<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
SCHEDULE 14D-1
(Amendment No. 2)
Tender Offer Statement
(Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934)
----------------------
CBI INDUSTRIES, INC.
(Name of Subject Company)
PRAXAIR, INC.
PX ACQUISITION CORP.
(Bidders)
Common Stock, $2.50 par value per share (and the associated Rights)
(Title of Class of Securities)
124800-10-3
(CUSIP Number of Class of Securities)
David H. Chaifetz
Vice President, General Counsel
and Secretary
Praxair, Inc.
39 Old Ridgebury Road
Danbury, Connecticut 06810-5113
(203) 837-2000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
----------------------
Copies to:
Neil T. Anderson, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
===============================================================================
<PAGE>
This Amendment No. 2 amends and supplements the Tender Offer Statement on
Schedule 14D-1, as amended (the "Schedule 14D-1"), originally filed by Praxair,
Inc., a Delaware corporation ("Praxair"), and PX Acquisition Corp., a Delaware
corporation (the "Purchaser"), on November 3, 1995 relating to the tender offer
disclosed therein to purchase all of the outstanding Shares (including any
associated Rights) upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 3, 1995, and the related Letter of
Transmittal. Capitalized terms used and not defined herein shall have the
meanings set forth in the Schedule 14D-1.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4 is hereby amended and supplemented by adding thereto the following:
On November 6, 1995, Praxair obtained commitments (the "Commitments"), from
Morgan Guaranty Trust Company of New York ("Morgan"), Chemical Bank ("Chemical")
and Credit Suisse (collectively, the "Committing Banks"), pursuant to and
subject to the terms of a letter dated November 6, 1995 (the "Commitment
Letter") and the Summary of Terms and Conditions attached thereto (the "Term
Sheet"), to provide up to $500 million each ($1.5 billion in aggregate) of a
credit facility of up to $3.0 billion (the "Credit Facility"), of which
approximately one-half would be used by Praxair for purposes of making capital
contributions or advances to the Purchaser to finance its purchase of the Shares
(and associated Rights), approximately $1.0 billion would be used to refinance
existing indebtedness of CBI Industries, Inc. (the "Company") and Praxair, and
the balance would be used to pay related fees and expenses and for general
corporate purposes.
Pursuant to the Commitment Letter, J.P. Morgan Securities Inc., Chemical
Securities Inc. and Credit Suisse (the "Arrangers") have agreed to use their
best efforts to arrange a syndicate of financial institutions ("Lenders"),
acceptable to Praxair, to provide the Credit Facility. Morgan will act as the
Documentation Agent and Chemical will act as Administrative Agent and Auction
Agent (Morgan and Chemical, in such capacity, the "Agents") for the Credit
Facility.
Under the Commitment Letter, each Committing Bank's commitment is subject
(among other conditions relating to certain material adverse changes (i) in the
business of Praxair or the Company, (ii) in the terms and conditions of the
Offer or (iii) in financing, bank syndication or capital market conditions) to
the negotiation, execution and delivery prior to March 1, 1996 of definitive
documentation with respect to the Credit Facility containing the terms and
conditions set forth in the Term Sheet and such other provisions, not
inconsistent with the Term Sheet, satisfactory in form and substance to such
Committing Bank and Praxair (the "Credit Documents"). The Financing Condition
will be deemed satisfied upon the execution of the Credit Documents.
The Credit Facility will be a reducing revolving credit facility with a
final maturity of five years from the closing date (the "Closing Date") of the
Credit Facility. The maximum amount of revolving credit commitments available
will be $3.0 billion for the first two years after the Closing Date, $2.7
billion for the third year after the Closing Date, $2.3 billion for the fourth
year after the Closing Date and $1.9 billion for the fifth year after the
Closing Date. As long as the commitments exceed $1.5 billion, they will be
reduced by 75% of all net cash proceeds from the (i) sale of any of the
Company's businesses and any other business that Praxair disposes of for
regulatory reasons and (ii) incurrence of certain other indebtedness and the
issuance of equity securities by Praxair.
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The Term Sheet provides that Praxair will have the option of borrowing (i)
at LIBOR plus a margin ranging from 12.00 to 45.00 basis points per annum,
depending on the ratings for Praxair's long-term senior unsecured debt (if
utilization exceeds 50%, plus a 5 basis point per annum utilization fee for
certain credit quality levels), (ii) at a CD rate plus a margin ranging from
24.50 to 57.50 basis points per annum, depending on the ratings for Praxair's
long-term senior unsecured debt, (iii) at a fluctuating Base Rate equal to the
higher of (x) the Agents' publicly announced reference rate or (y) the federal
funds rate plus 50 basis points or (iv) under a Money Market Option. Under the
Money Market Option, Praxair may from time to time request the Auction Agent to
select competitive bids from the Lenders at either a specified margin over LIBOR
or at a specified fixed absolute rate. Each Lender may bid at its own
discretion for amounts up to the total amount of commitments, and Praxair will
be under no obligation to accept any of the bids. Each Lender's advance under
the Money Market Option will not reduce such Lender's obligation to lend its pro
rata share of the remaining undrawn commitment.
The Term Sheet provides that Praxair shall pay a per annum facility fee
ranging from 8.00 to 25.00 basis points, depending on the ratings for Praxair's
long-term senior unsecured debt, of the total commitments in effect.
Under the Term Sheet, borrowings under the Base Rate may be prepaid at any
time on one business days' notice. Borrowings under the LIBOR and CD rates may
be prepaid subject to the payment of funding losses. Borrowings under the Money
Market Option may not be prepaid until the end of an interest period.
The Term Sheet provides that Praxair will make representations and
warranties including as to: (i) corporate existence, (ii) corporate and
governmental authorization, no contravention and binding effect, (iii) financial
information, (iv) no material adverse change, (v) environmental matters, (vi)
compliance with ERISA, (vii) no material litigation, (viii) existence,
incorporation, etc. of subsidiaries, (ix) not being an investment company, (x)
disclosure and (xi) any additional matters appropriate in light of the
acquisition of the Company and reasonable in the context of a public tender
offer.
The Term Sheet provides that conditions to each borrowing under the Credit
Facility will include: (i) absence of default, (ii) continued accuracy of
certain representations and warranties, (iii) appropriate conditions relating to
the acquisition of the Company and reasonable in the context of a public tender
offer, including, without limitation, fulfillment of conditions to acceptance of
tendered Shares and (iv) the amount of the commitments under the Credit Facility
being sufficient to finance the consummation of the acquisition of the Company
and the refinancing of the indebtedness contemplated to be repaid as a result of
such acquisition and to provide adequate liquidity for Praxair.
The Term Sheet provides that Praxair and certain of its subsidiaries will
be bound by covenants including as to (subject to modification to the extent
appropriate in light of the acquisition of the Company and to comply with margin
regulations): (i) provision of information, (ii) maintenance of property and
insurance coverage, (iii) absence of certain liens, (iv) limitation on debt
outstanding, (vi) consolidations, mergers and sale of assets, (vii) use of
proceeds and (viii) certain financial covenants, including (a) minimum book net
worth (not to be less than $830 million, subject to certain adjustments), (b)
debt to book net worth ratio and (c) interest coverage ratio.
The Term Sheet provides that the events of default under the Credit
Documents will include: (i) failure to pay principal within two days of when due
or interest or fees within five days of when due, (ii) failure to meet covenants
(with 20 days grace, where appropriate), (iii) falsehood of representations and
warranties in any materially adverse respect when made, (iv) occurrence of a
default under certain debt
2
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of Praxair and its subsidiaries, that allows such debt to be accelerated, (v)
change of ownership or control, (vi) bankruptcy and insolvency of Praxair or its
subsidiaries having assets greater than $150 million and (vii) other customary
defaults including ERISA and judgment default.
The Term Sheet provides that the Credit Documents will contain customary
provisions protecting the Lenders in the event of unavailability of funding,
illegality, increased costs and funding losses and new capital adequacy
requirements. The Term Sheet also provides that Praxair will indemnify the
Lenders against certain losses and will pay all reasonable legal and other out-
of-pocket expenses of the Agents related to the Credit Facility.
Praxair has also agreed to pay the Arrangers certain fees as consideration
for their agreement to arrange, manage and structure the Credit Facility and to
pay the Committing Banks certain fees for their commitment under the Commitment
Letter. Praxair has also agreed to pay each Lender (other than the Committing
Banks) to provide a portion of the Credit Facility an allocation fee based on
the amount such Lender offers to commit to the Credit Facility (which allocation
fee shall be paid by a Committing Bank, to the extent such Lender's commitment
represents an allocation of the Commiting Bank's commitment).
The foregoing summary of the Commitment Letter and the Term Sheet does not
purport to be complete and is qualified in its entirety by reference to the
Commitment Letter and Term Sheet, copies of which are attached hereto as an
exhibit and incorporated herein by reference.
3
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ITEM 10. ADDITIONAL INFORMATION.
(c) Praxair's Notification and Report Form under the HSR Act was accepted for
filing by the FTC and the Antitrust Division on November 6, 1995, and
accordingly, the waiting period under the HSR Act will expire at 11:59 P.M., New
York City time, on November 21, 1995 unless earlier terminated or extended by a
request for additional information.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by adding thereto the
following:
(b)(1) Commitment Letter dated November 6, 1995 from Morgan Guaranty Trust
Company of New York, J.P. Morgan Securities Inc., Chemical Bank, Chemical
Securities Inc. and Credit Suisse to Praxair, Inc., with attached Summary
of Terms and Conditions for Praxair, Inc.
4
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 8, 1995
PRAXAIR, INC.
By: /s/ David H. Chaifetz
----------------------
Name: David H. Chaifetz
Title: Vice President, General Counsel and
Secretary
PRAXAIR ACQUISITION CORP.
By: /s/ David H. Chaifetz
----------------------
Name: David H. Chaifetz
Title: President-Secretary
5
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGES
- ------------- ----------------------------------------------------------------------------------- ------------
<S> <C> <C>
(b)(1) Commitment Letter dated November 6, 1995 from Morgan Guaranty Trust
Company of New York, J.P. Morgan Securities Inc., Chemical Bank, Chemical
Securities Inc. and Credit Suisse to Praxair, Inc., with attached Summary of Terms
and Conditions for Praxair, Inc.
</TABLE>
<PAGE>
EXHIBIT 99(b)(1)
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
60 Wall Street
New York, New York 10260
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, New York 10260
CHEMICAL BANK
270 Park Avenue
New York, New York 10017
CHEMICAL SECURITIES INC.
270 Park Avenue
New York, New York 10017
CREDIT SUISSE
12 East 49th Street
New York, New York 10017
November 6, 1995
COMMITMENT LETTER
Praxair, Inc.
39 Old Ridgebury Road
Danbury, CT 06810-5113
Attention: James Sawyer, Vice President and Treasurer
Ladies and Gentlemen:
You have advised us that you intend to acquire CBI Industries, Inc.
pursuant to a tender offer and merger or a merger (the "Acquisition"). We
understand that you will require up to $3,000,000,000 of senior bank debt
facilities (the "Credit Facility"), of which approximately one half will be used
to finance the purchase of CBI Industries, Inc. common stock, approximately $1.0
billion will be used the refinance existing indebtedness of CBI
<PAGE>
Industries, Inc. and Praxair, Inc. ("Praxair") and the balance will be used to
pay related fees and expenses and for general corporate purposes. You have
requested us to arrange the Credit Facility.
J.P. Morgan Securities Inc. (the "Arranger" or "JPMSI"), Chemical
Securities Inc. and Credit Suisse (the "Co-Arrangers" and, together with the
Arranger, collectively the "Arrangers") are pleased to advise you that they are
willing to use their best efforts to arrange a syndicate of financial
institutions (the "Lenders") to provide the Credit Facility. In addition,
Morgan Guaranty Trust Company of New York ("Morgan"), Chemical Bank ("Chemical")
and Credit Suisse are each willing to commit to provide up to $500,000,000 for a
total of $1,500,000,000 of the Credit Facility.
Attached to this letter is a Summary of Terms and Conditions (the "Term
Sheet") setting forth the principal terms and conditions on and subject to which
each of Morgan, Chemical and Credit Suisse is willing to make its portion of the
Credit Facility available.
It is agreed that Morgan will act as the Documentation Agent for the Credit
Facility and that Chemical will act as Administrative Agent and Auction Agent.
All aspects of the syndication, including decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, the tiering
and allocations of the commitments among the Lenders and the amount, timing and
distribution of fees among the Lenders shall, in each case, be subject to mutual
agreement of the Arrangers and Praxair.
You agree to assist the Arrangers in forming any such syndicate and to
provide the Arrangers and the Lenders, promptly upon request, with all
information deemed reasonably necessary by them to complete successfully the
syndication, including, but not limited to an information package for delivery
to potential syndicate members and participants. You agree to refrain from any
other financings during the syndication process unless otherwise agreed by the
Arrangers. You further agree to make your officers and representatives
available to participate in information meetings for potential syndicate members
at such times and places as Morgan or JPMSI may reasonable request.
You represent and warrant and covenant that no written information and no
information (written or otherwise) given at information meetings for potential
syndicate members (collectively, the "Information") which has been or is
hereafter furnished by or on behalf of Praxair to any of the Arrangers or the
Lenders in connection with the transaction contemplated hereby contained (or, in
the case of Information furnished after the date hereof, will contain) as of the
time it was furnished (or is furnished) any material misstatement of fact or
omitted (or will omit) as of such time to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were (or will be) made, not misleading; provided, that the foregoing
--------
representation and warranty is made only to the best of your knowledge in the
case of Information relating to CBI Industries, Inc. and its subsidiaries, which
knowledge is based upon public disclosure by CBI Industries, Inc.; and provided,
--------
further, that, with respect to Information consisting of statements, estimates
- -------
and projections regarding the future performance of Praxair and CBI Industries,
Inc. and their respective subsidiaries (collectively, the "Projections"), no
representation or warranty is made
2
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other than that the Projections have been (or will be ) prepared in good faith
utilizing due and careful consideration and the best information available to
Praxair at the time of preparation thereof. You agree to supplement the
Information and the Projections from time to time as appropriate, so that the
representations and warranties in the preceding sentence remain correct. In
arranging and syndicating the Credit Facility, the Arrangers will use and rely
on the Information and the Projections without independent verification thereof.
Your obligations under this paragraph shall terminate on the date on which the
definitive documentation with respect to the Credit Facility becomes effective.
Each of Morgan's, Chemical's and Credit Suisse's commitment hereunder is
subject to the conditions that (a) after the date hereof there shall not have
occurred (i) any material adverse change in the business, financial position or
results of operations of Praxair and its consolidated subsidiaries, taken as a
whole, or CBI Industries, Inc. and its consolidated subsidiaries, taken as a
whole, (ii) any change in the terms and conditions of the Acquisition from those
set forth in the Offer to Purchase dated November 3, 1995 that is materially
adverse to the interests of such Lender as determined by it in good faith or
(iii) any material change in or material disruption of financing, bank
syndication or capital market conditions that in the good faith opinion of the
Arrangers could materially and adversely affect the syndication of the Credit
Facility and (b) all documents and materials publicly filed with respect to the
Acquisition shall be reasonably acceptable to it. In addition, each of
Morgan's, Chemical's and Credit Suisse's commitment is subject to the
negotiation, execution and delivery prior to March 1, 1996 of definitive
documentation with respect to the Credit Facility satisfactory in form and
substance to such Lender and its counsel. Such documentation shall contain the
terms and conditions set forth in the Term Sheet and such other indemnities,
covenants, representations and warranties, events of default, conditions
precedent and other terms and conditions (which in each case shall not be
inconsistent with the Term Sheet) as shall be satisfactory in all respects to
Morgan, Chemical and Credit Suisse and you. Matters which are not covered by
the provisions of this letter and the Term Sheet are subject to the approval of
Morgan, Chemical, Credit Suisse and you.
You agree to pay all reasonable out-of-pocket expenses of the Arrangers and
Morgan associated with the syndication of definitive financing agreements
(including the reasonable fees and disbursements and other reasonable charges of
counsel for each of them). You agree to indemnify and hold harmless each of the
Arrangers and Morgan, Chemical and Credit Suisse and each director, officer,
employee, affiliate and agent thereof (each, an "indemnified person") against,
and to reimburse each indemnified person, upon its demand, for, any losses,
claims, damages, liabilities or other expenses ("Losses") to which such
indemnified person may become subject insofar as such Losses arise out of or in
any way relate to or result from the Acquisition, this letter or the financing
contemplated hereby, including, without limitation, Losses consisting of legal
or other expenses incurred in connection with investigating, defending or
participating in any legal proceeding relating to any of the foregoing (whether
or not such indemnified person is a party thereto); provided that the foregoing
--------
will not apply to any Losses to the extent they are found by a final decision of
a court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such indemnified person. Your obligations under this
paragraph shall remain effective whether or not definitive financing
documentation is executed and notwithstanding any termination of this letter.
No
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indemnified person shall be responsible or liable to any other person for
consequential damages which may be alleged as a result of this letter or the
financing contemplated hereby.
If any litigation or proceeding is brought against any indemnified person
in respect of which indemnification may be sought against Praxair pursuant to
the preceding paragraph, such indemnified person shall promptly notify Praxair
in writing of the commencement of such litigation or proceeding, but the failure
to so notify Praxair shall relieve Praxair from any liability which it may have
hereunder only if, and to the extent that, such failure results in the
forfeiture by Praxair of substantial rights and defenses, and will not in any
event relieve Praxair from any other obligation or liability that it may have to
any indemnified person. If any such litigation or proceeding shall be brought
against any indemnified person and such indemnified person shall notify Praxair
in writing of the commencement of such litigation or proceeding, Praxair shall
be entitled to participate in such litigation or proceeding, and, after written
notice from Praxair to such indemnified person, to assume the defense of such
litigation or proceeding with counsel of its choice at its expense; provided,
however, that such counsel shall be satisfactory to the indemnified person in
the exercise of its reasonable judgment and that Praxair shall have confirmed
that it will indemnify such person without reservation with respect to any
claims in respect of which Praxair has assumed the defense (it being understood
that if additional claims are brought in respect of which Praxair does not wish
to provide such indemnification, it will cease to assume the defense of the
related litigation or proceeding). Notwithstanding the election of Praxair to
assume the defense of such litigation or proceeding, such indemnified person
shall have the right to employ separate counsel and to assume the defense of
such litigation or proceeding, and Praxair shall bear the reasonable expense of
such separate counsel and shall pay such fees, costs and expenses at least
quarterly (provided that with respect to any single litigation or proceeding or
with respect to several litigations or proceedings involving substantially
similar legal claims, Praxair shall not be required to bear the fees, costs and
expenses of more than one such counsel for such person) if (i) in the reasonable
judgment of such indemnified person the use of counsel chosen by Praxair to
represent such indemnified person would present such counsel with a conflict of
interest, (ii) the defendants in, or targets of, any such litigation or
proceeding include both an indemnified person and Praxair, and such indemnified
person shall have reasonably concluded that there may be legal defenses
available to it or to other indemnified persons which are different from or
additional to those available to Praxair, (iii) Praxair shall not have employed
counsel satisfactory to such indemnified person, in the exercise of the
indemnified person's reasonable judgment, to represent such indemnified person
within a reasonable time after notice of the institution of such litigation or
proceeding or (iv) Praxair shall authorize in writing such indemnified person to
employ separate counsel at the expense of Praxair. In any action or proceeding
the defense of which Praxair assumes and as to which the indemnified party has
not retained its own separate counsel as provided above, Praxair shall be
entitled to settle the same on behalf of the indemnified party and without the
prior consent of such indemnified party if such settlement of the claim or
claims against the indemnified party involves only the payment of money and such
payment is made by Praxair.
The provisions of this letter are supplemented as set forth in separate fee
letters dated the date hereof from us to you (the "Fee Letters") and are subject
to the terms of such Fee Letters. The Arrangers, Morgan, Chemical and Credit
Suisse and you agree that this letter
4
<PAGE>
and the Fee Letters supersede any previous letter agreements entered into by any
of the parties hereto with respect to the financing contemplated hereby (other
than any confidentiality agreements) and set forth the entire understanding of
the parties with respect thereto. Neither this letter nor the Fee Letters may
be changed except pursuant to a writing signed by each of the parties thereto.
This letter shall be governed by, and construed in accordance with, the laws of
the State of New York.
This letter is delivered to you on the understanding that neither this
letter nor any of its terms (other than the amount of the Credit Facility) or
substance shall be disclosed, directly or indirectly, to any other person except
(a) to your employees, directors, agents and advisers who are directly involved
in the consideration of this matter, (b) to CBI Industries, Inc. and its
employees, directors, agents and advisers or (c) as disclosure may be compelled
in a judicial or administrative proceeding or as otherwise required by law. All
descriptions of and references to the Credit Facility contained in any filing
with a governmental authority or in any press release, advertisement or other
public disclosure shall be subject to the prior approval, not to be unreasonably
withheld or delayed, of the Arrangers and you. The Arrangers consent to the
filing of this letter and the Term Sheet with the Securities and Exchange
Commission as an exhibit to the Schedule 14D-1 (as amended) filed by you in
connection with the Acquisition.
If you are in agreement with the foregoing, please sign and return to
Morgan the enclosed copies of this letter and the Fee Letters no later that 5:00
p.m., New York time, on November 7, 1995. This offer shall terminate at such
time unless prior thereto we shall have received signed copies of such letters.
We look forward to working with you on this transaction.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: ___________________________________
Title:
J.P. MORGAN SECURITIES INC.
By: ___________________________________
Title:
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CHEMICAL BANK
By: ___________________________________
Title:
CHEMICAL SECURITIES INC.
By: ___________________________________
Title:
CREDIT SUISSE
By: ___________________________________
Title:
Accepted and agreed to as of the date first
above written:
PRAXAIR, INC.
By: ______________________________
Title:
6
<PAGE>
SUMMARY OF TERMS AND CONDITIONS FOR PRAXAIR, INC.
BORROWER: Praxair, Inc.
AMOUNT: $3,000,000,000
PURPOSE: To finance the acquisition of CBI Industries, Inc.
("CBI"), and for general corporate purposes.
ARRANGER: J.P. Morgan Securities Inc.
CO-ARRANGERS: Chemical Securities Inc.
Credit Suisse
DOCUMENTATION AGENT: Morgan Guaranty Trust Company of New York
("Morgan")
ADMINISTRATIVE AND
AUCTION AGENT: Chemical Bank ("Chemical")
CO-SYNDICATION AGENTS: J.P. Morgan Securities Inc.
Chemical Securities Inc.
Credit Suisse
INITIAL COMMITMENT: Morgan $ 500,000,000
Chemical $ 500,000,000
Credit Suisse $ 500,000,000
LENDERS: Syndicate of lenders acceptable to the Borrower.
FACILITY DESCRIPTION: A reducing revolving credit facility with a final
maturity of five years from the Closing Date. The
amount of commitments (the "Maximum Commitment
Amount") available (subject to reduction as set forth
under Termination or Reductions of Commitments below)
will be as follows:
Period Amount
------ ------
two years from Closing $3,000,000,000
third year $2,700,000,000
fourth year $2,300,000,000
fifth year $1,900,000,000
<PAGE>
The amount by which commitments are reduced at the
end of each period pursuant to the above schedule is
referred to as the "Minimum Commitment Reduction".
At the end of the fifth year, commitments shall be
reduced to zero; the amount of that reduction is
referred to as the "Final Commitment Reduction".
Commitments will terminate in their entirety if the
conditions precedent to the initial borrowing have
not been satisfied by April 1, 1996.
BORROWING OPTIONS: LIBOR, CD, Base Rate, and Money Market. Alternative
Currency Advances on an "as offered" basis, as
described below.
Base Rate means the higher of Agent's publicly
announced reference rate or the federal funds rate +
0.50%.
MONEY MARKET OPTION
DESCRIPTION: The Borrower may request the Auction Agent to solicit
competitive bids from the Banks at a margin over
LIBOR or at an absolute rate. Each Bank will bid at
its own discretion for amounts up to the total amount
of commitments and the Borrower will be under no
obligation to accept any of the bids. Any Money
Market advance made by a Bank shall be deemed usage
of the facility for the purpose of utilization fees
and availability. However, each Bank's advance shall
not reduce such Bank's obligation to lend its pro
rata share of the remaining undrawn commitment.
Bid Selection Mechanism: The Borrower will determine
-----------------------
the aggregate amount of bids, if any, it will accept.
Bids will be accepted in order of the lowest to the
highest rates ("Bid Rates"). If two or more Banks
bid at the same Bid Rate and the amount of such bids
accepted is less than the aggregate amount of such
bids, then the amount to be borrowed at such Bid Rate
will be allocated among such Banks in proportion to
the amount for which each Bank bid at such Bid Rate.
If the bids are either unacceptably high to the
Borrower or are insufficient in amount, the Borrower
may cancel the auction.
ALTERNATIVE CURRENCY
ADVANCES: The Borrower will have the right to request quotes
for Alternative Currency Advances from any or all of
the Banks, provided that the outstanding principal
amount of Alternative Currency Advances does not
exceed the U.S. Dollar equivalent of $200,000,000 at
the time of
2
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borrowing. Each Bank may bid at its own discretion.
Any Alternative Currency Advances made by a Bank will
be deemed usage under the facility for the purposes
of utilization fees and availability. However, each
Bank's advance shall not reduce such Bank's
obligation to lend its pro rata share of the
remaining undrawn commitment.
PRICING: Pricing on the commitments and loans will vary
according to the Pricing Level commensurate with
credit quality as per the attached Pricing Grid.
FACILITY FEE: A per annum fee calculated on a 360 day basis payable
on each Bank's commitment irrespective of usage,
quarterly in arrears and on termination of the
facility. See attached Pricing Grid.
REFERENCE LENDERS: Three Banks representative of the lender group.
INTEREST PAYMENTS: At the end of each applicable Interest Period or
quarterly, if earlier.
INTEREST PERIODS: Syndicated Borrowings:
---------------------
Base Rate - 30 days.
LIBOR Loans - 1, 2, 3, or 6 months.
CD Loans - 30, 60, 90, or 180 days.
Non-Syndicated Borrowings:
-------------------------
Money Market LIBOR Loans - minimum 1 month.
Money Market Absolute Rate Loans - minimum 7 days.
Alternative Currency Advances as arranged between the
Borrower and the Banks.
DRAWDOWNS: Minimum amounts of $25 million with additional
increments of $1 million for Syndicated Borrowings.
Minimum amounts of $10 million for Non-Syndicated
Borrowings. Drawdowns are at the Borrower's option
with same day notice for Base Rate Loans, one
business day's notice for Money Market Absolute Rate
and CD Loans, three business days' notice for LIBOR
Loans, and four business days' notice for Money
Market LIBOR Loans. Alternative Currency Advances as
arranged between the Borrower and the Banks.
PREPAYMENTS: Base Rate Loans may be prepaid at any time on one
business day's notice. LIBOR and CD loans may be
prepaid subject to the payment of funding losses.
Money Market Loans may not be prepaid before the end
of an
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Interest Period. Alternative Currency Advances as
arranged between the Borrower and the Banks.
TERMINATION OR REDUCTIONS OF
COMMITMENTS: As long as the commitments exceed $1,500,000,000, in
addition to the reductions described under Facility
Description above, they will be reduced as follows:
(a) By amounts equal to 75% of all net cash proceeds
received from the sale of any of CBI's businesses
(including, without limitation, its contracting
services business and terminals and investments
business) and any other business that the Borrower
disposes of for regulatory reasons; and
(b) By amounts equal to 75% of all net cash proceeds
from the incurrence of Funded Debt for borrowed money
(other than Debt hereunder) and the issuance of
equity securities by the Borrower (other than to its
employees up to an annual amount to be agreed).
"Funded Debt" will be defined as Debt which matures
more than three years after the incurrence thereof or
is extendible, renewable or refundable, at the option
of the obligor, to a date more than three years after
the incurrence thereof (including the current portion
thereof); provided that Funded Debt shall not include
--------
Debt with a principal or face amount of less than $15
million to the extent that the aggregate principal
and face amount of such Debt incurred after the
Closing Date does not exceed $50 million.
The Borrower may terminate the unused commitments by
at least $25 million at any time on three business
day's notice.
All commitment reductions pursuant to this section
will be applied first to reduce the amount of the
remaining Minimum Commitment Reductions (if any) in
chronological order, and then to reduce the Final
Commitment Reduction.
REPRESENTATIONS AND
WARRANTIES: To include:
1. Corporate existence.
2. Corporate and governmental authorization; no
contravention; binding effect.
3. Financial information.
4. No material adverse change.
5. Environmental matters.
6. Compliance with ERISA.
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7. No material litigation.
8. Existence, incorporation, etc. of subsidiaries.
9. Not an Investment Company.
10. Full disclosure.
11. Any additional representations and warranties
appropriate in light of the acquisition of CBI
and reasonable in the context of a public tender
offer.
CONDITIONS TO BORROWING: To include:
1. Absence of default.
2. Accuracy of representations and warranties except,
in the case of refunding borrowings, the
representation as to no material adverse change or
material litigation.
3. Negotiation and execution of satisfactory closing
documentation.
4. Appropriate conditions relating to the acquisition
of CBI and reasonable in the context of a public
tender offer, including, without limitation,
fulfillment of conditions to acceptance of
tendered shares.
5. The amount of the commitments under the Credit
Facility shall be sufficient to finance the
consummation of the acquisition of CBI and the
refinancing of the Debt contemplated to be repaid
as a result of such acquisition and to provide
adequate liquidity for the Borrower.
COVENANTS: To include, subject to modification (i) to the extent
appropriate in light of the acquisition of CBI and
(ii) to comply with margin regulations:
1. Information.
2. Maintenance of property; insurance coverage.
3. Restricted Subsidiaries will be defined as all
domestic consolidated subsidiaries (except Altair
Inc., Genex Inc. and Gas Tech Inc.) and Praxair
Canada Inc.
4. Negative pledge applies to Debt of the Borrower
and Restricted Subsidiaries with certain
exceptions, including (i) outstanding Debt (other
than Debt of CBI and its subsidiaries) in an
aggregate principal amount not exceeding
$75,000,000 and outstanding Debt of CBI and its
subsidiaries in an aggregate principal amount to
be mutually agreed, and (ii) Debt not otherwise
permitted to be secured in an aggregate
principal amount not exceeding $300,000,000
5
<PAGE>
5. Subsidiary debt limitation applied to Restricted
Subsidiaries with the following exceptions:
(a) Intercompany Debt;
(b) Debt of Praxair Canada Inc., the proceeds of
which are used to finance (i) the Kelvin
Finance Company (a 100% indirectly owned Irish
subsidiary) or (ii) the acquisition of the
Canadian assets of CBI (provided that the
aggregate principal amount of Debt incurred to
finance the CBI Canada acquisition shall not
exceed $100,000,000; an amount equal to the
proceeds of such Debt shall be received by
Praxair, Inc.; and the commitments under this
credit facility shall be reduced automatically
by the amount of any such Debt);
(c) Debt of subsidiaries existing at the time they
become Restricted Subsidiaries, and
refinancings thereof; and
(d) Other Debt up to $300,000,000.
6. Consolidations, mergers and sale of assets.
7. Use of proceeds.
8. Financial Covenants as defined in the current
Credit Agreement to include:
MINIMUM BOOK NET WORTH shall not be less than
$830,000,000 plus the book value of equity used as
consideration in the acquisition of CBI plus 50% of
net income and 50% of equity proceeds. The required
level will be reduced by any future restructuring
charges up to a maximum of $150,000,000 for charges
relating to CBI and its subsidiaries and $75,000,000
for other restructuring charges.
The calculation of the Borrower's book net worth will
exclude any book loss associated with the sale of
CBI's contracting services business and terminals and
investments business.
TOTAL DEBT/BOOK NET WORTH shall not exceed:
3.6 to 1 from the Closing Date until 12/31/96;
3.2 to 1 from 12/31/96 until 12/31/97;
2.8 to 1 from 12/31/97 until the Termination Date.
INTEREST COVERAGE shall not be less than:
1.7 to 1 from the Closing Date until 12/31/97;
2.0 to 1 from 12/31/97 until the Termination Date.
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<PAGE>
Future restructuring charges up to a maximum of
$150,000,000 for charges relating to CBI and its
subsidiaries and $75,000,000 for other restructuring
charges will be excluded from the calculation.
EVENTS OF DEFAULT: To include:
1. Failure to pay any principal under the Credit
Agreement within two days of when due or interest
or fees within five days of when due.
2. Failure to meet covenants (with 20 day grace,
where appropriate).
3. Representations or warranties false in any
materially adverse respect when made.
4. Cross default to Material Debt (defined as
$50,000,000) of the Borrower and its Subsidiaries
(other than Debt of CBI and its Subsidiaries, not
to exceed an aggregate principal amount to be
agreed, which becomes due and payable as a result
of, and is paid within a period to be agreed
after, the acquisition of CBI) which is triggered
by an event which permits or, with the giving of
notice or lapse of time (or both), would permit
the holder to accelerate its debt or terminate
its commitment.
5. Change of ownership or control.
6. Bankruptcy and insolvency defaults with respect to
the Borrower and Material Subsidiaries (defined as
subsidiaries having assets greater than
$150,000,000).
7. Other defaults including ERISA and judgment
default.
INCREASED COSTS/CHANGE OF
CIRCUMSTANCES: The credit agreement will contain customary
provisions protecting the Banks in the event of
unavailability of funding, illegality, increased
costs and funding losses and new capital adequacy
requirements.
INDEMNIFICATION: The Borrower will indemnify the Banks against all
losses, liabilities, claims, damages, or expenses in
connection with proceedings relating to the Credit
Agreement and the Borrower's use of loan proceeds,
including but not limited to reasonable attorneys'
fees and settlement costs (except such as result from
the indemnitee's gross negligence or willful
misconduct).
TRANSFERS AND
PARTICIPATIONS: Banks will have the right to transfer or sell
participations in their loans or commitments with the
transferability of voting rights limited to changes
in principal, rate, fees and
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<PAGE>
term. Assignments, in minimum amounts of $10,000,000
(or all of a Bank's loans and commitments) will be
allowed with the consent of the Borrower, not to be
unreasonably withheld, and notification to the
Administrative Agent. Assignments to affiliates or
to Banks do not require prior consent of the
Borrower.
EXPENSES: Borrower will pay all reasonable legal and other out-
of-pocket expenses of the Documentation Agent and the
Administrative and Auction Agent (collectively, the
"Agents") related to this transaction and any
subsequent amendments or waivers, including the
reasonable fees and expenses of Davis Polk &
Wardwell, special counsel to the Agents.
GOVERNING LAW: State of New York.
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<PAGE>
PRICING GRID FOR PRAXAIR, INC.
(basis points per annum)
<TABLE>
<CAPTION>
PRICING LEVEL LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
<S> <C> <C> <C> <C> <C> <C>
Basis for Pricing: If the If the If the If the If the If no other
Borrower's Borrower's Borrower's Borrower's Borrower's Level applies
senior senior senior senior senior
unsecured unsecured unsecured unsecured unsecured
long-term debt long-term debt long-term debt long-term debt long-term debt
is rated at is rated at is rated at is rated at is rated at
least A by S&P least A- by S&P least BBB+ by least BBB by least BBB-by
and A3 by and Baa1 by S&P and Baa2 by S&P and Baa3 by S&P and Ba1 by
Moody's or at Moody's or at Moody's or at Moody's or at Moody's or at
least A- by S&P least BBB+ by least BBB by least BBB- by least BB+ by
and A2 by S&P and A3 by S&P and Baa1 by S&P and Baa2 by S&P and Baa3 by
Moody's Moody's and Moody's and Moody's and Moody's and
Level 1 does Levels I and II Levels I-III do Levels I-IV do
not apply do not apply not apply not apply
--------------- --------------- ---------------- --------------- --------------- ------------
Facility Fee 8.00 9.00 10.00 12.50 17.50 25.00
LIBOR Margin 12.00 16.00 22.50 25.00 27.50 45.00
CD Margin 24.50 28.50 35.00 37.50 40.00 57.50
Base Rate Margin 0 0 0 0 0 0
"Used" (Facility Fee + L + 20.00 L + 25.00 L + 32.50 L + 37.50 L + 45.00 L + 70.00
LIBOR + Margin)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) If utilization under the facility exceeds 50%, a 5 basis point per annum
utilization fee shall apply to the borrowing margins for Levels II, III, IV
and V (i.e., if Level IV applies and utilization exceeds 50%, the "Used" cost
is L+42.50).
(2) At signing of the credit agreement, if the Borrower's senior unsecured
long-term debt ratings are under review or on Credit Watch by S&P or Moody's,
--
Level IV shall apply until such ratings are affirmed/confirmed.
(3) Under this grid, in the event of a two-notch split between S&P and
Moody's, the intermediary level shall apply (i.e., if the Borrower is rated A-
and Baa2, level III shall apply).
9
