EXECUTION COPY
CIBA SPECIALTY CHEMICALS HOLDING INC.
Xxxxxxxxxxxxxx 000
0000 Xxxxx
Xxxxxxxxxxx
As of August 2, 2000
Citibank, N.A. - ADR
Department 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Exchange of Rule 144A ADSs for ADSs
Ladies and Gentlemen:
Reference is made to (i) the Amended and Restated Rule 144A Deposit
Agreement, dated as of March 16, 2000 (the "Rule 144A Deposit Agreement"), by
and among Ciba Specialty Chemicals Holding Inc., a company organized under the
laws of Switzerland (the "Company"), Citibank, N.A., a national banking
association organized under the laws of the United States of America
("Citibank"), acting in its capacity as Rule 144A ADS Depositary (Citibank
acting in such capacity, the "Rule 144A Depositary"), and the Holders of Rule
144A American Depositary Shares ("Rule 144A ADSs") evidenced by Rule 144A
American Depositary Receipts ("Rule 144A ADRs") issued thereunder, and (ii) the
Second Amended and Restated Deposit Agreement, dated as of August 2, 2000 (the
"Deposit Agreement"), by and among the Company and Citibank, as ADS Depositary
(Citibank acting in such capacity, the "ADS Depositary"), and the Holders and
Beneficial Owners of American Depositary Shares ("ADSs") evidenced by American
Depositary Receipts ("ADRs") issued thereunder. All capitalized terms used, but
not otherwise defined, herein shall have the meaning given to such terms in the
Deposit Agreement.
The Company hereby irrevocably instructs the Rule 144A Depositary to
terminate the Rule 144A depositary receipts facility established and currently
existing pursuant to the Rule 144A Deposit Agreement (the "Rule 144A ADR
Facility") upon the terms of conditions of the Rule 144A Deposit Agreement and
to refuse any deposits of Shares thereunder after August 1, 2000.
Notwithstanding the terms of the Rule 144A Deposit Agreement, the Company
requests that Citibank, in its capacity as Depositary and as Ru1e 144A
Depositary, establish procedures upon the terms and conditions set forth herein
to enable holders and beneficial owners of Rule 144A ADSs to surrender such Rule
144A ADSs at any time prior to March 6, 2001 in exchange for ADSs issued under
the terms of the Deposit Agreement. The purpose and intent of this letter
agreement is to supplement the Deposit Agreement for the sole purpose of
accommodating the surrender of Ru1e 144A ADSs in the context of the termination
(the "Termination") of the Rule 144A ADR Facility.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Depositary hereby agree as
follows:
1. Depositary Procedures. Citibank, in its capacity as Depositary and Rule
144A Depositary, agrees, upon the instructions of the Company contained herein,
to establish all necessary procedures to enable the surrender of Rule 144A ADSs
to the Rule 144A Depositary in connection with the Termination in order to
enable the issuance by the Depositary of ADSs to the persons surrendering the
Rule144A ADSs upon the terms described herein.
In order to effectuate the foregoing, the Company hereby instructs
(i) the Rule 144A Depositary to distribute, on or after August 2, 2000, to
participants in DTC who hold Rule 144A ADSs in the DTC Accounts, a Notice of
Termination of Rule 144A Facility substantially in the form of the draft thereof
attached hereto as Exhibit A, (ii) the Rule 144A Depositary (a) to accept Rule
144A ADSs validly surrendered to it for purposes of receiving ADSs, and (b) to
cancel such Rule 144A ADSs and to deliver the Shares represented by such Rule
144A ADSs into the
custodial account established by the Depositary to accept Shares under the terms
of the Deposit Agreement upon the timely receipt of the duly completed and
signed Exchange Certification substantially in the form of the draft thereof
attached hereto as Exhibit B (the "Exchange Certification"), and (iii) the
Depositary to issue in the name of, and deliver to, the persons who (a) validly
surrendered Rule 144A ADSs to the Rule 144A Depositary, and (b) timely delivered
to the Rule 144A Depositary the duly completed and signed Exchange
Certification, ADSs that represent the number of Shares transferred on behalf of
such persons from the custodial account of the Rule 144A ADR Facility to the
custodial account containing the Shares accepted for deposit in respect of the
ADR facility established under the terms of the Deposit Agreement.
2. Company Assistance. The Company agrees to (i) assist the Depositary in
the establishment of the procedures described above and the issuance of such
ADSs, and (ii) take all steps necessary and reasonably satisfactory to the
Depositary to insure that such procedures and the issuance of such ADSs do not
violate the provisions of the Securities Act, the Exchange Act or any other
applicable U.S. laws. In furtherance of the foregoing, the Company (i) has
consented to the disclosure to the Staff of the Securities and Exchange
Commission (the "Commission") of the exchange of Rule 144A ADSs for ADSs upon
the terms set forth herein by including a draft of this Letter Agreement as an
exhibit to the Post-Effective Amendment No.1 to F-6 Registration Statement (Reg.
No. 333-11666) filed with the Commission in respect of the ADSs on July 24,
2000, and (ii) shall cause its U.S. counsel to deliver an opinion to the
Depositary on which the Depositary is expressly permitted to rely, stating,
subject to customary exceptions and qualifications, that (a) all Shares
currently held in the Rule 144A ADR Facility and Rule 144A ADSs currently
outstanding are deemed, for purposes of Rule 144(k) under the Securities Act of
1933, as amended, to have been acquired from the Company at least two years
prior to August 2, 2000; (b) holders of Rule 144A ADSs who deliver Rule 144A
ADSs to the Rule 144A Depositary under the terms hereof may rely on
Rule 144(k) under the Securities Act of 1933, as amended, to transfer the ADSs
received under the terms hereof and the Shares held in respect of the ADSs so
issued are freely transferable by the Depositary in accordance with the terms of
the Deposit Agreement; (c) to counsel's knowledge the Staff of the Commission
has not objected (formally or informally) to the conversion of the Rule 144A
ADSs into ADSs; and (d) the Shares received for deposit under the terms of the
Deposit Agreement upon Termination and ADSs issued in respect of Shares so
deposited will not be "restricted securities" (as defined in Rule 144 under the
Securities Act).
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Depositary that (a) neither it nor any of its
Affiliates (as defined in the Deposit Agreement and hereinafter used as so
defined) has at any time in the two-year period preceding the date hereof
deposited, or will at any time hereafter, deposit any Shares into the Rule 144A
ADR facility; (b) neither it nor any of its Affiliates currently owns or has, at
any time in the two-year period preceding the date hereof, owned any Rule 144A
ADSs; (c) neither it nor any of its Affiliates will at any time after the date
hereof purchase or otherwise acquire any Rule 144A ADSs; and (d) upon reasonable
inquiry (with the assistance of its U.S. counsel) into the facts and
circumstances surrounding the Rule 144A ADR Facility, it believes that the
resale and transfer restrictions applicable to the Rule 144A ADSs will not be
needed after August 1, 2000.
4. Indemnity. The Company agrees to indemnify and hold harmless (i) the
Depositary, the Custodian and their respective officers, directors and employees
and (ii) the Rule 144A Depositary, the custodian appointed under the Rule 144A
Deposit Agreement and their respective officers, directors and employees for any
liability, loss, expense (including without limitation, the fees and expenses of
counsel) incurred as a result of, or in connection with, (x) the acceptance and
cancellation of Rule 144A ADSs, the acceptance of Shares for
deposit, the issuance of ADSs and the delivery of ADRs in each case upon the
terms set forth herein, except to the extent of their own negligence or bad
faith in performing such acts or omitting to perform such acts, (y) any other
acts performed or omitted by the Rule 144A Depositary or the Depositary as
contemplated by this letter agreement, except to the extent to their own
negligence or bad faith in performing such acts or omitting to perform such
acts, or (z) its reliance on any information contained herein or acting upon any
instructions set forth in or contemplated in this letter agreement.
Any person seeking indemnification hereunder (an "indemnified
person") shall notify the person from whom it is seeking indemnification (the
"indemnifying person") of the commencement of any indemnifiable action or claim
promptly after such indemnified person becomes aware of such commencement
(provided that the failure to make such notification shall not affect such
indemnified person's rights to seek indemnification except to the extent the
indemnifying person is materially prejudiced by such failure) and shall consult
in good faith with the indemnifying person as to the conduct of the defense of
such action or claim that may give rise to an indemnity hereunder, which defense
shall be reasonable in the circumstances. No indemnified person shall compromise
or settle any action or claim that may give rise to an indemnity hereunder
without the consent of the indemnifying person, which consent shall not be
unreasonably withheld.
This letter agreement shall be interpreted under, and all rights
hereunder shall be governed by, the laws of the State of New York without regard
to the principles of conflicts of law thereof.
The Company and the Citibank have caused this letter agreement to be
executed and delivered on their behalf by their respective officers thereunto
duly authorized as of the date set forth above.
CIBA SPECIALTY CHEMICALS HOLDING INC.
By: /s/ Xxxx Xxxxxxxxx Xxxxxx Xxxxx
---------------------------------------------
Name: Xxxx Xxxxxxxxx Xxxxxx Xxxxx
Title: Controller Corporate Counsel
Date: 2/8/00
CITIBANK, N.A.
as Depositary and Rule 144A Depositary
By:
----------------------------------------
Name:
Title:
Date
EXHIBITS
A Notice of Termination
B Exchange Certification
The Company and the Citibank have caused this letter agreement to be
executed and delivered on their behalf by their respective officers thereunto
duly authorized as of the date set forth above.
CIBA SPECIALTY CHEMICALS HOLDING INC.
By:
------------------------
Name:
Title:
Date:
CITIBANK, N.A.
as Depositary and Rule 144A Depositary
By: /s/ Xxxxx X. XxXxxxxxx
--------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Vice President
Date 8-2-00
EXHIBITS
A Notice of Termination
B Exchange Certification
