UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported): March 1, 2019

 

 

Linde plc

(Exact name of registrant as specified in its charter)

 

 

 

Ireland   001-38730   98-1448883

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

The Priestley Centre

10 Priestley Road

Surrey Research Park

Guildford, Surrey GU2 7XY

United Kingdom

(Address of principal executive offices)(Zip Code)

+44 1483 242200

(Registrant’s telephone numbers, including area code)

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

 

 

 

ITEM 2.01

Completion of Acquisition or Disposition of Assets.

On March 1, 2019, Linde Aktiengesellschaft (“Linde AG”), a stock corporation incorporated under the laws of Germany and an indirect subsidiary of Linde plc (the “Company”), completed the sale of the majority of its industrial gases business in North America and certain industrial gases business activities in South America to a consortium comprising companies of the German industrial gases manufacturer Messer Group and CVC Capital Partners Fund VII, pursuant to a Sale and Purchase Agreement, dated July 16, 2018, as amended on September 22, 2018, October 19, 2018 and February 20, 2019, by and among the Company, Linde AG, Praxair, Inc., Messer Group and CVC Capital Partners Fund VII (the “SPA”). Messer Group and CVC Capital Partners Fund VII paid $2.97 billion in cash consideration after purchase price adjustments for certain items relating to assets and liabilities of the sold businesses.

The SPA was entered into as part of the commitments in connection with the merger control review by the U.S. Federal Trade Commission (the “FTC”) of the previously completed combination of the businesses of Praxair, Inc. and Linde AG under the Company (the “Business Combination”).

Under the SPA, the Company had given an independent guarantee to MG Industries GmbH, a purchaser entity that is part of the Messer Group, as of the completion of the Business Combination for the full, due and timely performance of any obligation of Linde AG and Praxair, Inc. under the SPA. The SPA contains representations, warranties and covenants that can be considered customary for a transaction of this nature.

For further information about the SPA, refer to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on November 9, 2018. The description of the SPA contained herein does not purport to be complete and is qualified in its entirety by reference to the SPA, as amended, a copy of which is incorporated herein by reference to Exhibits 2.1, 2.2, 2.3 and 2.4 hereto.

The Company determined that Linde AG’s sale under the SPA of the majority of its industrial gases business in North America and certain industrial gases business activities in South America was significant under the criteria of SEC Regulation S-X Rule 1-02(w). While the divestitures also included Praxair, Inc.’s business in Chile, this component of the transaction was not material (assets of approximately $18 million). The Company further determined that pro forma combined financial information giving effect to the transactions contemplated by the SPA was not required because the divested businesses described above were not a component of the Company as of September 30, 2018, the Company’s most recent reporting date. Accordingly, the previously reported financial information for that period does not include the Linde AG divested businesses as it represented a period prior to the Business Combination.

The Business Combination has been accounted for using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations”, with Praxair, Inc. representing the accounting acquirer. As such, the historical information to be reported in the Company’s upcoming report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”) for periods prior to the consummation of the Business Combination will represent the historical Praxair, Inc. financial position and results of operations. As the results of operations and financial position of the Company prior to the consummation of the Business Combination represent Praxair, Inc. historical financial information that did not include the divested Linde AG businesses, unaudited pro forma combined financial information giving effect to the Linde AG divestitures is not filed with this Current Report on Form 8-K.

The divested businesses of Linde AG will be presented as discontinued operations in the 2018 Form 10-K, in accordance with FASB ASC 205-20, “Discontinued Operations”, as these businesses met the criteria for held-for-sale treatment upon consummation of the Business Combination. As disclosed in the Company’s Form 12b-25, filed with the SEC on March 1, 2019, the Company intends to file the 2018 Form 10-K no later than by March 18, 2019. As of the date of this Current Report on Form 8-K, both the Company’s and Praxair, Inc.’s most recent fiscal period reported under the Securities Exchange Act of 1934, as amended, is the period ended September 30, 2018.

 

ITEM 8.01

Other Events.

As part of the Company’s, Praxair, Inc.’s and Linde AG’s further commitments in connection with the merger control review by the FTC, Linde AG divested additional assets within the Americas for aggregate net proceeds of $531 million (i) to Matheson Tri-Gas, Inc., five of Linde AG’s HyCO facilities outside the Gulf Coast region, along with Linde AG’s hydrogen pipeline in the Gulf Coast, intellectual property, customer contracts, and other assets, (ii) to Celanese Corporation, Linde AG’s Clear Lake, Texas plant, and (iii) to LyondellBasell Industries N.V., Linde AG’s La Porte, Texas plant.

As disclosed in the Company’s Current Report on Form 8-K, filed with the SEC on December 6, 2018, Praxair, Inc. previously completed the sale of the majority of its businesses in Europe to Taiyo Nippon Sanso Corporation, an affiliate of Mitsubishi Chemical Holdings Corporation, which were required in connection with obtaining antitrust approval by the European Commission.

In addition, Praxair, Inc. and Linde AG have made certain other divestiture commitments in connection with the merger control proceedings in China, India and South Korea to the relevant antitrust authorities.

 

ITEM 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit
Number

  

Description of Exhibit

*2.1    Sale and Purchase Agreement, dated July 16, 2018, by and among Linde AG, Praxair,  Inc., MG Industries GmbH, Messer Canada Inc., MG Industries USA, Inc. (the MG entities and Messer Canada, Inc. being collectively referred to as “Messer”), and Linde plc, with respect to the sale of certain assets of Linde  AG in the Americas and certain assets of Praxair, Inc. to Messer in connection with the Business Combination Agreement dated as of June  1, 2017, as amended, to effect a combination of the businesses of Linde AG and Praxair, Inc. (incorporated by reference to Exhibit 2.2 to the Company’s Quarterly Report on Form  10-Q, filed with the SEC on November 9, 2018).
*2.2    First Amendment dated September 21, 2018 to the Sale and Purchase Agreement, dated July 16, 2018, by and among Linde  AG, Praxair, Inc., Messer, and Linde plc, with respect to the sale of certain additional assets of Linde AG in the Americas to Messer in connection with the Business Combination Agreement dated as of June  1, 2017, as amended, to effect a combination of the businesses of Linde AG and Praxair, Inc. (incorporated by reference to Exhibit  2.3 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2018).
*2.3    Second Amendment dated October 19, 2018 to the Sale and Purchase Agreement, dated July  16, 2018, as amended by the First Amendment thereto, by and among Linde AG, Praxair, Inc., Messer, and Linde plc, with respect to the sale of certain additional assets of Linde  AG in the Americas to Messer in connection with the Business Combination Agreement dated as of June 1, 2017, as amended, to effect a combination of the businesses of Linde AG and Praxair, Inc. (incorporated by reference to Exhibit  2.4 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2018).
*2.4    Third Amendment dated February 20, 2019 to the Sale and Purchase Agreement, dated July 16, 2018, as amended by the First and Second Amendment thereto, by and among Linde AG, Praxair,  Inc., Messer, and Linde plc, with respect to the sale of certain additional assets of Linde AG in the Americas to Messer in connection with the Business Combination Agreement dated as of June  1, 2017, as amended, to effect a combination of the businesses of Linde AG and Praxair, Inc.

 

*

Certain schedules or similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplemental copies of any of the omitted schedules or attachments upon request by the SEC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

LINDE PLC

Date: March 7, 2019

 

By:

 

/s/ Guillermo Bichara

 

Name: 

 

Guillermo Bichara

 

Title:

 

General Counsel

Exhibit 2.4

Execution Version

Third Amendment of the Americas Sale and Purchase Agreement

dated 20 February 2019

This Third Amendment of the Americas Sale and Purchase Agreement (the “ 3 rd Amendment ”) is entered into by and between:

 

1.

Linde Aktiengesellschaft , a stock corporation ( Aktiengesellschaft ) organised under the laws of the Federal Republic of Germany, registered with the commercial register ( Handelsregister ) of the local court ( Amtsgericht ) of Munich, Germany under registration number HRB 169850, having its registered address ( Geschäftsanschrift ) at Klosterhofstraße 1, 80331 Munich, Germany,

- herein “ Linde ” -

 

2.

Praxair, Inc. , a corporation organised under the laws of Delaware, USA, having its registered address at 10 Riverview Drive, Danbury, Connecticut, CT06810, United States of America,

- herein “ Praxair ” and together with Linde “ Sellers ” -

 

3.

Messer Industries GmbH (formerly MG Industries GmbH), a private limited liability company ( Gesellschaft mit beschränkter Haftung ) organised under the laws of the Federal Republic of Germany, registered with the commercial register ( Handelsregister ) of the local court ( Amtsgericht ) of Frankfurt am Main, Germany under registration number HRB 111628, having its registered address at Messer-Platz 1, 65812 Bad Soden am Taunus, Germany,

- herein “ Purchaser ” -

 

4.

Messer Canada Inc. , a corporation organised under the laws of Canada, registered with the register of Corporations Canada under registration number 1083715-6 having its registered address at 199 Bay Street, Suite 5300, Commerce Court West, Toronto, Ontario M5L 1B9, Canada,

- herein “ Canadian Local Purchaser ” -

5.

Messer Industries USA, Inc. (formerly MG Industries USA, Inc.), a company organised under the laws of Delaware, with registration number 6964345 and registered address at 251 Little Falls Drive, Wilmington, New Castle, Delaware 19808, United States of America,

- herein “ American Local Purchaser ” -

(the Canadian Local Purchaser and the American Local Purchaser herein collectively herein the “ Local Purchasers ”)

and

 

6.

Linde Public Limited Company , a public limited company organised under the laws of Ireland, having its business address at The Priestley Centre, 10 Priestley Road, The Surrey Research Park, Guildford, Surrey GU2 7XY, United Kingdom,

- herein “ PLC ” -

(each of Linde, Praxair, Purchaser, the Local Purchasers and PLC herein also referred to individually as a “ Party ” and collectively as “ Parties ”).

 

- 2 -

RECITALS

 

(A)

WHEREAS , inter alia , Linde, Praxair, and PLC have entered into a business combination agreement as of 1 June 2017, as amended, to effect a strategic combination of the businesses of Linde and Praxair (herein “ BCA ” and the transactions contemplated by the BCA the “ Business Combination ”).

 

(B)

WHEREAS , the Parties have entered into a sale and purchase agreement as of 16 July 2018 as amended by the First Amendment of the Americas Sale and Purchase Agreement dated 22 September 2018 (the “ 1 st Amendment ”) and the Second Amendment of the Americas Sale and Purchase Agreement dated 19 October 2018 (the “ 2 nd Amendment ”) to effect the sale and transfer of certain businesses (“ SPA ”) in order to meet certain regulatory concerns with a view to close the BCA.

 

(C)

WHEREAS , after the signing date of the 2 nd Amendment, upon further discussions with regulatory authorities and operational needs in connection with the implementation of regulatory requirements, the Parties wish to settle a number of issues and to amend the SPA as set out herein.

NOW, THEREFORE, the Parties agree as follows:

 

1.

INTERPRETATIONS

Unless otherwise provided herein or the context otherwise requires, words and expressions defined for the purposes of the SPA will have the same meaning in this 3 rd Amendment.

 

2.

AMENDMENT OF SCHEDULES AND OF CLAUSE 1.1 OF THE SPA

 

2.1

Amendment of the Index of Schedules

 

  (a)

The Index of Schedules to the SPA shall be amended to read as follows to reflect the insertion of new Schedules 25 through 30 to the SPA:

 

  Schedule 1    Target Companies and Ownership Structure
  Schedule 2    Financial Line Items
               Schedule 3    Apportioning between DivestCo Shares
  Schedule 4    Principles of Closing Statement
  Schedule 5    Form of Closing Statement

 

- 3 -

  Schedule 6    Closing Actions
  Schedule 7    Sellers’ Warranties
  Schedule 8    Remedies and Limitations
  Schedule 9    Third Party Assurances Sellers’ Groups
  Schedule 10    Target Company Third Party Assurances
  Schedule 11    Debt Commitment Letter and Form of Interim Facility
  Schedule 12    Equity Commitment Letter
  Schedule 13    Carve Out Steps
  Schedule 14    Welding Fumes Indemnification
  Schedule 15    Retained Business
  Schedule 16    Helium Perimeter Change
  Schedule 17    Perimeter Change I
  Schedule 18    Linde Canada Investments LLC Dissolution
  Schedule 19    Financial Information
  Schedule 20    Sample Helium Contract Iwatani Transfer Agreement
  Schedule 21    Financial Contract Information
  Schedule 22    Perimeter Change II Assets
  Schedule 23    Transfer Agreement Perimeter Change II Assets
  Schedule 24    Perimeter Change II Employees
  Schedule 25    Additional 1,500 tons LOX tank La Porte
  Schedule 26    Reliability increase of GOX Backup System
  Schedule 27    Decatur Control Room Separation

 

- 4 -

  Schedule 28    Changes in the allocation of CO² contracts
  Schedule 29    Draft O2-Agreement between DivestCos and LyondellBasell
  Schedule 30    Draft LOX back-up supply agreement and GOX offtake agreement

 

  (b)

To reflect changes in the scope of assets and contracts to be transferred in the Transaction under the SPA and clarify certain provisions, the Parties agree to replace the following Schedules to the SPA by amended Schedules attached hereto as Annex 2(b) :

 

  •  

Schedule 3 ( Apportioning between DivestCo Shares ),

 

  •  

Schedule 5 ( Form of Closing Statement ),

 

  •  

Schedule 14 ( Welding Fumes Indemnification ), and

 

  •  

Schedule 22 ( Perimeter Change II Assets) ,

and all references in the SPA to such Schedules (or parts thereof) shall be read to refer to the revised Schedules to the SPA annexed hereto.

For Schedule 2 ( Financial Line Items ) and Schedule 5 ( Form of Closing Statement ) to the SPA the Parties acknowledge – for the avoidance of misunderstandings – that these Schedules have been prepared on the basis of the status prior to the 1 st Amendment, the 2 nd Amendment and this 3 rd Amendment and the indicated numbers (at 31 December 2017 which were added for illustration purposes) do, therefore, not reflect any of the amendments to the SPA.

 

  (c)

The Parties further agree to add the following Schedules to the SPA as new Schedules attached hereto as Annex 2(c) :

 

  •  

“Schedule 6 ( Closing Actions )”,

 

  •  

“Schedule 25 ( Additional 1,500 tons LOX tank La Porte )”,

 

  •  

“Schedule 26 ( Reliability increase of GOX Backup System )”,

 

  •  

“Schedule 27 ( Decatur Control Room Separation )”,

 

  •  

“Schedule 28 ( Changes in the allocation of CO 2 contracts )”,

 

  •  

“Schedule 29 ( Draft O 2 -Agreement between DivestCos and LyondellBasell )”, and

 

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  •  

“Schedule 30 ( Draft LOX back-up supply agreement and GOX offtake agreement )”.

 

2.2

Amendment of clause 1.1 of the SPA ( Definitions )

 

  (a)

“ Additional IP License Agreement means the executed or Agreed Form (as the case may be) agreement relating to the licensing of certain engineering IP currently envisaged to be entered into between Linde AG on the one hand and Messer Industries USA, Inc. (previously MG Industries USA, Inc.), on the other hand;”

 

  (b)

“ Assignment and Assumption Agreement means the executed or Agreed Form (as the case may be) assignment and assumption agreement between Linde Gas North America LLC as assignor and LyondellBassell Acetyls LLC and Linde LLC as assignees regarding the assignment and assumption of the rights and responsibilities under an Agreement for Limitation on Appraised Value of Property for School District Maintenance and Operations Taxes dated November 12, 2013;”

 

  (c)

“ Decatur HyCO Control Center means the control room currently shared by Linde Gas North America LLC’s HyCO plant and Linde LLC’s purification and liquefaction plant at Decatur to be separated as set forth in Schedule 27;”

 

  (d)

“ Delineation Matters means the issues listed in clause 16.6;”

 

  (e)

“ Freezer Asset Transfer Agreement Columbia means the executed or Agreed Form (as the case may be) asset transfer agreement relating to the transfer of certain freezer assets between Linde AG and Linde Colombia S.A.;”

 

  (f)

“ Helium Inventory means the helium inventory reserves held by the Target Companies in the Bureau of Land Management reservoir (as reported by the Bureau of Land Management in the report for the calendar month in which the Financial Closing Date falls;”

 

  (g)

“ Idle ECOVARs has the meaning given to it in clause 16.6(d);”

 

  (h)

“ IP Transfer and Assignment Agreements means the executed or Agreed Form (as the case may be) intellectual property transfer and assignment agreements between Linde AG on the one hand and certain Target Companies on the other hand which provide for the transfer and assignment of certain intellectual property rights by members of Linde Group to certain Target Companies and vice versa relating to, as the case may be, Brazil, Columbia and Canada;”

 

- 6 -

  (i)

The last paragraph of the definition of “ Linde DivestCo Business ” shall be amended as follows:

“The Parties agree that (i) the addition of the Perimeter Change I Businesses, the Perimeter Change I Assets and the Perimeter Change I Contracts, (ii) the changes in the helium perimeter set out in Schedule 16, (iii) the addition of the Perimeter Change II Assets and the Perimeter Change II Employees and (iv) the swap of the contracts set out in Schedule 28 and the Perimeter Change III Employee shall each adjust the Linde DivestCo Business and the Praxair DivestCo Business, respectively, sold under this Agreement but are each not reflected in the Combined Carve Out Financial Statements as of 31 December 2017;”

 

  (j)

“ Perimeter Change III Contracts has the meaning given to it in clause 16.6(e);”

 

  (k)

“ Perimeter Change III Employee means the one (1) operation technician to be transferred from Linde Group to Linde DivestCos as listed in Schedule 27;”.

 

3.

AMENDMENT OF CLAUSE 2 OF THE SPA ( CARVE OUT )

A new Clause 2.4 shall be added to the SPA which shall read as follows:

“2.4 Carve-out scope

 

  (a)

For purposes of:

 

  (i)

the definitions of “Sellers’ Images” and “Sellers’ Trademarks”, the IP Transfer and Assignment Agreements;

 

  (ii)

clause 2.1 last para. (payments to be made but still outstanding) of the SPA, the Freezer Asset Transfer Agreement Colombia and the IP Transfer and Assignment;

 

  (iii)

clause 12 (Taxes) of the SPA and the allocation of Taxes under other clauses of the SPA (such as clause 6.5 and clause 25.1 of the SPA), the IP Transfer and Assignment Agreements and the Freezer Asset Transfer Agreement Colombia;

 

  (iv)

clause 25.1 of the SPA, the IP Transfer and Assignment Agreements and the Freezer Asset Transfer Agreement Colombia; and

 

  (v)

Schedule 7 paragraph 1.2 of the SPA, the IP Transfer and Assignment Agreements and the Freezer Asset Transfer Agreement Colombia,

shall be considered to be Carve Out Agreements so that the transactions contemplated by these agreements form part of the Carve Out.

 

- 7 -

  (b)

For purposes of clause 12 (Taxes) of the SPA and the allocation of Taxes under other clauses of the SPA (such as clause 6.5 and clause 25.1 of the SPA), the transfer of the rights and responsibilities under the Agreement for Limitation on Appraised Value of Property for School District Maintenance and Operations Taxes dated November 12, 2013 pursuant to the Assignment and Assumption Agreement shall be considered to form part of the Carve Out.

 

  (c)

The nomination by Purchaser pursuant to Section 3.3 of the SPA of Linde Gas Puerto Rico, Inc. to become the acquirer of General Gases of the Virgin Islands, Inc. shall not make such transfer become part of the Carve Out or the Carve Out Agreements. Instead, the transfer of the shares in General Gases of the Virgin Islands, Inc. to Linde Gas Puerto Rico, Inc. shall be a Closing action and be deemed to have occurred after the transfer of the shares in Linde Gas Puerto Rico, Inc. to the American Local Purchaser.”

 

4.

DELINEATION MATTERS AND PURCHASE PRICE ADJUSTMENT

 

4.1

Reduction of the Purchase Price

 

  (a)

Considering the delineation matters set forth under Section 4.2 below, the Parties agree to decrease the Enterprise Purchase Price by an amount of 7,500,000 USD.

In addition, the Parties acknowledge and agree that the Delineation Matters (other than the swap of contracts pursuant to Schedule 28) will not be considered in the Closing Statement and for the calculation of the Initial Purchase Price (but have been included in determining the decrease of the Enterprise Purchase Price set out above), provided that volumes in transit on the Financial Closing Date under the (additional) Perimeter Change II Contracts shall be for the account of and paid to Sellers.

 

  (b)

To implement Section 4.1(a) first paragraph above, a new lit. (i) shall be added to clause 4.1 of the SPA as follows:

“(i) subtracting an amount of 7,500,000 USD for the delineation matters set out in Clause 16.6.”

 

  (c)

As a consequence, the Initial Purchase Price and the Final Purchase Price shall be calculated considering such changes outlined in Section 4.1(a) through 4.1(b) above.

 

- 8 -

4.2

Delineation Matters

 

  (a)

Following further regulatory requirements and operational needs in their implementation and alongside the preparations of the Carve Out, the Parties have agreed to combine the handling of and comprehensively agree on the following matters:

 

  •  

building of an additional 1,500 tons LOX tank at La Porte;

 

  •  

enhancement of the ASU reliability at La Porte;

 

  •  

separation of Linde’s Decatur HyCo Control Center from Linde LLC’s CO² plant as requested under the unbundling requirement from the FTC;

 

  •  

transfer of the two idle disassembled ECOVAR assets (i) MicroLN (40 kscfh), manufactured by Cosmodyne in 1996/97, previously assembled at a customer site in Derry, Republic of Northern Ireland, for customer Seagate Technology and (ii) Flex-N (80 kscfh), manufactured by Cryostar-France S.A. in 1997/98, previously assembled at a customer site in Richmond, KY, for customer AGC Flat Glass North America, each located at the Butler warehouse at 315 Bantam Ave, Butler, PA 16001, USA, to Linde LLC;

 

  •  

reallocation of certain CO2 customers between members of Linde Group and Linde DivestCos;

 

  •  

reallocation of certain laser gas customers between members of Linde Group and Linde DivestCos;

 

  •  

requests by Linde DivestCos’ employees in respect of LTIP;

 

  •  

contribution by Linde to the capital expenditure required for the additional tank at La Porte, the enhancement of the ASU at La Porte and the separation at Decatur;

 

  •  

priority contracting for the construction of the aforementioned additional tank at La Porte and the enhancement of the ASU at La Porte, to members of Linde Group;

 

  •  

payment by Purchaser to Linde of any shortfall if the external costs (net amount, i.e. without VAT) incurred as cash out during the first 24 months from Closing or committed within such period and incurred within a further period of 12 months fall short of the amount of certain limits for (i) the construction of the additional tank at La Porte, (ii) for the enhancement of the ASU at La Porte and (iii) for the capital expenditures to separate the facilities at Decatur;

 

  •  

Purchaser supports Sellers to procure the signing, prior to Closing, of an O2-Agreement between DivestCos and LyondellBasell; and

 

- 9 -

  •  

entering into an additional LOX back-up supply agreement and GOX offtake agreement between the relevant member of Linde Group and DivestCo prior to Closing.

 

  (b)

To implement section 4.2(a) above, a new Clause 16.6 shall be inserted into the SPA as follows:

“16.6 Delineation Matters

The Parties have identified a number of issues, the commercial effects of which they have set-off against each other by mutual agreement as is reflected in the Enterprise Purchase Price as adjusted:

 

  (a)

The Purchaser shall build an additional 1,500 tons LOX tank at La Porte to enhance its back-up capacity as further set out in Schedule 25.

 

  (b)

The Purchaser shall enhance the ASU reliability at La Porte as further set out in Schedule 26.

 

  (c)

The Purchaser shall separate Linde’s Decatur HyCO Control Center from Linde LLC’s CO 2 Plant as requested under the unbundling requirement from the FTC as further set out in Schedule 27. This entails the Perimeter Change III Employee. The transfer of the Perimeter Change III Employee shall be implemented pursuant to the EMA. Any operating expenses associated will be solely borne by Purchaser.

 

  (d)

Sellers shall procure that the two idle disassembled ECOVAR assets (i) MicroLN (40 kscfh), manufactured by Cosmodyne in 1996/97, previously assembled at a customer site in Derry, Republic of Northern Ireland, for customer Seagate Technology and (ii) Flex-N (80 kscfh), manufactured by Cryostar-France S.A. in 1997/98, previously assembled at a customer site in Richmond, KY, for customer AGC Flat Glass North America, each located at the Butler warehouse at 315 Bantam Ave, Butler, PA 16001, USA, (the “ Idle ECOVARs ”) are transferred to Linde LLC as part of the Carve Out by way of including the transfer of the Idle ECOVARs into the Master Carve Out and Asset Exchange Agreement, however on an “as is” basis excluding any representation or warranty, liability or indemnity with respect to the Idle ECOVARs, whether under the Carve Out Agreements or the SPA or otherwise, with an aim of implementing the necessary transfers prior to the Financial Closing Date.

 

- 10 -

  (e)

Certain CO 2 customers shall, prior to Closing, be allocated differently between the members of Linde Group and Linde DivestCos as set out in Schedule 28 and such reallocation shall be considered part of the Carve Out. The CO 2 customer contracts transferred from Linde Group to Linde DivestCos set out in Schedule 28 (the “ Perimeter Change III Contracts ”) shall increase the Linde DivestCo Business and those transferred pursuant to Schedule 28 from Linde DivestCos to Linde Group shall reduce the Linde DivestCo Business. The Sellers shall use reasonable endeavours to procure the transfer of the Perimeter Change III Contracts from their current owners to Linde North America Inc., Linde LLC or to another Target Company as agreed between Sellers and Purchaser, or, if the current owner is already a Target Company, that they are kept by such entity with an aim of implementing the necessary transfers prior to the Financial Closing Date. Schedule 5 of Exhibit A (Carve-out Agreement) of the Master Carve Out and Asset Exchange Agreement shall apply to the Perimeter Change III Contracts and Schedule 5 of Exhibit B (Reverse Carve-out Agreement) shall apply to the contracts transferred from Linde DivestCos to Linde Group pursuant to Schedule 28.

 

  (f)

Certain laser gas customers shall be allocated differently between members of Linde Group and Linde DivestCos as set out in the changes to Schedules 22 and shall be considered part of the Carve Out. With respect to the new laser gas customers that have been added by the Third Amendment of the Americas Sale and Purchase Agreement dated 20 February 2019, subject to Section 13 thereof, the provisions of the Second Amendment of the Americas Sale and Purchase Agreement dated 19 October 2018 relating to the Perimeter Change II Assets and to the Perimeter Change II Customer Relationships apply.

 

  (g)

The employees of the Linde DivestCos will no longer participate in any LTIP of members of Linde Group. Should they request or should it be required that they participate in any future LTIP or comparable program, this shall be for the sole account of Purchaser.

 

  (h)

Linde contributes an amount of (i) up to six (6) million USD to the additional tank at La Porte, (ii) up to four (4) million USD to the enhancement of the ASU at La Porte and (iii) up to three (3) million USD to the capital expenditure required for the separation of the Linde Decatur HyCO Control Center. The operational expenses for such separation are for the account of Purchaser only. The contributions by Linde shall be deemed to have been fully made by way of the adjustment of the Enterprise Purchase Price under Clause 4.1(i).

 

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  (i)

Purchaser will contract the construction of the additional tank at La Porte as set out in Schedule 25 to members of Linde Group if their offer is not higher than six (6) million USD. Purchaser will contract the enhancement of the ASU at La Porte as set out in Schedule 26 to members of Linde Group if their offer is not higher than four (4) million USD.

 

  (j)

If Purchaser’s/Linde DivestCos’ external costs (net amount, i.e. without VAT) actually incurred as cash out during the first 24 months from Closing or committed to be incurred during such period and actually incurred within a period of 12 months thereafter (i) for the construction of the additional tank at La Porte fall short of six (6) million USD, (ii) for the enhancement of the ASU at La Porte falls short of four (4) million USD or (iii) for the capital expenditures to separate the facilities at Decatur as set out in Schedule 27 falls short of three (3) million USD, in each case, Purchaser shall pay to Linde the amount of such shortfall;

 

  (k)

Purchaser shall support Sellers to sign, prior to Closing, an O 2 - Agreement between DivestCos and LyondellBasell as set out in Schedule 29; and

 

  (l)

Sellers shall procure that, prior to Closing, the relevant member of Linde Group enters into an additional LOX back-up supply agreement and GOX offtake agreement with DivestCo as set out in Schedule 30.”

 

4.3

Amendment of Transaction Documents and Carve Out Agreements

The Parties will separately agree in good faith and document any amendments required with respect to the Transaction Documents (including the Additional IP License Agreement) and Carve Out Agreements (if any) to reflect the inclusion of the Delineation Matters, in particular the changes in the contracts and employees transferring, in the Transaction under the SPA.

 

4.4

Amendment of clause 6.1 of the SPA

 

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To implement Section 4.1(a) second paragraph above, Clause 6.1 of the SPA shall be amended and read as follows:

“Sellers shall, or shall procure that its accountants shall, after Closing prepare a draft statement showing, as at the Financial Closing Date, the Financial Debt, Cash, Working Capital, Inter-Company Payables and Inter-Company Receivables of the Target Companies as a whole by adding the respective figures for the Linde DivestCo Business and for the Praxair DivestCo Business (“ Closing Statement ”). For purposes of the Closing Statements, (i) the Helium Iwatani Contract, (ii) any purchase price payments to be made by Linde LLC but still outstanding under the Helium Container Transfer Agreement and the helium containers transferred or to be transferred under the Helium Container Transfer Agreement (iii) the Linde LAR Enid Plant, (iv) the Perimeter Change II Assets, (v) the Delineation Matters – other than the swap of contracts set out in Schedule 28 –, and (vi) the claims by Target Company against JSW as specified in clause 16.6 will not be considered, provided that volumes in transit on the Financial Closing Date under the Helium Iwatani Contract, the Perimeter Change II Contracts as supplemented by the Third Amendment of the Americas Sale and Purchase Agreement dated 20 February 2019 shall be for account of and paid to Sellers. The Closing Statement shall set out the calculation of the Final Purchase Price and the Final Inter- Company Payment Amount and be in the form set out in Schedule 5.

Sellers shall deliver the draft Closing Statement to Purchaser within sixty (60) Business Days following Closing. The Closing Statement shall be prepared in accordance with the accounting principles and methodology set out in Schedule 4.”

 

4.5

Interpretation of clause 4.1 of the SPA

Since the inclusion of the Delineation Matters into the Transaction shall be reflected by a decrease in the Enterprise Purchase Price as set forth in Section 4.1 above, clause 4.1(g) of the SPA shall be disregarded for purposes of the calculation of the Final Purchase Price with respect to the inclusion of the Delineation Matters under this 3 rd Amendment.

 

4.6

Amendment of clause 15.6 of the SPA ( Agreements as of Closing )

The list after the first paragraph of clause 15.6 of the SPA shall be supplemented by the following lit. (m) to reflect the additional agreement entered into:

 

  “(m)

the Third Amendment of the Americas Sale and Purchase Agreement dated 20 February 2019.”

 

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5.

AMENDMENT OF CLAUSE 5.9 OF THE SPA ( CANADA CASH AMOUNT )

To clarify the Parties’ mutual understanding on the Canada Cash Amount, clause 5.9 of the SPA shall be amended and read as follows:

“ 5.9 Canada Cash Amount

The Parties agree that an amount equal to the Cash position held by Linde Canada Ltd. in excess of CAD 10,000,000 as of the Financial Closing Date (“ Canada Cash Amount ”) shall be treated as follows:

 

  (a)

For the avoidance of doubt, the Canada Cash Amount and the further Cash amount of CAD 10,000,000 shall constitute Cash and shall be included in the Closing Statement.

 

  (b)

The Canada Cash Amount shall not be paid with the Initial Purchase Price pursuant to clause 4.2 and payment shall be deferred until the earliest point in time at which Purchaser has been able to extract the Canada Cash Amount by way of a loan, at the latest, however, until five (5) Business Days after the Closing (the “ Canada Cash Extraction ”). Such deferred portion of the Initial Purchase Price shall not bear any interest.

 

  (c)

Purchaser shall procure that Linde Canada Ltd. will be merged into Local Canadian Purchaser by way of amalgamation as soon as reasonably practical after the Closing (expected to occur with effect as of the end of the fiscal year of Linde Canada Ltd.).”

 

6.

AMENDMENT OF CLAUSE 8.2(A) OF THE SPA ( COMMITMENTS AND PROCESSES REGARDING CLOSING CONDITIONS )

To reflect the certain Acquirer Agreement Containing Revised Decision and Order a new sentence shall be added after the last sentence of the second paragraph of Clause 8.2(a) of the SPA that end with “…, in case of Perimeter Changes in accordance with clause 8.2(c).” as follows:

“The Parties agree that the Acquirer Agreement Containing Revised Decision and Order to be executed by shareholders of the Purchaser and the FTC as soon as possible hereafter in the File No. 171-0068 does not trigger any compensation claims or claims to discuss compensation by Purchaser against Sellers.”

 

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7.

AMENDMENT OF CLAUSE 14.2 OF THE SPA

To reflect the agreement that certain details of the concept of rebranding shall be changed and certain maximum timelines for identified rebranding exercises shall be prolonged, the wording of Clause 14.2 (a) (ii) 3. of the SPA shall be amended and read as follows:

“3. from tools and products relating to the Business and any materials (print or electronic) used in connection with, or related to, any products or services of the Business, provided that any Names including (in whole or in part) any of Sellers’ Trademarks, if any,

 

  (A)

– subject to clause 14(b)(ii) – on any neckring of cylinders (but, for the avoidance of doubt, not the shoulder) being part of the Business, shall have to be removed latest upon the first cylinder testing of the cylinder at a cylinder testing facility undertaken in the regular cylinder testing period in accordance with the regular course of business (occurring after a transition period of at least one (1) month) by, or on behalf of, any member of Purchaser Group after the Closing Date (but, in any event, within ten (10) years of the Closing Date);

 

  (B)

– subject to clauses 14.2(a)(ii)3.(A) and 14.2(b)(ii) – on any cylinders being part of the Business, shall have to be removed latest upon the first filling of the relevant cylinder by, or on behalf of, any member of Purchaser Group after the Closing Date (but, in any event, within ten (10) years of the Closing Date); and

 

  (C)

on any freezers, tanks or other installations being part of the Business, but not located at a site of the Business on the Closing Date, shall have to be removed latest upon the first routine inspection or other visit (e.g. for maintenance or re- filling) of the relevant freezer, tank or other installation by, or on behalf of, any member of Purchaser Group after the Closing Date (but, in any event, within two (2) years of the Closing Date).”

 

8.

AMENDMENT OF CLAUSE 16 OF THE SPA ( POST-CLOSING COVENANTS )

A new Clause 16.6 shall be added to the SPA which shall read as follows:

“16. 6. ASU Pipeline JSW Mingo Junction

 

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Under a letter of intent signed between a Target Company and SSW Steel USA Ohio, Inc. (“ JSW ”) on 16 October 2018 and amended on 3 December 2018, the Target Company has a claim for a payment of USD 3.7 million for the purchase of a LOX/LIN station financed by Linde and a further claim for a penalty of USD 0.2 million if the Target Company is not awarded the supply contract for LOX and/or LIN. The Purchaser undertakes to procure (i) that any claim for payment against JSW is pursued and (ii) that monies received, net of any tax effects, and after external duties and reasonable external costs incurred for collection, are passed on to Linde without further deduction.”

 

9.

AMENDMENT OF CERTAIN INFORMATION IN SCHEDULE 1 OF THE SPA ( TARGET COMPANIES AND OWNERSHIP STRUCTURE )

The information set out with respect to General Gases of the Virgin Islands, Inc. in Schedule 1 under A. II. 2. shall be amended and shall read as follows:

[intentionally omitted]

 

10.

AMENDMENT OF PARAGRAPH 1.3 OF SCHEDULE 7 OF THE SPA ( FINANCIAL MATTERS )

 

  (a)

Purchaser acknowledges that the swap of the contracts set out in Schedule 28 is not reflected in the Combined Carve Out Financial Statements. This is also set forth in Section 2.2(i) above.

 

  (b)

To implement Section 10(a) above, paragraph 1.3(a) of Schedule 7 to the SPA shall be amended and shall read as follows:

 

  “(a)

The Combined Carve Out Financial Statements were prepared in accordance with the requirements of all relevant laws and the relevant accounting principles then in force save as disclosed therein and subject to the basis of preparation and the assumptions made therein to reflect the separation of the

 

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  respective business and, on the basis of the knowledge of the respective management when they were prepared, present fairly, in all material respects, the combined carve-out financial position of the respective Target Companies as of the date to which they relate, and the respective Target Companies’ combined carve-out financial performance and such companies’ combined carve-out cash flows for the periods to which they relate, provided that they neither take into account (i) the changes in the helium perimeter set out in Schedule 16 nor (ii) the addition of the Perimeter Change I Businesses, the Perimeter Change I Assets, and the Perimeter Change I Contracts, nor (iii) the addition of the Perimeter Change II Assets, nor (iv) the swap of the contracts set out in Schedule 28.”

 

11.

AMENDMENT OF PARAGRAPH 1.9 OF SCHEDULE 7 OF THE SPA ( CONTRACTUAL MATTERS )

A new paragraph 1.9(e) shall be added to Schedule 7 to the SPA which shall read as follows:

“(e) With respect to the Perimeter Change III Contracts, there are no material unremedied breaches by the Sellers’ Groups or the Target Companies or, to Sellers’ Knowledge, by the counterparties of such contracts. All Perimeter Change III Contracts subject to the terms specified in Schedule 28, are in full force and effect. For the purposes of this warranty under Schedule 7 paragraph 1.9(e) reference to Sellers’ Knowledge means the actual knowledge as of the date hereof of Dr Harald Voigts after having made due inquiry with Mr Robert Capellman without any further inquiry.”

 

12.

AMENDMENT OF SCHEDULE 14 OF THE SPA ( WELDING FUMES INDEMNIFICATION )

The Parties clarify their mutual understanding on the relationship of the indemnity provided in Schedule 14 towards the liability of any insurer for the indemnified claims by introducing a new subparagraph to paragraph 2 of Schedule 14 of the SPA.

 

13.

INTERPRETATION OF THE SPA WITH RESPECT TO TIME PERIODS “AS OF THE DATE OF THIS AGREEMENT” OR SIGNING

The Parties agree that with respect to the inclusion of the Delineation Matters into the Transaction any undertaking, warranty, right or obligation shall, in relation to the Delineation Matters, not be given as of the date of the SPA but as of the date of this 3 rd Amendment and as of Closing, as the case may be provided for in the SPA. Therefore, any reference in the SPA to “the date of this Agreement” or the signing of the SPA shall, with respect to the Delineation Matters, be interpreted and construed, except for clause 8.5 of the SPA, to mean exclusively a reference to the date of this 3 rd Amendment.

 

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14.

MISCELLANEOUS

 

14.1

Entirety of 3 rd Amendment

This 3 rd Amendment contains the entirety of the amendments to the SPA agreed by the Parties at this time which shall otherwise remain unamended.

 

14.2

Provisions applied mutatis mutandis

The content of clauses 25, 26, and 27 of the SPA shall apply to this 3 rd Amendment mutatis mutandis as if contained in this 3 rd Amendment and being a part hereof.

[ Signatures to follow ]

 

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Date: 20/02 2019

For and on behalf of LINDE AG

 

  

/s/ Matthias von Plotho

             

/s/ Dr. Harald Voigts

Name:   

Matthias von Plotho

      Name:    Dr. Harald Voigts
Title:    Programme Manager       Title:    Head of Legal - M&A

Date: 20 February 2019

For and on behalf of PRAXAIR, INC.

 

/s/ Guillermo Bichara

Name:   Guillermo Bichara
Title:   Director

Date: 20 February 2019

For and on behalf of LINDE PUBLIC LIMITED COMPANY

 

/s/ C J Cossins

Name:   C J Cossins
Title:   Permanent Representative

Date: 20 February 2019

For and on behalf of MESSER INDUSTRIES GMBH

 

/s/ Michael Beck

              

/s/ Carsten Knecht

Name: Mr Michael Beck

     

Name: Mr Carsten Knecht

Title:    Managing Director (Geschäftsführer)

     

Title:     Managing Director (Geschäftsführer)

Date: 20 February 2019

For and on behalf of MESSER INDUSTRIES GMBH

 

/s/ Michael Beck

              

/s/ Carsten Knecht

Name: Mr Michael Beck

     

Name: Mr Carsten Knecht

Title:    Managing Director (Geschäftsführer)

     

Title:     Managing Director (Geschäftsführer)

Date: 20 February 2019

For and on behalf of MESSER CANADA INC.

 

/s/ Carsten Knecht

Name:   Mr Carsten Knecht
Title:   Chief Executive Officer (CEO)

Date: 20 February 2019

For and on behalf of MESSER INDUSTRIES USA, INC.

 

/s/ Michael Beck

Name:   Mr Michael Beck
Title:   Managing Director