Break Fee Exclusivity Agreement

[25] The Australian panel stated: [2] For example, in August 2005, GasNet Australia Group (“GasNet”), an Australian gas transmission and distribution company, agreed to pay an interruption fee of AUD 4.2 million to Colonial First State Global Asset Management (“Colonial”) if Colonial`s offer (estimated at AUD 420 million and recommended by GasNet`s Board of Directors) in certain circumstances: did not succeed. At the time GasNet`s break-up tax was agreed, it was already subject to a hostile AUD 372 million takeover bid by the Australian Pipeline Trust (“APT”) and Babcock & Brown Infrastructure. The balance of power changes radically as soon as the seller grants exclusivity to an individual buyer, and it is very important to be sure that a transaction can be concluded with the selected buyer. In the United States, the “Enhanced Scrutiny” standard, pronounced by the Unocal court, applies to transaction protection measures, including termination fees and exclusivity agreements. The board of directors of the objective must demonstrate that by accepting the payment of a break fee or the granting of exclusivity to a bidder, it has reasonable grounds to believe that there is a risk to the policy and efficiency of the company and that such an agreement is appropriate with respect to the threat. . . .