Exhibit 10.3
SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment"),
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dated as of May 31, 2007, is between SOLUTIA INC., a Delaware corporation (the
"Seller"), and THERMPHOS TRADING GMBH, a Swiss company (the "Buyer").
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WHEREAS, the Seller and the Buyer have entered into that certain
Asset Purchase Agreement dated as of March 11, 2007 (as amended by that First
Amendment to the Asset Purchase Agreement, dated as of March 13, 2007, the
"Purchase Agreement") pursuant to which the Buyer has agreed to purchase
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assets of the Seller and its Affiliates (as defined in the Purchase Agreement)
that are used or held for use exclusively in the Business (as defined in the
Purchase Agreement); and
WHEREAS, the parties hereto desire to amend the Purchase Agreement;
NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, representations and warranties set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and accepted; the parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used herein without definition
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shall have their respective meanings assigned in the Purchase Agreement.
2. DEFINITION OF "ANCILLARY AGREEMENTS". The definition of "Ancillary
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Agreements" in Section 1.1 of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"Ancillary Agreements" means, collectively, the Bills of
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Sale, the Assumption Agreements, the Employee Letter, the Lease
and Operating Agreement, the Lease Agreements, the Transition
Services Agreement, the Italian Letter Agreement, the Trademark
Assignment Agreements, the Patent Assignment Agreements, the
Premises Lease and Services Agreements and such other documents,
agreements, deeds, instruments of sale, transfer and conveyance as
are required to be delivered by a Party pursuant to the terms of
this Agreement and are actually delivered by such Party.
3. DEFINITION OF "BUSINESS EMPLOYEES". The definition of "Business
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Employees" is hereby amended by adding the words "but excluding in all cases
the Excluded Business Employee" after the words "regardless of the company
payroll on which such individuals are listed" in such definition.
4. DEFINITION OF "EMPLOYEE LETTER". The definition of "Employee
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Letter" in Section 1.1 of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"Employee Letter" means that certain letter dated as of
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the date hereof between the Seller and the Buyer with respect to
certain Business
Employee related matters (as such letter may be amended, restated
or otherwise modified from time to time in writing executed by
both parties thereto).
5. DEFINITION OF "TRANSFERRING AFFILIATE". The definition of
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"Transferring Affiliate" in Section 1.1 is hereby amended and restated in its
entirety as follows:
"Transferring Affiliate" means (i) an Affiliate of the
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Seller that will be transferring Transferred Assets pursuant to
this Agreement, (ii) Solutia Australia Pty. Ltd., (iii) Solutia
(Thailand) Ltd. or (iv) Solutia South Africa (Pty.) Ltd ., as the
case may be.
6. NEW DEFINITIONS. Section 1.1 of the Purchase Agreement is hereby
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amended by adding the following new definitions in Section 1.1 of the Purchase
Agreement in their proper alphabetical order:
"Excluded Business Employee" means the individual listed
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on Schedule 5 to the Employee Letter.
"GE Lease" means that certain Car Leasing Agreement
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8180-83 (Rider No. 45) between the Seller and General Electric
Railcar Services with respect to 16 railcars (and shall not be
deemed to include any other Rider to such Car Leasing Agreement).
"Italian Letter Agreement" means that certain letter
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agreement by and among the Seller, the Buyer and Solutia Italy
regarding certain matters related to the transfer of Transferred
Assets held by Solutia Italy.
"P4 Working Fund" means the "Working Fund" (as such term
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is defined in that certain Supply Agreement, dated as of May 31,
2000, by and between the Seller, P4 Production, LLC and Pharmacia
Corporation (as in effect on the Closing Date)).
"Resale Services" shall have the meaning ascribed to such
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term in the Transition Services Agreement.
"Retained Inventory" means Inventory that is a Transferred
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Asset that is owned by the Seller, Solutia Canada Inc., Solutia
Australia Pty. Ltd., Solutia (Thailand) Ltd. or Solutia South
Africa (Pty.) Ltd as of the Closing Time and is located in the
jurisdiction of organization of such Person.
7. SECTION 2.1.
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(a) The first paragraph of Section 2.l of the Purchase
Agreement is hereby amended and restated in its entirety as follows:
Section 2.1 Purchase and Sale of Assets. Pursuant to
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Sections 363 and 365 of the Bankruptcy Code, the Sale Order and
any other orders of the Bankruptcy Court pertaining to the
Transactions (provided that such Orders conform to the
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provisions of this Agreement and the Lease and Operating
Agreement), upon the terms and subject to the conditions of this
Agreement, at the Closing, the Seller shall, and shall cause its
applicable Affiliates to, sell, assign, transfer, convey and
deliver to the Buyer (or such of its Affiliates as the Buyer may
direct), free and clear of all Encumbrances (other than
Permitted Encumbrances), all of the Seller's and such
Affiliates' rights, title and interest as of the Closing Time in
and to the Transferred Assets (other than the Retained
Inventory) and the Buyer shall (or shall procure that its
relevant Affiliates shall) (i) purchase, acquire, accept and pay
for the Transferred Assets (other than the Retained Inventory,
except as provided in Section 2.1(ii)), (ii) pay for the
Retained Inventory as if title thereto were being transferred on
the Closing Date and (iii) assume the Assumed Liabilities.
"Transferred Assets" shall mean the rights, title and interest
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of the Seller and its Affiliates in and to the assets,
buildings, properties and rights (wherever located, including in
transit to the Seller and its Affiliates), whether tangible or
intangible, used or held for use (except for assets described in
Section 2.1(k) and Section 2.1(l)) exclusively in the Business
(other than the Excluded Assets), as they exist at the Closing
Time, as set forth below:
(b) Section 2.1 of the Purchase Agreement is hereby further
amended by adding the following language at the end of Section 2.1:
Notwithstanding the foregoing, the GE Lease shall be deemed
sold, transferred and assigned to Thermphos USA Corp., after the
Closing Time, without further action by any of the parties to
this Agreement or to the GE Lease upon entry of the Stipulation
and Order Resolving the Objection of General Electric Railcar
Services to the Proposed Assumption and Assignment of Certain
Executory Contracts by Solutia Inc. and Determining the Cure
Amount by the Bankruptcy Court.
8. SECTION 2.1(i). Section 2.1(i) of the Purchase Agreement is hereby
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amended and restated in its entirety to read as follows:
(i) all credits, prepaid expenses, security
deposits and all prepayments or deposits, in each case in
respect of orders or product to be shipped after the
Closing, and in each case to the extent relating exclusively
to the Business;
9. SECTION 2.8. Sections 2.8(b), (c) and (d) of the Purchase
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Agreement are hereby amended and restated in its entirety as follows:
(b) Final Inventory Value Adjustment/P4 Amount.
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(i) Within sixty (60) days following the Closing
Date, the Seller shall deliver to the Buyer the Final
Inventory Value Statement and a statement showing the
calculation of an amount equal to the amount of the balance
of the P4 Working Fund as of the Closing Time (such amount,
the "P4 Amount" and such statement, the "P4 Statement"). The
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Final Inventory Value Statement shall be prepared in a
manner consistent with the Accounting Principles. The Seller
shall derive the Final Inventory Value from the Final
Inventory Value Statement, and shall deliver such
calculation together with the Final Inventory Value
Statement to the Buyer. The Buyer shall cause its employees
and employees of the Business to assist the Seller and its
Representatives in the preparation of the Final Inventory
Value Statement and the P4 Statement and shall provide the
Seller and its Representatives reasonable access, during
normal business hours and upon reasonable prior notice, to
the personnel, properties, books and records of the Buyer.
(ii) After receipt of the Final Inventory Value
Statement and the P4 Statement, the Buyer shall have thirty
(30) days to review the Final Inventory Value Statement and
the P4 Statement. The Seller shall cooperate with the Buyer
and its Representatives to provide them with any information
used in preparing the Final Inventory Value Statement and
the P4 Statement reasonably requested by the Buyer and its
Representatives and reasonably available to the Seller. The
Final Inventory Value Statement and the P4 Statement shall
become final and binding on the thirtieth (30th) day
following the delivery thereof, unless prior to the end of
such period, the Buyer delivers to the Seller a written
notice of its disagreement ("Notice of Disagreement")
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specifying the nature and amount of any disputed item and
accompanied by a certificate of the Buyer's auditors stating
that they concur with each of the positions taken by the
Buyer in the Notice of Disagreement. The Buyer shall be
deemed to have agreed with all items and amounts in the
Final Inventory Value Statement and the P4 Statement not
specifically identified as a disputed item in the Notice of
Disagreement, and such undisputed items shall be deemed
final and binding and shall not be subject to review in
accordance with Section 2.8(c). Any Notice of Disagreement
may reference only disagreements based on mathematical
errors or based on amounts reflected on the Final Inventory
Value Statement or the P4 Statement not being calculated in
accordance with the Accounting Principles.
(c) Resolution of Notice of Disagreement. During
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the twenty (20) Business Day period following delivery of a
Notice of Disagreement by the Buyer to the Seller, the
Parties in good faith shall seek to resolve in writing any
differences that they may have with respect to the disputed
items specified therein (the "Disputed Items"). During such
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twenty (20) Business Day period, the Buyer shall cooperate
with the Seller and its Representatives to provide them with
any information used in preparing the Notice of Disagreement
reasonably requested by the Seller or its Representatives
and reasonably available to the Buyer. Any Disputed Items
resolved in writing between the Buyer and the Seller within
such twenty (20) Business Day period shall be final and
binding with respect to such items, and if the Seller and
the Buyer agree in writing on the resolution of each
Disputed Item and the amount of the Final Inventory Value
and the P4 Amount, the amount so determined shall be final
and binding on the Parties for all purposes hereunder. If
the Seller and the Buyer have not resolved all such
differences by the end of such twenty (20) Business Day
period, the Seller and the Buyer shall jointly submit, in
writing, to a mutually acceptable internationally recognized
independent public accounting firm (the "Independent
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Accounting Firm"), all Disputed Items remaining in dispute.
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The Parties shall deliver to the Independent Accounting Firm
a written brief from each Party detailing its views as to
the correct nature and amount of each Disputed Item
remaining in dispute and the amount of the Final Inventory
Value and/or the P4 Amount, as the case may be. The
Independent Accounting Firm shall make a written
determination as to each such Disputed Item and the amount
of the Final Inventory Value and/or the P4 Amount, as the
case may be, which determination shall be final and binding
on the Parties for all purposes hereunder. The determination
of the Independent Accounting Firm shall be accompanied by a
certificate of the Independent Accounting Firm that it
reached such determination in accordance with the provisions
of this Section 2.8. The Independent Accounting Firm shall
be Ernst & Young LLP or, if such firm is unable or unwilling
to act, such other internationally recognized independent
public accounting firm as shall be agreed in writing by the
Seller and the Buyer. The Seller and the Buyer shall use
their respective commercially reasonable efforts to cause
the Independent Accounting Firm to render a written decision
resolving the matters submitted to it within twenty (20)
Business Days following the submission thereof. The
Independent Accounting Firm shall be authorized to resolve
only those Disputed Items remaining in dispute between the
Parties in accordance with the provisions of this Section
2.8 within the range of the difference between the Buyer's
position with respect thereto and the Seller's position with
respect thereto. Judgment may be entered upon the written
determination of the Independent Accounting Firm in any
court referred to in Section 10.9. The costs of any dispute
resolution pursuant to this Section 2.8(c), including the
fees and expenses of the Independent Accounting Firm and of
any enforcement of the determination thereof, shall be borne
by the Parties in inverse proportion as they may prevail on
the matters resolved by the Independent Accounting Firm,
which proportionate allocation shall be calculated on an
aggregate basis based on the relative values of the amounts
in dispute and shall be determined by the Independent
Accounting Firm at the time the determination of such firm
is rendered on the merits of the matters submitted. The fees
and disbursements of the Representatives of each Party
incurred in connection with the preparation or review by
such Representatives of the Final Inventory Statement, the
P4 Statement and preparation or review of any Notice of
Disagreement, as applicable, shall be borne by such Party.
The Parties agree that all information, documents and other
materials prepared or disclosed by a Party (the "Disclosing
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Party") in connection with the processes described in this
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Section 2.8 will be exchanged as part of an offer of
compromise and shall not be used (or requested to be
provided, whether through discovery or otherwise) by the
other Party in connection with any proceeding by such other
Party or any of its Affiliates against the Disclosing Party
or any of its
Affiliates, including any proceedings pursuant to Article VIII.
(d) Final Settlement. Within three (3) Business Days after
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the later of (A) the final determination of the Final Inventory
Value and (B) the final determination of the P4 Amount pursuant
to the provisions of this Section 2.8,
(i) the following amounts, if any, shall be paid by
wire transfer of US Dollars in immediately available funds
to such account or accounts as may be designated in writing
by the Party entitled to such payment at least five (5)
Business Days prior to such payment date:
(A) if the Final Inventory Adjustment
Amount is positive, the Buyer shall pay to the
Seller an amount equal to the Final Inventory
Adjustment Amount;
(B) if the Final Inventory Adjustment
Amount is negative, the Seller shall pay to the
Buyer an amount equal to the absolute value of the
Final Inventory Adjustment Amount; and
(ii) the Buyer shall pay to the Seller the amount
equal to the P4 Amount as set forth on the final P4
Statement.
10. SECTION 3.3. Section 3.3 of the Purchase Agreement is hereby
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amended by adding the following new Section 3.3(c) after Section 3.3(b):
(c) Notwithstanding any provision to the contrary in this
Section 3.3, no representations or warranties are provided
pursuant to this Section 3.3 (other than Section 3.3(a)(i))
with respect to the Resale Services or any Local Transition
Agreement executed in connection therewith.
11. SECTION 5.6. A new Section 5.6(a)(v) is hereby added to the
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Purchase Agreement to read as follows:
(v) Business Employees in the United States.
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Notwithstanding any other provision of this Agreement to the
contrary, Business Employees in the United States shall not
become Transferred Employees until the end of the "Leasing
Period" (as defined in the Transition Services Agreement);
provided, however, that the Buyer and its Affiliates shall
be responsible for all Losses incurred with respect to any
such Business Employee that would be the Buyer's
responsibility under this Section 5.6 if the Business
Employee had become a Transferred Employee effective on the
Closing Date.
12. SECTION 5.8. Section 5.8 of the Purchase Agreement is hereby
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amended by adding the following new Section 5.8(d) after Section 5.8(c):
(d) Notwithstanding any provision to the contrary in this
Agreement, (i) neither the Seller nor its Affiliates shall have any
obligation to
obtain any consent, authorization, qualification, order, approval
or waiver from any Governmental Authority or any other Person in
connection with the Resale Services or any Local Transition
Agreement executed in connection therewith and (ii) the Sellers
and its Affiliates shall be indemnified by the Buyer against any
liabilities related thereto not caused by willful misconduct of
the Sellers and their Affiliates).
13. SECTION 5.12. Section 5.12(a) of the Purchase Agreement is hereby
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amended by deleting the words "After the Closing" and replacing such words
with the words "Except as set forth in Section 3 of the Transition Services
Agreement, after the Closing".
14. SECTIONS 5.25
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Section 5.25 Certain Warehousing Agreements. As
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promptly as possible after the Closing Date, the Buyer shall
(i) use commercially reasonable efforts to enter into (or
cause its Affiliates to enter into) agreements with
counterparties to agreements listed on Schedule 5.25 hereto
(such agreements, the "Warehousing Agreements") with respect
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to the Business and (ii) cooperate with the Seller in
obtaining releases of the obligations of the Seller and its
Affiliates under such Warehousing Agreements to the extent
such obligations relate to the Business and arise from and
after the time the Buyer or one of its Affiliates enters
into a new agreement with the relevant counterparty.
15. SCHEDULE 5.26. The Purchase Agreement is hereby amended by
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adding Schedule 5.26 (Warehouse Agreements) after Schedule 5.1 to the Purchase
Agreement in the form of Annex A hereto.
16. EFFECT ON PURCHASE AGREEMENT.
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(a) On and after the date hereof, each
reference in the Purchase Agreement to "this Agreement",
"herein", "hereof" or words of similar import shall mean and
be a reference to the Purchase Agreement as amended hereby.
(b) Except as specifically amended by this
Amendment, the Purchase Agreement shall remain in full force
and effect and the Purchase Agreement, as amended by this
Amendment, is hereby ratified and confirmed in all respects.
17. GOVERNING LAW. This Amendment and all disputes or
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controversies arising out of or relating to this Amendment shall be governed
by, and construed in accordance with, the internal laws of the State of New
York, without regard to the laws of any other jurisdiction that might be
applied because of the conflicts of laws principles of the State of New York.
18. EFFECTIVENESS; COUNTERPARTS. This Amendment may be executed in
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two or more counterparts, all of which shall be considered one and the same
instrument and shall become effective, as of the date of the Purchase
Agreement, when one or more counterparts have been signed by each of the
undersigned and delivered to the other undersigned.
19. FACSIMILE SIGNATURE. This Agreement may be executed by
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facsimile signature and a facsimile signature shall constitute an original for
all purposes.
20. HEADINGS. The headings contained in this Amendment are for
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convenience of reference purposes only and shall not affect in any way the
meaning or interpretation of the Purchase Agreement or this Amendment.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
duly executed as of the date first written above.
SOLUTIA INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Deputy General
Counsel
THERMPHOS TRADING GMBH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Acknowledged and agreed:
THERMPHOS INTERNATIONAL B.V.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
