EXHIBIT 2.1(d)
CIBA SPECIALTY CHEMICALS HOLDING INC.
XX 0000
XXXXX, XXXXXXXXXXX
February 21, 1997
LETTER AGREEMENT
Dear Sirs:
We refer to the Strategic Alliance Agreement dated as of September
29, 1995 among Ciba-Geigy Limited ("Ciba"), Ciba-Geigy corporation ("CGC")
and Hexcel Corporation ("Hexcel"), as amended (the "SAA"), the Ancillary
Agreements (as defined in the SAA) and the Retention Agreement dated as of
June 27, 1996, between Hexcel and Ciba (the "Retention Agreement"), and
collectively with the SAA and the Ancillary Agreement, the "Agreements").
Capitalized terms used in this Letter Agreement but not defined herein shall
have the meanings set forth in the SAA.
Ciba and Sandoz Limited ("Sandoz") effected a business combination
on December 20, 1996 (the "Combination"), forming Novartis Inc., a Swiss
corporation ("Novartis"). Ciba previously formed a new subsidiary, Ciba
Specialty Chemicals Holding Inc. ("SpinCo"), the holding company for
Novartis' (formerly Ciba's) specialty chemicals businesses (including its
direct or indirect interest in Hexcel Common and Senior Subordinated Debt and
its rights and obligations under the Agreements) and plans to distribute the
stock of SpinCo on a pro rata basis to the stockholders of Novartis (the
"Spin-off").
In connection with the Spin-off:
1. Hexcel hereby consents to the consummation of the Spin-off
and, in connection therewith, to the assignment to and the assumption by
SpinCo and any of its wholly-owned Subsidiaries (by operation of law or
otherwise in a manner reasonably satisfactory to Hexcel) of the Agreements.
Such consent is being granted by Hexcel subject to the following: (a) the
consummation of the Spin-off and the related assignments and assumptions will
have no adverse consequences to Hexcel under the revolving credit facility as
in effect on the date hereof and entered into by Hexcel and certain of its
Subsidiaries in connection with Hexcel's acquisition of Hercules' Composite
Products Division (the "Credit Facility"), (b) SpinCo will pay (or reimburse
Hexcel for) any and all out-of-pocket fees and/or expenses incurred in
connection with obtaining any required consents to or waivers regarding the
Spin-off and the related and assumptions under the Credit Facility and (c)
immediately after the Spin-off, SpinCo will contain Ciba's former Additives,
Pigments, Polymers, Textile Dyes and Chemicals Divisions. SpinCo
acknowledges that such consent shall be null and void if any of the foregoing
conditions are not satisfied.
2. As a result of the Combination and the Spin-off, the
Agreements shall be deemed amended so that all references therein to Ciba, a
Subsidiary of Ciba or the term "Ciba" shall, subject to the effectiveness of
the foregoing consents, effective upon consummation of the Spin-off, be
references to SpinCo, a Subsidiary of SpinCo or the name of SpinCo, as the
case may be.
3. Subject to the effectiveness of the foregoing consents, (a)
Hexcel waives any violations of the Agreements that may result solely from
the consummation of the Spin-off, (b) Hexcel confirms that, after giving
effect to this Letter Agreement, consummation of the Spin-off will not
conflict with or give rise to any right of termination, cancellation or
acceleration by Hexcel or any of its Subsidiaries, or the loss by Ciba,
Novartis, SpinCo or any of their respective Subsidiaries of any right (other
than by virtue of having assigned such right to and in favor of SpinCo or any
of its Subsidiaries, as the case may be, as contemplated by this Letter
Agreement), under the Agreements and (c) upon consummation of the Spin-off,
Hexcel releases Novartis and its Subsidiaries from any and all obligations
under the Agreements, whether or not existing on the date of this Letter
Agreement.
4. For purposes of paragraph 1, adverse consequences shall mean
(a) any and all fees, costs, expenses and other adverse consequences
(including any increase in interest rates) under the Credit Facility that
result solely from the Spin-off or a Default or Event of Default under
Sections 15.1(m), (n), (o) or (p) of the Credit Facility resulting solely
from the Spin-off (a "Spin-off Event or Default"), if at the time of the
Spin-off there are no other Defaults or Events of Defaults, as defined in the
Credit Facility, and (b) in the event that any other Default, Event of
Default or other adverse consequence occurs under the Credit Facility (other
than a Spin-off Event of Default), only those fees, costs, expenses and other
adverse consequences (including any increase in interest rates) that the
lenders under the Credit Facility (after having first met in good faith
jointly with SpinCo and Hexcel representatives) specifically identify in
writing as attributable solely to the Spin-off and/or a Spin-off Event of
Default. The fees, costs and expenses required to be paid or reimbursed by
SpinCo or other adverse consequences for which SpinCo is responsible under
this Letter Agreement shall be limited to solely to those fees, costs,
expenses and other adverse consequences as described in this paragraph 4, and
upon (i) payment of all such fees, costs and expenses by SpinCo or (ii)
resolution of each other adverse consequence by SpinCo in a manner reasonably
satisfactory to Hexcel no further action shall be required and no such
adverse consequence shall be deemed to have occurred hereunder.
5. SpinCo agrees to provide reasonable prior notice to Hexcel as
to the timing of the spin-off and, SpinCo and Hexcel agree to cooperate with
each other in negotiating jointly in good faith with the lenders to obtain
any necessary consents or waivers, reduce or obviate any fees, costs and
expenses and minimize and otherwise resolve any other adverse consequences
for which SpinCo is responsible under paragraph 4 of this Letter Agreement.
Notwithstanding anything herein to the contrary, SpinCo shall
retain without prejudice its right to assert that any consent or waiver by
Hexcel referred to in this Letter
Agreement is not necessary in order to consummate the Spin-off without
affecting any party's rights under any particular Agreement, and Hexcel shall
retain without prejudice its right to assert that any such consent or waiver
is necessary.
The provisions of this Letter Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law.
As used herein, the term "Including" means including, without limitation.
Except as expressly set forth herein, each of the Agreements shall remain in
full force and effect.
If the foregoing is in accordance with your understanding of our
agreement, please sign where indicated below and return a copy of the same to
the undersigned, whereupon this Letter Agreement shall represent a binding
agreement between SpinCo and Hexcel
Very truly Yours,
CIBA SPECIALTY CHEMICALS
HOLDING INC.
by
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Name: X. Xxxx Xx. Xxxxx Xxxxxx
Title: Head Senior Division Counsel
Affiliate Financing
The foregoing is hereby confirmed and accepted as of the date first above
written:
HEXCEL CORPORATION
by:
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Name: S.C. Forsyth
Title: Senior Vice President
