Exhibit 99.1
SECOND AMENDMENT TO STOCK AND ASSET PURCHASE AGREEMENT
SECOND AMENDMENT, dated as of February 5, 2005 (this
"Amendment"), to the Stock and Asset Purchase Agreement, dated as of October 1,
2004 (as amended by the First Amendment to Stock and Asset Purchase Agreement,
dated as of January 4, 2005, the "Purchase Agreement"), between UCB S.A., a
Belgian societe anonyme ("Seller") and Cytec Industries Inc., a Delaware
corporation ("Buyer").
W I T N E S S E T H :
WHEREAS, the Seller and Buyer desire to amend the Purchase
Agreement to reflect certain additional or modified terms.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and undertakings contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
1. All capitalized terms used and not otherwise defined in this Amendment are
used herein as defined in the Purchase Agreement.
2. The following sections are amended or amended and restated as follows:
(a) The following definitions are hereby added to Section 1.1 in alphabetical
order:
(i) "Buyer's Proposed Earn-Out Adjustment Amount" has the meaning
set forth in Section 2.13(a).
(ii) "Buyer's Reimbursed Expenses" has the meaning set forth in
Section 9.6.
(iii) "Earn-Out Adjustment Amount" has the meaning set forth in
Section 2.5(e).
(iv) "Earn-Out Calculation" has the meaning set forth on Schedule
1.1(m).
(v) "Earn-Out Objection" has the meaning set forth in Section
2.13(b).
(vi) Final Earn-Out Amount has the meaning set forth in Section
2.13(c).
(vii) "Seller's Proposed Earn-Out Adjustment Amount" has the meaning
set forth in Section 2.13(b).
(viii) "Unresolved Earn-Out Items" has the meaning set forth in
Section 2.13(c).
(b) Section 2.5(a) is hereby amended and restated in its entirety as
follows:
"(a) On the terms and subject to the conditions set forth
herein, in consideration of the sale of the Shares, the GmbH
Shares and the Transferred Assets, at the Closing, in
addition to the assumption of the Assumed Liabilities by
Buyer, Buyer shall (i) deliver to Seller the Purchase Price
Shares and (ii) pay to Seller an amount in cash equal to
EUR 1,160,000,000 (the "Cash Purchase Price" and, as
adjusted pursuant to this Section 2.5 and pursuant to
Section 2.6, together with the Purchase Price Shares, the
"Purchase Price")."
(c) Section 2.5 is hereby further amended by the addition of a new
subsection (e) as follows:
"(e) Within five (5) Business Days of the final
determination of the Earn-Out Calculation pursuant to
Section 2.13, the Cash Purchase Price shall be adjusted by
the amount (the "Earn-Out Adjustment Amount") equal to (i)
the product of (A) EUR 50,000,000 and (B) the Earn-Out
Calculation minus (ii) EUR 20,000,000. If the Earn-Out
Adjustment Amount is a positive number, then Buyer shall
promptly (and in any event within five Business Days) after
the final determination of the Earn-Out Calculation pursuant
to Section 2.13 pay to Seller the Earn-Out Adjustment
Amount, up to a maximum amount of EUR 30,000,000, plus
interest from January 31, 2006 to, but not including, the
date of payment at LIBOR calculated on a 365-day basis, in
Euro by wire transfer of immediately available funds to an
account designated in writing by Seller. If the Earn-Out
Adjustment Amount is a negative number, then Seller shall
promptly (and in any event within five Business Days) after
the final determination of the Earn-Out Calculation pursuant
to Section 2.13 pay to Buyer the Earn-Out Adjustment Amount,
up to a maximum amount of EUR 20,000,000, plus interest
from January 31, 2006 to, but not including, the date of
payment at LIBOR calculated on a 365-day basis, in Euro by
wire transfer of immediately available funds to an account
designated in writing by Buyer."
(d) Article II is hereby amended by the addition of a new Section 2.13 as
follows:
"Section 2.13. Determination of Earn-Out Calculation. (a) As
soon as practicable after December 31, 2005 but in any event
by January 31, 2006, Buyer shall prepare, or cause to be
prepared, and deliver to Seller Buyer's calculation of the
Earn-Out Calculation and of the amount to be paid by Buyer
or Seller, as the case may be, pursuant to Section 2.5(f)
(such amount, "Buyer's Proposed Earn-Out Adjustment Amount")
(b) Seller shall have until March 30, 2006 to review Buyer's
calculation of the Earn-Out Calculation. In the event that
(i) Seller determines that the Earn-Out Calculation has not
been calculated in accordance with Schedule 1.1(m) or (ii)
Seller reasonably believes that Buyer has failed to comply
with Section 5.21(a), Seller shall, on or before March 30,
2006 so inform Buyer in writing (the "Earn-Out Objection"),
setting forth a reasonably specific description of the basis
of Seller's determination and/or belief, the adjustments
that Seller believes should be made to the Earn-Out
Calculation and the amount to be paid by Buyer or Seller, as
the case may be, pursuant to Section 2.5(f) (such amount,
"Seller's Proposed Earn-Out Adjustment Amount"). If no
Earn-Out Objection is received by Buyer on or before March
30, 2006, then the calculation of the Earn-Out Calculation
delivered by Buyer shall be deemed final for all purposes
under this Agreement. Buyer shall have thirty (30) days from
its receipt of the Earn-Out Objection, if any, to review and
respond to the Earn-Out Objection.
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(c) Buyer and Seller shall use their reasonable best efforts
to resolve any disagreements with respect to the proposed
adjustments set forth in the Earn-Out Objection. If Buyer
and Seller are unable to resolve such disagreements within
thirty (30) days following the completion of Buyer's review
of the Earn-Out Objection, they shall refer any remaining
disagreements (the "Unresolved Earn-Out Items") to the CPA
Firm which, acting as experts and not as arbitrators, shall
determine, on the basis set forth in and in accordance with
Sections 2.13(a) and 5.21(a), and only with respect to the
Unresolved Earn-Out Items (including, if applicable, with
respect to verifying Buyer's compliance with Section
5.21(a), determining the amount of a reasonable equitable
adjustment to the Earn-Out Calculation in connection with
any finding by the CPA Firm of non-compliance by Buyer with
Section 5.21(a)), whether and to what extent, if any,
Buyer's calculation of the Earn-Out Calculation requires
adjustment. Seller and Buyer shall instruct the CPA Firm to
deliver its written determination to Seller and Buyer no
later than thirty (30) days after such disagreements are
referred to the CPA Firm. The CPA Firm's determination shall
be conclusive and binding upon Seller and Buyer and their
respective Affiliates and for all purposes under this
Agreement and shall set forth the CPA Firm's determination
of the final Earn-Out Calculation and the amount to be paid
by Buyer or Seller, as the case may be, pursuant to Section
2.5(f) (such amount, the "Final Earn-Out Amount"). The fees
and disbursements of the CPA Firm shall be borne by Seller
and Buyer based on the following formula: (i) Seller shall
pay a portion of such fees and expenses equal to the product
of (A) the total of such fees and expenses and (B) a
fraction, the numerator of which is the absolute value of
the difference between Seller's Proposed Earn-Out Adjustment
Amount and the Final Earn-Out Amount and the denominator of
which is the absolute value of the difference between
Seller's Proposed Earn-Out Adjustment Amount and Buyer's
Proposed Earn-Out Adjustment Amount; and (ii) Buyer shall
pay a portion of such fees and expenses equal to the product
of (A) the total of such fees and expenses and (B) a
fraction, the numerator of which is the absolute value of
the difference between the Final Earn-Out Amount and Buyer's
Proposed Earn-Out Adjustment Amount and the denominator of
which is the absolute value of the difference between
Seller's Proposed Earn-Out Adjustment Amount and Buyer's
Proposed Earn-Out Adjustment Amount. Buyer and Seller shall
make readily available to the CPA Firm all relevant books
and records and any work papers (including those of the
parties' respective accountants, to the extent permitted by
such accountants) relating to the calculation of the
Earn-Out Calculation and to the Earn-Out Objection and all
other items reasonably requested by the CPA Firm in
connection with its review.
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(d) Seller and its accountants shall have reasonable access
to all information used by Buyer in preparing, and employees
of Buyer and its Affiliates involved in the preparation of,
Buyer's calculation of the Earn-Out Calculation, including
the work papers of Buyer's accountants, in each case during
regular business hours and upon reasonable advance notice.
Each party shall have reasonable access to all information
used by the CPA Firm in reaching its determination
hereunder."
(e) Section 3.7(g) is hereby amended and restated in its entirety as
follows:
"The combined statement of income included in the 2004
financial statements included in the document described in
Item 11 of Seller Disclosure Schedule 3.9 accurately
reflects, in all material respects, the amount of EBITDA of
the Business for the fiscal year ended 2004."
(f) Section 5.11 is hereby amended by the addition of a new subsection (c)
as follows:
"(c) Prior to the Closing, Seller shall, or shall cause one
or more of its Affiliates to, (i) renew the Business'
property insurance policy for the Business' Drogenbos and
Schoonaarde properties on a basis such that such policy can
be terminated at any time without notice or penalty upon the
occurrence of a change of ownership, direct or indirect, of
such properties, and (ii) renew the Business' property
insurance policy for the properties of the Business that
Seller acquired from Solutia, Inc. or its Affiliates on a
basis such that out of the twelve (12) months of insurance
premiums that are prepaid to the applicable insurers upon
such renewal, any remaining premiums covering the period
after termination will be reimburseable to Buyer up to a
maximum of six (6) months, Seller shall, and shall cause its
Affiliates to, promptly pay to Buyer any and all amounts
paid to Seller or any of its Affiliates by an insurer (or
any Affiliate, agent or representative of an insurer)
pursuant to an insurance policy covering the properties,
assets, employees, directors and operations of the Business
to the extent (i) such amounts represent the prepaid
insurance premia attributable (A) to any period commencing
as of the Closing and (B) to the Business, and (ii)
corresponding prepaid insurance premia were included as
Current Assets in the calculation of Final Closing Net
Working Capital Value. Seller shall use its reasonable best
efforts, at Buyer's reasonable request, to obtain any such
refund of prepaid insurance premia from the applicable
insurers to the extent Seller is entitled thereto under the
applicable insurance policy."
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(g) Article V is hereby amended by the addition of a new Section 5.21 as
follows:
"Section 5.21. Earn-Out-Related Provisions. (a) During the
period from and after the Closing Date until December 31,
2005, Buyer shall, and shall cause its Affiliates to, (i)
account for all sales of Products consistent with Seller's
past practices as they relate to recording sales at shipment
date and (ii) not take any action with respect to the
Business for the sole purpose of distorting, manipulating or
depressing the recorded sales of the Products in order to
adjust the Earn-Out Adjustment Amount.
(b) Buyer shall, not later than the thirtieth (30th)
Business Day after the end of each calendar quarter ending
after the Closing Date until and including the calendar
quarter ended December 31, 2005, provide to Seller a
statement of all sales of Products of the Business by volume
for the preceding calendar quarter."
(h) Section 6.2(g) is hereby amended and restated in its entirety as
follows:
"No Business Material Adverse Effect. Since the date hereof,
the Business shall not have experienced any event or
condition, other than the matters set forth in Schedule 3.9
of the Seller Disclosure Schedules, that, individually or in
the aggregate, has had or is reasonably likely to have, a
Business Material Adverse Effect. The EBITDA of the Business
for fiscal year 2004 shall not be materially lower than
EUR 146,600,000.
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(i) Section 9.6 is hereby amended by the addition of the following
sentence:
"At the Closing, Seller shall pay Buyer the sum of
EUR 15,000,000 as reimbursement for certain expenses
incurred by Buyer and its Affiliates in connection with the
transactions contemplated by this Agreement and the
Ancillary Agreements, in immediately available funds by wire
transfer to an account designated in writing by Buyer. Buyer
shall deliver an invoice for such amount at least five
Business Days prior to the Closing."
(j) New Seller Disclosure Schedule 1.1(m) in the form attached as Schedule
A to this Amendment is hereby added to the Seller Disclosure
Schedules.
(k) The Seller Disclosure Schedules are hereby amended by the addition of
the items set forth on Schedule B to this Amendment. The disclosures
set forth on Schedule B shall be deemed for all purposes of the
Agreement to have been incorporated into the Seller Disclosure
Schedules and disclosed as of the date of the Agreement.
(l) Seller Disclosure Schedules 3.22(a)(i)(B), (D) and (L) are hereby
amended and restated in their entirety to appear as set forth on
Schedule C to this Amendment.
(m) Seller Disclosure Schedule 3.22(a)(ii) is hereby amended by the
addition of the insurance policies listed below:
(i) Estimated Surplus Tax on Excess Liability
(ii) Workers' Compensation, Hartford Specialty, Policy No. 20 WN MS
5270
(iii) International Voluntary Workers' Compensation, AIG
Worldsource, Policy. No. EX 55800027
(iv) International Voluntary Workers' Compensation Surplus Tax
(v) Marine/Transit, ACE, Policy No. 1190556
(vi) Marine/Transit War, ACE, Policy No. 1190556
(vii) Rolling Stock, ACE, Policy No. 1190556
(viii) Fidelity Liability, Chubb, Policy No. 8134 07 21
(ix) Fiduciary Liability, Chubb, Policy No. 8134 07 21
(x) Employment Practices Liability, Chubb, Policy No. 8164 33 55
(xi) Pollution Legal Liability, AIG Specialty Lines, 476 11 73
(xii) Property/Business Interruption, AIG Starr Technical (Lead),
Policy No. ST 260 78 92 (Lead)
(xiii) Terrorism, AIG Lexington, Policy No. 221730
(xiv) Auto Liability, Hartford Specialty, Policy Xx. 00 XXX XX0000
(XXX), 00 MCP ME8863 (MA), 20 UEN ME8862 (TX)
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3. This Amendment shall become effective as of the date hereof.
4. This Amendment may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which shall constitute one and the
same agreement.
5. This Amendment shall not constitute an amendment or waiver of any other
provision of the Purchase Agreement not expressly referred to herein.
Except as expressly amended hereby, the provisions of the Purchase
Agreement are and shall remain in full force and effect.
6. This Amendment shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflicts of
law. Any dispute, controversy or claim arising out of or in connection with
this Amendment shall be resolved in accordance with the procedures set
forth in Section 9.8 of the Purchase Agreement.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.
UCB SA
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx XXXXXX
Title: Chairman of the Board
By: /s/ Baron X. Xxxxxxx
---------------------------------
Name: Baron X. XXXXXXX
Title: Director
CYTEC INDUSTRIES INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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