaser or any
of its Affiliates on or after the Closing Date;
(e) any liability, obligation, claim, demand or condition
arising out of or with respect to NWS' participation as a party
to this Agreement (other than such liabilities or obligations
that the Seller has to NWS under the terms of this Agreement) or
in connection with the Inter-Purchaser Agreement, including in
any event any liability, obligation, claim, demand or condition
arising out of or relating to any dispute between Airgas and NWS
(including in connection with the operation by the Seller of any
Carolina Asset or any other transaction contemplated by Section
7.18(c)), whether or not NWS' purchase of the Carolina Assets and
assumption of the Carolina Assumed Liabilities is consummated;
(f) except for matters relating to Environmental Laws,
Environmental Permits, Environmental Liabilities, and any other
matters related thereto, which are covered exclusively by Section
14.5(c) above, (i) any liability or obligation (other than
Excluded Liabilities) of any nature or kind, known or unknown,
fixed, accrued, absolute or contingent, or any claim, demand or
condition asserted with respect to a Purchaser's operation of the
Purchased Assets arising out of events or conditions occurring on
or after the Closing Date or (ii) any Assumed Liability; or
(g) any Tax liability imposed or incurred with respect to the
Packaged Gas Business or the Purchased Assets for all Post-
Closing Tax Periods (or any portion thereof), and those Taxes
described in Section 13.1 and 13.2 .
The obligations of Airgas hereunder shall bind the successors
and assigns of Airgas.
14.6 Indemnification of the Seller by NWS. Subject to Sections
14.7, 14.8 and 14.9 hereof, NWS agrees to defend, indemnify and
(64)
hold harmless the Seller Indemnitees against and in respect of
any Losses incurred by the Seller Indemnitees to the extent
resulting or arising from:
(a) except for matters relating to Environmental Laws,
Environmental Permits, Environmental Liabilities, and any other
matters related thereto, which are covered exclusively by Section
14.6(c) below, a breach of any of the representations or
warranties made by NWS in Section 6 of this Agreement or in any
certificate, agreement or document or instrument delivered
pursuant hereto;
(b) except for matters relating to Environmental Laws,
Environmental Permits, Environmental Liabilities, and any other
matters related thereto, which are covered exclusively by Section
14.6(c) below, a breach of any of the covenants or agreements
(other than the Enabling Agreements) made or to be performed by
NWS or its successors pursuant to this Agreement or in any
certificate, agreement or document or instrument delivered
pursuant hereto;
(c) except to the extent that the Seller is required to
indemnify any Purchaser for a particular Environmental Liability
pursuant to Section 14.2(c) or Section 14.2(d), any Environmental
Liabilities that are related to any Carolina Asset to the extent
such Environmental Liability arises out of events, actions or
conditions occurring on or after the Closing Date, specifically
including (but not limited to) the Management on or after the
Closing Date by NWS of any Hazardous Substance to, at or from any
Owned Real Property that is included in the Carolina Assets or
any Leased Real Property which is subject to a Real Property
Lease that is included in the Carolina Assets;
(d) except to the extent that a claim seeks relief under any
Employee Benefit and Compensation Plan, any claim of wrongful
termination, constructive discharge or wrongful discharge or any
other employment-related claim asserted by an employee hired by
NWS in connection with the transactions contemplated by this
Agreement who is terminated or severed by NWS or any of its
Affiliates on or after the Closing Date;
(e) except for matters relating to Environmental Laws,
Environmental Permits, Environmental Liabilities, and any other
matters related thereto, which are covered exclusively by Section
14.6(c) above, (i) any liability or obligation (other than
Excluded Liabilities) of any nature or kind, known or unknown,
fixed, accrued, absolute or contingent, or any claim, demand or
condition asserted with respect to NWS' operation of the Carolina
Assets arising out of events or conditions occurring on or after
the Closing Date or (ii) any Carolina Assumed Liability; or
(f) any Tax liability imposed or incurred with respect to any
Carolina Asset for all Post-Closing Tax Periods (or any portion
thereof), and those Taxes described in Section 13.1 and 13.2 to
the extent applicable to the Carolina Assets.
The obligations of NWS hereunder shall bind the successors
and assigns of the Purchasers.
14.7 Duration of Indemnification of the Seller. The Purchasers'
respective obligations to defend, hold harmless and indemnify the
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Seller Indemnitees under Sections 14.5 and 14.6 shall apply only
to any Claim Notice given pursuant to Section 14.9 within the
following periods:
Section 18 months after the Closing Date
14.5(a) and
14.6(a)
Sections 18 months after the Closing Date with
14.5(b) and respect to covenants an agreements of the
14.6(b) Purchasers other than those enumerated in
the succeeding two paragraphs.
No time limit (except to the extent
otherwise provided in the relevant Section)
with respect to covenants and agreements of
a Purchaser set forth in Sections 7.1(b),
7.1(d), 7.3(a), 7.3(b), 7.3(c), 7.6, 7.8(a),
7.9(b), 7.9(c), 7.9(d), 7.11, 7.18, 7.19(a),
7.20, 7.24, Section 10, Section 13 and
Section 16 ("Purchaser Post-Closing
Covenants"); provided however, that any
notice to a Purchaser with respect to any
such indemnification claim based upon or
arising out of a breach of a Purchaser Post-
Closing Covenant shall be delivered to such
Purchaser no later than 60 days following
the date on which any Seller Indemnitee
becomes aware of such claim.
The covenants and agreements of a Purchaser
set forth in Sections 7.7, 7.8(b), 7.8(c)
and 7.13 shall extinguish at the Closing,
and the Purchasers shall have no
indemnification obligation with respect
thereto under this Agreement.
Sections 10 years after the Closing Date.
14.5(c) and 14.6(c)
Sections 15 years after the Closing Date.
14.5(d), 14.5(e),
14.5(f), 14.5(g),
14.6(d), 14.6(e) or
14.6(f)
14.8 Limitation on Indemnification of the Seller. The
Purchasers' obligation to defend, indemnify and hold harmless the
Seller Indemnitees (i) shall apply only after the Seller
Indemnitees have suffered Losses in excess of the Minimum Amount,
after which the Purchasers shall only be obligated to indemnify
Losses in excess of such amount; provided, however, that solely
for purposes of determining whether the amount of the Purchasers'
indemnification obligations exceed the Minimum Amount, a breach
of a Purchaser's representations or warranties shall be
determined without regard to any limitation or qualification as
to materiality set forth in such representation or warranty, and
(ii) in any case shall apply only after the amount of any
individual or any series of related Losses indemnified against
hereunder shall exceed twenty-five thousand dollars ($25,000) and
then shall apply to the entire amount of such Loss. In any event,
the Purchasers will be obligated only to indemnify Losses in
excess of the Minimum Amount and up to an aggregate amount equal
to the Maximum Amount; provided, however, that neither the
Minimum Amount nor the Maximum Amount shall apply to Airgas'
(66)
indemnification obligation under Section 14.5(e). Any claim
which is within the description of Section 14.5(a) or 14.5(b),
which is also within the description of any of Section 14.5(c)
through 14.5(g), shall be deemed to be asserted and treated
hereunder for all purposes as a claim arising out of
Sections 14.5(c) through 14.5(g), as appropriate. Any claim which
is within the description of Section 14.6(a) or 14.6(b), which is
also within the description of any of Section 14.6(c) through
14.6(f), shall be deemed to be asserted and treated hereunder for
all purposes as a claim arising out of Sections 14.6(c) through
14.6(f), as appropriate. Notwithstanding anything to the
contrary herein, the minimum thresholds set forth in clauses (i)
and (ii) of this Section 14.8 shall not apply to any Losses
suffered as a result of a breach by a Purchaser of Section 3.2,
3.3, 3.4, 3.5, 3.6, 7.1(b), 7.1(d), 7.3(a), 7.3(b), 7.3(c), 7.6,
7.9(b), 7.9(c), 7.9(d), 7.11, 7.18, 7.19(a), 7.20, 7.24, Section
10, Section 11, Section 13, Section 16 or Section 18.
14.9 Procedure for Indemnification.
(a) Whenever any party becomes aware that any claim is
threatened or asserted against it or the existence of any other
circumstances that would occasion the indemnification described
in this Section 14 (a "Covered Claim"), such party shall promptly
provide the party from whom it is seeking indemnification with a
notice (a "Claim Notice") of such Covered Claim pursuant to the
provisions of Section 19 hereof. Failure to give such notice
promptly shall not relieve the Assuming Party (defined below) of
its indemnification obligations hereunder except to the extent it
actually is prejudiced by such failure. Each Claim Notice shall
describe the Covered Claim, the party threatening or asserting it
(if applicable), the relief sought, and the basis for
indemnification hereunder with respect thereto. In the case of a
third-party claim, the party receiving such notice may, at its
option, assume the defense of such Covered Claim (the "Assuming
Party"), provided that, within forty (40) days after the Claim
Notice is given (or sooner, if the nature of the Covered Claim so
requires), the party receiving such notice shall have given
notice to the other party (the "Notifying Party"), pursuant to
the provisions of Section 19 hereof, of its election to assume
such defense, whether or not the Assuming Party acknowledges its
obligation to indemnify the Notifying Party in connection with
such Covered Claim. If the defense is so assumed by the Assuming
Party with counsel reasonably acceptable to the Notifying Party,
the Notifying Party shall be entitled to participate in (but not
control, which shall be solely the Assuming Party's right if the
Assuming Party assumes the defense) the defense of the Covered
Claim with its own counsel at its own expense, and the Notifying
Party shall provide such cooperation at the expense of the
Assuming Party (including but not limited to providing available
information and personnel to the Assuming Party) as the Assuming
Party shall reasonably request to facilitate such defense. The
Assuming Party shall have the right to defend and/or settle any
such Covered Claim on such terms and conditions and in such
amounts as it deems appropriate, and the Notifying Party shall
promptly execute all documents reasonably requested of it with
respect to any such defense and/or settlement; provided, however,
any such settlement shall include an unconditional release by the
claimant of all indemnified persons with respect to such Covered
Claim and the indemnified persons shall not be required to take
any action other than the delivery of such release. If the party
receiving the notice does not assume the defense of a given
Covered Claim pursuant hereto or fails to notify the Notifying
Party of its election hereunder, the party giving the notice
shall defend against such Covered Claim in such manner, and/or
settle such Covered Claim on such terms, as it shall, in its sole
reasonable judgment, determine to be appropriate under the
circumstances and such action shall be binding on the parties for
the purposes of this Section 14. Notwithstanding the foregoing,
(67)
in any action or proceeding in which the counsel chosen by the
Assuming Party determines that it cannot represent both the
Notifying Party and the Assuming Party in connection with the
defense of any Covered Claim consistent with the applicable rules
of professional conduct, the Notifying Party shall have the right
to employ separate counsel at the Notifying Party's expense and
to control its own defense in connection therewith.
(b) The obligation to indemnify a party's officers and directors
in accordance with this Section 14, shall be enforced exclusively
by such party and nothing herein shall be construed to grant such
officers or directors any individual rights, remedies,
obligations or liabilities with respect to this Agreement. The
parties to this Agreement may amend or modify this Agreement in
any respect without the consent of such officers or directors.
SECTION 15. TERMINATION OF AGREEMENT
15.1 Events of Termination. This Agreement and the transactions
contemplated hereby may be terminated or abandoned at any time
prior to the Closing Date as follows:
(a) upon the written agreement of the Seller and Airgas;
(b) at the election of Airgas, if (i) the Seller has breached
any representation, warranty, covenant or agreement contained in
this Agreement that is qualified by materiality or a Business
Material Adverse Effect requirement, or (ii) the Seller has
breached in any material respect any representation, warranty,
covenant or agreement contained in this Agreement that is not so
qualified, in the case of (i) or (ii), which breach has not been
cured on or prior to thirty (30) days following delivery of
written notice of such breach by Airgas to the Seller;
(c) at the election of the Seller, if (i) Airgas has breached
any representation, warranty, covenant or agreement contained in
this Agreement that is qualified by materiality or material
adverse effect or (ii) if Airgas has breached in any material
respect any representation, warranty, covenant or agreement
contained in this Agreement that is not so qualified, in the case
of (i) or (ii), which breach has not been cured on or prior to
thirty (30) days following delivery of written notice of such
breach by the Seller to Airgas;
(d) upon written notice by either the Seller or Airgas, if the
Closing Date shall not have occurred before March 31, 2002 (the
"Drop Dead Date"), for any reason other than (i) the failure of
the party seeking to terminate this Agreement to perform its
obligations hereunder or (ii) a breach of a representation or
warranty by such party herein, in each case that would give the
other party the right to terminate the Agreement;
(e) upon written notice by the Seller, if the FTC or DOJ serves
a Second Request upon the parties in connection with the parties'
filings under the HSR Act, the scope of which, after reasonable
attempts at negotiating limitations and exhausting the appeals
process provided for in 16 C.F.R. 2.20 or the DOJ Second Request
Internal Appeals Procedures, requires, in the opinion of the
Seller's outside antitrust counsel, an unreasonably burdensome
amount of information relating to any of the Seller's businesses
other than the Packaged Gas Business;
(68)
(f) upon written notice by Airgas if the FTC or DOJ shall
require as a condition to the approval of the transaction
contemplated by this Agreement, that Airgas hold separate or make
any divestments of any assets that represent more than $40
million of revenues in calendar year 2001, and Airgas elects not
to comply with such condition;
(g) upon 10-days' written notice by either the Seller or Airgas
if the FTC or DOJ authorizes its staff to seek a preliminary
injunction against the transactions contemplated by this
Agreement; or
(h) at the election of the Seller, if a preliminary injunction
is entered by a court of competent jurisdiction which restrains
or prohibits the transactions contemplated by this Agreement
based upon or related to Airgas' ownership interest in NWS; or
(i) at the election of the Seller, if Airgas' financing for the
transactions contemplated by this Agreement is not available as a
result of breach, the lapse of time or otherwise.
15.2 Consequences of Termination. If this Agreement shall be
terminated pursuant to Section 15.1, this Agreement shall
thereafter become void and neither party shall have any further
obligation to the other hereunder, except as set forth in
Sections 7.3 and 10.5, Section 11, Section 12 and this Section
15.2; provided, however, that
(a) (i) if the Seller shall have the right to terminate this
Agreement pursuant to Section 15.1(c) (regardless of whether the
Seller shall have the right to terminate this Agreement pursuant
to any other provision of this Section 15.1), or (ii) if Airgas
shall have the right to terminate this Agreement pursuant to
Section 15.1(b) (regardless of whether Airgas shall have the
right to terminate this Agreement pursuant to any other provision
of this Section 15.1), it is expressly understood and agreed
that, subject to Section 15.2(b), the terminating party's right
to pursue all legal remedies for breach of contract and damages
shall survive such termination unimpaired; and
(b) upon the termination of this Agreement, the Deposit shall be
non-refundable to the Purchaser and will be retained by the
Seller as liquidated damages (the "Liquidated Damages Amount");
provided, however that in the event of a termination of this
Agreement pursuant to Section 15.1(b) or 15.1(d) (due to
termination by the Seller) or 15.1(e), the Deposit shall be
returned to the Purchasers on a pro rata basis (based upon each
Purchaser's contribution to the Deposit). The Seller and Airgas
acknowledge and agree that the provisions of this Section 15.2
are for the mutual benefit of both parties and are intended to
avoid a protracted dispute respecting damages relating to a
termination of this Agreement pursuant to Section 15.1, other
than Section 15.1(b) or 15.1(c).
15.3 NWS Obligations. (a) Notwithstanding anything herein
to the contrary, NWS may elect, exercisable by delivering written
notice thereof (a "NWS Termination Notice") to the other parties
hereto, to no longer be a party under this Agreement or any other
Transaction Document in the event any of the following occur: (i)
the failure of any of the conditions set forth in Section 8.2 to
(69)
be satisfied at or prior to the Closing, (ii) NWS determines, in
good faith, that one or more of the conditions set forth in
Section 8.2 will not be satisfied or waived at or prior to the
Closing, (iii) the termination of this Agreement pursuant to
Section 15.1, (iv) the consummation of the acquisition of the
Airgas Assets (or any portion thereof) by Airgas without the
contemporaneous acquisition of the Carolina Assets by NWS, (v)
the FTC or DOJ staff indicates that it is likely to recommend a
challenge to the proposed transaction unless the parties divest
assets or agree to any other obligation, covenant or commitment,
or (vi) the FTC or DOJ imposes or attempts to impose any terms
any terms or conditions, including without limitation any
obligations, covenants, commitments or divestitures, upon NWS, as
a condition to obtaining the termination or expiration of the HSR
waiting period or otherwise in connection with the proceedings
contemplated by Section 7.8(b) or the consummation of the
transactions contemplated hereby.
(b) Effective immediately upon the delivery of a NWS Termination
Notice or a Seller Termination Notice, notwithstanding anything
herein to the contrary, (i) NWS shall no longer be a party to
this Agreement or any of the other Transaction Documents, (ii)
NWS shall have no obligation or liability, and shall be deemed to
have been released by the other parties hereto from all
obligations and liabilities, arising under or relating to this
Agreement and any other Transaction Document, (iii) NWS' sole
remedy against the Seller under this Agreement and any other
Transaction Documents shall be not to consummate the purchase and
sale of the Carolina Assets, and (iv) the Seller shall have no
liability or obligation to NWS, and shall be deemed to have been
released by NWS from all liabilities and obligations arising
under or relating to this Agreement and any other Transaction
Document.
SECTION 16. DISPUTE RESOLUTION
16.1 General Disputes. Except with regard to Factual
Environmental Disputes (as defined below), which are exclusively
covered by Section 16.2 below:
(a) The Seller, on the one hand, and the Purchasers, on the
other hand, shall attempt in good faith to resolve any dispute,
controversy or claim among them arising out of or relating to
this Agreement, including without limitation any dispute over the
breach, termination, interpretation, or validity thereof (the
"Dispute"). Any party may request through written notice that
the Dispute be referred to senior executives of the parties who
have authority to resolve the Dispute. The executives shall
attempt to resolve the Dispute by agreement within thirty (30)
days of such notice.
(b) If the parties to the Dispute are unable to resolve the
Dispute as provided in Section 16.1(a) above, the applicable
Purchaser and the Seller shall try in good faith to resolve the
Dispute by mediation and may use any mediator upon which they
mutually agree. If such Purchaser and the Seller are unable to
mutually agree upon a mediator, the dispute shall be referred to
the Philadelphia office of Judicial Arbitration and Mediation
Services, Inc. ("JAMS") mediation or such other mediation service
as the parties to the Dispute may agree. The cost of the mediator
will be split equally between such Purchaser and the Seller
unless they agree otherwise.
(c) If such Purchaser and the Seller are unsuccessful in their
good faith attempt to mediate the dispute, the dispute shall be
resolved by binding arbitration. The parties to the Dispute shall
select a mutually agreed upon single arbitrator and may utilize
any format and set rules for the binding arbitration upon which
(70)
such parties may mutually agree. If such parties are unable to so
agree, the dispute shall be submitted to a single arbitrator
chosen by the parties from a list of retired judges and justices
at the Philadelphia office of JAMS or such other mediation or
arbitration service as such parties may agree. Should such
parties be unable to agree on a choice of arbitrator within
thirty (30) days from the demand for arbitration, then any party
to the Dispute may request the contract arbitration administrator
of JAMS (or other service, as the case may be) to furnish a list
of three names and the Seller may strike one name, and the
Purchasers may jointly strike one name, thereby nominating the
remaining person as replacement arbitrator. If more than one name
remains, the contract arbitration administrator of JAMS will
choose an arbitrator from the list of remaining names. If the
parties to the Dispute are unable to agree on a format and set of
rules for the arbitration, the arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association American Arbitration Association.
(d) The costs of the arbitration shall be borne equally among
the parties to the Dispute. Each party shall bear its own
expenses for attorneys' fees, expert fees, witness fees, travel
costs and other arbitration-related costs. In no event is the
arbitrator authorized or empowered to award punitive or exemplary
damages.
(e) Judgment upon an award rendered by the arbitrator may be
entered in any court with jurisdiction. The arbitrator may issue
interim orders of protection as necessary or appropriate to
maintain the status quo, safeguard property or prevent
irreparable injury. Notwithstanding the foregoing, any party to
the Dispute may seek injunctive relief in the courts in the
Commonwealth of Pennsylvania or the United States District Court
for the Eastern District of Pennsylvania, which relief shall last
until the arbitrator renders its decision.
16.2 Factual Environmental Disputes.
(a) If the parties do not agree concerning a particular factual
matter that is relevant to a determination of any party's rights
and/or obligations under this Agreement with respect to any
matter governed by, or otherwise relevant to a determination
concerning, environmental issues (a "Factual Environmental
Dispute"), and if it is necessary to resolve such factual dispute
in order to establish any rights and/or obligations pursuant to
this Agreement, the parties to the dispute, after good faith
negotiations between their respective officials (lasting no more
than thirty (30) Business Days), will resolve the Factual
Environmental Dispute in the following manner:
(A) Within ten (10) Business Days, such parties
will mutually agree on one person who has the technical
background and expertise necessary to resolve the environmental
matter in dispute ( a "Technical Expert"); or, failing such
agreement, each such party shall designate one such Technical
Expert (provided that if both Purchasers are a party to the
dispute the Purchasers shall jointly designate one such Technical
Expert), and within fifteen (15) Business Days after such
designation, those two Technical Experts shall designate a third
Technical Expert (not a current or former employee or agent of
such parties or of their respective Technical Experts);
(B) Within thirty (30) Business Days after
designation of the Technical Expert(s), such Technical Expert(s)
(71)
shall independently consider all information relevant to the
determination and resolution of the factual matter(s) that is the
subject of dispute between the parties. Each party shall have a
reasonable opportunity to provide timely input to the Technical
Expert(s).
(C) Within forty (40) Business Days after the
designation of the Technical Expert(s), the Technical Expert(s)
shall decide the factual matter(s) that is the subject of dispute
(with a vote of two being necessary to reach this decision if
three Technical Experts have been designated).
(b) Decisions of the Technical Expert(s) under this Section 16.2
shall be exclusive, final and binding upon the parties as to the
factual matters thereby decided.
(c) This Section 16.2 shall apply only to the resolution of
disputes between the parties concerning factual matters, as
described in Section 16.2(a) above.
SECTION 17. BULK SALES LAW
Subject to Section 14.2(f), each Purchaser hereby waives
compliance by the Seller with the provisions of the bulk sales
law of any state.
SECTION 18. PUBLIC ANNOUNCEMENTS
No press release or other public announcement shall be made
by or on behalf of any party hereto concerning this Agreement or
the transactions contemplated hereby without obtaining the prior
written approval of the other parties (which approval will not be
unreasonably withheld or delayed), except as may be required by
applicable law or the regulations of any securities exchange)
including as to the form and specific content of such press
release or other announcement.
SECTION 19. NOTICES
All notices and all other communications hereunder shall be
in writing and shall be deemed given if delivered personally or
sent by registered or certified mail, postage prepaid (return
receipt requested), telecopied (which is confirmed) or sent by a
nationally recognized overnight courier to a party at the
following address (or at such other address for a party as shall
be specified by like notice):
If to the Seller, to Air Products and Chemicals, Inc., ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, telecopy (610) 481-
5765, Attention of the Corporate Secretary; copy to Executive
Vice President - Gases and Equipment, Air Products and Chemicals,
Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
telecopy (▇▇▇) ▇▇▇-▇▇▇▇;
If to Airgas, to Airgas, Inc., ▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, telecopy (▇▇▇) ▇▇▇-▇▇▇▇,
Attention of General Counsel; and
(72)
If to NWS, to National Welders Supply Company, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopy (704) 342-
0260, attention ▇▇▇▇▇▇▇ ▇▇▇▇, with a copy to ▇▇▇▇ ▇▇▇▇▇, Parker,
Poe, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopy (▇▇▇) ▇▇▇-▇▇▇▇.
Each such notice or other communication shall be effective
at the time of receipt if delivered personally or sent by
telecopy (with answer-back received) or overnight courier, or
three Business Days after being mailed, registered or certified
mail, postage prepaid, return receipt requested.
SECTION 20. CONSTRUCTION
All references herein to a Section, Schedule or Exhibit are
to a Section, Schedule or Exhibit, respectively, of or to this
Agreement, unless otherwise indicated. The headings of Sections
in this Agreement are provided for convenience only and will not
affect the construction or interpretation of this Agreement. All
words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise
expressly provided, the words "include," "includes" and
"including" shall be construed as if followed by the phrase
"without being limited to." Words such as "herein," "hereof,"
"hereby," "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular Section of this
Agreement, unless the context clearly indicates otherwise. All
references herein to NWS as a Purchaser shall be deemed to apply
only to the extent relevant to any of the Carolina Factors. The
parties hereto agree that they have been represented by counsel
during the negotiation and execution of this Agreement and,
therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party
drafting such agreement or document.
SECTION 21. EXTENSIONS AND WAIVERS
This Agreement may not be varied in any respect except by an
instrument in writing of even or subsequent date hereto duly
executed by the parties hereto. The parties hereto may not (a)
extend the time for the performance of any of the obligations or
other acts of the parties hereto, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or
in any documents delivered pursuant to this Agreement or (c)
waive compliance with or modify any of the covenants or
agreements contained in this Agreement and waive or modify
performance of any of the obligations of any of the parties
hereto, except by an instrument in writing signed by the parties
purporting to be bound thereby.
SECTION 22. ENTIRE AGREEMENT
This Agreement, including the schedules attached hereto
which are hereby incorporated by reference, contains all the
terms agreed upon among the parties with respect to the subject
matter hereof and supersedes all prior agreements, arrangements
and communications, whether oral or written with respect to such
subject matter.
(73)
SECTION 23. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, without
giving effect to the choice of law principles thereof.
SECTION 24. TRANSFERABILITY; NO THIRD PARTY BENEFICIARIES
The respective rights and obligations of each party hereto
shall not be assignable by such party without the written consent
of the other party, except that any party without such consent
may assign its rights and obligations under this Agreement to (a)
any one or more wholly owned subsidiary of such party or (b) any
successor in the event of a merger, consolidation, sale of all or
substantially all of its assets, liquidation or dissolution
(provided any such assignee pursuant to the foregoing clause (a)
or (b) executes and delivers to such other party an agreement
satisfactory in form and substance to such other party under
which such assignee assumes and agrees to perform and discharge
all the obligations and liabilities of the assigning party), but
any such permitted assignment shall not relieve the assigning
party of its obligations hereunder. Notwithstanding the
foregoing, each of the Purchasers may from time to time assign
any or all of its rights hereunder to the other Purchaser without
the consent of the Seller, provided that such assignment shall
not relieve the assigning party of its obligations hereunder, and
provided further that such assignment shall not enlarge or expand
in any manner any of the Seller's obligations or liabilities
under any Transaction Document beyond those obligations or
liabilities that the Seller would have absent such assignment.
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assignees. Nothing herein express or implied is intended to
confer upon any Person, other than the parties hereto and their
respective successors and permitted assignees, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement. Any purported assignment in violation of this Section
24 shall be null and void.
SECTION 25. COUNTERPARTS
This Agreement may be executed in any number of counterparts
with the same effect as if the signatures to each such
counterpart were upon the same instrument.
(74)
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be duly executed in its name and on its behalf as of
the date first above written.
AIR PRODUCTS AND CHEMICALS, INC.
By:/S/ R.E. ▇▇▇▇▇▇▇▇
Name: R.E. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
AIRGAS, INC.
By:/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chairman and
Chief Executive Officer
NATIONAL WELDERS SUPPLY COMPANY
By:/S/ ▇▇▇▇▇▇▇ ▇. Lake
Name: ▇▇▇▇▇▇▇ ▇. Lake
Title: President and
Chief Executive Officer
[Asset Purchase Agreement]
EXHIBIT E-1
Note: Pursuant to a request submitted to the Securities and
Exchange Commission for confidential treatment, portions of
sections 6.3 and 7.4 of the Liquid Bulk Supply Agreement were
omitted. The omitted information is marked with bolded brackets
and asterisks.
LIQUID BULK PRODUCT SUPPLY AGREEMENT
This Liquid Bulk Product Supply Agreement (the "Agreement") is
made as of the 28th day of February, 2002 (the "Effective
Date"), between Air Products and Chemicals, Inc. ("Seller"),
with its headquarters at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and Airgas, Inc., with its
headquarters at ▇▇▇ ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer").
1. Sale and Purchase
1.1 Minimum Requirements. During the Term (as defined in
Section 3.1), Seller hereby agrees to sell to Buyer, and Buyer
hereby agrees to purchase from Seller, 35% of Buyer's entire
liquid requirements (excluding those requirements satisfied by
Buyer's own existing or acquired liquid production, including
without limitation Buyer's production by means of membrane, PSA
or on-site generator units) including without limitation
amounts arising in the future through acquisitions, internal
growth, additional customers or otherwise in the United States
for distribution in the United States, net of Seller's Minimum
Transfill Volumes (defined in Section 1.2), for each of the
products set forth in Attachments 3A, 3B and 3C (individually a
"Product" and collectively the "Products"), in liquid form (as
to a Product, "Buyer's Minimum Requirement"); provided however,
that from the Effective Date through 31 August 2002, Buyer
shall only be obligated to purchase the volumes of Products it
currently purchases under the Terminated Agreements (as defined
in Section 3.2) but will use commercially reasonable efforts to
increase such purchases from Seller until it reaches the
Buyer's Minimum Requirement.
1.2 Minimum Transfill Volumes. In addition to Buyer's
obligation to purchase and pay for Buyer's Minimum Requirement
for each Product, Seller hereby agrees to sell to Buyer, and
Buyer hereby agrees to purchase from Seller, Products of like
kind and equal quantities to those kinds and quantities Seller
currently delivers to the transfill locations sold to Buyer by
Seller as of the Effective Date, all as set forth on Attachment
2 (as to a Product, the "Minimum Transfill Volume"), it being
agreed that such volumes need not be delivered to any specific
location.
1.3 Regions and Subregions; Reallocations. Buyer shall, no
later than 1 June 2002, identify in writing for Seller the
tanks and volume requirements within and among the various
geographic regions (each a "Region") and subregions within such
Regions (each a "Subregion") through which it will satisfy its
purchase requirements hereunder commencing 1 September 2002.
Buyer shall have the right to move tanks and volumes among
Regions or Subregions at the start of each three (3)
consecutive Contract Year (as defined in Section 1.4) period
(each a "Reallocation Period"), commencing with the Contract
Year beginning 1 September 2005.
1.4 Annual Forecasts. Buyer shall provide Seller, on or
before each June 1 during the Term, with the identity of those
tanks within a Region and Subregion (both at Buyer's transfill
locations and at customers), the requirements of which, during
the immediately following September 1 through August 31
contract year (each September 1 through August 31 during the
Term (as defined in Section 3.1), commencing 1 September 2002,
is referred to herein as a "Contract Year"), Buyer anticipates
satisfying through purchases of Product under this Agreement
(each an "Annual Forecast"). Any changes to a forecast or
actual volume requirement for a given Product in a given Region
or Subregion that exceeds an amount equal to fifteen (15%)
percent of the actual average delivery of such Product to such
Region or Subregion during the immediately preceding twelve
(12) months that end 1 June. shall be subject to Seller's
consent, not to be unreasonably delayed or denied.
1.5 Buyer's Right to Request Product Increases. Buyer may, by
written notice to Seller given concurrently with the Annual
Forecast elect to purchase in the immediately following
Contract Year, in addition to the Minimum Transfill Volume and
Buyer's Minimum Requirement provided for in Section 1.1, up to
an additional fifteen percent (15%) of its entire purchase
requirements (the "Additional Product"), net of Seller's
Minimum Transfill Volume, for Products (each a "Product
Increase Notice"). Buyer's Product Increase Notice shall
specify the type and volume amount of the Additional Product
and the location at which such Additional Product is to be
delivered; the Annual Forecast for such Contract Year shall
likewise reflect such Additional Product. Once ordered, the
Additional Product shall remain in effect for the remainder of
the Reallocation Period in which such Contract Year falls.
Pricing for Additional Product under this Section 1.5 shall be
in accordance with Article 7. Buyer's purchases of Products
shall first be applied to Buyer's Minimum Requirement and
Minimum Transfill Volumes, and then to the Additional Product
amount Seller shall, subject to the proviso, supply the
Additional Product to Buyer; provided however, that if Seller
does not have such Additional Product available, Seller shall
use commercially reasonable efforts to make such Additional
Product available and, as soon as Product becomes available to
Seller, from expiring contracts with other purchasers or
otherwise, shall deliver such Product to fulfill the Additional
Product order.
1.6 Seller's Right to Supply Additional Product. Buyer shall
meet with Seller to negotiate in good faith the supply of up to
an additional fifteen percent (15%) of Buyer's entire purchase
requirements, net of Seller's Minimum Transfill Volume, for
Products at such prices and supply term as the parties agree
upon. Seller may, but shall not be required, to supply Product
under this Section 1.6. Buyer may, but shall not be required,
to purchase Product under this Section 1.6.
1.7 Quarterly Statements. Within thirty (30) days after the
end of each Contract Year quarter during the Term, Seller shall
deliver to Buyer a written summary statement of the volume of
each Product purchased in a Region during such Contract Year
quarter. Products shall be deemed to have been purchased in
the Contract Year quarter in which delivery is made. Buyer
shall have thirty (30) days from its receipt of the summary
statement to either accept the statement or to object to the
quantities set forth therein. Prior to Buyer's acceptance,
Seller may correct errors in the statement; once Buyer accepts
the statement, such volumes shall be controlling as to Buyer's
meeting/not meeting Buyer's Minimum Requirement for a Product.
1.8 Audit Rights re: Volumes. Seller shall have the right,
at its expense, for purposes of determining the accuracy of
volumes against which the Buyer's Minimum Volumes are
calculated, to audit Buyer's actual requirement for volumes of
Product in a Contract Year. The parties shall mutually select
a major public accounting firm, unaffiliated with either Buyer
or Seller, to perform such audit under a confidentiality
agreement reasonably acceptable to both parties. Any such
audit may cover no more than the three (3) most recently
completed Contract Years prior to the date of such audit.
Buyer shall have the right to review the auditor's work and
discuss it with the auditor if it disputes the auditor's
results prior to the results being presented to Seller. If
such audit determines that Buyer's actual volumes for a Product
are greater than the amount Buyer has been using to compute
Buyer's Minimum Volume for such Product, Buyer shall promptly
reimburse Seller for the Price of the amount of Product that
should have been included in Buyer's Minimum Volume but was not
and such amount for which Buyer reimburses Seller shall
constitute "Shortfall Product" for all purposes of Article 2.
1.9 Helium and Hydrogen. Seller shall sell to Buyer, and
Buyer shall purchase from Seller, (i) helium in accordance with
the provisions of Attachment 8A and (ii) hydrogen in accordance
with the provisions of Attachment 8B. Such Attachments shall
set forth the Sections or of this Agreement or portions thereof
that apply to such helium or hydrogen transactions, as
applicable, and only those expressly listed Sections or
portions thereof, and no other provisions of this Agreement,
shall be applicable to such transactions.
2
2. Purchase of Shortfall Product
2.1 Shortfall Product. By October 31 of each Contract Year,
Seller shall notify Buyer of any shortfall in Buyer's
obligation to take delivery of Buyer's Minimum Requirement or
the Minimum Transfill Volume of a given Product (in either
event, the "Shortfall Product") for the immediately previous
Contract Year (the "Shortfall Amount") and shall invoice Buyer
for such Shortfall Amount in accordance with the provisions of
Section 2.2. Buyer shall be entitled to take delivery of the
paid-up Shortfall Amount, or any portion thereof, during the
six (6) months following the date of the invoice setting forth
the Shortfall Amount. Buyer's purchase of Shortfall Product
shall not reduce Buyer's Minimum Requirement in any subsequent
Contract Year.
2.2 Pricing of Shortfall Product. At the time Buyer pays the
Shortfall Amount, Buyer shall provide Seller with the identity
of those tanks to which the Shortfall Product is to be
delivered (the "Shortfall Delivery Forecast") and the Price (as
defined in Article 7) payable at that time for the Shortfall
Product shall be based on the assumption that deliveries are
made to those tanks. The Price for Shortfall Product shall be
the Price in effect under this Agreement for the Contract Year
in which the shortfall occurred.
3. Term and Termination; Termination of Prior Agreements
3.1 Agreement Term. The term of this Agreement shall
commence on the Effective Date and shall continue until
September 1, 2017, on which date this Agreement shall
automatically terminate (the "Term").
3.2 Termination of Prior Agreements. As of the Effective
Date, the following product supply agreements that are in place
between Seller, as seller, and Buyer, as buyer, shall be
terminated and of no further force and effect (collectively the
"Terminated Agreements"); provided however, that any claims
under such agreements arising prior to the Effective Date in
favor of one party against the other shall survive termination
of such Terminated Agreements:
1. Product Supply Agreement dated as of 1 September 1999
2. Letter agreement dated 30 April 1998 (the Tyson
agreement)
4. Buyer's Obligations
4.1 Buyer's Obligations. Buyer shall, without cost to
Seller:
(a) Provide sufficient physical access to areas in
which delivery tanks are located to Seller and Seller's
authorized representatives for all proper purposes under
this Agreement.
(b) Comply with all relevant reporting obligations
under the Emergency Planning and Community Right-To-Know
Act of 1986, 42 U.S.C. 11001-11050 (EPCRA, also
commonly known as Title III of the Superfund Amendments
and Reauthorization Act of 1986 (▇▇▇▇ Title III))
resulting from the presence of the chemicals supplied
under this Agreement. Further, it is the responsibility
of Buyer to warn its employees and others exposed to the
hazards posed by Buyer's storage and use of Product and
to comply with all federal, state and local legal
notification, reporting and/or permit requirements that
may be associated with the storage or use of a Product.
3
(c) Maintain in strictest confidence and require its
employees by appropriate instructions to safeguard any
installation, maintenance and telephone access
instructions and codes provided by Seller with respect
to any telemetry system incorporated in equipment, and
to return promptly all such materials to Seller upon
termination of this Agreement and maintain telephone
lines at each location of Buyer to which Seller delivers
product for telemetry hookup. Seller's use of telemetry
at locations of Buyer's customers is subject to the
prior written approval of such customers.
(d) Ensure that all of Buyer's third party
installations comply with safety standards generally
accepted in the industry and the following additional
safety standards:
(i) dual safeties and a rupture disc on all
tanks;
(ii) oxygen tanks cannot have aluminum inner
linings;
(iii) no low pressure tanks without approved
fill-line closure devices;
(iv) no LOX deliveries to a tank situated on an
asphalt base; and
(v) appropriate ingress and egress by Seller's
tank trucks to the tank to be filled.
5. Specifications
5.1 Product Specifications. All Products delivered by
Seller shall conform to the applicable specifications set forth
in Attachments 3A through 3E (the "Specifications").
5.2 UPC/Mega Class Products. If Buyer desires to purchase
Product applicable to its Minimum Transfill Volume that has a
purity standard higher than that set forth in the
Specifications (a "UPC/Mega Class Product"), Buyer must source,
and Seller shall provide, such UPC/Mega Class Product from an
identified location set forth in Attachment 3F and the Price
for such UPC/Mega Class Product will be determined as set forth
in Attachments 3A, 3B and 3C, as appropriate, from such
identified location. If such an identified location ceases
production of a UPC/Mega Class Product, Seller shall make such
UPC/Mega Class Product available from another reasonable
location and the parties shall amend Attachment 3F to set forth
the then-current applicable locations.
6. Delivery
6.1 Delivery of Products. Product shall be delivered by
Seller F.O.B. Seller's delivery vehicle or Seller's production
facility if Seller's delivery vehicle is not utilized. Risk of
loss shall pass to Buyer upon delivery. Seller will use
commercially reasonable efforts to deliver Products so as to
avoid customer run-outs and will attempt to deliver liquid
oxygen and liquid nitrogen within twenty-four (24) hours' and
liquid argon within forty-eight (48) hours' notice. If Seller
fails to make timely delivery of Product such that a customer
experiences interruption of supply, Buyer may purchase the
Product Seller has failed to deliver and Seller shall pay Buyer
the difference between the cost to Buyer of purchasing such
alternative Product and the cost of such Product under this
Agreement. Such remedy shall be in addition to, and not in
lieu of, any other remedy Buyer may have under this Agreement.
Such Product shall be deemed to have been purchased from Seller
for purposes of determining whether Buyer has purchased its
Buyer's Minimum Requirement and Minimum Transfill Volume.
6.2 Notice of Requirements. Buyer, or Buyer's third party
customer, shall monitor its inventory of Product and give
reasonable notice, in accordance with Paragraph 6.1, of the
quantity of Product needed to permit delivery prior to
exhaustion of such inventory; provided however, that if Buyer
or, with Buyer's consent, Seller installs telemetry, Seller
shall be solely responsible for such monitoring.
4
6.3 Additional [**] Charges. Buyer shall pay Seller
additional charges for all applicable [**] as specified in
Attachment 6; provided however, that Buyer may designate (by
a written list delivered to Seller identifying the [**] or
changes to the [**]) (i) up to [**] of its [**] as exempt from
the additional [**] charge for [**] on Attachment 6 (the [**])
through Contract Year 2005, (ii) up to [**] as [**] through
Contract Years 2006 and 2007, and (iii) up to [**] from and after
Contract Year 2007; provided however, that Buyer shall use
commercially reasonable efforts to reduce the percentage of such
[**] as soon as is commercially practicable.
[**] - Confidential treatment requested.
6.4 Equipment. As of the Effective Date, the parties do
not contemplate that Seller will provide any storage units,
equipment, piping, controls or other instrumentation and
devices (collectively, "Equipment") for the storage and use of
any Product delivered for the benefit of Buyer hereunder. If,
at any time, the parties agree that Seller will provide any
Equipment in connection with the transactions contemplated
hereunder, the terms and conditions of Attachment 9 shall
govern the relationship between the parties with respect to
such Equipment.
7. Price and Charges for Products and Services
7.1 Prices. The price for Product sold may include a "Unit
Price" (when Product is supplied in liquid or bulk form), a
power cost (for liquid oxygen and liquid nitrogen only, it
being understood that the Unit Price for liquid argon already
includes a power cost factor), and a distribution cost (when
Product is delivered, calculated in accordance with Attachments
5 and 7), and shall be subject to adjustment as provided herein
(collectively the "Price"). The Price for a Product shall be
calculated in accordance with the terms of Attachments 3A, 3B
and 3C, as appropriate, applicable to such Product and shall be
subject to the applicable Product sourcing requirements set
forth in Attachment 1. If Seller closes an operating merchant
facility, Seller will maintain such closed facility as a
pricing source for ninety (90) days from the date if notifies
Buyer of such closing and thereafter will, at its election,
either (i) continue to maintain such facility as a pricing
source (even though Product is being delivered from another
facility) for the remainder of the then-current Reallocation
Period or (ii) release Buyer from its obligation to purchase
the then-forecast amount of Products that were being sourced
from such facility prior to its closing and reduce Buyer's
Minimum Requirement with respect to such Product for the then-
current Reallocation Period.
7.2 Audit Rights re: Cost of Power. Buyer shall have the
right, at its expense, for purposes of determining the accuracy
of ▇▇▇▇▇▇▇▇ by Seller, to audit Seller's actual charged and
paid power rates. The parties shall mutually select a major
public accounting firm, unaffiliated with either Buyer or
Seller, to perform such audit under a confidentiality agreement
reasonably acceptable to both parties. Any such audit may
cover no more than the three (3) most recently completed
Contract Years prior to the date of such audit. Seller shall
have the right to review the auditor's work and discuss it with
the auditor if it disputes the auditor's results prior to the
results being presented to Buyer. If such audit determines
that Seller's actual power rate is less than the amount Seller
has been using to compute the power cost component of Price,
Seller shall promptly reimburse Buyer for all excess charges
theretofore paid by Buyer on account of such discrepancy.
7.3 Surcharges. If during any Contract Year a location
of Seller providing Products hereunder experiences an
extraordinary increase in its truck fuel costs or power costs
and such extraordinary cost increases are likewise being
experienced by a majority of the other producers in the
industry within three hundred (300) miles of such Seller
location, Seller, by written notice to Buyer, may charge Buyer
and Buyer shall pay a surcharge (a "Surcharge") in an amount no
greater than the amount required for Seller to recover such
increased costs. Such Surcharge shall remain in effect until
5
the date upon which Seller's costs return to an amount
comparable to what it was prior to such extraordinary increase
in its costs. Prior to imposing a Surcharge under this Section
7.3, Seller shall provide Buyer with evidence supporting the
need for the Surcharge. In addition, Buyer shall have the
right to verify the necessity for and the amount of any
Surcharges under this Section 7.3 in the same manner and with
the same effect as is provided for in Section 7.2. Any
Surcharge shall be one that Seller is applying generally to its
customers and not one applicable to Buyer alone. Surcharges
shall be in addition to the Price and neither the assessment of
nor changes in such Surcharges shall be construed as a Price
adjustment under Section 8.1; provided however, that there
shall be no duplication of Price adjustments and Surcharges
hereunder.
7.4 Competitive Prices. Buyer shall, at [**], have the
right to furnish written evidence to Seller of its ability to
purchase Product for a Region or Subregion from a responsible
supplier thereof, in like quantity and quality and by like
delivery for a term of not less than [**] as compared to the
quantity and quality and delivery method for such Product
Seller is then delivering to Buyer in such Region or Subregion
under this Agreement, at a lower price than Seller's then-
current Price. In such event, Seller will reduce its Price for
such Product to Buyer in such Region or Subregion by the lesser
of [**].
[**] - Confidential treatment requested.
8. Adjustments in Prices.
8.1 Adjustments. The Price of each Product shall be adjusted
as outlined in Attachments 4A, 4B, 4C and 4E, as appropriate,
to this Agreement. Distribution Matrices shall be adjusted
annually commencing 1 September 2003, as outlined in Attachment
4F.
9. [Reserved]
10.Invoicing and Payment
10.1 Payment Terms. Seller shall invoice Buyer as each delivery
of Product is made or monthly, in Seller's discretion. All
payments due Seller hereunder shall be made to Seller at the
location indicated on the invoice. The undisputed portion of
all invoices shall be payable net forty-five (45) days. The
timely payment by Buyer of all amounts due and owing to Seller
hereunder is an express condition to the continued performance
by Seller of its obligations hereunder.
11.Warranty
11.1 Seller's Sole Warranties. Seller warrants that each
Product shall conform to the specifications and express
warranties set forth for such Product in the Attachment(s) and
that at the time of delivery, Seller shall have good title and
right to transfer the same and that the same shall be delivered
free of encumbrances. THE FOREGOING WARRANTY IS THE SOLE
WARRANTY AND IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, IN FACT OR BY LAW, INCLUDING, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
6
12.Indemnity
12.1 Each Party's Indemnification Obligation. Each party
hereby agrees to indemnify and hold harmless the other party
from any form of action, lawsuit or claim brought by or on
behalf of the indemnifying party's employees, agents or
invitees and related in any way to the Products supplied by
Seller under this Agreement. Each party expressly agrees that
the obligation of indemnity under this Section 12.1 extends to
an action, lawsuit or claim alleging negligence of the
indemnitee.
13.Limitation of Liability
13.1 Obligation to Warn. Buyer acknowledges that there are
hazards associated with the use of the Products, that it
understands such hazards, and that it is the responsibility of
Buyer to warn its employees and others exposed to such hazards
through Buyer's storage and use of the Product. Seller shall
provide Buyer with copies of Material Safety Data Sheets
relating to the Products for Buyer to make such warnings, and
Buyer shall hold harmless, indemnify and defend Seller from and
against any liability incurred by Seller because such warnings
were not made.
13.2 Limitation on Claims. No claim of any kind with respect
to nondelivery of a Product shall be greater than the Price
payable hereunder for the Product in respect to which such
claim is made and Buyer's sole and exclusive remedy (except for
the remedy of termination for material default in accordance
with the terms of Section 16.3) for delivery of nonconforming
Product to Buyer shall be replacement by Seller of a like
quantity of conforming Product at no additional cost to Buyer
plus the cost of cleaning all delivery vessels, storage vessels
and delivery equipment contaminated by such nonconforming
Product.
13.3 Waiver of Consequentials. Seller shall not be liable
in contract or tort (including negligence and strict liability)
for any other direct not expressly provided for in this
Agreement or any indirect, special, incidental or consequential
damages arising out of its performance or non-performance
hereunder. Buyer shall not be liable in contract or tort
(including negligence and strict liability) for any indirect,
special, incidental or consequential damages arising out of its
performance or non-performance hereunder.
14.Force Majeure
14.1 Force Majeure Events. Neither party hereto shall be
considered in default in the performance of its obligations
hereunder (other than its obligation to make any payment of
money hereunder), or be liable in damages or otherwise for any
failure or delay in performance that is due to strike, lockout,
concerted act of workers or other industrial disturbance, fire,
explosion, flood or other natural catastrophe, civil
disturbance or acts of terrorism, riot or armed conflict,
whether declared or undeclared, curtailment, shortage,
rationing or allocation of normal sources of supply of labor,
materials, transportation, energy or utilities, accident, act
of God, delay of subcontractors or vendors, sufferance of or
voluntary compliance with act of government and government
regulations (whether or not valid), embargo, machinery or
equipment breakdown, or any other cause, whether similar or
dissimilar to any of the causes or categories of causes
described above, and that is beyond the reasonable control of
the party claiming excuse hereunder.
14.2 Strikes, etc. Neither party hereto shall be required to
make any concession or grant any demand or request to bring to
an end any strike or other concerted act of workers.
7
14.3 Notice. Either party affected by an event described in
Paragraph 14.1 shall, within forty-eight (48) hours after
learning of such event and ascertaining that it has or will
affect its performance hereunder, give notice to the other
party, stating the nature of the event, its anticipated
duration and any action being taken to avoid or minimize its
effect.
14.4 Allocation of Products. If any event within
Paragraph 14.1 shall only partially reduce Seller's ability to
produce or deliver Product, Seller may prorate its available
supply among Buyer and Seller's other customers in a fair and
equitable manner.
14.5 Other Supply Sources. If Seller, under the
circumstances described in this Article 14, is unable to supply
any or all of Buyer's requirements for Product, Buyer may
purchase such requirements during the period of Seller's
inability from other qualified vendors and such purchases shall
be deemed to have been made from Seller for purposes of
determining whether Buyer has purchased its Buyer's Minimum
Requirement and Minimum Transfill Volumes.
15.[Reserved]
▇▇.▇▇▇▇▇▇▇▇▇ Impairment; Breaches
16.1 Bankruptcy Scenarios. Unless otherwise required by law,
if a petition is brought by or against either party under any
present or future bankruptcy or insolvency laws seeking any
reorganization, arrangement, readjustment, liquidation,
dissolution or similar relief with respect to such party, or if
either party shall make any assignment for the benefit of
creditors, or if a receiver is appointed for either party, the
other party may, at its option, terminate this Agreement by
written notice. The election of any option under this
Section 16.1 shall not preclude the exercise of any other
option.
16.2 Damages for Buyer's Breach. In the event of a material
breach of this Agreement by Buyer, which is not cured prior to
that day that is thirty (30) days after written notice thereof
from Seller to Buyer (or, if such cure is not possible within
such thirty (30) days but has been commenced and is being
diligently pursued by Buyer, such longer period as shall be
necessary) (a `"Buyer Breach"):
8
(a) if a Buyer Breach occurs prior to the end of the tenth
(10th) Contract Year, Seller shall have the right to either (i)
demand payment of liquidated damages in the amount set forth in
the following table (the "LDs"), in which case Buyer shall be
obligated to pay such LDs or (ii) pursue its other remedies at
law or in equity. In either case, Seller shall be released
from its non-competition covenant under the Asset Purchase
Agreement between Buyer and Seller dated as of January 3, 2002.
If Seller elects the LDs remedy set forth in clause (i) of this
paragraph (a), such remedy shall be in lieu of all other
remedies at law or in equity.
Date of breach: Liquidated Damage Amount:
-------------- ------------------------
Prior to end of the 5th Contact Year $15,000,000
After the 5th and prior to the end
of the 10th Contract Year $ 5,000,000
The parties agree that the LDs are not unconscionable, will not
constitute a conversion by or unjust enrichment of Seller, and
were bargained for and derived through mutual negotiations and
constitute a material and integral part of, this Agreement;
provided however, that such LDs shall in no event be used as
evidence of any agreement as to the minimum amount of damages
suffered by Seller in the event of a Buyer Breach regardless of
the time of the occurrence thereof.
; and (b) if a Buyer Breach occurs from and after the tenth
(10th) anniversary of the Effective Date, Buyer shall pay
Seller its actual damages for such breach. In addition to the
remedy set forth in this paragraph (b), Seller may, but shall
in no event be required to, terminate this Agreement.
16.3 Damages for Seller's Breach. In the event of a material
breach of this Agreement by Seller, which breach Seller fails
to cure within thirty (30) days of written notice thereof from
Buyer (or, if such cure is not possible within such thirty (30)
days but has been commenced and is being diligently pursued by
such longer period of time by Seller, then such longer period
as shall be necessary), Buyer may terminate this Agreement in
addition to any other remedies it may have.
17.General Provisions
17.1 Representatives. Each party agrees to designate a
representative with decision-making authority for purposes of
administering and resolving disputes under this Agreement.
Seller's initial representative shall be ▇▇. ▇▇▇▇▇▇ Bones and
Buyer's initial representative shall be Mr. ▇▇▇ ▇▇▇▇▇. Either
party may change its representative by written notice to the
other party given in accordance with Paragraph 17.6.
17.2 Entire Agreement; Headings. This Agreement together with
any terms and conditions of the Attachment(s) hereto and the
Existing Agreements constitute the entire agreement between the
parties. No terms and conditions in any form of purchase order,
order acknowledgment or other acceptance forms issued with
respect to transactions under this Agreement shall alter the
terms hereof and thereof and objection is hereby made to all
such additional or different terms. Acceptance is expressly
limited to the terms offered herein and therein. No
modification or waiver of this Agreement shall bind either
party unless in writing and signed and accepted by a duly
authorized representative of each party. Headings of any
Sections, subsections, Attachments or Exhibits shall be for
ease of reference only and shall in no way affect or be deemed
to affect the meaning of the provisions of this Agreement.
9
17.3 Dispute Resolution. Unless a dispute resolution
mechanism is expressly provided for a particular dispute
arising under this Agreement, any dispute between the parties
relating to this Agreement that cannot be resolved with
reasonable promptness shall be referred to each party's
designated representative under Paragraph 17.1 in an effort to
obtain prompt resolution. Neither party shall commence any
action against the other until the expiration of sixty (60)
days from the date of referral to such senior managers;
provided however, this shall not preclude a party from
instituting an action seeking injunctive relief to prevent
irreparable damage to such party.
17.4 Assignment. This Agreement may not be assigned by
either party without the prior written consent of the other
party, not to be unreasonably delayed or denied. This Agreement
shall inure to the benefit of and be binding upon the
successors and, if properly assigned, the assigns of both
parties. Any such assignment or successorship, by operation of
law or otherwise, shall not increase the volumes of Products
required to be purchased hereunder (e.g. by reason of the
existing requirements of such assignee or successor) and if
such assignee or successor complies with the terms of this
Agreement, no liquidated damages shall be payable under
Paragraph 16.3.
17.5 Severability. If any provision of this Agreement is held
invalid by any law and/or regulation, all other provisions
hereof shall continue in full force and effect.
17.6 Notices. Any notice required to be given under this
Agreement shall be given by fax (with confirmation by regular
mail), certified mail or by overnight courier providing proof
of delivery to the address set forth below or such other
address as is set forth in a notice given in accordance
herewith:
If to Seller:
Air Products and Chemicals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President - Sales; North America Gases
Fax # ▇▇▇-▇▇▇-▇▇▇▇
Copy to: Corporate Secretary
Fax # ▇▇▇-▇▇▇-▇▇▇▇
If to Buyer:
Airgas, Inc.
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Attention: President
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
17.7 Governing Law. This Agreement shall be governed by
and construed according to the laws of the Commonwealth of
Pennsylvania without giving effect to its conflicts of law
provisions.
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17.8 Priority of Provisions. This Agreement includes and
incorporates in their entirety the terms and conditions of all
Attachments and Exhibits hereto, whether in existence at the
Effective Date or added thereafter through an amendment of the
Agreement. In the event of conflict between the terms of this
Agreement and any of its Attachments/Exhibits, the terms of the
Attachments/Exhibits shall govern. Attachments hereto at the
time of execution of this Agreement are: Attachments 1-9.
AIRGAS, INC. AIR PRODUCTS AND CHEMICALS, INC.
By:/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President of Title: Attorney-in-fact
Corporate Development
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