Acquisition Agreement

ACQUISITION AGREEMENT ONE


This Agreement made this 14th day of June, 1999 by and between L'AIR LIQUIDE, SA a limited liability corporation organized under the laws of France (hereinafter referred to as "A") and AIR PRODUCTS AND CHEMICALS, INC, a corporation organized under the laws of Delaware, USA (hereinafter referred to as "B").


WHEREAS, A and B have separately been invited by the Board of Directors of THE BOC GROUP PLC (hereinafter referred to as "Target") to submit bids or proposals for the purchase of all the outstanding shares of Target; and


WHEREAS, A has separately submitted to the Board of Directors of Target [*] successive bids to purchase the shares of Target, and each such bid has been rejected; and


WHEREAS, B has separately submitted to the Board of Directors of Target [*] successive bids to purchase the shares of Target, and each such bid has been rejected; and


WHEREAS, the Board of Directors of Target has encouraged A and B to make another bid, also advising each of A and B that another party has submitted a bid but not disclosing the price; and


WHEREAS, A and B have independently determined that each of them cannot justify raising their last rejected bid any further, for financial and other business reasons, including the raising of the funds necessary and the risks attendant thereto; and


WHEREAS, A and B believe that the only way in which they may be in a position to raise the bid price for the shares of Target, as desired by the Board of Directors of Target, is by making a joint proposal to the Board of Directors of Target, since, based on the current


- ------------------- *This information has been omitted pursuant to a Request for Confidential Treatment and such information has been filed separately with the Securities and Exchange Commission.


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respective operation of each of A and B, various portions of the businesses of C are more valuable to one party than to the other;


Now, therefore, A and B agree as follows:


1. From and after the date of this Agreement to termination hereof, neither A nor B will separately submit (or express or imply an intention to submit) a proposal to the Board of Directors of Target or any other party to purchase (or agree to purchase or actually purchase) (a) all or some of the shares of Target or (b) any business or assets of the Target group (other than in the ordinary course of business). Provided however that each of A and B may (having giving notice to the other) confirm to Target that its latest proposal as rejected by the Target Board meeting held on 9 June 1999 remains open and unchanged, except to the extent necessary to make such proposal consistent with this Agreement. Subject thereto, neither party will amend the terms of such latest proposal (nor express or imply any intention so to do), which proposal may be implemented in accordance with clause 3.


2. Subject to clause 3, A and B will work together to formulate, agree upon and submit a joint proposal to the Board of Directors of Target to offer to acquire all the share capital of Target, exchanging between themselves such information as may be necessary, but not including the details of their previous proposals to Target, or any confidential information which would cause either A or B to be in breach of any confidentiality obligation to Target. Therefore, A and B will have present whenever the joint proposal is discussed between them or with Target their respective counsel to verify that this provision is complied with and that no competitively sensitive information about one of them is disclosed to the other.


3. A and B intend that the business of the Target group will be shared equally between them. If for any reason the latest proposal, as referred to in clause 1 above, of either A or B is accepted by the Board of Directors of Target, then the party whose proposal is accepted will in good faith enter into put and call options with the other over shares and assets


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of the Target group so that the principles for the sharing of the assets of the Target group contained in the attached draft agreement of the parties (under which they propose to submit the joint proposal to the Board of Directors of Target) will be substantially fulfilled, except that the equal sharing ratio will change to [*] for the party whose proposal is accepted and [*] for the other party (or such other proportion as may be agreed by the parties). Those clauses indicated with a tick on, and the schedules to, the attached draft will be deemed to be incorporated in this Agreement mutatis mutandis.


4. In the circumstances set out in clause 3, the parties shall share in the said [*] proportion the costs and expenses incurred by each of them in relation to (a) the offer for Target (to the extent that such costs and expenses are of the type and at a rate customarily incurred in, and payable following announcement of, a public takeover offer in the UK) and (b) the sharing of the assets/shares of Target group (including any related costs, including taxation, incurred in the Target group).


5. This Agreement shall terminate on [*], unless any offer for Target as contemplated by this Agreement is announced, in which event this Agreement shall not be so terminated but shall continue until such offer lapses or is withdrawn or until [*] (if later).


6. This Agreement is governed by and shall be construed in accordance with English law. References to A or B shall include persons (other than the other party) acting in concert with the relevant party.


7. Neither party shall assign this Agreement to any other person, except affiliates controlled by a party, without the consent of the other party in writing.


8. Each party recognizes the irreparable harm that would occur to the other party if either party breaches its obligations under this Agreement. Accordingly, if either party


- ------------------- *This information has been omitted pursuant to a Request for Confidential Treatment and such information has been filed separately with the Securities and Exchange Commission.


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shall breach any of its obligations hereunder, the other party shall, in addition to any claim for damages incurred or any other legal remedies available to it, be entitled to injunctive relief and/or specific performance with respect to any such breach.


9. Each clause shall represent a separate obligation of the parties and shall not be affected by the invalidity of any clause.


IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day first above written.


A B


By GERARD LEVY By JOHN PAUL JONES


Witnessed by Mike Dominianni Witnessed by Doug Brown


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APPENDIX I


ACQUISITION AGREEMENT TWO


This Agreement is made this ___ day of June 1999 by and between A and B.


WHEREAS, A and B, at the invitation of the Board of Directors of C, have separately submitted several bids or proposals to acquire all of the outstanding shares of C, which proposals have been rejected, and A and B have independently determined that each of them cannot justify further increasing their respective last rejected bids, for financial and other business reasons, including the raising of necessary funds and the risks attendant thereto.


WHEREAS, A and B believe that the only way in which they may be in a position to raise the price bid for the shares of C, as desired by the Board of Directors of C, is by making a joint bid to the Board of Directors of C, since various portions of the businesses of C are more valuable to one party than to the other.


WHEREAS, A and B intend to jointly develop a proposal for the possible acquisition of C (the "Proposed Acquisition") and desire to set forth the general terms and conditions upon which they will jointly negotiate the Proposed Acquisition, as well as the terms and principles upon which the Proposed Acquisition will be implemented and the assets and businesses of C will be allocated to each of the parties or jointly operated by them, recognizing that various asset divestitures will be required by the antitrust authorities of certain jurisdictions in order for the parties to consummate the Proposed Acquisition.


WHEREAS, in connection with the foregoing, A and B have entered into acquisition Agreement One, [dated the date hereof,] covering certain matters relating to the joint proposal.


NOW, THEREFORE, the parties agree as follows:


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X 1. Formation and Functions of Special Committee.
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(a) A and B each hereby designate the following representatives who shall constitute a ___ member special committee (the "Committee") that will be responsible for all negotiations, meetings and other contacts with C on behalf of the parties in connection with the Proposed Acquisition.


A B
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(b) The Committee (or such of its individual members or other representatives as shall be designated by the Committee from time to time) shall be the contact group for all communications between A and B, on the one hand, and C, on the other. The Committee shall be authorized to act upon the consent or approval of at least two representatives, which consent or approval includes at least one of the representatives appointed by each party. In the event the Committee cannot agree upon any matter, such matter shall be referred to the Chairman of A, ___, in the case of A, and the Chairman of B, _____, in the case of B, who shall confer together in order to mutually agree on an appropriate resolution of the matter. The Committee shall be responsible for supervising all negotiations with C and all other matters relating to the Proposed Acquisition and the implementation of all other provisions of this Agreement, provided that each party may form such working groups to report to that party's Committee members as it may determine and may rely on such representatives, advisors and other experts as it may deem appropriate. Each party may appoint successor representatives so that the total number of Committee representatives always totals _____. The Committee shall continue in existence throughout the consummation of the Proposed Acquisition and the implementation of the other matters provided for in this Agreement, including the period during which the parties are jointly operating any assets or businesses of C acquired in the Proposed Acquisition. The Committee shall in all matters


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observe the preeminent principle that the parties could not anticipate all of the issues that will arise in making the Proposed Acquisition and implementing the allocation between the parties of the assets and businesses of C in accordance with the terms of this Agreement, and, therefore, the Committee is intended to resolve all questions with a spirit of fairness and understanding of each party's needs, attempting to avoid minor matters, in order to enable the parties to acquire their respective portions of such assets and businesses in accordance with the principles of this Agreement. Without attempting to limit the functions of the Committee, it shall have the following duties:


(i) settling the terms and conditions of the Proposed Acquisition, including price and other offer terms, and any agreements entered into with C or other parties relating thereto;


(ii) supervising the allocation of the assets and businesses of C between the parties in accordance with the principles set forth herein and the process of determining the final allocations of such assets and businesses;


(iii) settling the terms and conditions of appropriate joint venture or other agreements between A and B covering the conduct of those portions of the assets and businesses of C that will be owned and operated on a joint ownership basis by the parties following consummation of the Proposed Acquisition, as well as of appropriate arrangements to ensure the independent operation, following the consummation of the Proposed Acquisition, of assets and businesses required to be divested by the antitrust authorities of relevant jurisdictions;


(iv) supervising the various filings and submissions with governmental bodies and agencies, in order to obtain all necessary statutory, governmental and regulatory approvals for the Proposed Acquisition; and


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(v) considering and resolving any concerns which may be raised by either party or its representatives relating to the transactions contemplated by this Agreement, including the Proposed Acquisition and the subsequent asset and business allocations and joint operation of certain businesses of C, in order to enable the parties to proceed in accordance with the general principles expressed herein.


X 2. Proposal Letter and Presentation of Proposal.
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(a) A and B will agree upon the form of a proposal letter to be delivered to C (the "Proposal Letter"), the final form of which shall be approved by the Committee.


(b) The Committee shall be responsible for determining the manner, timing and method by which the Proposal Letter will be presented to and negotiated with C and for establishing and coordinating the procedures for responding to any requests for information or comment from, or otherwise communicating with, the press or other media, as well as determining the content of any such responses or communications.


3. Financing.
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Each party covenants and agrees that it has or will have sufficient funds available, whether in the form of borrowings, equity or any combination thereof, so as to enable it to proceed with the terms of the Proposal Letter and to conclude the Proposed Acquisition in accordance with the obligations undertaken herein and therein.


X 4. Structure of Proposed Acquisition.
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The parties intend that the Proposed Acquisition would be effected through an offer for all of the outstanding shares of C under the relevant laws of England and the United States (the "Offer") followed by a compulsory acquisition of any shares not acquired in the offer if permitted by English law (the "Compulsory Acquisition"). The


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Offer and the Compulsory Acquisition would be made by a new company incorporated by the parties under the laws of [England], with each party owning, directly or indirectly through wholly-owned subsidiaries, 50% of the outstanding share capital of the new company. Following the Offer and the Compulsory Acquisition, the parties intend to allocate the assets and businesses acquired through the Proposed Acquisition as provided in this Agreement.


X 5. Offer Price and Allocation of Assets and Businesses.
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X (a) Offer Price


(i) The price to be offered by the parties in the Proposed Acquisition shall be as mutually agreed and set forth in the Proposal Letter or as otherwise determined by the Committee.


(ii) A and B shall each be responsible to fund 50% of the aggregate cash purchase price to be paid in the Proposed Acquisition.


b) Actual Aggregate Purchase Price.


For purposes of this Section 5, the "actual aggregate purchase price" shall mean the sum of (i) the purchase price paid to acquire outstanding ordinary shares of C pursuant to the Offer and any Compulsory Acquisition or otherwise within the period of _____ months following the making of the Offer, (ii) any funds expended to acquire or cancel outstanding options to purchase ordinary shares of C to the extent not included in (i) above, and (iii) the aggregate amount of outstanding indebtedness for borrowed money of C group at the dat ...