Avecia Investments Limited (the “Parent”)
(formerly ZSC Speciality Chemicals Group Limited)
and
each of the Obligors
c/o the Parent
X.X. Xxx 00
Xxxxxxx Xxxxx
Xxxxxxxx
Xxxxxxxxxx X0 0XX
|
For the attention of Xxxxx Xxxxx |
| 1.1 |
We refer to the facilities agreement dated
12 May 1999 and made between, among others, the Parent (in various capacities),
X.X. Xxxxxx plc (then known as Chase Manhattan plc), and X.X. Xxxxxx Securities
Ltd. as Arrangers, JPMorgan Chase Bank (then known as The Chase Manhattan
Bank) and X.X. Xxxxxx Securities Ltd. as Underwriters, the banks and financial
institutions whose names and addresses are set out in schedule 1 thereto
as Banks and X.X. Xxxxxx Europe Limited (then known as Chase Manhattan International
Limited) as Agent and as Security Trustee (the “Original Agreement”)
as supplemented and amended by: |
| |
(a) |
a first supplemental agreement dated 29 June
1999 and made between certain of the same parties (the “First Supplemental
Agreement”); |
| |
(b) |
a second supplemental agreement dated 28
July 1999 made between certain of the same parties (the “Second
Supplemental Agreement”); and |
| |
(c) |
a consent letter dated 14 December 2001 made
between certain of the same parties (the “Consent Letter”) |
| |
(the Original Agreement as supplemented
and amended by the First Supplemental Agreement, the Second Supplemental
Agreement, the Consent Letter and as further supplemented and amended prior
to the date of this letter and as from time to time supplemented and amended
being the “Facilities Agreement”). |
| 1.2 |
Save as defined in this letter, words and
expressions defined in the Facilities Agreement shall have the same meanings
when used in this letter and clause 1.4 of the Facilities Agreement shall
be deemed to be incorporated in this letter in full, mutatis mutandis.
In this letter, unless otherwise specified, references to clauses and schedules
are references to clauses of, and schedules to, the Facilities Agreement.
|
1
| 2.1 |
We refer to the Avecia Financial Covenants Proposal
dated 21 March 2003 (the “Covenants Proposal”) (a copy
of which is attached to this letter). |
| 2.2 |
As described in the Covenants Proposal, the Group
initiated a restructuring programme in 2002 and charged to its profit and
loss account a restructuring charge of £11,100,000 in respect of that
programme in the last Quarter of 2002 (the “Restructuring Charge”).
You have informed us that, under the Appropriate Accounting Principles,
the Restructuring Charge would not be treated as an “exceptional item”
and, therefore, would be deducted in calculating Consolidated EBITDA. |
| 2.3 |
You have requested (the “First Request”)
the Banks to agree to add back of the amount of the Restructuring Charge
to Consolidated EBITDA for the purpose of calculating (a) the ratio of Consolidated
EBITDA to Consolidated Net Interest Charges pursuant to paragraph 1.1 of
schedule 8 and (b) the ratio of Net Senior Debt to Consolidated EBITDA pursuant
to paragraph 1.3 of schedule 8 in each case for the periods in respect of
which such Financial Covenants are tested ending 31 March 2003, 30 June
2003 and 30 September 2003. |
| 2.4 |
You have also requested (the “Second
Request”) the Banks to agree to make an add back to Adjusted
Cash Flow, to the extent the amount provided for in the Restructuring
Charge is actually expended by the Group, for the purposes of calculating
the ratio of Adjusted Cashflow to Relevant Expenditure pursuant to paragraph
1.2 of schedule 8. Such add back shall apply for the periods in respect
of which such Financial Covenant is tested ending 30 June 2003, 31 December
2003, 30 June 2004 and 31 December 2004 (each a “relevant test
period”). The amount to be added back in relation to any relevant
test period shall be the cumulative amount of the Restructuring Charge
(if any) actually expended by the Group during such relevant test period
and which has been deducted in calculating Consolidated EBITDA for the
purposes of calculating such Financial Covenant for such relevant test
period.
|
| 2.5 |
Subject to paragraph 4 below and on the basis
of the information that you have supplied to us, we confirm that the Majority
Banks agree pursuant to clause 17.11 (Amendments and waivers) to the First
Request and the Second Request to the extent referred to in paragraphs 2.3
and 2.4 above (but not otherwise). |
| 3.1 |
As further discussed in the Covenants Proposal,
you have requested that the Banks amend schedule 8 in the manner set out
in the appendix to this letter (the “Third Request”). |
| 3.2 |
Subject to paragraph 4 below and on the basis of the information that you have supplied to us, we confirm the Majority Banks agree pursuant to clause 17.11 (Amendments and waivers) to the Third Request. |
2
| |
The waivers and amendments of the Majority Banks
set out in paragraphs 2.5 and 3.2 above are subject to satisfaction of each
of the following:
|
| |
(a) |
receipt by the Agent of a copy of this letter
duly countersigned by each of the Parent and each other Obligor to signify
its acceptance of its terms and conditions;
|
| |
(b) |
receipt by the Agent of a certified copy of the
resolutions of the Boards of Directors of the Parent and each Obligor which
is a party to this letter evidencing the approval of this letter and authorising
its appropriate officers to sign this letter; and
|
| |
(c) |
receipt by the Agent on behalf of the Banks of
a fee equal to 0.10% of the aggregate, at the date of this letter, of the
Commitments of all Banks that notified the Agent in writing on or before
the date specified under the heading “Fees” in the Covenants
Proposal (the “Specified Date”) that it is in favour
of approving the First Request, the Second Request and the Third Request
(as notified by the Agent to the Parent) (to be distributed to the Banks
that notified the Agent in writing on or before the Specified Date that
they are in favour of the First Request, the Second Request and the Third
Request, pro rata to their relative Commitments). |
| |
|
| 5. |
REPRESENTATIONS AND WARRANTIES
|
| |
By its acceptance of the terms and conditions
of this letter, the Parent and each other Obligor a party to this letter: |
| |
(a) |
represents and warrants that it is authorised
to enter into this letter; and |
| |
(b) |
(in the case of the Parent only) represents and
warrants that having made all reasonable enquiries: |
| |
|
(i) |
as far as it is aware, the facts and statements
made in the Covenants Proposal are true and accurate in all material respects
and not misleading in any material respect and all reasonable enquiries
have been made by the Parent to verify the facts and statements contained
in the Covenants Proposal; |
| |
|
(ii) |
all forecasts, projections and estimates contained
in or referred to in the Covenants Proposal taken as a whole were arrived
at after due and careful consideration, were based on assumptions which
the Parent considers fair and reasonable and reflect opinions honestly held
by the Parent; and |
| |
|
(iii) |
to the best of the knowledge, information and
belief of the Parent after making due and careful enquiry, nothing has occurred
since the date of the Covenants Proposal which could reasonably be expected
to render the basis on which such assumptions were made or on which such
opinions were drawn inapplicable, untrue or misleading in any material respect; |
| |
(c) |
makes and gives the representations and warranties
set out in paragraphs (a) to (d) (inclusive) in clause 9.1 but as if references
therein to the Finance Documents were references to this letter; and |
| |
(d) |
agrees to reimburse the Agent and each of the
Banks on demand for: |
| |
|
(i) |
all reasonable costs and expenses (including
legal fees together with any VAT thereon) incurred by them in connection
with the preparation and execution of this letter; and |
| |
|
(ii) |
all costs and expenses (including legal fees together with any VAT thereon) incurred by them in connection with the enforcement of, or preservation of any rights under this letter. |
3
| 6.1 |
This letter is designated a Finance Document. |
| 6.2 |
Save as amended, waived or varied by this letter,
the provisions of the Facilities Agreement shall continue in full force
and effect and the Facilities Agreement and this letter shall be read and
construed as one instrument. |
| 6.3 |
With effect from the date of this letter, references
in the Facilities Agreement to this “Agreement” shall, unless
the context otherwise requires, be to the Facilities Agreement as amended
by this letter in words such as “herein”, “hereof”,
“hereunder”, “hereafter”, “hereby” and
“hereto” where they appear in the Facilities Agreement shall
be construed accordingly. |
| 6.4 |
This letter may be executed in any number of
counterparts and by the different parties on separate counterparts, each
of which when so executed shall be an original but all counterparts shall
together constitute one of the same instrument. |
| 6.5 |
This letter is governed by and construed in accordance
with English law. |
| 6.6 |
Clause 22.2 (Submission to jurisdiction) applies
to this letter as if set out in this letter in full, mutatis mutandis. |
|
Please sign and return the attached copy of this letter to signify your acceptance of its terms and conditions. |
|
X.X. Xxxxxx Europe Limited |
(as Agent under the Facilities Agreement
on behalf of the Banks) |
| To: |
X.X. Xxxxxx Europe Limited |
| |
(a) |
agreement to the terms and conditions thereof; and |
| |
(b) |
obligations under the Finance Documents continue in full force and effect despite the terms of this letter save only to the extent obligations under the Facilities Agreement are expressly waived or amended by the terms of this letter. |
|
Avecia Investments Limited |
|
Avecia Investments Limited |
|
Avecia UK Holdings Limited |
4
APPENDIX
|
Schedule 8 will be amended as set out below. |
| (a) |
By deleting all of columns A and B in paragraph 1.1 (Total Net Interest Cover) of schedule 8 and replacing it with the following: |
| |
A |
B |
|
| |
Period from ACD and ending
on: |
|
|
| |
31 December 1999 |
1.40:1 |
|
| |
31 March 2000 |
1.40:1 |
|
| |
|
|
|
| |
Period of 12 months ending
on |
|
|
| |
30 June 2000 |
1.45:1 |
|
| |
30 September 2000 |
1.45:1 |
|
| |
31 December 2000 |
1.50:1 |
|
| |
31 March 2001 |
1.55:1 |
|
| |
30 June 2001 |
1.65:1 |
|
| |
30 September 2001 |
1.70:1 |
|
| |
31 December 2001 |
1.75:1 |
|
| |
31 March 2002 |
1.50:1 |
|
| |
30 June 2002 |
1.50:1 |
|
| |
30 September 2002 |
1.50:1 |
|
| |
31 December 2002 |
1.50:1 |
|
| |
31 March 2003 |
1.50:1 |
|
| |
30 June 2003 |
1.50:1 |
|
| |
30 September 2003 |
1.55:1 |
|
| |
31 December 2003 |
1.60:1 |
|
| |
31 March 2004 |
1.70:1 |
|
| |
30 June 2004 |
1.80:1 |
|
| |
30 September 2004 |
1.90:1 |
|
| |
31 December 2004 |
2.05:1 |
|
| |
31 March 2005 |
2.50:1 |
|
| |
30 June 2005 |
2.50:1 |
|
| |
30 September 2005 |
2.50:1 |
|
| |
31 December 2005 |
2.50:1 |
|
| |
31 March 2006 |
2.75:1 |
|
| |
30 June 2006 |
2.75:1 |
|
| |
30 September 2006 |
2.75:1 |
|
| |
31 December 2006 |
2.75:1 |
|
| |
and thereafter (on a rolling
12 month basis, at the end of each Quarter) |
3.00:1 |
|
5
| (b) |
By deleting all of columns A and B in paragraph 1.3 (Net Senior Debt to Consolidated EBITDA) of schedule 8 and replacing it with the following: |
| |
A |
B |
|
| |
Period of 12 months ending
on: |
|
|
| |
31 December 1999 |
4.80:1 |
|
| |
31 March 2000 |
4.70:1 |
|
| |
30 June 2000 |
4.75:1 |
|
| |
30 September 2000 |
4.85:1 |
|
| |
31 December 2000 |
4.70:1 |
|
| |
31 March 2001 |
4.65:1 |
|
| |
30 June 2001 |
4.55:1 |
|
| |
30 September 2001 |
4.40:1 |
|
| |
31 December 2001 |
4.25:1 |
|
| |
31 March 2002 |
3.15:1 |
|
| |
30 June 2002 |
3.15:1 |
|
| |
30 September 2002 |
3.15:1 |
|
| |
31 December 2002 |
3.15:1 |
|
| |
31 March 2003 |
3.15:1 |
|
| |
30 June 2003 |
3.15:1 |
|
| |
30 September 2003 |
3.10:1 |
|
| |
31 December 2003 |
2.75:1 |
|
| |
31 March 2004 |
2.70:1 |
|
| |
30 June 2004 |
2.50:1 |
|
| |
30 September 2004 |
2.35:1 |
|
| |
and thereafter (on a rolling
12 month basis, at the end of each Quarter) |
2.00:1 |
|
6
