EXHIBIT 10.1
CREDIT AND GUARANTY AGREEMENT
dated as of
March 19, 2003
among
HEXCEL CORPORATION,
HEXCEL COMPOSITES LIMITED,
HEXCEL COMPOSITES GMBH (GERMANY)
and
HEXCEL COMPOSITES GMBH (AUSTRIA),
as Borrowers,
THE GUARANTORS NAMED HEREIN,
THE LENDERS PARTY HERETO FROM TIME TO TIME,
FLEET CAPITAL CORPORATION,
as Administrative Agent and as Fronting Bank,
FLEET NATIONAL BANK, LONDON U.K. BRANCH,
as Fronting Bank and Issuing Bank
FLEET NATIONAL BANK,
as Issuing Bank,
and
FLEET SECURITIES, INC.,
as Lead Arranger
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.....................................................1
1.1. DEFINITIONS.........................................................................1
1.2. RULES OF INTERPRETATION............................................................42
2. THE REVOLVING CREDIT FACILITY..............................................................43
2.1. COMMITMENT TO LEND.................................................................43
2.1.1. REVOLVING CREDIT LOANS TO HEXCEL..........................................43
2.1.2. MULTICURRENCY LOANS TO FOREIGN BORROWERS..................................44
2.2. COMMITMENT FEE.....................................................................45
2.3. REDUCTION OF TOTAL COMMITMENT......................................................45
2.4. THE REVOLVING CREDIT NOTES.........................................................46
2.5. INTEREST ON REVOLVING CREDIT LOANS.................................................47
2.6. REQUESTS FOR REVOLVING CREDIT LOANS................................................48
2.6.1. GENERAL...................................................................48
2.6.2. SWING LINE................................................................48
2.7. CONVERSION OPTIONS.................................................................49
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.....................49
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN.............................49
2.7.3. EUROCURRENCY RATE LOANS...................................................50
2.8. FUNDS FOR REVOLVING CREDIT LOAN....................................................50
2.8.1. FUNDING PROCEDURES FOR REVOLVING CREDIT LOANS TO HEXCEL...................50
2.8.2. ADVANCES BY AGENT FOR REVOLVING CREDIT LOANS TO HEXCEL....................50
2.8.3. FUNDING PROCEDURES FOR REVOLVING CREDIT LOANS TO FOREIGN BORROWERS........51
2.8.4. ADVANCES BY AGENT FOR REVOLVING CREDIT LOANS TO FOREIGN BORROWERS.........51
2.9. SETTLEMENTS........................................................................52
2.9.1. GENERAL...................................................................52
2.9.2. FAILURE TO MAKE FUNDS AVAILABLE...........................................53
2.9.3. NO EFFECT ON OTHER LENDERS................................................53
2.10. OPTIONAL CURRENCY..................................................................53
2.10.1. REQUEST FOR OPTIONAL CURRENCY.............................................53
2.10.2. EXCHANGE RATE.............................................................54
2.10.3. MULTIPLE DENOMINATIONS....................................................54
2.10.4. FUNDING...................................................................55
2.11. FRONTING PROVISIONS................................................................55
-ii-
2.11.1. APPLICATION OF INTEREST PAYMENTS FOR MULTICURRENCY LOANS..................55
2.11.2. CURRENCY CONVERSIONS AND CONTINGENT FUNDING AGREEMENT.....................56
2.11.3. RESIGNATION OF FRONTING BANK..............................................58
2.12. CHANGE IN BORROWING BASE...........................................................58
2.13. REPAYMENT OF THE REVOLVING CREDIT LOANS............................................59
2.13.1. MATURITY..................................................................59
2.13.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS............................59
2.13.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS.............................61
2.13.4. AUSTRIAN BORROWER.........................................................61
3. LETTERS OF CREDIT..........................................................................62
3.1. LETTER OF CREDIT COMMITMENTS.......................................................62
3.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT; LC GUARANTY........................62
3.1.2. LETTER OF CREDIT APPLICATIONS.............................................63
3.1.3. TERMS OF LETTERS OF CREDIT................................................63
3.1.4. REIMBURSEMENT OBLIGATIONS OF LENDERS; PARTICIPATION IN LC GUARANTY........63
3.1.5. PARTICIPATIONS OF LENDERS.................................................64
3.2. REIMBURSEMENT OBLIGATION OF THE BORROWER...........................................64
3.3. LETTER OF CREDIT PAYMENTS..........................................................65
3.4. OBLIGATIONS ABSOLUTE...............................................................66
3.5. RELIANCE BY ISSUER.................................................................67
3.6. LETTER OF CREDIT FEE...............................................................67
4. CERTAIN GENERAL PROVISIONS.................................................................67
4.1. CLOSING FEE........................................................................67
4.2. ADMINISTRATIVE AGENT'S FEE.........................................................68
4.3. FUNDS FOR PAYMENTS.................................................................68
4.3.1. PAYMENTS TO ADMINISTRATIVE AGENT..........................................68
4.3.2. NO OFFSET, ETC............................................................69
4.3.3. NON-U.S. LENDERS..........................................................70
4.3.4. REFUNDS...................................................................71
4.4. COMPUTATIONS.......................................................................71
4.5. INABILITY TO DETERMINE EUROCURRENCY RATE...........................................71
4.6. ILLEGALITY.........................................................................72
4.7. ADDITIONAL COSTS ARISING FROM CHANGE IN LAW, ETC...................................73
4.8. CAPITAL ADEQUACY...................................................................74
4.9. CERTIFICATE........................................................................75
4.10. INDEMNITY.........................................................................75
4.11. INTEREST AFTER DEFAULT............................................................75
-iii-
4.12. CURRENCY MATTERS..................................................................75
4.13. LENDING OFFICE....................................................................76
4.14. CURRENCY FLUCTUATIONS.............................................................76
4.15. LENDERS' OBLIGATION TO MITIGATE; REPLACEMENT OF LENDER............................77
5. COLLATERAL SECURITY AND GUARANTIES.........................................................78
5.1. GENERAL............................................................................79
5.2. SECURITY OF BORROWERS AND GUARANTORS...............................................79
5.3. GUARANTY...........................................................................80
5.4. GUARANTY ABSOLUTE..................................................................80
5.5. EFFECTIVENESS, ENFORCEMENT.........................................................81
5.6. WAIVER.............................................................................82
5.7. SUBORDINATION; SUBROGATION.........................................................82
5.8. PAYMENTS...........................................................................83
5.9. GUARANTORS' AGREEMENT TO PAY ENFORCEMENT COSTS.....................................83
5.10. RECEIPT OF INFORMATION............................................................83
5.11. TERMINATION.......................................................................84
6. REPRESENTATIONS AND WARRANTIES.............................................................84
6.1. CORPORATE AUTHORITY................................................................84
6.1.1. INCORPORATION; GOOD STANDING..............................................84
6.1.2. AUTHORIZATION.............................................................84
6.1.3. ENFORCEABILITY............................................................85
6.2. GOVERNMENTAL APPROVALS.............................................................85
6.3. TITLE TO PROPERTIES; LEASES........................................................85
6.4. FINANCIAL STATEMENTS AND PROJECTIONS...............................................85
6.4.1. FISCAL YEAR...............................................................85
6.4.2. FINANCIAL STATEMENTS......................................................85
6.4.3. PROJECTIONS...............................................................86
6.4.4. SOLVENCY..................................................................86
6.5. NO MATERIAL ADVERSE CHANGES, ETC...................................................86
6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC...............................................86
6.7. LITIGATION.........................................................................87
6.8. TAX STATUS.........................................................................87
6.9. NO EVENT OF DEFAULT................................................................87
6.10. HOLDING COMPANY AND INVESTMENT COMPANY ACTS.......................................87
6.11. ABSENCE OF FINANCING STATEMENTS, ETC..............................................87
6.12. CERTAIN TRANSACTIONS..............................................................87
6.13. EMPLOYEE BENEFIT PLANS............................................................88
6.13.1. IN GENERAL................................................................88
6.13.2. TERMINABILITY OF WELFARE PLANS............................................88
6.13.3. GUARANTEED PENSION PLANS..................................................88
6.13.4. MULTIEMPLOYER PLANS.......................................................89
-iv-
6.14. USE OF PROCEEDS....................................................................89
6.14.1. GENERAL...................................................................89
6.14.2. REGULATIONS U AND X.......................................................89
6.14.3. INELIGIBLE SECURITIES.....................................................89
6.15. ENVIRONMENTAL COMPLIANCE...........................................................89
6.16. SUBSIDIARIES, ETC..................................................................91
6.17. BANK ACCOUNTS......................................................................91
6.18. DISCLOSURE.........................................................................91
6.19. INSURANCE..........................................................................91
6.20. PERFECTION OF SECURITY INTEREST....................................................92
6.21. ACCOUNTS RECEIVABLE................................................................92
6.22. EQUITY OFFERING DOCUMENTS, SENIOR SECURED NOTE
DOCUMENTS, FRENCH FACILITY AND SUBORDINATED DEBT DOCUMENTS...............................92
6.23. FRENCH FACILITY UPSTREAM LIMITATION................................................93
7. AFFIRMATIVE COVENANTS......................................................................93
7.1. PUNCTUAL PAYMENT...................................................................93
7.2. MAINTENANCE OF OFFICE..............................................................93
7.3. RECORDS AND ACCOUNTS...............................................................94
7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION.................................94
7.5. NOTICES............................................................................96
7.5.1. DEFAULTS..................................................................96
7.5.2. ENVIRONMENTAL EVENTS......................................................96
7.5.3. NOTIFICATION OF CLAIM AGAINST ASSETS......................................97
7.5.4. NOTICE OF LITIGATION AND JUDGMENTS........................................97
7.6. LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES.........................................97
7.7. INSURANCE..........................................................................97
7.8. TAXES..............................................................................97
7.9. INSPECTION OF PROPERTIES AND BOOKS, ETC............................................98
7.9.1. GENERAL...................................................................98
7.9.2. COLLATERAL REPORTS........................................................98
7.9.3. APPRAISALS................................................................99
7.9.4. COMMUNICATIONS WITH ACCOUNTANTS...........................................99
7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.............................99
7.11. EMPLOYEE BENEFIT PLANS............................................................100
7.12. USE OF PROCEEDS...................................................................100
7.13. FAIR LABOR STANDARDS ACT..........................................................100
7.14. ADDITIONAL SUBSIDIARIES...........................................................101
7.15. NEW GUARANTORS; NEW STOCK PLEDGES.................................................101
7.16. AMENDMENTS TO GOVERNING DOCUMENTS.................................................102
7.17. BANK ACCOUNTS.....................................................................102
7.17.1. GENERAL..................................................................102
7.17.1.1. HEXCEL AND THE U.K. BORROWER...................................102
-v-
7.17.1.2. THE AUSTRIAN BORROWER AND THE GERMAN BORROWER..................103
7.17.2. ACKNOWLEDGMENT OF APPLICATION............................................104
7.18. SENIOR INDEBTEDNESS...............................................................104
7.19. FURTHER ASSURANCES................................................................104
7.20. POST-CLOSING COVENANTS............................................................104
8. CERTAIN NEGATIVE COVENANTS................................................................104
8.1. RESTRICTIONS ON INDEBTEDNESS......................................................104
8.2. RESTRICTIONS ON LIENS.............................................................106
8.3. RESTRICTIONS ON INVESTMENTS.......................................................109
8.4. RESTRICTED PAYMENTS...............................................................111
8.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS...................................112
8.5.1. MERGERS AND ACQUISITIONS..................................................112
8.5.2. DISPOSITION OF ASSETS.....................................................113
8.6. SALE AND LEASEBACK................................................................113
8.7. COMPLIANCE WITH ENVIRONMENTAL LAWS................................................113
8.8. EMPLOYEE BENEFIT PLANS............................................................114
8.9. BUSINESS ACTIVITIES...............................................................114
8.10. FISCAL YEAR.......................................................................114
8.11. TRANSACTIONS WITH AFFILIATES......................................................114
8.12. MODIFICATION OF GOVERNING DOCUMENTS...............................................115
8.13. EQUITY OFFERING; SUBORDINATED DEBT; SENIOR SECURED NOTES;
FRENCH FACILITY AND CAPITALIZED LEASES..................................................115
8.14. BANK ACCOUNTS.....................................................................116
8.15. FOREIGN SUBSIDIARY BORROWINGS.....................................................116
9. FINANCIAL COVENANTS.......................................................................116
9.1. LEVERAGE RATIO....................................................................116
9.2. SENIOR LEVERAGE RATIO.............................................................117
9.3. FIXED CHARGE COVERAGE RATIO.......................................................117
9.4. CAPITAL EXPENDITURES..............................................................118
10. CLOSING CONDITIONS........................................................................119
10.1. LOAN DOCUMENTS, ETC...............................................................119
10.2. CERTIFIED COPIES OF GOVERNING DOCUMENTS; GOOD STANDING CERTIFICATES...............119
10.3. CORPORATE OR OTHER ACTION.........................................................119
10.4. INCUMBENCY CERTIFICATE............................................................119
10.5. VALIDITY OF LIENS.................................................................119
10.6. CAPITALIZATION....................................................................120
10.7. CONSENTS AND APPROVALS............................................................120
10.8. AVAILABILITY......................................................................120
-vi-
10.9. LIEN SEARCHES.....................................................................120
10.10. CERTIFICATES OF INSURANCE........................................................120
10.11. BORROWING BASE REPORT............................................................120
10.12. ACCOUNTS RECEIVABLE AGING REPORT AND INVENTORY SUMMARY...........................120
10.13. SOLVENCY CERTIFICATE.............................................................121
10.14. OPINIONS OF COUNSEL..............................................................121
10.15. PAYMENT OF FEES..................................................................121
10.16. PAYOFF LETTER....................................................................121
11. CONDITIONS TO ALL BORROWINGS..............................................................121
11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT.........................................121
11.2. PROCEEDINGS AND DOCUMENTS.........................................................122
11.3. BORROWING BASE REPORT.............................................................122
12. EVENTS OF DEFAULT; ACCELERATION; ETC......................................................122
12.1. EVENTS OF DEFAULT AND ACCELERATION................................................122
12.2. TERMINATION OF COMMITMENTS........................................................125
12.3. REMEDIES..........................................................................125
12.4. DISTRIBUTION OF PROCEEDS..........................................................126
12.5. JUDGEMENT CURRENCY................................................................127
12.6. PARALLEL DEBT.....................................................................127
13. THE ADMINISTRATIVE AGENT..................................................................128
13.1. AUTHORIZATION.....................................................................128
13.2. EMPLOYEES AND AGENTS..............................................................129
13.3. NO LIABILITY......................................................................129
13.4. NO REPRESENTATIONS................................................................129
13.4.1. GENERAL..................................................................129
13.4.2. CLOSING DOCUMENTATION, ETC...............................................130
13.5. PAYMENTS..........................................................................130
13.5.1. PAYMENTS TO ADMINISTRATIVE AGENT.........................................130
13.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT.....................................131
13.5.3. DELINQUENT LENDERS.......................................................131
13.6. HOLDERS OF REVOLVING CREDIT NOTES.................................................131
13.7. INDEMNITY.........................................................................132
13.8. ADMINISTRATIVE AGENT AS LENDER....................................................132
13.9. RESIGNATION.......................................................................132
13.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT...................................132
13.11. RELEASE OF COLLATERAL............................................................132
13.12. INTERCREDITOR AGREEMENT..........................................................133
14. ASSIGNMENT AND PARTICIPATION..............................................................133
14.1. CONDITIONS TO ASSIGNMENT BY LENDERS...............................................133
-vii-
14.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS....................134
14.3. REGISTER..........................................................................135
14.4. NEW REVOLVING CREDIT NOTES........................................................135
14.5. PARTICIPATIONS....................................................................135
14.6. MISCELLANEOUS ASSIGNMENT PROVISIONS...............................................136
14.7. ASSIGNMENT BY THE BORROWERS.......................................................136
15. PROVISIONS OF GENERAL APPLICATIONS........................................................136
15.1. SETOFF............................................................................136
15.2. EXPENSES..........................................................................137
15.3. INDEMNIFICATION...................................................................138
15.4. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.....................................139
15.4.1. CONFIDENTIALITY..........................................................139
15.4.2. PRIOR NOTIFICATION.......................................................140
15.4.3. OTHER....................................................................140
15.5. SURVIVAL OF COVENANTS, ETC........................................................141
15.6. NOTICES...........................................................................141
15.7. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES......................142
15.8. HEADINGS..........................................................................143
15.9. COUNTERPARTS......................................................................143
15.10.ENTIRE AGREEMENT, ETC.............................................................144
15.11.WAIVER OF JURY TRIAL..............................................................144
15.12.CONSENTS, AMENDMENTS, WAIVERS, ETC................................................144
15.13.SEVERABILITY......................................................................146
15.14.TERMINATION.......................................................................146
-viii-
EXHIBITS
EXHIBIT A Form of Borrowing Base Report
EXHIBIT B-1 Form of Revolving Credit Note
EXHIBIT B-2 Form of Swing Line Note
EXHIBIT C Form of Loan Request
EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Assignment and Acceptance
EXHIBIT F Form of Instrument of Assumption and Joinder
SCHEDULES
SCHEDULE 1 Lenders and Commitments
SCHEDULE 2 Mandatory Costs
SCHEDULE 6.6 Franchises, Patents and Copyrights
SCHEDULE 6.7 Litigation
SCHEDULE 6.15 Environmental Compliance
SCHEDULE 6.16(a) Subsidiaries
SCHEDULE 6.16(b) Joint Ventures and Partnerships
SCHEDULE 6.17 Bank Accounts
SCHEDULE 8.1 Existing Indebtedness
SCHEDULE 8.2 Existing Liens
SCHEDULE 8.3(f) Existing Investments
SCHEDULE 8.5.2 Asset Sales
SCHEDULE 9 Legacy Quarters
CREDIT AND GUARANTY AGREEMENT
This
CREDIT AND GUARANTY AGREEMENT is made as of March 19, 2003, by and
among (a) HEXCEL CORPORATION, a Delaware corporation ("HEXCEL"), (b) HEXCEL
COMPOSITES LIMITED, a private company limited by shares organized under the laws
of England and Wales with registered number 03069887 (the "U.K. BORROWER"), (c)
HEXCEL COMPOSITES GMBH (AUSTRIA), an Austrian limited liability company
registered with the Commercial Register of Linz, Austria under registration
number FN144908a (the "AUSTRIAN BORROWER"), (d) HEXCEL COMPOSITES GMBH
(GERMANY), a German limited liability company registered with the Commercial
Register of X-00000 Xxxxx, Xxxxxxx under registration number HRB 6324 (the
"GERMAN BORROWER", and together with the U.K. Borrower and the Austrian
Borrower, the "FOREIGN BORROWERS" and each individually, a "FOREIGN BORROWER,"
and the Foreign Borrowers together with Hexcel, collectively, the "BORROWERS"
and each individually, a "BORROWER"), (e) the Guarantors named herein, (f) the
lenders from time to time a party hereto, (g) FLEET CAPITAL CORPORATION, as
Administrative Agent and as Fronting Bank, (h) FLEET NATIONAL BANK, London U.K.
branch, trading as FleetBoston Financial, as Fronting Bank and Issuing Bank, (i)
FLEET NATIONAL BANK, as Issuing Bank and (j) FLEET SECURITIES, INC., as Lead
Arranger.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth in
this Section 1 or elsewhere in the provisions of this Credit Agreement referred
to below:
ACCOUNTANT RELEASE LETTER. See Section 7.9.4.
ACCOUNTS RECEIVABLE. All rights of the Borrowers or any of the Guarantors
to payment for goods sold in the ordinary course of business and all rights of
the Borrowers or any of the Guarantors to payment for services rendered in the
ordinary course of business and all sums of money or other proceeds due thereon
pursuant to transactions with account debtors, except for that portion of the
sum of money or other proceeds due thereon that relate to sales, use or property
taxes in conjunction with such transactions, recorded on books of account of
such Person in accordance with GAAP.
ADDITIONAL AVAILABILITY. At any time, (i) the cash and Cash Equivalents
reflected on the balance sheet of the Borrowers and the Guarantors at such time,
PLUS (ii) the Excess Availability hereunder at such time.
ADJUSTMENT DATE. The first day of the month immediately following the month
in which a Compliance Certificate is to be delivered by Hexcel pursuant to
Section 7.4(d).
ADMINISTRATIVE AGENT. Fleet Capital Corporation, acting as administrative
agent for the Lenders, and each other Person appointed as the successor
Administrative Agent in accordance with Section 13.9.
-2-
ADMINISTRATIVE AGENT'S FEE. See Section 4.2.
ADMINISTRATIVE AGENT'S OFFICE. The Administrative Agent's office located at
000 Xxxxxxxxxxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxx 00000, or at such other
location as the Administrative Agent may designate from time to time.
ADMINISTRATIVE AGENT'S SPECIAL COUNSEL. Xxxxxxx XxXxxxxxx LLP or such other
counsel as may be approved by the Administrative Agent.
AFFILIATE. Any Person which, directly or indirectly, controls, is
controlled by or is under common control with any Borrower or any Lender, as the
case may be. "CONTROL" of a Person means the power, directly or indirectly, (a)
to vote ten percent (10%) or more of the Capital Stock (on a fully diluted
basis) of such Person having ordinary voting power for the election of
directors, managing members or general partners (as applicable); or (b) to
direct or cause the direction of the management and policies of such Person
(whether by contract or otherwise).
AGENCY ACCOUNT AGREEMENTS. See Section 7.17.1.
APPLICABLE COMMITMENT FEE. For each calendar quarter or portion thereof,
the Applicable Commitment Fee shall be the applicable commitment fee at a rate
per annum set forth below with respect to the Commitment Fee Percentage, as
determined for such calendar quarter or portion thereof.
LEVEL COMMITMENT FEE PERCENTAGE APPLICABLE COMMITMENT FEE
------------------------------------------------------------------------------------------
I Less than 33.3%
0.750%
II Greater than or equal to 33.3%
but less than 66.6% 0.500%
III Greater than or equal to 66.6%
0.250%
APPLICABLE MARGIN. For each period commencing on an Adjustment Date through
the date immediately preceding the next Adjustment Date (each a "RATE ADJUSTMENT
PERIOD"), the Applicable Margin shall be the applicable margin set forth below
for Base Rate Loans or Eurocurrency Rate Loans, as the case may be, denominated
in Dollars or in Pounds Sterling or Euros, as the case may be, with respect to
the Fixed Charge Coverage Ratio, as determined for the Reference Period of the
Borrowers and its Subsidiaries ending on the fiscal quarter ended immediately
prior to the applicable Rate Adjustment Period.
-3-
FIXED CHARGE
COVERAGE
LEVEL RATIO BASE RATE LOANS EUROCURRENCY RATE LOANS
------------------------------------------------------------------------------------------------------
I Less than or equal to
1.00:1.00 but not in
Default Dollars: 1.75% Dollars: 3.25%
----------------------------- ---------------------------
Pounds Sterling: 3.25% Pounds Sterling: 3.25%
----------------------------- ---------------------------
Euros: 3.25% Euros: 3.25%
-------------- -------------------------- ----------------------------- ---------------------------
II Greater than 1.00:1.00
but less than or equal
to 1.10:1.00 Dollars: 1.50% Dollars: 3.00%
----------------------------- ---------------------------
Pounds Sterling: 3.00% Pounds Sterling: 3.00%
----------------------------- ---------------------------
Euros: 3.00% Euros: 3.00%
-------------- -------------------------- ----------------------------- ---------------------------
III Greater than 1.10:1.00
but less than or equal
to 1.30:1.00 Dollars: 1.25% Dollars: 2.75%
----------------------------- ---------------------------
Pounds Sterling: 2.75% Pounds Sterling: 2.75%
----------------------------- ---------------------------
Euros: 2.75% Euros: 2.75%
-------------- -------------------------- ----------------------------- ---------------------------
IV Greater than 1.30:1.00
but less than or equal
to 1.50:1.00 Dollars: 1.00% Dollars: 2.50%
----------------------------- ---------------------------
Pounds Sterling: 2.50% Pounds Sterling: 2.50%
----------------------------- ---------------------------
Euros: 2.50% Euros: 2.50%
-------------- -------------------------- ----------------------------- ---------------------------
V Greater than 1.50:1.00 Dollars: 0.75% Dollars: 2.25%
----------------------------- ---------------------------
Pounds Sterling: 2.25% Pounds Sterling: 2.25%
----------------------------- ---------------------------
Euros: 2.25% Euros: 2.25%
-------------- -------------------------- ----------------------------- ---------------------------
Notwithstanding the foregoing, (a) for the Revolving Credit Loans
outstanding during the period commencing on the Closing Date through the date
immediately preceding the date six (6) months following the Closing Date, the
Applicable Margin shall be the Applicable Margin set forth in Level III above,
and (b) if the Borrowers fail to deliver any Compliance Certificate pursuant to
Section 7.4(d) hereof then, for the period commencing on the next Adjustment
Date to occur subsequent to such failure through the date immediately following
the date on which such Compliance Certificate is delivered, the Applicable
Margin shall be set at Level I.
APPLICABLE PENSION LEGISLATION. At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Parent or any of its Subsidiaries.
ASSET SALE. Any one or series of related transactions in which any Borrower
or any of its Subsidiaries conveys, sells, leases, licenses or otherwise
disposes of, directly or
-4-
indirectly, any of its properties, businesses or assets (including the sale or
issuance of capital stock of any Subsidiary other than to such Borrower or any
Subsidiary of such Borrower) whether owned on the Closing Date or thereafter
acquired.
ASSET SALES PROCEEDS ACCOUNT. The "Asset Sale Proceeds Account" established
by Hexcel pursuant to the terms of the Senior Secured Note Documents, as in
effect on the date hereof.
ASSIGNMENT AND ACCEPTANCE. See Section 14.1.
AUSTRIAN BORROWER. As defined in the preamble hereto.
AUSTRIAN BORROWING BASE. At the relevant time of reference thereto, an
amount determined by the Administrative Agent by reference to the most recent
Borrowing Base Report delivered to the Administrative Agent and the Lenders
pursuant to subsection 7.4(f) which is equal to the lesser of the Austrian
Sublimit and the Dollar Equivalent sum of:
(a) 85% of Eligible Accounts of the Austrian Borrower; MINUS
(b) reserves in respect of payroll, employee benefits and payroll taxes
for a one (1) month period (it being understood that up to one-half of
such reserve pursuant to this paragraph (b) may, at the option of
Hexcel upon notice to the Administrative Agent, be taken against the
Domestic Borrowing Base); minus
(c) reserves in respect of the Austrian Overdraft Facility; MINUS
(d) other reserves as either the Administrative Agent and/or the
Co-Collateral Agent in its good faith judgment exercised in a
commercially reasonable manner consistent with its customary practice
for comparable asset based transactions shall deem appropriate from
time to time.
The Austrian Borrowing Base shall be calculated in Dollars at the Exchange
Rate. In determining the Austrian Borrowing Base from time to time, each of the
Administrative Agent and the Co-Collateral Agent may, but shall not be required
to, rely upon reports or analyses generated by the Austrian Borrower (including,
without limitation, Borrowing Base Reports) and reports or analyses generated by
or on behalf of the Administrative Agent or any Lender or by third party
collateral examination. Notwithstanding anything to the contrary set forth
herein, each of the Administrative Agent and the Co-Collateral Agent may in its
good faith judgment exercised in a commercially reasonable manner consistent
with its customary practice for comparable asset based transactions at any time
and from time to time, (i) decrease the percentage advance rate of Eligible
Accounts included in the Austrian Borrowing Base based upon the results of any
collateral exams or other sources of information which demonstrate in the
Administrative Agent's or the Co-Collateral Agent's reasonable judgment based on
due inquiry a change in the collectability of accounts receivable of the
Austrian
-5-
Borrower and/or other market changes affecting the value of accounts comprising
the Austrian Borrowing Base, and (ii) make more restrictive the eligibility
criteria contained in the definition of Eligible Accounts. In addition, the
Administrative Agent may in its good faith judgment exercised in a commercially
reasonable manner consistent with its customary practice for comparable asset
based transactions, in the event that the Dilution with respect to the Accounts
Receivable of the Austrian Borrower for the period calculated has increased
above 5%, reserve against the Austrian Borrowing Base an amount necessary such
that the effective Dilution will be less than or equal to 5%; PROVIDED that in
calculating the amount of such Dilution, the Administrative Agent may take into
account credits posted to Accounts Receivable which are not, in its judgment,
truly dilutive. For the avoidance of doubt, (a) each of the Administrative Agent
and the Co-Collateral Agent may impose reserves and suspend reserves without the
consent of the other, and (b) if, at any time, any reserve is imposed by any of
the Administrative Agent and the Co-Collateral Agent, such reserve shall be
imposed without duplication.
AUSTRIAN EXPOSURE. At any time, the sum of the Dollar Equivalent of the
outstanding amount of all Revolving Credit Loans advanced to the Austrian
Borrower PLUS the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations with respect to Letters of Credit issued for the account of the
Austrian Borrower.
AUSTRIAN OVERDRAFT FACILITY. The credit facility to be provided by Fleet
U.K., as Fronting Bank, to the Austrian Borrower in an aggregate amount not to
exceed the Austrian Overdraft Facility Sublimit pursuant to which Fleet U.K., as
Fronting Bank, may advance Base Rate Loans to the Austrian Borrower pursuant to
Section 2.1.2.
AUSTRIAN OVERDRAFT FACILITY SUBLIMIT. The amount selected by the Austrian
Borrower from time to time with ten (10) days prior written notice to the
Fronting Bank and the Administrative Agent and with the approval of the Fronting
Bank and the Administrative Agent of such amount; PROVIDED that the Austrian
Borrower shall not change such amount more than one (1) time per fiscal quarter;
PROVIDED FURTHER that (x) the Austrian Overdraft Facility Sublimit shall not at
any time exceed the Dollar Equivalent of Euro 1,000,000 and (y) the Austrian
Overdraft Facility Limit as of the Closing Date is $0.
AUSTRIAN SECURITY DOCUMENTS. Collectively, the Assignment by way of
Security, dated or to be dated on or prior to the Closing Date, between the
Austrian Borrower and the Administrative Agent, and the Account Pledge
Agreement, dated or to be dated on or prior to the Closing Date, between the
Austrian Borrower and the Administrative Agent, each in form and substance
satisfactory to the Administrative Agent, and all other instruments, agreements
and documents required to be executed or delivered pursuant to any Austrian
Security Document.
AUSTRIAN SUBLIMIT. $7,500,000 MINUS the Austrian Overdraft Facility
Sublimit.
BALANCE SHEET DATE. December 31, 2002.
-6-
BASE RATE. (a) With respect to amounts denominated in Dollars, the Dollar
Base Rate, (b) with respect to amounts denominated in Pounds Sterling, the
Pounds Sterling Base Rate and (c) with respect to amounts denominated in Euros,
the Euro Base Rate.
BASE RATE LOANS. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
BORROWING BASE REPORT. A Borrowing Base Report signed by any of the chief
executive officer, the chief financial officer, the treasurer or the controller
of a Borrower and, with respect to the U.K. Borrower, any director and, with
respect to the Austrian Borrower or the German Borrower , any individual listed
on the commercial register of the Austrian Borrower or the German Borrower,
respectively, and in each case, in substantially the form of Exhibit A hereto.
BORROWERS. As defined in the preamble hereto.
BUSINESS DAY. Any day other than a Saturday or a Sunday on which banking
institutions in New York, New York or London, England are open for the
transaction of banking business and, in addition, (a) with respect to
Eurocurrency Rate Loans denominated in Dollars, a day which is also a day on
which commercial banks are open for international business (including dealings
in Dollar deposits) in London or such other eurodollar interbank market as may
be selected by the Administrative Agent in its sole discretion acting in good
faith, and (b) if Eurocurrency Rate Loans denominated in Pounds Sterling or
Euros are involved, a day on which dealings and exchange in Dollars and the
relevant currency can be carried on in the relevant Eurocurrency interbank
market (including dealings in Pound Sterling and Euro deposits) and Dollar
settlements of such dealings may be effected in New York, New York and London,
and also a day on which dealings and exchange in Dollars and in the relevant
currency can be carried on in the principal financial center of the country in
which such currency is legal tender and in London, England.
CAPITAL EXPENDITURES. Amounts paid or Indebtedness incurred by the
Borrowers or any of their Subsidiaries in connection with the purchase or lease
by the Borrowers or any of their Subsidiaries of capital assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with GAAP.
CAPITALIZED LEASES. Leases under which the Borrowers or any of their
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.
CAPITAL STOCK. Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
CASH EQUIVALENTS. Those Investments listed in clauses (a) through (e) of
Section 8.3.
-7-
CASH MANAGEMENT SERVICES. Any cash management services (including, without
limitation, ACH and similar transactions, the maintenance of operating or
deposit accounts and the provision of checking or overdraft facilities) from
time to time made available to the Credit Parties or any of their Subsidiaries
by any of the Lenders, the Administrative Agent, the Fronting Bank or the
Issuing Bank, individually or collectively, or any of their Affiliates.
CERCLA. See Section 6.15(a).
CHANGE OF CONTROL. An event or series of events by which any person or
group of persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act but other than Affiliates of The Xxxxxxx Xxxxx Group, Inc.,
Affiliates of Greenbriar Equity Group LLC and Affiliates of Berkshire Partners
LLC), directly OR indirectly, of forty percent (40%) or more of the outstanding
shares of Capital Stock of Hexcel; or, during any period of two consecutive
years, individuals who at the beginning of that period constituted the board of
directors of Hexcel, together with any new directors whose election by the board
of directors of Hexcel or whose nomination for election by the stockholders of
the Hexcel was approved under the Governance Agreement, the Stockholders
Agreement of Hexcel or by a vote of 66% of the directors of the Hexcel then
still in office who were either directors at the beginning of the two-year
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the board of directors of
Hexcel then in office.
CHARGE OVER SHARES: The Share Charge, dated or to be dated on or prior to
the Closing Date, between Hexcel and FCC relating to Hexcel Holdings (UK)
Limited.
CLOSING DATE. The first date on which the conditions set forth in Section
10 have been satisfied and any Revolving Credit Loans can be made or any Letter
of Credit can be issued hereunder.
CLOSING FEE. See Section 4.1.
CODE. The Internal Revenue Code of 1986.
CO-COLLATERAL AGENT. General Electric Capital Corporation.
COLLATERAL. All of the property, rights and interests of the Borrowers and
the Guarantors that are or are intended to be subject to the Liens created by
the Security Documents.
COMMITMENT. With respect to each Lender, the amount set forth on SCHEDULE 1
hereto as the amount of such Lender's commitment to make Revolving Credit Loans
to the Borrowers and to purchase a risk participation from the Fronting Bank for
Multicurrency Loans made to the Foreign Borrowers by the Fronting Bank pursuant
to Section 2.11 hereof, and to participate in the issuance, extension and
renewal of Letters of
-8-
Credit for the account of, the Borrowers, as the same may be reduced from time
to time; or if such commitment is terminated pursuant to the provisions hereof,
zero.
COMMITMENT FEE. See Section 2.2.
COMMITMENT FEE PERCENTAGE. For any fiscal quarter of Hexcel, a fraction
expressed as a percentage, the numerator of which is equal to the sum of (i) the
Dollar Equivalent of the average daily outstanding amount of the Revolving
Credit Loans advanced to the Borrowers during such period PLUS (ii) the average
daily Maximum Drawing Amount with respect to all Letters of Credit issued for
the account of the Borrowers during such period, and the denominator of which is
equal to the average daily Total Commitment during such period.
COMMITMENT PERCENTAGE. With respect to each Lender, the percentage set
forth on SCHEDULE 1 hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders.
COMPLIANCE CERTIFICATE. See Section 7.4(d).
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrowers and their
Subsidiaries, consolidated in accordance with GAAP.
CONVERSION REQUEST. A notice given by a Borrower to the Administrative
Agent of such Borrower's election to convert or continue a Revolving Credit Loan
in accordance with Section 2.7.
CONVERTIBLE PREFERRED STOCK. The 125,000 shares of Class A and the 125,000
shares of Class B convertible preferred stock of Hexcel issued in exchange for
aggregate gross proceeds in the amount of $125,000,000 pursuant to the Equity
Offering Documents. The Convertible Preferred Stock shall not be considered
Indebtedness for purposes of the financial covenants under this Credit
Agreement.
CREDIT AGREEMENT. This
Credit and Guaranty Agreement, including the
Schedules and Exhibits hereto.
CREDIT PARTY. Each of the Borrowers and all Guarantors.
CSI LEASING TRUST ASSETS. The assets leased pursuant to CSI Leasing Trust
Capital Lease.
CSI LEASING TRUST CAPITAL LEASE. The Lease Agreement, dated as of September
15, 1998, by and among CSI Lease Trust, a Delaware business trust, as lessor,
Xxxxxxx X. Xxxx, as co-trustee for CSI Leasing Trust, and Hexcel CS Corporation
(now known as Xxxxx-Xxxxxxxx Corporation), as lessor.
DEFAULT. See Section 12.1.
-9-
DELINQUENT LENDER. See Section 13.5.3.
DILUTION. With respect to any Person and for any period, the amount
(expressed as a percentage) by which the aggregate face amount of Accounts
Receivable of such Person exceeds the net collected amount of Accounts
Receivable of such Person.
DOCUMENTATION AGENT. Each of Foothill Capital Corporation and Xxxxxxx Xxxxx
Capital, a division of Xxxxxxx Xxxxx Business Financial Services.
DOLLAR EQUIVALENT. On any particular date, with respect to any amount
denominated in Dollars, such amount in Dollars, and with respect to any amount
denominated in Pounds Sterling or Euros, the amount (as conclusively ascertained
by the Administrative Agent absent manifest error) of Dollars which could be
purchased by the Administrative Agent (in accordance with its normal banking
practices) in the London foreign currency deposit markets with such amount of
such currency at the spot rate of exchange prevailing at or about 11:00 a.m.
(London time) on such date.
DOLLARS or $. Dollars in lawful currency of the United States of America.
DOLLAR BASE RATE. The higher of (i) the variable annual rate of interest so
designated from time to time by Fleet as its "PRIME RATE", such rate being a
reference rate and not necessarily representing the lowest or best rate being
charged to any customer, and (ii) one-half of one percent (0.5%) above the
Federal Funds Effective Rate. For the purposes of this definition, "FEDERAL
FUNDS EFFECTIVE RATE" shall mean for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three funds brokers of recognized standing selected by the
Administrative Agent. Changes in the Dollar Base Rate resulting from any changes
in Fleet's "PRIME RATE" shall take place immediately without notice or demand of
any kind.
DOLLAR LIBOR RATE. For any Interest Period with respect to a Eurocurrency
Rate Loan denominated in Dollars, the rate of interest equal to (a) the rate
determined by the Administrative Agent at which Dollar deposits for such
Interest Period are offered based on information presented on Telerate Page 3750
as of 11:00 a.m. (Atlanta, Georgia time) on the second Business Day prior to the
first day of such Interest Period, DIVIDED BY (b) a number equal to 1.00 MINUS
the Eurocurrency Reserve Rate. If the rate described above does not appear on
the Telerate System on any applicable interest determination date, the Dollar
LIBOR Rate shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in Dollars for a period of time comparable to such
Dollar LIBOR Rate Loan which are offered by four (4) major banks in the London
interbank market at approximately 11:00 a.m. (Atlanta, Georgia time) on the
second Business Day prior to the first day of such Interest Period as selected
by the Administrative Agent. The
-10-
principal London office of each of the four (4) major London banks will be
requested to provide a quotation of its Dollar deposit offered rate. If at least
two (2) such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations. If fewer than two (2) quotations are provided
as requested, the rate for that date will be determined on the basis of the
rates quoted for loans in Dollars to leading European banks for a period of time
comparable to such Interest Period offered by major banks in New York City at
approximately 11:00 a.m. (New York City time) on the second Business Day prior
to the first day of such Interest Period. In the event that the Administrative
Agent is unable to obtain any such quotation as provided above, it will be
considered that Dollar LIBOR Rate pursuant to a Eurocurrency Rate Loan
denominated in Dollars cannot be determined.
DOMESTIC BORROWING BASE. At the relevant time of reference thereto, an
amount determined by the Administrative Agent by reference to the most recent
Borrowing Base Report delivered to the Administrative Agent and the Lenders
pursuant to subsection 7.4(f) which is equal to the sum of:
(a) 85% of Eligible Accounts of Hexcel and its Domestic Subsidiaries which
are Guarantors, PLUS
(b) 85% of the Orderly Liquidation Value of Eligible Inventory (based on
the then-current appraisal thereof) of Hexcel and its Domestic
Subsidiaries which are Guarantors, PROVIDED that in no event shall the
sum of (i) the amount of the Domestic Borrowing Base comprised of
Eligible Inventory of Hexcel and its Domestic Subsidiaries which are
Guarantors PLUS (ii) the amount of the U.K. Borrowing Base comprised
of Eligible Inventory of the U.K. Borrower, exceed $50,000,000 at any
time, PROVIDED FURTHER, that in no event shall the Domestic Borrowing
Base comprised of Eligible Inventory of Hexcel and its Domestic
Subsidiaries which are Guarantors exceed 55% of the Domestic Borrowing
Base, MINUS
(c) reserves in respect of Hedging Agreements; MINUS
(d) reserves in respect of Cash Management Services; MINUS
(e) reserves in respect of Permitted Restructuring Expenses; MINUS
(f) reserves in respect of amortization payments in accordance with
Section 9.3; MINUS
(g) other reserves as either the Administrative Agent and/or the
Co-Collateral Agent in its good faith judgment exercised in a
commercially reasonable manner consistent with its customary practice
for comparable asset based transactions shall deem appropriate from
time to time.
In determining the Domestic Borrowing Base from time to time, each of
Administrative Agent and the Co-Collateral Agent may, but shall not be required
to,
-11-
rely upon reports or analyses generated by Hexcel (including, without
limitation, Borrowing Base Reports) and reports or analyses generated by or on
behalf of the Administrative Agent or any Lender or by third party collateral
examination. Notwithstanding anything to the contrary set forth herein, each of
the Administrative Agent and the Co-Collateral Agent may in its good faith
judgment exercised in a commercially reasonable manner consistent with its
customary practice for comparable asset based transactions at any time and from
time to time, (i) decrease the percentage advance rate of Eligible Accounts
included in the Domestic Borrowing Base based upon the results of any collateral
exams or other sources of information which demonstrate in the Administrative
Agent's or the Co-Collateral Agent's reasonable judgment based on due inquiry a
change in the collectability of accounts receivable of Hexcel or any Domestic
Subsidiary and/or other market changes affecting the value of accounts
comprising the Domestic Borrowing Base, and (ii) make more restrictive the
eligibility criteria contained in the definition of Eligible Accounts. In
addition, the Administrative Agent may in its good faith judgment exercised in a
commercially reasonable manner consistent with its customary practice for
comparable asset based transactions, in the event that the Dilution with respect
to the Accounts Receivable of Hexcel and the Guarantors for the period
calculated has increased above 6.1%, reserve against the Domestic Borrowing Base
an amount necessary such that the effective Dilution will be less than or equal
to 6.1%; PROVIDED that in calculating the amount of such Dilution, the
Administrative Agent may take into account credits posted to Accounts Receivable
which are not, in its judgment, truly dilutive. For the avoidance of doubt, (a)
each of the Administrative Agent and the Co-Collateral Agent may impose reserves
and suspend reserves without the consent of the other, and (b) if, at any time,
any reserve is imposed by any of the Administrative Agent and the Co-Collateral
Agent, such reserve shall be imposed without duplication.
In addition, each of the Administrative Agent and the Co-Collateral Agent
may in its good faith judgment exercised in a commercially reasonable manner
consistent with its customary practice for comparable asset based transactions
at any time and from time to time, (i) decrease the percentage advance rate of
Eligible Inventory included in the Domestic Borrowing Base and/or (ii) implement
reserves with respect to Eligible Inventory included in the Domestic Borrowing
Base, in each case, to the extent the information set forth on the Restricted IP
Schedule demonstrates in the Administrative Agent's or the Co-Collateral Agent's
reasonable judgment based on due inquiry an impairment of the ability of the
Administrative Agent to realize on the value of the Eligible Inventory
comprising the Domestic Borrowing Base because the Third Party Restricted IP (as
defined in the Intellectual Property License Agreement) is necessary to the
production, manufacture, completion, sale, or lease of such inventory.
DOMESTIC EXPOSURE. At any time, the sum of the Dollar Equivalent of the
outstanding amount of the Revolving Credit Loans advanced to Hexcel PLUS the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations with respect to
all Letters of Credit issued for the account of Hexcel.
-12-
DOMESTIC FOREIGN HOLDING COMPANY. Any Subsidiary that is created or
organized in or under the laws of the United States of America or any state of
the United States of America or the District of Colombia and whose sole asset
consists of the stock of Foreign Subsidiaries; PROVIDED that such Subsidiary may
have (i) additional assets in an amount not in excess of $100,000 at any one
time and (ii) other additional assets held by such Subsidiary for not in excess
of five (5) Business Days at any one time, so long as (A) no Event of Default
shall have occurred and be continuing, (B) the Administrative Agent shall have
received prior written notice of the transfer of assets to such Subsidiary, and
(C) the transfer to such Subsidiary is permitted pursuant to Sections 8.3 and
8.4(a) hereof.
DOMESTIC GROSS AVAILABILITY. At any time, the lesser of (a) the Domestic
Borrowing Base at such time and (b) the result of (i) Total Commitment at such
time MINUS (ii) the U.K. Exposure at such time MINUS (iii) the Austrian Exposure
at such time MINUS (iv) the German Exposure at such time.
DOMESTIC LENDING OFFICE. Initially, the office of each Lender designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Lender, if any,
located within the United States that will be making or maintaining Dollar Base
Rate Loans.
DOMESTIC SUBSIDIARY. Any Subsidiary which is not a Foreign Subsidiary,
except for a Domestic Foreign Holding Company.
DRAWDOWN DATE. The date on which any Revolving Credit Loan is made or is to
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.7.
EBITDA (CONSOLIDATED). With respect to any fiscal period, an amount equal
to the sum of (a) Net Income of Hexcel and its Subsidiaries for such fiscal
period, PLUS (b) in each case to the extent deducted in the calculation of such
Person's Net Income and without duplication, the sum of (i) depreciation and
amortization for such period, PLUS (ii) income tax expense for such period, PLUS
(iii) Total Interest Expense (Consolidated) paid or accrued during such period,
PLUS (iv) extraordinary losses (including but not limited to asset impairments,
expenses or losses incurred in connection with debt refinancings and the
issuance of equity) and other non-operating expenses, PLUS (v) Permitted
Restructuring Expenses during such period, PLUS (vi) non-cash losses during such
period of non-Subsidiaries and Subsidiaries which are not wholly-owned, PLUS
(vii) the amount of dividends made during such period and dividend expenses and
charges during such period including any accretion of discount upon issuance,
amortization of expenses, accretion of non-cash dividends, and any beneficial
conversion factor with respect to the Convertible Preferred Stock, PLUS (viii)
any noncash expense during such period related to accounting for the grant of
stock options or restricted stock, or similar equity compensation to Hexcel's
and its Subsidiaries' employees or directors LESS (c), in each case to the
extent included in the calculation of such Person's Net Income and without
duplication, the sum of (i) extraordinary gains (including any gains incurred in
connection with debt refinancing) during such period, PLUS (ii) income during
such period of non-Subsidiaries and Subsidiaries which are not wholly-owned to
the extent
-13-
not distributed to Hexcel or any wholly-owned Subsidiary during such period,
PLUS (iii) gains in connection with the sale of property and gains based upon
market valuation, GAAP valuation or sale of securities, in each case during such
period, PLUS (iv) interest and other non-operating income during such period,
all as determined in accordance with GAAP.
ELIGIBLE ACCOUNTS. (a) The aggregate face amount of the accounts receivable
outstanding and owed to any Credit Party as determined in accordance with GAAP
consistently applied and as entered on the books and records of such Credit
Party in the ordinary course of the business operations of such Credit Party,
MINUS (b) without duplication, the aggregate amount of any returns, discounts
(which may, at the Administrative Agent's option, be calculated on the shortest
term offered by such Credit Party), claims with respect to such accounts,
credits, debit memoranda, customer deposits, chargebacks, contra accounts,
allowances or excise taxes of any nature (whether issued, owing, granted or
outstanding), and which satisfy each of the requirements set forth below:
(i) the subject goods have been sold and/or services have
been rendered on an absolute sale basis and on an open account basis to an
account debtor which is not (A) a Governmental Authority or other Person
such that the Assignment of Claims Act (or other similar legal or
regulatory requirement) would apply to the pledge of receivables of such
account debtor, unless the Assignment of Claims Act (or such other legal or
regulatory requirement) has been complied with to the satisfaction of the
Administrative Agent or (B) an Affiliate of such Credit Party;
(ii) a written invoice has been sent to the applicable account
debtor and bears an invoice date contemporaneous with or later than the
date of sale of such goods or rendering of such service;
(iii) the account receivable does not arise from a sale to the
account debtor on a xxxx-and-hold, guaranteed sale, sale-or-return,
sale-on-assignment, sale-on-appraisal, consignment (except in respect of a
final sale) or any other repurchase or return basis;
(iv) the account is not evidenced by chattel paper or an
instrument of any kind, and has not been reduced to judgment;
(v) the account debtor is not insolvent or the subject of any
bankruptcy or insolvency proceedings of any kind;
(vi) (A) with respect to the Domestic Borrowing Base, the
account debtor is ASTA, Bombardier, Embraer-Empresa, Hawker DeHavilland,
Boeing Canada or an entity organized under the laws of one of the United
States whose main office is also located within the United States, or, if
the account debtor is not such an entity organized and located within the
United States (other than ASTA, Bombardier, Embraer-Empresa, Hawker
DeHavilland or Boeing Canada),
-14-
the account is supported by a letter of credit issued or confirmed by a
bank reasonably acceptable to the Administrative Agent or by other credit
enhancements, in each case in form and substance reasonably satisfactory to
the Administrative Agent, (B) with respect to the U.K. Borrowing Base, the
account debtor is Hawker DeHavilland, SAAB or an entity organized under the
laws of the United Kingdom whose main office is also located within the
United Kingdom, or, if the account debtor is not such an entity organized
and located within the United Kingdom (other than Hawker DeHavilland or
SAAB), the account is supported by a letter of credit issued or confirmed
by a bank reasonably acceptable to the Administrative Agent or by other
credit enhancements, in each case in form and substance reasonably
satisfactory to the Administrative Agent, (C) with respect to the Austrian
Borrowing Base, the account debtor is an entity organized under the laws of
the Austria whose main office is also located within Austria, or, if the
account debtor is not such an entity organized and located within Austria,
the account is supported by a letter of credit issued or confirmed by a
bank reasonably acceptable to the Administrative Agent or by other credit
enhancements, in each case in form and substance reasonably satisfactory to
the Administrative Agent and (D) with respect to the German Borrowing Base,
the account debtor is an entity organized under the laws of the Germany
whose main office is also located within Germany, or, if the account debtor
is not such an entity organized and located within Germany, the account is
supported by a letter of credit issued or confirmed by a bank reasonably
acceptable to the Administrative Agent or by other credit enhancements, in
each case in form and substance reasonably satisfactory to the
Administrative Agent;
(vii) the account receivable is a valid and legally enforceable
obligation of the account debtor thereunder, it is not subject to
recoupment, offset (which has been asserted or exercised) (other than
discount for prompt payment or volume discounts given in the ordinary
course of a Borrower's business) or other defense on the part of such
account debtor or to any claim on the part of such account debtor denying
liability thereunder;
(viii) the account receivable is not subject to any Lien of any
kind except for the Lien of the Administrative Agent securing the
obligations of such Credit Party under this Agreement and the Liens
permitted hereunder, and, with respect to accounts receivable included in
the German Borrowing Base, the inventory (and all component parts thereof)
sold in the transaction giving rise to the account receivable has been
fully paid for by Hexcel and/or one of its Subsidiaries;
(ix) the account receivable has not remained outstanding in
whole or in part for more than sixty (60) days after the due date (invoiced
in accordance with the Borrowers' usual and customary terms as in effect on
the Closing Date) or for more than one hundred twenty (120) days from the
date of invoice;
-15-
(x) the account receivable does not arise out of a
transaction (direct or indirect) with an Affiliate of any Credit Party;
(xi) the account receivable is not owing from an account
debtor from whom fifty percent (50%) or more of the dollar amount of all
accounts receivable are deemed ineligible under clause (ix) above;
(xii) the account receivable constitutes Collateral in which
the Administrative Agent has a First Priority Lien securing the Obligations
of such Credit Party under this Agreement;
(xiii) such Credit Party has not made an agreement with the
account debtor to extend the time of payment of the then-outstanding
account receivable;
(xiv) the account debtor is not located in Minnesota (or any
other jurisdiction which adopts a statute or other requirement with respect
to which any Credit Party that obtains business from within such
jurisdiction or is otherwise subject to such jurisdiction's tax law must
file a "Business Activity Report" (or other applicable report) or make any
other required filings in a timely manner in order to enforce its claims in
such jurisdiction's courts or arising under such jurisdiction's laws);
PROVIDED that accounts receivable which would be Eligible Accounts but for
the terms of this clause (xiv) shall nonetheless be deemed to be Eligible
Accounts if such Credit Party has filed a "Business Activity Report" (or
other applicable report) with the applicable state office or is qualified
to do business in such jurisdiction and, at the time the account receivable
was created, was qualified to do business in such jurisdiction or had on
file with the applicable state office a current "Business Activity Report"
(or other applicable report);
(xv) the account receivable is (A) with respect to accounts
receivable included in the Domestic Borrowing Base, denominated in Dollars,
(B) with respect to accounts receivable included in the U.K. Borrowing
Base, denominated in Pounds Sterling or Dollars, (C) with respect to
accounts receivable included in the Austrian Borrowing Base, denominated in
Euros or Dollars, and (D) with respect to accounts receivable included in
the German Borrowing Base, denominated in Euros or Dollars; and
(xvi) the account receivable does not consist of a progress
billing or an excess billing,
PROVIDED HOWEVER, that (A) each of the Administrative Agent and the
Co-Collateral Agent may, in each case in its good faith judgment exercised in a
commercially reasonable manner and consistent with its customary practice for
comparable asset based transactions, (i) exclude particular accounts from the
definition of Eligible Accounts and (ii) impose additional and/or more
restrictive eligibility or valuation criteria than those set forth above as
preconditions for any account to be deemed to be an Eligible Account hereunder,
and (B) an account deemed to be an Eligible Account at
-16-
any one point in time may be excluded by each of the Administrative Agent and
the Co-Collateral Agent, in each case in its good faith judgment exercised in a
commercially reasonable manner and consistent with its customary practice for
comparable asset based transactions, at a future point in time.
ELIGIBLE INVENTORY. Finished goods, raw materials and work in process
inventory of any Credit Party recorded on the books and records of such Credit
Party in the ordinary course of the business operations of such Credit Party
valued on a first in first out basis, which inventory satisfies each of the
following requirements:
(i) is in good and merchantable condition;
(ii) meets all standards imposed by any government agency
having regulatory authority over such goods and/or their use, manufacture
and/or sale;
(iii) has been physically received in (A) with respect to
inventory included in the Domestic Borrowing Base, the continental United
States by Hexcel or a Domestic Subsidiary which is a Guarantor or (B) with
respect to inventory included in the U.K. Borrowing Base, the United
Kingdom by the U.K. Borrower, and, in each case, is located at a facility
owned or leased by such Credit Party, is not in-transit (except in-transit
between facilities owned by Hexcel or a Domestic Subsidiary which is a
Guarantor located in the United States), and is not subject to advance
payment by such Credit Party; PROVIDED that (a) from and after April 30,
2003, no inventory located at a leased facility which is a manufacturing
facility shall be deemed to be "Eligible Inventory" hereunder unless the
landlord and any mortgagee of such facility shall have entered into an
agreement reasonably satisfactory in form and substance to the
Administrative Agent acknowledging the Liens of the Administrative Agent
and granting the Administrative Agent access to such inventory in
accordance with industry standards; and (b) with respect to leased
facilities which are warehouse, distribution or storage facilities, and
which are not manufacturing facilities, (I) the Borrowers will use their
commercially reasonable best efforts to obtain the agreement of any
applicable landlord and mortgagee and (II) from and after April 30, 2003,
in the absence of the delivery of such agreement to the Administrative
Agent, the Administrative Agent shall be entitled to implement a reserve
for up to three (3) months of unpaid rentals with respect to each such
facility;
(iv) is currently held for sale and currently salable in the
normal course of the business operations, or, as respects raw materials or
work in process, is incorporated or is being held to be incorporated in
customer products being produced or provided by any Credit Party;
(v) does not constitute returned (unless suitable for
resale), excess, obsolete, unsaleable, shopworn, seconds, used, damaged or
unfit inventory;
-17-
(vi) has not remained in the possession of such Credit Party
(a) with respect to inventory of Xxxxx-Xxxxxxxx Corporation consisting of
finished goods of a type with no sales in the prior six (6) months, test
rolls and/or packaging, or (b) with respect to any other inventory, for
more than twelve (12) months, or has not otherwise been determined by the
Administrative Agent in its sole discretion to constitute slow-moving
inventory;
(vii) is not subject to a sale to an account debtor on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment or any other repurchase or return basis; PROVIDED that
consigned inventory may be included as Eligible Inventory hereunder (1) at
any time prior to April 30, 2003 and (2) from and after April 30, 2003, to
the extent (x) the aggregate amount of the Domestic Borrowing Base and the
U.K. Borrowing Base comprised of such consigned inventory does not exceed
$750,000 (exclusive of any consigned inventory which meets the Eligible
Inventory criteria set forth in clause (vii)(y) of this definition of
"Eligible Inventory"), or (y) the consignee shall have entered into an
agreement reasonably satisfactory in form and substance to the
Administrative Agent acknowledging the Liens of the Administrative Agent
and granting the Administrative Agent access to such inventory in
accordance with industry standards;
(viii) is not subject to any Lien of any kind except for the
Lien of the Administrative Agent securing Obligations under this Agreement
and other Liens permitted hereunder, and, with respect to the U.K.
Borrowing Base, has been fully paid for by Hexcel or one of its
Subsidiaries;
(ix) has not been sold to any Credit Party; and
(x) constitutes Collateral in which the Administrative Agent
has a First Priority Lien securing the Obligations,
PROVIDED HOWEVER, that (A) each of the Administrative Agent and the
Co-Collateral Agent may, in each case in its good faith judgment exercised in a
commercially reasonable manner and consistent with its customary practice for
comparable asset based transactions, (i) exclude particular items of inventory
from the definition of Eligible Inventory and (ii) impose additional and/or more
restrictive eligibility or valuation criteria than those set forth above as
preconditions for any item of inventory to be deemed to be Eligible Inventory
hereunder, and (B) inventory deemed to be Eligible Inventory at any one point in
time may be excluded by each of the Administrative Agent and the Co-Collateral
Agent, in each case, in its good faith judgment exercised in a commercially
reasonable manner and consistent with its customary practice for comparable
asset based transactions at a future point in time.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by Hexcel or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
-18-
ENVIRONMENTAL LAWS. See Section 6.15(a).
EPA. See Section 6.15(b).
EQUITY ISSUANCE. The sale or issuance by the Borrowers or any of their
Subsidiaries of any of its Capital Stock.
EQUITY OFFERING. The issuance of the Convertible Preferred Stock.
EQUITY OFFERING DOCUMENTS. Collectively, (i) the Stock Purchase Agreement
by and between Hexcel and Affiliates of The Xxxxxxx Sachs Group, Inc., dated
December 18, 2002, and (ii) the Stock Purchase Agreement by and between Hexcel
and Affiliates of Greenbriar Equity Group LLC and Affiliates of Berkshire
Partners LLC, dated December 18, 2002, and any schedules, annexes or exhibits
related thereto and all other agreements, instruments and documents required to
be executed or delivered pursuant to such Equity Offering Document, in each case
as in effect on the date hereof.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
Hexcel under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.
EURO or e. The euro referred to in the Council Regulation (EC) No. 1103/97
dated 17 June 1997 passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of the Economic and Monetary Union.
EURO BASE RATE. The variable annual rate of interest so designated from
time to time by Fleet U.K. as its "BASE RATE" for loans denominated in Euros,
such rate being a reference rate and not necessarily representing the lowest or
best rate being charged to any customer. Changes in the Euro Base Rate resulting
from any changes in Fleet U.K.'s "BASE RATE" for loans denominated in Euros
shall take place immediately without notice or demand of any kind.
EUROCURRENCY. Dollars, Pounds Sterling or Euros.
EUROCURRENCY INTERBANK MARKET. Any lawful recognized market in which
deposits of Dollars, Pounds Sterling and Euros are offered by international
banking units of United States banking institutions and by foreign banking
institutions to each other and in which foreign currency and exchange operations
or eurocurrency funding operations are customarily conducted.
-19-
EUROCURRENCY LENDING OFFICE. Initially, the office of each Lender
designated as such in SCHEDULE 1 hereto; thereafter, such other office of such
Lender, if any, that shall be making or maintaining Eurocurrency Rate Loans.
EUROCURRENCY RATE. (a) With respect to amounts denominated in Euros, the
Euro LIBOR Rate, (b) with respect to amounts denominated in Dollars, the Dollar
LIBOR Rate and (c) with respect to amounts denominated in Pounds Sterling, the
Pounds Sterling LIBOR Rate.
EUROCURRENCY RATE LOANS. Revolving Credit Loans bearing interest calculated
by reference to the Eurocurrency Rate.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurocurrency Rate
Loan, the maximum rate (expressed as a decimal) at which any bank subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "EUROCURRENCY
LIABILITIES" (as that term is used in Regulation D), if such liabilities were
outstanding, or the maximum rate (expressed as a decimal) at which any foreign
bank would be required by the laws of the applicable jurisdiction to maintain
reserves with respect to such Eurocurrency Rate Loan, as applicable. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
EURO EQUIVALENT. On any particular date, with respect to any amount
denominated in Euros, such amount in Euros, and with respect to any amount
denominated in Pounds Sterling or Dollars, the amount (as conclusively
ascertained by the Administrative Agent absent manifest error) of Euros which
could be purchased by the Administrative Agent (in accordance with its normal
banking practices) in the London foreign currency exchange markets with such
amount of Pounds Sterling or Dollars at the spot rate of exchange prevailing at
or about 11:00 a.m. (London time) on such date.
EURO LIBOR RATE. For any Interest Period with respect to a Eurocurrency
Rate Loan denominated in Euros, the rate of interest equal to (a) the rate
determined by the Administrative Agent at which Euro deposits for such Interest
Period are offered based on information presented on Telerate Page 3750 as of
11:00 a.m. (London time) on the second Business Day prior to the first day of
such Interest Period, DIVIDED BY (b) a number equal to 1.00 MINUS the
Eurocurrency Reserve Rate. If the rate described above does not appear on the
Telerate System on any applicable interest determination date, the Euro LIBOR
Rate shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in Euros for a period of time comparable to such Euro
LIBOR Rate Loan which are offered by four (4) major banks in the London
interbank market at approximately 11:00 a.m. (London time) on the second
Business Day prior to the first day of such Interest Period as selected by the
Administrative Agent. The principal London office of each of the four (4) major
London banks will be requested to provide a quotation of its Euro deposit
offered rate. If at least two (2) such quotations are
-20-
provided, the rate for that date will be the arithmetic mean of the quotations.
If fewer than two (2) quotations are provided as requested, the rate for that
date will be determined on the basis of the rates quoted for loans in Euros to
leading European banks for a period of time comparable to such Interest Period
offered by major banks in New York City at approximately 11:00 a.m. (New York
City time) on the second Business Day prior to the first day of such Interest
Period. In the event that the Administrative Agent is unable to obtain any such
quotation as provided above, it will be considered that Euro LIBOR Rate pursuant
to a Eurocurrency Rate Loan denominated in Euros cannot be determined.
EURO NOTICE. See Section 2.10.1.
EVENT OF DEFAULT. See Section 12.1.
EXCESS AVAILABILITY. At any time, (a) the Total Gross Availability at such
time LESS (b) the sum of (i) the Domestic Exposure at such time, PLUS (ii) the
U.K. Exposure at such time, PLUS (iii) the Austrian Exposure at such time, PLUS
(iv) the German Exposure at such time; PROVIDED that the Excess Availability
shall be calculated (x) giving effect to all reserves included under the
Domestic Borrowing Base, the U.K. Borrowing Base, the Austrian Borrowing Base
and the German Borrowing Base and (y) based on all trade accounts payable
arising in the ordinary course of business being paid in the ordinary course of
business, consistent with past practices.
EXCHANGE RATE. On any day, (a) with respect to Pounds Sterling in relation
to U.S. Dollars, the spot rate as quoted by the Fleet as its noon spot rate at
which U.S. Dollars are offered on such day for Pounds Sterling, and (b) with
respect to Euros in relation to U.S. Dollars, the spot rate as quoted by Fleet
as its noon spot rate at which U.S. Dollars are offered on such date for Euros,
(c) with respect to U.S. Dollars in relation to Pounds Sterling, the spot rate
as quoted by Fleet as its noon spot rate at which Pounds Sterling are offered on
such day for U.S. Dollars, (d) with respect to U.S. Dollars in relation to
Euros, the spot rate as quoted by Fleet at its noon spot rate at which Euros are
offered on such date for U.S. Dollars, (e) with respect to Euros in relation to
Pounds Sterling, the spot rate as quoted by Fleet as its noon spot rate at which
Pounds Sterling are offered on such day for Euros and (f) with respect to Pounds
Sterling in relation to Euros, the spot rate as quoted by Fleet as its noon spot
rate at which Euros are offered on such day for Pounds Sterling.
EXISTING CREDIT AGREEMENT. The Second Amended and Restated Credit, dated as
of September 15, 1998, by and among Hexcel and certain of its subsidiaries, the
lenders from time to time a party thereto, Citibank N.A., as documentation
agent, and Credit Suisse First Boston, as lead arranger and administrative agent
for the lenders, as amended and in effect from time to time.
FCC. Fleet Capital Corporation.
FCC CONCENTRATION ACCOUNT. See Section 7.17.1.
-21-
FEE LETTER. The fee letter, dated on or prior to the Closing Date, among
the Borrowers, the Administrative Agent and the Lead Arranger, as amended and in
effect from time to time.
FEES. Collectively, the Commitment Fee, the Administrative Agent's Fee, the
Fronting Fee, the Letter of Credit Fee and the Closing Fee.
FINANCIAL AFFILIATE. A Subsidiary of the bank holding company controlling
any Lender, which Subsidiary is engaging in any of the activities permitted by
Section 4(e) of the Bank Holding Company Act of 1956 (12 U.S.C. Section 1843).
FIRST PRIORITY. With respect to any Lien created or purported to be created
in any Collateral hereunder or pursuant to any Loan Document, that such Lien is
the most senior Lien to which such Collateral is subject.
FIXED CHARGE COVERAGE RATIO. As of any date of determination, the ratio of
(a) an amount equal to the result of (i) EBITDA (Consolidated) for the
applicable Reference Period, LESS (ii) Capital Expenditures made during such
Reference Period LESS (iii) cash taxes on income paid during such Reference
Period PLUS (iv) to the extent not included in EBITDA (Consolidated) for such
period, cash dividends received by Hexcel and its Subsidiaries during such
Reference Period in respect of equity interests in joint ventures, but excluding
dividends arising from or paid out of extraordinary, non-recurring gains or
transactions of such joint venture to (b) Total Debt Service (Consolidated) for
such Reference Period.
FLEET. Fleet National Bank, a national banking association.
FLEET U.K. Fleet National Bank, London U.K. branch, trading as FleetBoston
Financial.
FOREIGN BORROWER. As defined in the preamble hereto.
FOREIGN SECURITY DOCUMENTS. Collectively, the U.K. Security Documents, the
Austrian Security Documents and the German Security Documents.
FOREIGN SUBSIDIARY. Any Subsidiary that is created or organized in or under
the laws of a jurisdiction other than the United States of America or any state
of the United States of America or the District of Columbia.
FOREIGN SUBSIDIARY BORROWING BASE. As at any date of determination, the sum
of:
(a) 75% of the then most recently reported net book value of all
inventory owned by Foreign Subsidiaries that are Restricted
Subsidiaries (under and as defined in the Senior Secured Note
Documents) as of the end of the most recent fiscal quarter
preceding such date; provided that the amount of this clause (a)
shall not exceed 55% of the total Foreign Subsidiary Borrowing
Base on any date of calculation; PLUS
-22-
(b) 80% of the face amount of all accounts receivable owned by
Foreign Subsidiaries as of the end of the most recent fiscal
quarter preceding such date that were not more than 180 days past
due.
FOREIGN SUBSIDIARY INDEBTEDNESS. Indebtedness incurred by Foreign
Subsidiaries of Hexcel that are Restricted Subsidiaries (under and as defined in
the Senior Secured Note Documents) to finance the working capital requirements
of such Subsidiaries.
FRENCH FACILITY. The factoring facility to be provided to Hexcel Composites
S.A., and Hexcel Fabrics S.A. by GE Factofrance pursuant to the terms of the
French Facility Documents in an aggregate principal amount to not exceed Euro
25,000,000.
FRENCH FACILITY DOCUMENTS. Collectively, the agreements, instruments and
documents required to be executed or delivered pursuant to the French Facility,
in each case on terms and conditions approved by the Administrative Agent.
FRENCH PLEDGE. The French Pledge Agreement, dated or to be dated on or
prior to the Closing Date, by and between Hexcel and the Administrative Agent
(for the benefit of the Lenders and the other parties described therein) in
respect of the Capital Stock of Hexcel S.A.
FRONTED LOANS. That portion of the Revolving Credit Loans which is funded
by the Fronting Bank and has not been funded by another Lender.
FRONTING BANK. With respect to Base Rate Loans advanced to the U.K.
Borrower, the Austrian Borrower or the German Borrower, Fleet U.K., and in all
other cases, FCC, as fronting bank and any other Person who replaces FCC or
Fleet U.K., as the case may be, as Fronting Bank pursuant to the provisions of
Section 2.11.3 hereof, provided, for purposes of this Credit Agreement, in the
event the Fronting Bank is also a Lender.
FRONTING EXPOSURE. The Dollar Equivalent of the aggregate amount of
Revolving Credit Loans advanced to the Foreign Borrowers by the Fronting Bank
pursuant to Section 2.1.2 (with each Lender agreeing to participate in the risk
associated with such Multicurrency Loan in accordance with Section 2.11).
FRONTING FEE. See Section 3.6.
GAAP OR GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in Section
9, whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board, the
Securities and Exchange Commission and the Emerging Issues Task Force and their
predecessors, in effect for the fiscal period ended on the Balance Sheet Date,
and (ii) to the extent consistent with such principles, the accounting practice
of Hexcel reflected in its financial statements for the fiscal period ended on
the Balance Sheet Date, and (b) when used in general, other than as provided
above, means principles that are (i) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board, the Securities and
Exchange
-23-
Commission and the Emerging Issues Task Force and their predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of Hexcel adopting the same principles, PROVIDED that in each case
referred to in this definition of "GAAP" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in GAAP) as to financial statements in which such principles have been properly
applied.
GERMAN BORROWER. As defined in the preamble hereto.
GERMAN BORROWING BASE. At the relevant time of reference thereto, an amount
determined by the Administrative Agent by reference to the most recent Borrowing
Base Report delivered to the Administrative Agent and the Lenders pursuant to
subsection 7.4(f) which is equal to the lesser of the German Sublimit and the
Dollar Equivalent sum of:
(a) 85% of Eligible Accounts of the German Borrower; MINUS
(b) reserves in respect of (i) nine percent (9%) collection reserve, (ii)
payroll, employee benefits and payroll taxes for a one (1) month
period, and (iii) accounts payable in respect of third-party material
purchases; MINUS
(c) reserves in respect of the German Overdraft Facility; MINUS
(d) other reserves as each of the Administrative Agent and/or the
Co-Collateral Agent in its good faith judgment exercised in a
commercially reasonable manner consistent with its customary practice
for comparable asset based transactions shall deem appropriate from
time to time.
The German Borrowing Base shall be calculated in Dollars at the Exchange
Rate. In determining the German Borrowing Base from time to time, each of the
Administrative Agent or the Co-Collateral Agent may, but shall not be required
to, rely upon reports or analyses generated by the German Borrower (including,
without limitation, Borrowing Base Reports) and reports or analyses generated by
or on behalf of the Administrative Agent or any Lender or by third party
collateral examination. Notwithstanding anything to the contrary set forth
herein, each of the Administrative Agent and the Co-Collateral Agent may in its
good faith judgment exercised in a commercially reasonable manner consistent
with its customary practice for comparable asset based transactions at any time
and from time to time, (i) decrease the percentage advance rate of Eligible
Accounts included in the German Borrowing Base based upon the results of any
collateral exams or other sources of information which demonstrate in the
Administrative Agent's or the Co-Collateral Agent's reasonable judgment based on
due inquiry a change in the collectability of accounts receivable of the German
Borrower and/or other market changes affecting the value of accounts comprising
the German Borrowing Base, and (ii) make more restrictive the eligibility
criteria contained in the definition of Eligible Accounts. In addition, the
Administrative Agent may in its good faith judgment exercised in a commercially
reasonable manner consistent with its
-24-
customary practice for comparable asset based transactions, in the event that
the Dilution with respect to the Accounts Receivable of the German Borrower for
the period calculated has increased above 5%, reserve against the German
Borrowing Base an amount necessary such that the effective Dilution will be less
than or equal to 5%; PROVIDED that in calculating the amount of such Dilution,
the Administrative Agent may take into account credits posted to Accounts
Receivable which are not, in its judgment, truly dilutive. For the avoidance of
doubt, (a) each of the Administrative Agent and the Co-Collateral Agent may
impose reserves and suspend reserves without the consent of the other, and (b)
if, at any time, any reserve is imposed by any of the Administrative Agent and
the Co-Collateral Agent, such reserve shall be imposed without duplication.
GERMAN EXPOSURE. At any time, the sum of the Dollar Equivalent of the
outstanding amount of all Revolving Credit Loans advanced to the German Borrower
PLUS the Maximum Drawing Amount and all Unpaid Reimbursement Obligations with
respect to Letters of Credit issued for the account of the German Borrower.
GERMAN OVERDRAFT FACILITY. The credit facility to be provided by Fleet
U.K., as Fronting Bank, to the German Borrower in an aggregate amount not to
exceed the German Overdraft Facility Sublimit pursuant to which Fleet U.K., as
Fronting Bank, may advance Base Rate Loans to the German Borrower pursuant to
Section 2.1.2.
GERMAN OVERDRAFT FACILITY SUBLIMIT. The amount selected by the German
Borrower from time to time with ten (10) days prior written notice to the
Fronting Bank and the Administrative Agent and with the approval of the Fronting
Bank and the Administrative Agent of such amount; PROVIDED that the German
Borrower shall not change such amount more than one (1) time per fiscal quarter;
PROVIDED FURTHER that (x) the German Overdraft Facility Sublimit shall not at
any time exceed the Euro Equivalent of $1,000,000 and (y) the German Overdraft
Facility Sublimit as of the Closing Date is $0.
GERMAN SECURITY DOCUMENTS. Collectively, the Global Security Assignment
Agreement, dated or to be dated on or prior to the Closing Date, between the
German Borrower and the Administrative Agent, and the Account Pledge Agreement,
dated or to be dated on or prior to the Closing Date, between the German
Borrower and the Administrative Agent, each in form and substance satisfactory
to the Administrative Agent, and all other instruments, agreements and documents
required to be executed or delivered pursuant to any German Security Document.
GERMAN SUBLIMIT. $5,000,000 MINUS the German Overdraft Facility Sublimit.
GOVERNANCE AGREEMENT. The Amended and Restated Governance Agreement, dated
as of March 19, 2003, among Hexcel, LXH, L.L.C., LXH II, L.L.C., GS Capital
Partners 2000, L.P., GS Capital Partners 2000 Offshore, L.P., GS Capital
Partners 2000 Employee Fund, L.P., GS Capital Partners 2000 GmbH & Co.
Beteiligungs KG and Stone Street Fund 2000, L.P., as the same may be amended,
modified, restated or supplemented from time to time.
-25-
GOVERNING DOCUMENTS. With respect to any Person, its certificate or
articles of incorporation, its by-laws and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its Capital Stock, as
applicable in each relevant jurisdiction.
GOVERNMENTAL AUTHORITY. Any foreign, federal, state, regional, local,
municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court or any other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by Hexcel or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
GUARANTIES. Collectively, (a) the Guaranties made by the Guarantors in
favor of the Lenders and the Administrative Agent pursuant to Section 5 hereof,
and (b) any additional Guaranty made pursuant to by Section 7.15 hereof
(including, without limitation, the execution of an Instrument of Assumption and
Joinder) made by any applicable Guarantor in favor of the Lenders and the
Administrative Agent, and in each case pursuant to which each Guarantor
guaranties to the Lenders and the Administrative Agent the payment and
performance of the Obligations and in form and substance satisfactory to the
Lenders and the Administrative Agent.
GUARANTORS. Collectively, (a) Hexcel (with respect to the Obligations of
the other Borrowers) and (b) each Subsidiary Guarantor. Each such Person shall
be a party to a Guaranty.
HAZARDOUS SUBSTANCES. See Section 6.15(b).
HEDGING AGREEMENT. Any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate futures contract,
interest rate option agreement, interest rate exchange agreement, forward
currency exchange agreement, forward rate currency agreement or other similar
agreement or arrangement to which any Borrower or any of its Subsidiaries and
any Lender is a party, designed to protect the applicable Borrower or any of its
Subsidiaries against fluctuations in interest rates, exchange rates or forward
rates.
HEXCEL. As defined in the preamble hereto.
HEXCEL HOLDING (U.K.) LIMITED. Hexcel Holding (U.K.) Limited, a private
company limited by shares organized under the laws of England and Wales with
registered number 03069887.
HEXCEL S.A. Hexcel S.A., a French SOCIETE ANONYME with capital of EUR
3,135,140, whose registered office is at "Le President", 3 avenue Condorcet,
00000 Xxxxxxxxxxxx,
-00-
Xxxxxx, registered with the Commercial and Companies Registry of Xxxxx under the
number 955 508 007.
INDEBTEDNESS. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments,
(c) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person,
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business and payable in
accordance with customary practice or which are being contested in good
faith),
(e) every obligation of such Person under any Capitalized
Lease,
(f) every obligation of such Person (an "EQUITY RELATED
PURCHASE OBLIGATION") to purchase, redeem, retire or otherwise acquire for
value any shares of Capital Stock issued by such Person or any rights
measured by the value of such Capital Stock,
(g) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and
similar agreements), the value of which is dependent upon interest rates,
currency exchange rates, commodities or other indices (a "DERIVATIVE
CONTRACT"),
(h) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result of
such Person's ownership interest in or other relationship with such entity,
except to the extent that the terms of such Indebtedness provide that such
Person is not liable therefor and such terms are enforceable under
applicable law, and
(i) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(a) through (j) (the "PRIMARY OBLIGATION") of another Person (the "PRIMARY
OBLIGOR"), in any manner, whether directly or indirectly, and including,
without limitation, any
-27-
obligation of such Person (i) to purchase or pay (or advance or supply
funds for the purchase of) any security for the payment of such primary
obligation, (ii) to purchase property, securities or services for the
purpose of assuring the payment of such primary obligation, or (iii) to
maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such primary obligation.
The "AMOUNT" or "PRINCIPAL AMOUNT" of any Indebtedness at any time of
determination represented by (v) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (w) any
Capitalized Lease shall be the principal component of the aggregate of the
rentals obligation under such Capitalized Lease payable over the term thereof
that is not subject to termination by the lessee, (x) any derivative contract
shall be the maximum amount of any termination or loss payment required to be
paid by such Person if such derivative contract were, at the time of
determination, to be terminated by reason of any event of default or early
termination event thereunder, whether or not such event of default or early
termination event has in fact occurred, (y) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price and (z) any guaranty or other contingent liability referred to
in clause (i) shall be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such guaranty or other contingent
obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
INELIGIBLE SECURITIES. Securities which may not be underwritten or dealt in
by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
INSOLVENCY EVENT. Any of the following events or circumstances: (i) any
Borrower organized in the United Kingdom shall be deemed unable to pay its debts
within the meaning of section 123(1) (a), (b), or (2) of the Xxxxxxxxxx Xxx 0000
(Xxxxxx Xxxxxxx) or shall otherwise become insolvent or stop or suspend making
payments (whether of principal or interest) with respect to all or any class of
its Indebtedness or announce an intention to do so, (ii) any petition shall be
presented or other step taken for the purpose of the appointment of an
administrator or the winding up of any such Borrower (not being, in the case of
a winding up, a petition which such Person can demonstrate to the reasonable
satisfaction of the Administrative Agent, by providing an opinion of leading
counsel to that effect, is frivolous, vexatious or an abuse of the process of
the court or relates to a claim to which such Person has a good defense and
which is being vigorously contested by such Person) or an order shall be made or
resolution passed for the winding up of any such Guarantor, Borrower, or any of
its Subsidiaries or a notice shall be issued by convening a meeting for the
purpose of passing any such resolution (except for the purpose of a solvent
amalgamation or reconstitution), or (iii) any steps shall be taken, or
negotiations commenced by any such
-28-
Borrower or by any of their respective creditors with a view to proposing any
kind of composition, compromise or arrangement involving such Person and any of
its creditors or for the presentation of a petition for the appointment of an
administrator, or (iv) any event giving rise to insolvency proceedings with
respect to any Borrower in any jurisdiction, including under the German
Insolvency Act (Insolvenzordnung).
INTELLECTUAL PROPERTY LICENSE AGREEMENT. The License Agreement, dated the
date hereof, between Hexcel, its Domestic Subsidiaries, and the Administrative
Agent which, among other things, grants, to the extent provided therein, a
royalty-free, perpetual license (with the right to sublicense) of all
intellectual property of Hexcel and its Domestic Subsidiaries (including,
without limitation, patents, trade secrets, trademarks, copyrights, books and
records, computer systems and data thereon) and access to certain real property,
plant and equipment, in each case, to the extent necessary to enable the
Administrative Agent and the Lenders to realize on the Collateral, provided that
such license shall not conflict with the rights of third parties.
INSTRUMENT OF ASSUMPTION AND JOINDER. An Instrument of Assumption and
Joinder substantially in the form of EXHIBIT F hereto, pursuant to which
Subsidiaries of the Borrower become parties to this Credit Agreement as
Guarantors, as contemplated by Section 7.15(a).
INTERCREDITOR AGREEMENT. That certain Intercreditor Agreement, dated the
date hereof, by and among the Administrative Agent, Fleet Capital Corporation,
as intercreditor agent and security trustee, Xxxxx Fargo Bank Minnesota,
National Association, as trustee under the Senior Secured Note Indenture, and
HSBC Bank USA, as collateral agent.
INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of the
calendar month with respect to interest accrued during such calendar month,
including, without limitation, the calendar month which includes the Drawdown
Date of such Base Rate Loan, as the case may be; and (b) as to any Eurocurrency
Rate Loan in respect of which the Interest Period is (i) one (1) month, the last
day of such Interest Period and (ii) more than one (1) month, the last day of
each one-month period commencing on the date that is one (1) month from the
first day of such Interest Period and, in addition, the last day of such
Interest Period.
INTEREST PERIOD. With respect to each Revolving Credit Loan, (a) initially,
the period commencing on the Drawdown Date of such Revolving Credit Loan and
ending on the last day of one of the periods set forth below, as selected by the
Borrowers in a Loan Request or as otherwise required by the terms of this Credit
Agreement (i) for any Base Rate Loan, the last day of the calendar month; and
(ii) for any Eurocurrency Rate Loan, one (1), two (2), three (3) or six (6)
months; and (b) thereafter, each period commencing on the last day of the then
ending Interest Period applicable to such Revolving Credit Loan and ending on
the last day of one of the periods set forth above, as selected by the Borrowers
in a Conversion Request; PROVIDED that all of the foregoing provisions relating
to Interest Periods are subject to the following:
-29-
(A) if any Interest Period with respect to a Eurocurrency
Rate Loan would otherwise end on a day that is not a Business Day, that
Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end
on the immediately preceding Business Day;
(B) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period shall
end on the next succeeding Business Day;
(C) if the Borrowers shall fail to give notice as provided in
Section 2.7, (i) for Revolving Credit Loans denominated in Dollars, the
applicable Borrower shall be deemed to have requested a conversion of the
affected Eurocurrency Rate Loan to a Base Rate Loan and the continuance of
all Base Rate Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto, and (ii) subject to Section 2.1.2,
for Revolving Credit Loans denominated in Pounds Sterling or Euros made to
the U.K. Borrower, the Austrian Borrower or the German Borrower, as the
case may be, such Borrower shall be deemed to have requested a conversion
or continuance, as the case may be, of the affected Eurocurrency Rate Loan
to a Eurocurrency Rate Loan having a one (1) month Interest Period on the
last day of the then current Interest Period with respect thereto;
(D) subject to paragraph (A) above, any Interest Period
relating to any Eurocurrency Rate Loan that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(E) any Interest Period that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date.
INTERIM CONCENTRATION ACCOUNT. See Section 7.17.1.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or
-30-
otherwise, except that accrued interest included as provided in the foregoing
clause (b) may be deducted when paid; and (e) there shall not be deducted from
the aggregate amount of Investments any decrease in the value thereof.
ISSUING BANK. With respect to Letters of Credit issued for the account of
any of Hexcel, the Austrian Borrower or the German Borrower, Fleet and, with
respect to Letters of Credit issued for the account of the U.K. Borrower, Fleet
U.K.
LC GUARANTY. A guaranty or indemnity in form and substance satisfactory to
the Administrative Agent and the Issuing Bank pursuant to which the
Administrative Agent shall guarantee the payment or performance by each of the
Borrowers of its reimbursement obligations in respect of Letters of Credit.
LEAD ARRANGER. Fleet Securities, Inc.
LENDER AFFILIATE. (a) With respect to any Lender, (i) an Affiliate of such
Lender or (ii) any entity (whether a corporation, partnership, limited liability
company, trust or legal entity) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by such Lender or
an Affiliate of such Lender and (b) with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other entity
(whether a corporation, partnership, limited liability company, trust or other
legal entity) that is a fund that invests in bank loans and similar extensions
of credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
LENDERS. FCC and the other lending institutions listed on SCHEDULE 1 hereto
and any other Person who becomes an assignee of any rights and obligations of a
Lender pursuant to Section 14 and, unless the context otherwise requires, the
Fronting Bank, the Issuing Bank, the Swing Line Lender and, with respect to the
Overdraft Facility, Fleet U.K.
LETTER OF CREDIT. See Section 3.1.1.
LETTER OF CREDIT APPLICATION. See Section 3.1.1.
LETTER OF CREDIT FEE. See Section 3.6.
LETTER OF CREDIT PARTICIPATION. See Section 3.1.4.
LEVERAGE RATIO. As at any date of determination, the ratio of (a) Total
Funded Debt (Consolidated) outstanding on such date to (b) EBITDA (Consolidated)
for the Reference Period ending on such date.
LIEN. Any mortgage, deed of trust, security interest, pledge,
hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien
(statutory, judgment or otherwise), or other security agreement or preferential
arrangement of any kind or
-31-
nature whatsoever (including any conditional sale or other title retention
agreement, any Capitalized Lease, any financing lease involving substantially
the same economic effect as any of the foregoing and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
LOAN DOCUMENTS. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the LC Guaranty, the
Security Documents, the Accountant Release Letter and the Fee Letter.
LOAN REQUEST. See Section 2.6.
LOCAL ACCOUNT. See Section 7.17.1.
MANDATORY COSTS. With respect to any Lender or the Administrative Agent,
any cost of compliance by such Lender or the Administrative Agent with (a) the
requirements of the Bank of England and/or the Financial Services Authority (or,
in either case, any other authority which replaces all or any of its functions)
and/or (b) the requirements of the European Central Bank, determined in
accordance with SCHEDULE 2 hereto.
MATERIAL ADVERSE EFFECT. With respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding):
(a) a material adverse effect on the business, properties, condition
(financial or otherwise), assets, operations or income of any Borrower,
individually or the Borrowers and their Subsidiaries, taken as a whole;
(b) a material adverse effect on the ability of the Credit Parties,
individually and taken as a whole, to perform any of their respective
Obligations under any of the Loan Documents to which it is a party; or
(c) any material impairment of the validity, binding effect or
enforceability of this Credit Agreement or any of the other Loan Documents, any
impairment of the rights, remedies or benefits available to the Administrative
Agent or any Lender under any Loan Document.
MATERIAL DOMESTIC SUBSIDIARY. As at any date of determination, any Domestic
Subsidiary of the Borrowers with respect to which any of the following criteria
has been met: (a) the aggregate revenue generated by such Domestic Subsidiary
equals or exceeds an amount equal to $15,000,000 for the period of four (4)
consecutive fiscal quarters most recently ended, (b) whose assets at any time
exceed $5,000,000 in aggregate book value, or (c) which has guaranteed any other
Indebtedness of Hexcel or any of its Subsidiaries; PROVIDED that (x) any
Domestic Subsidiary whose only asset is the equity interests of a joint-venture
shall not be subject to the criteria contained in clause (a) hereof, and (y) the
fair market value of such equity interests in the joint venture shall be the
carrying value of such equity interests on the books of Hexcel (determined in
accordance with GAAP).
-32-
A Domestic Subsidiary that is a Material Domestic Subsidiary at any date
pursuant to this definition shall continue to be or be deemed to be a Material
Domestic Subsidiary at all times thereafter, without regard to the results of
any future re-determination pursuant to this definition.
MATERIAL FOREIGN SUBSIDIARY. As at any date of determination, any Foreign
Subsidiary of the Borrowers with respect to which any of the following criteria
has been met: (a) the aggregate revenue generated by such Foreign Subsidiary
equals or exceeds an amount equal to $15,000,000 for the period of four (4)
consecutive fiscal quarters most recently ended, (b) whose assets at any time
exceed $5,000,000 in aggregate book value, or (c) which has had its Capital
Stock pledged to the holder of any other Indebtedness of Hexcel or any of its
Subsidiaries; PROVIDED that (x) any Foreign Subsidiary whose only asset is the
equity interests of a joint-venture shall not be subject to the criteria
contained in clause (a) hereof, and (y) the fair market value of such equity
interests in the joint venture shall be the carrying value of such equity
interests on the books of Hexcel (determined in accordance with GAAP). A Foreign
Subsidiary that is a Material Foreign Subsidiary at any date pursuant to this
definition shall continue to be or be deemed to be a Material Foreign Subsidiary
at all times thereafter, without regard to the results of any future
re-determination pursuant to this definition.
MATURITY DATE. March 31, 2008.
MAXIMUM DRAWING AMOUNT. The Dollar Equivalent of the maximum aggregate
amount that the beneficiaries may at any time draw under outstanding Letters of
Credit, as such aggregate amount may be reduced from time to time pursuant to
the terms of the Letters of Credit.
MINIMUM RATIO. See Section 9.3.
XXXXX'X. Xxxxx'x Investors Services, Inc.
MULTICURRENCY LOANS. Revolving Credit Loans made or to be made by the
Fronting Bank to the Foreign Borrowers pursuant to Section 2.1.2 and Section
2.11 hereof.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by Hexcel or any ERISA Affiliate.
NET INCOME (OR LOSS) (CONSOLIDATED). The consolidated net income (or loss)
of Hexcel and its Subsidiaries, after deduction of all expenses, taxes
(including franchise and foreign withholding taxes and any state single business
or unitary tax of any Foreign Subsidiary), and other proper charges, determined
in accordance with GAAP.
OBLIGATIONS. All indebtedness, obligations and liabilities of the Borrowers
and their Subsidiaries to any of the Lenders, the Administrative Agent, the
Fronting Bank or the Issuing Bank, individually or collectively, existing on the
date of this Credit Agreement or arising thereafter, direct or indirect, joint
or several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured,
-33-
arising by contract, operation of law or otherwise, arising or incurred under
this Credit Agreement or any of the other Loan Documents or any Overdraft
Facility or any Hedging Agreements or any Cash Management Services or in respect
of any of the Revolving Credit Loans made or Reimbursement Obligations incurred
or any of the Revolving Credit Notes, Letter of Credit Applications, Letters of
Credit or other instruments at any time evidencing any thereof. Notwithstanding
the foregoing, it is expressly agreed that the obligations of each of the
Austrian Borrower, the German Borrower and the U.K. Borrower hereunder and under
the other Loan Documents shall be limited to all indebtedness, obligations and
liabilities arising or incurred only in respect of Revolving Credit Loans or
Letters of Credit issued for the account of the Austrian Borrower, the German
Borrower and the U.K. Borrower, respectively, and all overdraft obligations,
fees, costs, charges, expenses and other obligations with respect to such
Revolving Credit Loans or Letters of Credit, from time to time owing to the
Administrative Agent and the Lenders.
OC NOTICE. See Section 2.10.1.
ORDERLY LIQUIDATION VALUE. With respect to any inventory, the net appraised
orderly liquidation value of such inventory, as determined from time to time by
the Administrative Agent by reference to the most recent appraisal of the
inventory of the Borrowers performed by an appraisal firm acceptable to the
Administrative Agent. On the Closing Date, the Orderly Liquidation Value shall
be equal to thirty-four percent (34%) of Eligible Inventory of Hexcel and the
Material Domestic Subsidiaries that are Guarantors.
OTHER LABOR REGULATIONS. See Section 7.13.
OUTSTANDING. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination, with respect to
Letters of Credit, any outstanding Letters of Credit and with respect to
Reimbursement Obligations, the Unpaid Reimbursement Obligations.
OVERDRAFT FACILITY. Each of the U.K. Overdraft Facility, the Austrian
Overdraft Facility and the German Overdraft Facility.
OVERDRAFT FACILITY SUBLIMIT. Each of the U.K. Overdraft Facility Sublimit,
the Austrian Overdraft Facility Sublimit and the German Overdraft Facility
Sublimit.
OVERNIGHT RATE. For any day (a) as to Revolving Credit Loans denominated in
Dollars, the weighted average interest rate paid by the Administrative Agent for
federal funds acquired by the Administrative Agent, and (b) as to Revolving
Credit Loans denominated in Pounds Sterling or Euros, the rate of interest per
annum at which overnight deposits in Pounds Sterling or Euros, as the case may
be, in an amount approximately equal to the amount with respect to which such
rate is being determined, would be offered for such day by the Administrative
Agent to major banks in the London interbank market.
-34-
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITTED LIENS. Liens permitted by Section 8.2.
PERMITTED RESTRUCTURING EXPENSES. Permitted business consolidation and
restructuring expenses incurred by Hexcel during the 2003 fiscal year and
approved by the Administrative Agent; PROVIDED that during each month a reserve
to the Domestic Borrowing Base equal to the amount of the cash restructuring
charges projected to be incurred in the upcoming month shall be established by
the Administrative Agent, and such reserve shall be maintained until the end of
the following month; PROVIDED HOWEVER, that such Permitted Restructuring
Expenses shall not exceed an aggregate amount of $7,500,000 during the 2003
calendar year.
PERSON. Any individual, corporation, limited liability company partnership,
limited liability partnership, trust, other unincorporated association,
business, or other legal entity, and any Governmental Authority.
POUNDS STERLING or L . The lawful currency of the United Kingdom of Great
Britain and Northern Ireland.
POUNDS STERLING BASE RATE. The variable annual rate of interest so
designated from time to time by Fleet U.K. as its "BASE RATE" for loans
denominated in Pounds Sterling, such rate being a reference rate and not
necessarily representing the lowest or best rate being charged to any customer.
Changes in the Pounds Sterling Base Rate resulting from any changes in Fleet
U.K.'s "BASE RATE" for loans denominated in Pounds Sterling shall take place
immediately without notice or demand of any kind.
POUNDS STERLING EQUIVALENT. On any particular date, with respect to any
amount denominated in Pounds Sterling, such amount in Pounds Sterling, and with
respect to any amount denominated in Dollars or Euros, the amount (as
conclusively ascertained by the Administrative Agent absent manifest error) of
Pounds Sterling which could be purchased by the Administrative Agent (in
accordance with its normal banking practices) in the London foreign currency
deposit markets with such amount of Dollars or Euros at the spot rate of
exchange prevailing at or about 11:00 a.m. (London time) on such date.
POUNDS STERLING LIBOR RATE. For any Interest Period with respect to a
Eurocurrency Rate Loan denominated in Pounds Sterling, the rate of interest
equal to (a) the rate determined by the Administrative Agent at which Pounds
Sterling deposits for such Interest Period are offered based on information
presented on Telerate Page 3750 as of 11:00 a.m. (Atlanta, Georgia time) on the
second Business Day prior to the first day of such Interest Period, DIVIDED BY
(b) a number equal to 1.00 MINUS the Eurocurrency Reserve Rate. If the rate
described above does not appear on the Telerate System on any applicable
interest determination date, the Pounds Sterling LIBOR Rate shall be the rate
(rounded upward, if necessary, to the nearest one hundred-thousandth of a
percentage point), determined on the basis of the offered rates for deposits in
Pounds Sterling for a
-35-
period of time comparable to such Pounds Sterling LIBOR Rate Loan which are
offered by four (4) major banks in the London interbank market at approximately
11:00 a.m. (Atlanta, Georgia time) on the second Business Day prior to the first
day of such Interest Period as selected by the Administrative Agent. The
principal London office of each of the four (4) major London banks will be
requested to provide a quotation of its Pounds Sterling deposit offered rate. If
at least two (2) such quotations are provided, the rate for that date will be
the arithmetic mean of the quotations. If fewer than two (2) quotations are
provided as requested, the rate for that date will be determined on the basis of
the rates quoted for loans in Pounds Sterling to leading European banks for a
period of time comparable to such Interest Period offered by major banks in New
York City at approximately 11:00 a.m. (New York City time) on the second
Business Day prior to the first day of such Interest Period. In the event that
the Administrative Agent is unable to obtain any such quotation as provided
above, it will be considered that Pounds Sterling LIBOR Rate pursuant to a
Eurocurrency Rate Loan denominated in Pounds Sterling cannot be determined.
PREFERENTIAL INDEBTEDNESS. Indebtedness of the U.K. Borrower which would,
pursuant to the provisions of any law relating to liquidation, bankruptcy,
insolvency or creditors' rights generally, be paid in priority or preference to
other Indebtedness in a winding up, dissolution, administration, insolvency or
other similar process of law in any jurisdiction, including without limitation
Indebtedness of the types listed in Schedule 6 to the Insolvency Xxx 0000 of the
U.K. (or any statutory re-enactment or modification thereof pursuant to which
the payment of certain obligations of a Person are given statutory preference
over the payment of other such obligations). The Borrower will use its
reasonable best efforts to estimate such Preferred Indebtedness as of the
Closing Date, as approved by the Administrative Agent.
RATE ADJUSTMENT PERIOD. As defined in the definition of "APPLICABLE
MARGIN".
RATE OF EXCHANGE. See Section 2.10.2.
RCRA. See Section 6.15(a).
REAL ESTATE. All real property at any time owned or leased (as lessee or
sublessee) by any of the Borrowers or any of their Subsidiaries.
RECORD. The grid attached to a Revolving Credit Note, or the continuation
of such grid, or any other similar record, including computer records,
maintained by any Lender with respect to any Revolving Credit Loan referred to
in such Revolving Credit Note.
REFERENCE PERIOD. As of any date of determination, the period of four (4)
consecutive fiscal quarters of the Borrowers and their Subsidiaries ending on
such date, or if such date is not a fiscal quarter end date, the period of four
(4) consecutive fiscal quarters most recently ended (in each case treated as a
single accounting period).
REGISTER. See Section 14.3.
-36-
REIMBURSEMENT OBLIGATION. With respect to any Borrower, such Borrower's
obligation to reimburse the Issuing Bank and/or the Administrative Agent and/or
the Lenders on account of any drawing under any Letter of Credit as provided in
Section 3.2.
RELEASE. See Section 6.15(c).
REQUIRED LENDERS. As of any date, the Lenders holding an aggregate of at
least fifty-one percent (51%) of the Total Commitment (or if the Total
Commitment is terminated, the outstanding principal amount of the Revolving
Credit Loans, Letter of Credit Participations in Unpaid Reimbursement
Obligations and participating interests in the risk relating to outstanding
Letters of Credit and Fronted Loans) on such date.
RESTRICTED IP SCHEDULE. Schedule 4.2 to the Intellectual Property License
Agreement, listing all Third Party Restricted IP (as defined therein).
RESTRICTED PAYMENT. In relation to the Borrowers and their Subsidiaries,
any (a) declaration or payment of any dividend on or in respect of any shares of
any class of Capital Stock of the Borrowers or any of their Subsidiaries, other
than dividends payable solely in shares of common stock of such Borrower or
Subsidiary; the purchase, redemption, defeasance, retirement or other
acquisition of any shares of any class of Capital Stock of the Borrowers or any
of their Subsidiaries, directly or indirectly through a Subsidiary of such
Person or otherwise (including the setting apart of assets for a sinking or
other analogous fund to be used for such purpose); the return of capital by the
Borrowers or any of their Subsidiaries to its shareholders as such; or any other
distribution on or in respect of any shares of any class of Capital Stock of the
Borrowers or any of their Subsidiaries, (b) payment in respect of any phantom
stock or similar interests, or (c) any interest or dividend payments made in
respect of the Convertible Preferred Stock.
REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by the
Lenders and/or by the Fronting Bank on behalf of the Lenders to the Borrowers
pursuant to Section 2, including the Swing Line Loans.
REVOLVING CREDIT NOTES. See Section 2.4.
SAME DAY FUNDS. With respect to disbursements and payments in (a) Dollars,
immediately available funds, and (b) Pounds Sterling or Euros, same day or other
funds as may be determined by the Administrative Agent to be customary in the
place of disbursement or payment for the settlement of international banking
transactions in Pounds Sterling or Euros, as the case may be.
XXXX. See Section 6.15(a).
SECURITY AGREEMENT. The Security Agreement, dated or to be dated on or
prior to the Closing Date, between Hexcel and its Domestic Subsidiaries which
are Guarantors and the Administrative Agent and in form and substance
satisfactory to the Lenders and
-37-
the Administrative Agent, and all other instruments, agreements and documents
required to be executed or delivered pursuant to the Security Agreement.
SECURITY DOCUMENTS. Collectively, the Guaranties, the Security Agreement,
the Intellectual Property License Agreement, the Agency Account Agreements, the
U.K. Security Documents, the Austrian Security Documents, the German Security
Documents, the Charge over Shares, the French Pledge, and all other instruments
and documents, including without limitation Uniform Commercial Code financing
statements (or the foreign equivalent, if applicable), required to be executed
or delivered pursuant to any Security Document.
SENIOR LEVERAGE RATIO. As at the end of any fiscal quarter, the ratio of
(a) Total Senior Funded Debt (Consolidated) outstanding on such date to (b)
EBITDA (Consolidated) for the Reference Period for such date.
SENIOR SECURED NOTES. The 9.875% Senior Secured Notes of Hexcel due in 2008
issued in the aggregate principal amount of $125,000,000 pursuant to the Senior
Secured Note Documents.
SENIOR SECURED NOTE DOCUMENTS. Collectively, as in effect on the date
hereof, the Senior Secured Notes, the Indenture, dated March 19, 2003, among
Hexcel, the guarantors named therein and Xxxxx Fargo Bank Minnesota, National
Association, as trustee, the Security Documents (as defined therein), any
schedules, annexes or exhibits related any Senior Secured Note Document and all
other agreements, instruments and documents required to be executed or delivered
pursuant to any Senior Secured Note Document.
SETTLEMENT. The making or receiving of payments, in Same Day Funds, by the
Lenders, to the extent necessary to cause each Lender's actual share of the
outstanding amount of Revolving Credit Loans (after giving effect to any Loan
Request) to be equal to such Lender's Commitment Percentage of the outstanding
amount of such Revolving Credit Loans (after giving effect to any Loan Request),
in any case where, prior to such event or action, the actual share is not so
equal.
SETTLEMENT AMOUNT. See Section 2.9.1.
SETTLEMENT DATE. See Section 2.9.1.
SETTLING LENDER. See Section 2.9.1.
S&P. Standard & Poor's Ratings Group.
STRATEGIC ALLIANCE AGREEMENT. The Strategic Alliance Agreement dated as of
September 29, 1995, as amended through the date hereof, among Hexcel and Ciba
Specialty Chemicals Corporation.
-38-
STOCKHOLDERS AGREEMENT. The Stockholders Agreement, dated as of March 19,
2003, among Berkshire Fund V, Limited Partnership, Berkshire Fund VI, Limited
Partnership, Berkshire Fund V Investment Corp., Berkshire Fund VI Investment
Corp., Berkshire Investors LLC, Greenbriar Co-Investment Partners, L.P.,
Greenbriar Equity Fund, L.P. and Hexcel.
SUBSIDIARY. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
SUBSIDIARY GUARANTOR. Xxxxx-Xxxxxxxx Corporation, a Delaware corporation,
Hexcel Pottsville Corporation, a Delaware corporation, Xxxxx-Xxxxxxxx Holding
Corp., a Delaware corporation, CS Tech-Fab Holdings, Inc., a Delaware
corporation and each other Domestic Subsidiary of Hexcel which elects to or is
otherwise required to become a Guarantor from time to time pursuant to
Section 7.15.
SUBORDINATED DEBT. Indebtedness of Hexcel in respect of (i) the 9.75%
Senior Subordinated Notes due 2009 issued pursuant to the Indenture, dated as of
January 21, 1999 between Hexcel and The Bank of New York, as Trustee, as in
effect on the date hereof, and (ii) the 7.00% Convertible Subordinated
Debentures due 2011 issued pursuant to the Indenture, dated as of August 1,
1986, between Hexcel and The Bank of California, N.A., as Trustee, as in effect
on the date hereof.
SUCCESSOR RATING AGENCY. See definition of "DEBT RATING".
SUPERMAJORITY LENDERS. As of any date, the Lenders holding an aggregate of
at least sixty-six and two-thirds percent (66-2/3%) of the Total Commitment (or
if the Total Commitment is terminated, the outstanding principal amount of the
Revolving Credit Loans, Letter of Credit Participations in Unpaid Reimbursement
Obligations and participating interests in the risk relating to outstanding
Letters of Credit and Fronted Loans) on such date.
SWING LINE LENDER. FCC.
SWING LINE LOANS. See Section 2.6.2.
SYNDICATION AGENT. General Electric Capital Corporation.
TOTAL COMMITMENT. The sum of the Commitments of the Lenders, as in effect
from time to time. On the Closing Date, the Total Commitment is equal to
$115,000,000.
TOTAL DEBT SERVICE (CONSOLIDATED). With respect to Hexcel and its
Subsidiaries and for any period, the sum, without duplication, of (a) Total
Interest Expense (Consolidated) paid in cash for such period PLUS (b) any and
all scheduled repayments of principal during such period in respect of
Indebtedness that becomes due and payable or that are to become due and payable
during such period pursuant to any agreement or instrument to which Hexcel or
any of its Subsidiaries is a party relating to
-39-
(i) the borrowing of money or the obtaining of credit, including the issuance of
notes or bonds (including, without limitation, sinking fund payments and open
market purchases, in each case, in respect of the 7.00% Convertible Subordinated
Debentures due 2011), and (ii) in respect of any Capitalized Leases, MINUS (c)
until such time as the CSI Leasing Trust Capital Lease has been prepaid,
principal payments in respect of Capitalized Leases made during such period in
an aggregate amount not to exceed $2,000,000 over the term of this Credit
Agreement, to be utilized in accordance with Section 9.3 for the purpose of
covenant compliance in the periods to be elected by Hexcel.
TOTAL EXPOSURE. At any time, the Dollar Equivalent of the sum of (i) the
Domestic Exposure at such time, PLUS (ii) the U.K. Exposure at such time, PLUS
(iii) the Austrian Exposure at such time, PLUS (iv) the German Exposure at such
time.
TOTAL FUNDED DEBT (CONSOLIDATED). With respect Hexcel and its Subsidiaries,
the aggregate amount of Indebtedness of Hexcel and its Subsidiaries, on a
consolidated basis, relating to (i) the borrowing of money or the obtaining of
credit, including the issuance of notes or bonds, (ii) the deferred purchase
price of assets (other than trade payables incurred in the ordinary course of
business), (iii) in respect of any Capitalized Leases, and (iv) the maximum
drawing amount of all letters of credit outstanding. With respect to the fiscal
quarter ending March 31, 2003, the 7.00% Convertible Notes due 2003 shall not
constitute "Indebtedness" for the purposes of this definition to the extent that
such the Indebtedness thereunder has been defeased.
TOTAL GROSS AVAILABILITY. At any time, the lesser of (a) the sum of (i) the
Domestic Borrowing Base at such time PLUS (ii) the U.K. Borrowing Base at such
time PLUS (iii) the Austrian Borrowing Base at such time PLUS (iv) the German
Borrowing Base at such time, and (b) the Total Commitment at such time.
TOTAL INTEREST EXPENSE (CONSOLIDATED). For any period, the aggregate amount
of interest required to be paid or accrued by Hexcel and its Subsidiaries during
such period on all Indebtedness of Hexcel and its Subsidiaries outstanding
during all or any part of such period, whether such interest was or is required
to be reflected as an item of expense or capitalized, including payments
consisting of interest in respect of any Capitalized Lease, and including
commitment fees, agency fees, facility fees, balance deficiency fees and similar
fees or expenses in connection with the borrowing of money.
TOTAL SENIOR FUNDED DEBT (CONSOLIDATED). Total Funded Debt (Consolidated)
MINUS Subordinated Debt.
TYPE. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Eurocurrency Rate Loan.
U.K. BORROWER. As defined in the preamble hereto.
U.K. BORROWING BASE. At the relevant time of reference thereto, an amount
determined by the Administrative Agent by reference to the most recent Borrowing
Base
-40-
Report delivered to the Administrative Agent and the Lenders pursuant to
subsection 7.4(f) which is equal to the lesser of the U.K. Sublimit and the
Dollar Equivalent sum of:
(a) 85% of Eligible Accounts of the U.K. Borrower; PLUS
(b) 85% of the Orderly Liquidation Value of Eligible Inventory of the U.K.
Borrower, PROVIDED that in no event shall the sum of (i) the amount of
the Domestic Borrowing Base comprised of Eligible Inventory of Hexcel
and its Domestic Subsidiaries which are Guarantors plus (ii) the
amount of the U.K. Borrowing Base comprised of Eligible Inventory of
the U.K. Borrower, exceed $50,000,000 at any time, PROVIDED FURTHER,
that in no event shall the U.K. Borrowing Base comprised of Eligible
Inventory of the U.K. Borrower exceed 50% of the U.K. Borrowing Base;
MINUS
(c) Preferential Indebtedness (which, for purposes of calculating the
Borrowing Base at each time such a calculation is required to be made
hereunder, shall, until a subsequent readjustment is required as
described herein, be that amount which appears on the Borrowing Base
Report delivered on the Closing Date and then, to the extent the
Administrative Agent using good faith and reasonable business judgment
determines (which determination may occur from time to time) as a
result of conducting a commercial finance examination or otherwise
that a different amount more accurately reflects the amount of
Preferential Indebtedness as of such date of determination,
Preferential Indebtedness for calculation purposes shall thereafter be
such different amount); MINUS
(d) reserves in respect of Cash Management Services; MINUS
(e) reserves in respect of the U.K. Overdraft Facility; MINUS
(f) other reserves as the Administrative Agent and/or the Co-Collateral
Agent in its good faith judgment exercised in a commercially
reasonable manner consistent with its customary practice for
comparable asset based transactions shall deem appropriate from time
to time.
The U.K. Borrowing Base shall be calculated in Dollars at the Exchange
Rate. In determining the U.K. Borrowing Base from time to time, each of the
Administrative Agent and the Co-Administrative Agent may, but shall not be
required to, rely upon reports or analyses generated by the U.K. Borrower
(including, without limitation, Borrowing Base Reports) and reports or analyses
generated by or on behalf of the Administrative Agent or any Lender or by third
party collateral examination. Notwithstanding anything to the contrary set forth
herein, each of the Administrative Agent and the Co-Collateral Agent may in its
good faith judgment exercised in a commercially reasonable manner consistent
with its customary practice for comparable asset based transactions at any time
and from time to time, (i) decrease the percentage advance rate of Eligible
Accounts included in the U.K. Borrowing Base based upon the
-41-
results of any collateral exams or other sources of information which
demonstrate in the Administrative Agent's or the Co-Collateral Agent's
reasonable judgment based on due inquiry a change in the collectability of
accounts receivable of the U.K. Borrower and/or other market changes affecting
the value of accounts comprising the U.K. Borrowing Base, and (ii) make more
restrictive the eligibility criteria contained in the definition of Eligible
Accounts. In addition, the Administrative Agent may in its good faith judgment
exercised in a commercially reasonable manner consistent with its customary
practice for comparable asset based transactions, in the event that the Dilution
with respect to the Accounts Receivable of the U.K. Borrower for the period
calculated has increased above 5%, reserve against the U.K. Borrowing Base an
amount necessary such that the effective Dilution will be less than or equal to
5%; PROVIDED that in calculating the amount of such Dilution, the Administrative
Agent may take into account credits posted to Accounts Receivable which are not,
in its judgment, truly dilutive. For the avoidance of doubt, (a) each of the
Administrative Agent and the Co-Collateral Agent may impose reserves and suspend
reserves without the consent of the other, and (b) if, at any time, any reserve
is imposed by any of the Administrative Agent and the Co-Collateral Agent, such
reserve shall be imposed without duplication.
U.K. CONCENTRATION ACCOUNT. See Section 7.17.1.
U.K. EXPOSURE. At any time, the sum of the Dollar Equivalent of the
outstanding amount of all Revolving Credit Loans advanced to the U.K. Borrower
PLUS the Maximum Drawing Amount and all Unpaid Reimbursement Obligations with
respect to Letters of Credit issued for the account of the U.K. Borrower.
U.K. OVERDRAFT FACILITY. The credit facility to be provided by Fleet U.K.,
as Fronting Bank, to the U.K. Borrower in an aggregate amount not to exceed the
Overdraft Facility Sublimit pursuant to which Fleet U.K., as Fronting Bank, may
advance Base Rate Loans to the U.K. Borrower pursuant to Section 2.1.2 or
provide Letters of Credit to the U.K. Borrower pursuant to Section 3.
U.K. OVERDRAFT FACILITY SUBLIMIT. The amount selected by the U.K. Borrower
from time to time with ten (10) days prior written notice to the Fronting Bank
and the Administrative Agent and with the approval of the Fronting Bank and the
Administrative Agent of such amount; PROVIDED that the U.K. Borrower shall not
change such amount more than one (1) time per fiscal quarter; PROVIDED FURTHER
that (i) the U.K. Overdraft Facility Sublimit shall not at any time exceed the
Pounds Sterling Equivalent or the Euro Equivalent, as the case may be, of
$1,000,000, (ii) the U.K. Overdraft Facility Sublimit as of the Closing Date is
the Pounds Sterling Equivalent of $500,000, and (iii) the sum of the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations with respect to Letters
of Credit issued for the account of the U.K. Borrower shall not exceed the
Pounds Sterling Equivalent or the Euro Equivalent, as the case may be, of
$1,000,000.
U.K. SECURITY DOCUMENTS. Collectively, the Debenture, dated on or prior to
the Closing Date, between the U.K. Borrower and the Administrative Agent, as
security trustee, the Security Trust Deed, dated on or prior to the Closing
Date, by and among
-42-
Hexcel, FCC, as security trustee, and the other parties thereto, the U.K.
Foreign Concentration Collection Account Agreement, dated or to be dated on or
prior to the Closing Date, between the U.K. Borrower, the Administrative Agent
and the other parties thereto, the Account Control Agreements, each in form and
substance satisfactory to the Administrative Agent, and all other instruments
and documents required to be executed or delivered pursuant to any U.K. Security
Document.
U.K. SUBLIMIT. $12,500,000 MINUS the U.K. Overdraft Facility Sublimit.
UNPAID REIMBURSEMENT OBLIGATION. The Dollar Equivalent of any Reimbursement
Obligation for which the Issuing Bank and/or the Administrative Agent and/or the
Lenders have not been reimbursed on the date specified in, and in accordance
with, Section 3.2.
VOTING STOCK. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time
to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by GAAP applied on a consistent basis by the
accounting entity to which they refer.
(f) The words "INCLUDE", "INCLUDES" and "INCLUDING" are not
limiting.
(g) All terms not specifically defined herein or by GAAP,
which terms are defined in the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts, have the meanings assigned to them therein,
with the term "INSTRUMENT" being that defined under Article 9 of the
Uniform Commercial Code.
-43-
(h) Reference to a particular "Section" refers to that
section of this Credit Agreement unless otherwise indicated.
(i) The words "HEREIN", "HEREOF", "HEREUNDER" and words of
like import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "FROM" means "from and including," the words "TO" and "UNTIL" each
mean "to but excluding," and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may
use several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements are,
however, cumulative and are to be performed in accordance with the terms
thereof.
(l) This Credit Agreement and the other Loan Documents are
the result of negotiation among, and have been reviewed by counsel to,
among others, the Administrative Agent and the Borrowers and are the
product of discussions and negotiations among all parties. Accordingly,
this Credit Agreement and the other Loan Documents are not intended to be
construed against the Administrative Agent or any of the Lenders merely on
account of the Administrative Agent's or any Lender's involvement in the
preparation of such documents.
(m) Unless otherwise expressly indicated, each reference to a
specific amount denominated in Dollars shall also be deemed to be a
reference to the Dollar Equivalent of such amount.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND.
2.1.1. REVOLVING CREDIT LOANS TO HEXCEL.
Subject to the terms and conditions set forth in this Credit
Agreement, each of the Lenders severally agrees to lend to Hexcel and
Hexcel may borrow, repay, and reborrow from time to time from the Closing
Date up to but not including the Maturity Date, upon notice by Hexcel to
the Administrative Agent given in accordance with Section 2.6, such sums in
Dollars as are requested by Hexcel up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested by any Borrower)
at any one time equal to such Lender's Commitment MINUS such Lender's
Commitment Percentage of the sum of (a) the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations with respect to all Letters of Credit
issued for the account of all of the Borrowers and (b) the Fronting
Exposure, and (c) the outstanding amount of Swing Line Loans,
-44-
PROVIDED that (i) that the Total Exposure (after giving effect to all
amounts requested) shall not at any time exceed the Total Commitment, and
(ii) that the Domestic Exposure (after giving effect to all amounts
requested) shall not at any time exceed the Domestic Gross Availability.
The Revolving Credit Loans shall be made PRO RATA in accordance with each
Lender's Commitment Percentage. Each request for a Revolving Credit Loan
hereunder shall constitute a representation and warranty by Hexcel that the
conditions set forth in Section 10 and Section 11, in the case of the
initial Revolving Credit Loans to be made on the Closing Date, and Section
11, in the case of all other Revolving Credit Loans, have been satisfied on
the date of such request. Each Revolving Credit Loan to Hexcel shall be
denominated in Dollars.
2.1.2. MULTICURRENCY LOANS TO FOREIGN BORROWERS.
Subject to the terms and conditions set forth in this Credit
Agreement, each of the Lenders severally agrees to lend to each of the
Foreign Borrowers and each of the Foreign Borrowers may borrow, repay, and
reborrow from time to time from the Closing Date up to but not including
the Maturity Date upon notice by the applicable Foreign Borrower to the
Administrative Agent given in accordance with Section 2.6, such sums in
Dollars and/or at the applicable Foreign Borrower's option from time to
time, subject to Section 2.10 hereof, (a) with respect to the U.K.
Borrower, in Pounds Sterling or Euros, (b) with respect to the Austrian
Borrower, in Euros and (c) with respect to the German Borrower, in Euros,
as are requested by the applicable Foreign Borrower up to a maximum Dollar
Equivalent of the aggregate amount outstanding for all Foreign Borrowers
(after giving effect to all amounts requested) at any one time equal to
such Lender's Commitment MINUS such Lender's Commitment Percentage of the
sum of (i) the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations with respect to Letters of Credit issued for the account of all
Borrowers and (ii) the Dollar Equivalent of the Revolving Credit Loans
advanced to Hexcel, PROVIDED that (a) that the Total Exposure (after giving
effect to all amounts requested) shall not at any time exceed the Total
Commitment, (b)(i) the U.K. Exposure (after giving effect to all amounts
requested) shall not at any time exceed the U.K. Borrowing Base at such
time and (ii) the aggregate outstanding amount of Base Rate Loans advanced
to the U.K. Borrower PLUS the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations with respect to Letters of Credit Issued for the
account of the U.K. Borrower shall not at any time exceed the U.K.
Overdraft Facility Sublimit, (c)(i) the Austrian Exposure (after giving
effect to all amounts requested) shall not at any time exceed the Austrian
Borrowing Base at such time and (ii) the aggregate outstanding amount of
Base Rate Loans advanced to the Austrian Borrower shall not at any time
exceed the Austrian Overdraft Facility Sublimit and (d)(i) the German
Exposure (after giving effect to all amounts requested) shall not at any
time exceed the German Borrowing Base at such time and (ii) the aggregate
outstanding amount of Base Rate Loans advanced to the German Borrower shall
not at any time exceed the German Overdraft Facility Sublimit. The
Revolving Credit Loans shall be made PRO RATA
-45-
in accordance with each Lender's Commitment Percentage, PROVIDED, HOWEVER,
that notwithstanding anything to the contrary contained herein, with
respect to any Revolving Credit Loan made to any Foreign Borrower
(including any such Revolving Credit Loan made under any Overdraft
Facility), whether denominated in Dollars, Pounds Sterling or Euros, the
Commitment Percentage of each Lender shall be fronted by the Fronting Bank
(with each Lender hereby agreeing to participate in the risk associated
with such Multicurrency Loan in accordance with Section 2.11 hereof). Each
request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by the requesting Foreign Borrower that the
conditions set forth in Section 10 and Section 11, in the case of the
initial Revolving Credit Loans to be made on the Closing Date, and Section
11, in the case of all other Revolving Credit Loans, have been satisfied on
the date of such request. Each Base Rate Loan (a) to the U.K. Borrower
shall be denominated in Dollars, or, subject to Section 2.10 hereof, in
Pounds Sterling or Euros and, in each case, such Base Rate Loan shall be
made under the U.K. Overdraft Facility, (b) to the Austrian Borrower shall
be denominated in Dollars, or, subject to Section 2.10 hereof, in Euros
and, in each case, such Base Rate Loan shall be made under the Austrian
Overdraft Facility, and (c) the German Borrower shall be denominated in
Dollars, or, subject to Section 2.10 hereof, in Euros and, in each case,
such Base Rate Loan shall be made under the German Overdraft Facility. Each
Eurocurrency Rate Loan (a) to the U.K. Borrower shall be denominated in
Dollars, or, subject to Section 2.10 hereof, in Pounds Sterling or Euros
and (b) to the Austrian Borrower or the German Borrower shall be
denominated in Dollars, or, subject to Section 2.10 hereof, in Euros. With
respect to borrowings under any Overdraft Facility, the prior notice
requirements may be waived by the Fronting Bank.
2.2. COMMITMENT FEE.
Hexcel agrees to pay to the Administrative Agent for the accounts of the
Lenders in accordance with their respective Commitment Percentages a commitment
fee (the "COMMITMENT FEE") calculated at the rate per annum of the Applicable
Commitment Fee as in effect from time to time from the Closing Date to but
excluding the Maturity Date, multiplied by the average daily amounts during each
calendar quarter or portion thereof by which the Total Commitment exceeds the
sum of (i) the Maximum Drawing Amount, (ii) all Unpaid Reimbursement
Obligations, and (iii) the Dollar Equivalent of the outstanding amount of the
Revolving Credit Loans during such calendar quarter or portion thereof. The
Commitment Fee shall be payable quarterly in arrears on the first day of each
calendar quarter for the immediately preceding calendar quarter commencing on
the first such date following the date hereof, with a final payment on the
Maturity Date or any earlier date on which the Commitments shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrowers shall have the right at
any time and from time to time upon three (3) Business Days prior written notice
to the Administrative Agent to reduce by $1,000,000 or an integral multiple
thereof or to terminate entirely the Total Commitment, whereupon the Commitments
of the Lenders shall be reduced PRO RATA in accordance with their respective
Commitment Percentages
-46-
of the amount specified in such notice or, as the case may be, terminated.
Promptly after receiving any notice of the Borrowers delivered pursuant to this
Section 2.3, the Administrative Agent will notify the Lenders of the substance
thereof. If the Borrowers reduce or terminate the Total Commitment, Hexcel shall
pay to the Administrative Agent a fee in an amount calculated as follows:
(a) if such repayment or prepayment and reduction or
termination is concluded on or prior to the first anniversary of the
Closing Date, an amount equal to one percent (1%) of the amount by which
the Total Commitment is reduced, as calculated based on the Total
Commitment immediately prior to such repayment or prepayment;
(b) if such repayment or prepayment and reduction or
termination is concluded after the first anniversary of the Closing Date
but on or prior to the third anniversary of the Closing Date, an amount
equal to one-half of one percent (0.50%) of the amount by which the Total
Commitment is reduced, as calculated based on the Total Commitment
immediately prior to such repayment or prepayment; and
(c) if such repayment or prepayment and reduction or
termination is concluded after the third anniversary of the Closing Date,
no fee shall be payable.
The parties hereto agree that the fees provided for in this Section 2.3 are
reasonable and fair estimates of the damages which would be incurred as a result
of any reduction or termination of the Total Commitment in accordance with the
terms hereof. Upon the effective date of any such reduction or termination,
Hexcel shall pay to the Administrative Agent for the respective accounts of the
Lenders the full amount of any Commitment Fee then accrued on the amount of the
reduction. No reduction or termination of the Commitments may be reinstated.
2.4. THE REVOLVING CREDIT NOTES. (a) The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrowers in substantially the
form of EXHIBIT B-1 hereto (each a "REVOLVING CREDIT NOTE"), dated as of the
Closing Date (or such other date on which a Lender may become a party hereto in
accordance with Section 14 hereof) and completed with appropriate insertions.
One Revolving Credit Note shall be payable to the order of each Lender in a
principal amount equal to such Lender's Commitment or, if less, the outstanding
amount of all Revolving Credit Loans made by such Lender, plus interest accrued
thereon, as set forth below. Each Borrower irrevocably authorizes and requests
each Lender to make or cause to be made, at or about the time of the Drawdown
Date of any Revolving Credit Loan or at the time of receipt of any payment of
principal on such Lender's Revolving Credit Note, an appropriate notation on
such Record reflecting the making of such Revolving Credit Loan or (as the case
may be) the receipt of such payment. The outstanding amount of the Revolving
Credit Loans set forth on such Lender's Record or any other loan account
maintained by the Administrative Agent shall be PRIMA FACIE evidence of the
principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error
-47-
in so recording, any such amount on such Lender's Record shall not limit or
otherwise affect the obligations of the Borrowers hereunder or under any
Revolving Credit Note to make payments of principal of or interest on any
Revolving Credit Note when due. Each Revolving Credit Note shall provide that,
notwithstanding that such Revolving Credit Note shall be executed by each
Borrower, the obligations of each Borrower under such Revolving Credit Note
shall be several and not joint.
(b) The Swing Line Loans shall be evidenced by a promissory note of Hexcel
in substantially the form of EXHIBIT B-2 hereto (a "SWING LINE NOTE"), dated as
of the Closing Date (or such other date on which a Lender may become a party
hereto in accordance with Section 14 hereof) and completed with appropriate
insertions. One Swing Line Note shall be payable to the order of the Swing Line
Lender in a principal amount equal to $11,500,000 or, if less, the outstanding
amount of all Swing Line Loans made by such Swing Line Lender, plus interest
accrued thereon, as set forth below. Hexcel irrevocably authorizes and requests
the Swing Line Lender to make or cause to be made, at or about the time of the
Drawdown Date of any Swing Line Loan or at the time of receipt of any payment of
principal on such Swing Line Lender's Swing Line Note, an appropriate notation
on such Record reflecting the making of such Swing Line Loan or (as the case may
be) the receipt of such payment. The outstanding amount of the Swing Line Loans
set forth on such Swing Line Lender's Record or any other loan account
maintained by the Administrative Agent shall be PRIMA FACIE evidence of the
principal amount thereof owing and unpaid to such Swing Line Lender, but the
failure to record, or any error in so recording, any such amount on such Swing
Line Lender's Record shall not limit or otherwise affect the obligations of
Hexcel hereunder or under any Swing Line Note to make payments of principal of
or interest on any Swing Line Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided in
Section 4.11,
(a) Each Revolving Credit Loan which is a Base Rate Loan
shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest Period with respect
thereto at the rate per annum equal to the Base Rate PLUS the Applicable
Margin for Revolving Credit Loans denominated in Dollars, Pounds Sterling
or Euros, as the case may be, with respect to Base Rate Loans as in effect
from time to time.
(b) Each Revolving Credit Loan which is a Eurocurrency Rate
Loan shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest Period with respect
thereto at the rate per annum equal to the Eurocurrency Rate determined for
such Interest Period PLUS the Applicable Margin for Revolving Credit Loans
denominated in Dollars, Pounds Sterling or Euros as the case may be, PLUS,
with respect to Eurocurrency Rate Loans made to the U.K. Borrower,
Mandatory Costs, with respect to Eurocurrency Rate Loans as in effect from
time to time.
Each Borrower promises to pay interest on each Revolving Credit Loan made
to it in arrears on each Interest Payment Date with respect thereto. Interest on
the
-48-
Revolving Credit Loans shall be payable in the currency (i.e., Dollars, Pounds
Sterling or Euros, as the case may be) of the underlying Revolving Credit Loan.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS.
2.6.1. GENERAL. The applicable Borrower shall give to the
Administrative Agent written notice in the form of EXHIBIT C hereto (or
telephonic notice confirmed in a writing in the form of EXHIBIT C hereto)
of each Revolving Credit Loan requested hereunder (a "LOAN REQUEST") no
later than (a) 12:00 p.m. (Hartford time) on the proposed Drawdown Date of
any Base Rate Loan and (b) 12:00 p.m. (Hartford time) on the third Business
Day prior to the proposed Drawdown Date of any Eurocurrency Rate Loan;
PROVIDED that any notice requesting a Revolving Credit Loan be made in
Pounds Sterling or Euros must comply with the requirements of this Section
2.6 and the requirements of an OC Notice pursuant to Section 2.10. Each
such notice shall specify (i) the principal amount of the Revolving Credit
Loan requested stated in Dollars, or, subject to Section 2.10, Pounds
Sterling or Euros, (ii) the proposed Drawdown Date of such Revolving Credit
Loan, (iii) the Interest Period for such Revolving Credit Loan and (iv) the
Type of such Revolving Credit Loan. Promptly upon receipt of any such
notice, the Administrative Agent shall notify the applicable Lenders
thereof. Each Loan Request shall be irrevocable and binding on the
applicable Borrower and shall obligate the applicable Borrower to accept
the Revolving Credit Loan requested from the Lenders on the proposed
Drawdown Date. Each Loan Request with respect to a Base Rate Loan shall be
in a minimum aggregate amount of $500,000 or an integral multiple of
$100,000 in excess thereof. Each Loan Request with respect to a
Eurocurrency Rate Loan shall be in a minimum aggregate amount of $1,000,000
or an integral multiple of $100,000 in excess thereof. With respect to
borrowings under any Overdraft Facility, the prior notice requirements and
minimum amount requirements may be waived by the Fronting Bank.
2.6.2. SWING LINE. Notwithstanding the notice and minimum amount
requirements set forth in Section 2.6.1 (but subject to the second proviso
of this sentence) but otherwise in accordance with the terms and conditions
of this Credit Agreement, the Swing Line Lender may, in its sole discretion
and without conferring with the Lenders, make Revolving Credit Loans in
Dollars to Hexcel in an amount as otherwise requested by Hexcel (each a
"SWING LINE LOAN"); PROVIDED that the aggregate amount of all outstanding
advances made pursuant to this Section 2.6.2 shall not exceed $11,500,000;
PROVIDED FURTHER that the advance of Swing Line Loans by the Swing Line
Lender shall not reduce the Swing Line Lender's obligation to lend its
Commitment Percentage of the Excess Availability hereunder. Hexcel
acknowledges and agrees that the making of such Swing Line Loans shall, in
each case, be subject in all respects to the provisions of this Credit
Agreement as if they were Revolving Credit Loans covered by a Loan Request
including, without limitation, the limitations set forth in Section 2.1 and
the requirements that the applicable provisions of Section 10 (in the case
of Swing Line Loans made on the Closing Date) and Section 11 be satisfied.
All actions taken by the
-49-
Swing Line Lender pursuant to the provisions of this Section 2.6.2 shall be
conclusive and binding on Hexcel and the Lenders absent the Swing Line
Lender's gross negligence or willful misconduct. Swing Line Loans made
pursuant to this Section 2.6.2 to Hexcel shall be Base Rate Loans and,
prior to a Settlement, interest on such Swing Line Loans shall be for the
account of the Swing Line Lender.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
Subject to Section 2.1, the applicable Borrower may elect from time to time
to convert any outstanding Revolving Credit Loan to a Revolving Credit Loan
of another Type denominated in the same currency, PROVIDED that (a) with
respect to any such conversion of a Eurocurrency Rate Loan to a Base Rate
Loan, the applicable Borrower shall give the Administrative Agent at least
two (2) Business Days prior written notice of such election; (b) with
respect to any such conversion of a Base Rate Loan to a Eurocurrency Rate
Loan, the applicable Borrower shall give the Administrative Agent at least
three (3) Business Days prior written notice of such election; (c) with
respect to any such conversion of a Eurocurrency Rate Loan into a Base Rate
Loan, such conversion shall only be made on the last day of the Interest
Period with respect thereto and (d) no Revolving Credit Loan may be
converted into a Eurocurrency Rate Loan when any Event of Default has
occurred and is continuing. On the date on which such conversion is being
made each Lender shall take such action as is necessary to transfer its
Commitment Percentage of such Revolving Credit Loans to its Domestic
Lending Office or its Eurocurrency Lending Office, as the case may be.
Subject to the Overdraft Facility Sublimits, all or any part of outstanding
Revolving Credit Loans of any Type may be converted into a Revolving Credit
Loan of another Type as provided herein, PROVIDED that any partial
conversion shall be in an aggregate principal amount of $1,000,000 or an
integral multiple of $100,000 in excess thereof. Each Conversion Request
relating to the conversion of a Revolving Credit Loan to a Eurocurrency
Rate Loan shall be irrevocable by the applicable Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Revolving Credit Loan of any Type may be continued as a Revolving Credit
Loan of the same Type upon the expiration of an Interest Period with
respect thereto by compliance by the applicable Borrower with the notice
provisions contained in Section 2.7.1; PROVIDED that (a) as to any
Eurocurrency Rate Loan denominated in Dollars, no such Eurocurrency Rate
Loan may be continued as such when any Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto ending during the
continuance of any Event of Default of which officers of the Administrative
Agent active upon the Borrowers' account have actual knowledge; and (b) as
to any Eurocurrency Rate Loan (i) denominated in Pounds Sterling or Euros
made to the U.K. Borrower, or (ii) denominated in Euros made to the
Austrian Borrower or the German Borrower, then, in either case, no such
Eurocurrency Rate Loan may be continued as such when any Event of Default
-50-
has occurred and is continuing or the provisions of Section 2.10 hereof
have not or cannot be met at the time of such continuation but shall be
automatically converted to a Eurocurrency Rate Loan having a one (1) month
Interest Period on the last day of the then current Interest Period with
respect thereto ending during the continuance of any Event of Default of
which officers of the Administrative Agent active upon the Borrowers'
account have actual knowledge. The Administrative Agent shall notify the
Lenders promptly when any such automatic conversion contemplated by this
Section 2.7 is scheduled to occur.
2.7.3. EUROCURRENCY RATE LOANS. Any conversion to or from
Eurocurrency Rate Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurocurrency Rate Loans having the same Interest
Period shall not be less than $1,000,000 or a whole multiple of $100,000 in
excess thereof (or, in the case of Eurocurrency Rate Loans denominated in
Pounds Sterling or Euros, that whole number which is nearest to the Dollar
Equivalent of $1,000,000 or $100,000, as the case may be). With respect to
any borrowing of, conversion to or continuation of Eurocurrency Rate Loans,
no more than seven (7) Eurocurrency Rate Loans having different Interest
Periods may be outstanding at any time to the Borrowers.
2.8. FUNDS FOR REVOLVING CREDIT LOAN.
2.8.1. FUNDING PROCEDURES FOR REVOLVING CREDIT LOANS TO HEXCEL.
Not later than 3:00 p.m. (Hartford, Connecticut time) on the proposed
Drawdown Date of any Revolving Credit Loans denominated in Dollars to be
made to Hexcel, each of the Lenders will make available to the
Administrative Agent to credit to Hexcel's account in Same Day Funds, the
amount of such Lender's Commitment Percentage of the amount of the
requested Revolving Credit Loans at the Administrative Agent's Office. Upon
receipt from each Lender of such amount, and upon receipt of the documents
required by Section 10 and Section 11 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Administrative
Agent will make available to Hexcel the aggregate amount of such Revolving
Credit Loans made available to the Administrative Agent by the Lenders. The
failure or refusal of any Lender to make available to the Administrative
Agent at the aforesaid time and place on any Drawdown Date the amount of
its Commitment Percentage of the requested Revolving Credit Loans shall not
relieve any other Lender from its several obligation hereunder to make
available to the Administrative Agent the amount of such other Lender's
Commitment Percentage of any requested Revolving Credit Loans.
2.8.2. ADVANCES BY AGENT FOR REVOLVING CREDIT LOANS TO HEXCEL.
The Administrative Agent may, unless notified to the contrary by any Lender
prior to a Drawdown Date, assume that such Lender has made available to the
Administrative Agent on such Drawdown Date the amount of such Lender's
Commitment Percentage of the Revolving Credit Loans to be made on such
Drawdown Date, and the Administrative Agent may (but it shall not be
required
-51-
to), in reliance upon such assumption, make available to Hexcel a
corresponding amount. If any Lender makes available to the Administrative
Agent such amount on a date after such Drawdown Date, such Lender shall pay
to the Administrative Agent on demand an amount equal to the product of (a)
the average computed for the period referred to in clause (c) below, of the
Overnight Rate for each day included in such period, times (b) the amount
of such Lender's Commitment Percentage of such Revolving Credit Loans,
times (c) a fraction, the numerator of which is the number of days that
elapse from and including such Drawdown Date to the date on which the
amount of such Lender's Commitment Percentage of such Revolving Credit
Loans shall become immediately available to the Administrative Agent, and
the denominator of which is 365. A statement of the Administrative Agent
submitted to such Lender with respect to any amounts owing under this
paragraph shall be PRIMA FACIE evidence of the amount due and owing to the
Administrative Agent by such Lender. If the amount of such Lender's
Commitment Percentage of such Revolving Credit Loans is not made available
to the Administrative Agent by such Lender within three (3) Business Days
following such Drawdown Date, the Administrative Agent shall be entitled to
recover such amount from Hexcel on demand, with interest thereon at the
rate per annum applicable to the Revolving Credit Loans made on such
Drawdown Date.
2.8.3. FUNDING PROCEDURES FOR REVOLVING CREDIT LOANS TO FOREIGN
BORROWERS. Not later than 12:00 noon (Atlanta, Georgia time) on the
proposed Drawdown Date of any Revolving Credit Loans that are Eurocurrency
Rate Loans to any Foreign Borrower, the Fronting Bank shall make available
to such Foreign Borrower or the Administrative Agent, as the case may be,
the amount of such Revolving Credit Loans made or to be made on such date
corresponding to the aggregate Commitment Percentages of the Lenders. If
such amounts are made available to the Administrative Agent, upon receipt
from the Fronting Bank of such amount, and upon receipt of the documents
required by Section 10 and Section 11 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Administrative
Agent will make available to the applicable Foreign Borrower the aggregate
amount of such Revolving Credit Loans made available to the Administrative
Agent by the Fronting Bank.
2.8.4. ADVANCES BY AGENT FOR REVOLVING CREDIT LOANS TO FOREIGN
BORROWERS. The Administrative Agent may, unless notified to the contrary by
the Fronting Bank prior to a Drawdown Date, assume that the Fronting Bank
has made available to the Administrative Agent or to the applicable Foreign
Borrower on such Drawdown Date the amount of Revolving Credit Loans to be
made on such Drawdown Date and the Administrative Agent may (but it shall
not be required to), in reliance upon such assumptions, make available to
the applicable Foreign Borrower a corresponding amount. If the Fronting
Bank makes available to the Administrative Agent such amount on a date
after such Drawdown Date, the Fronting Bank shall pay to the Administrative
Agent on demand an amount equal to the product of (a) the average computed
for the
-52-
period referred to in clause (c) below, of the Overnight Rate for each day
included in such period, TIMES (b) the aggregate amount of such Revolving
Credit Loans, TIMES (c) a fraction, the numerator of which is the number of
days that elapse from and including such Drawdown Date to the date on which
the amount of such Revolving Credit Loans shall become immediately
available to the Administrative Agent, and the denominator of which is 365.
A statement of the Administrative Agent submitted to the Fronting Bank with
respect to any amounts owing under this paragraph shall be PRIMA FACIE
evidence of the amount due and owing to the Administrative Agent by such
Lender. If the amount of the Revolving Credit Loans is not made available
to the Administrative Agent by the Fronting Bank within three (3) Business
Days following such Drawdown Date, the Administrative Agent shall be
entitled to recover such amount from the applicable Foreign Borrower on
demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.
2.9. SETTLEMENTS.
2.9.1. GENERAL. Upon demand by the Swing Line Lender (a
"SETTLEMENT DATE") which shall be made no less frequently than every other
week, the Administrative Agent shall, not later than 11:00 a.m. (Hartford
time), give telephonic or facsimile notice (a) to the Lenders and the
Borrowers of the respective outstanding amount of Swing Line Loans made by
the Swing Line Lender on behalf of the Lenders from the immediately
preceding Settlement Date through the close of business on the prior day
and the amount of any Eurocurrency Rate Loans to be made (following the
giving of notice pursuant to Section 2.6.1(b) or (c)) on such date pursuant
to a Loan Request, if any, and (b) to the Lenders of the amount (a
"SETTLEMENT Amount") that each Lender (a "SETTLING LENDER") shall pay (or
receive) to effect a Settlement of any Revolving Credit Loan. A statement
of the Administrative Agent submitted to the Lenders and the applicable
Borrowers or to the Lenders with respect to any amounts owing under this
Section 2.9 shall be PRIMA FACIE evidence of the amount due and owing. Each
Settling Lender shall, not later than 3:00 p.m. (Hartford time) on such
Settlement Date for any Revolving Credit Loan, effect a wire transfer of
Same Day Funds to the Administrative Agent in the amount of the Settlement
Amount for such Settling Lender. All funds advanced by any Lender as a
Settling Lender pursuant to this Section 2.9 shall for all purposes be
treated as a Revolving Credit Loan made by such Settling Lender to the
Borrowers and all funds received by any Lender pursuant to this Section 2.9
shall for all purposes be treated as repayment of amounts owed with respect
to Revolving Credit Loans made by such Lender. In the event that any
bankruptcy, reorganization, liquidation, receivership or similar cases or
proceedings in which any Borrower is a debtor prevent a Settling Lender
from making any Revolving Credit Loan to effect a Settlement as
contemplated hereby, such Settling Lender will make such dispositions and
arrangements with the other Lenders with respect to such Revolving Credit
Loans, either by way of purchase of participations, distribution, PRO TANTO
-53-
assignment of claims, subrogation or otherwise as shall result in each
Lender's share of the outstanding Revolving Credit Loans being equal, as
nearly as may be, to such Lender's Commitment Percentage of the outstanding
amount of the Revolving Credit Loans.
2.9.2. FAILURE TO MAKE FUNDS AVAILABLE. The Administrative Agent
may, unless notified to the contrary by any Settling Lender prior to a
Settlement Date, assume that such Settling Lender has made or will make
available to the Administrative Agent on such Settlement Date the amount of
such Settling Lender's Settlement Amount, and the Administrative Agent may
(but it shall not be required to), in reliance upon such assumption, make
available to the Swing Line Lender a corresponding amount. If any Settling
Lender makes available to the Administrative Agent such amount on a date
after such Settlement Date, such Settling Lender shall pay to the
Administrative Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the
Overnight Rate for each day included in such period, times (b) the amount
of such Settlement Amount, times (c) a fraction, the numerator of which is
the number of days that elapse from and including such Settlement Date to
the date on which the amount of such Settlement Amount shall become
immediately available to the Administrative Agent, and the denominator of
which is 360. A statement of the Administrative Agent submitted to such
Settling Lender with respect to any amounts owing under this Section 2.9.2
shall be prima facie evidence of the amount due and owing to the
Administrative Agent by such Settling Lender. If such Settling Lender's
Settlement Amount is not made available to the Administrative Agent by such
Settling Lender within three (3) Business Days following such Settlement
Date, the Administrative Agent shall be entitled to recover such amount
from the Borrowers on demand, with interest thereon at the rate per annum
applicable to the Revolving Credit Loans as of such Settlement Date and
Hexcel's outstanding Swing Line Loans shall be reduced by such amount.
2.9.3. NO EFFECT ON OTHER LENDERS. The failure or refusal of any
Settling Lender to make available to the Administrative Agent at the
aforesaid time and place on any Settlement Date the amount of such Settling
Lender's Settlement Amount shall not (a) relieve any other Settling Lender
from its several obligation hereunder to make available to the
Administrative Agent the amount of such other Settling Lender's Settlement
Amount or (b) impose upon any Lender, other than the Settling Lender so
failing or refusing, any liability with respect to such failure or refusal
or otherwise increase the Commitment of such other Lender.
2.10. OPTIONAL CURRENCY.
2.10.1. REQUEST FOR OPTIONAL CURRENCY. Subject to the limitations
set forth in Section 2.1., any Foreign Borrower may, upon at least three
(3) Business Days' notice to the Administrative Agent (an "OC NOTICE"),
request that one or more Revolving Credit Loans be made in Pounds Sterling
or Euros, PROVIDED that any Eurocurrency Rate Loan proposed to be made
under this Section 2.10.1 shall be in an
-54-
amount not less than the Pounds Sterling Equivalent or Euro Equivalent, as
applicable, of $1,000,000, or a greater amount which is an integral
multiple of $100,000. Each OC Notice requesting a Revolving Credit Loan in
Pounds Sterling or Euros, as the case may be, shall be by written notice
(or telephonic notice confirmed in writing by the applicable Borrower),
specifying (a) the Revolving Credit Loan to be made, (b) the requested
Drawdown Date of the proposed borrowing of such Revolving Credit, (c) the
requested currency in which the Revolving Credit Loan is to be made, and
(d) the initial Interest Period for the Revolving Credit Loan to be
borrowed. If the Fronting Bank, on or prior to any Drawdown Date,
determines (which determination shall be conclusive) that Pounds Sterling
or Euros, as requested, is not freely transferable and convertible into
Dollars or that it will be impracticable for the Fronting Bank to fund the
Revolving Credit Loan in such currency, then the Fronting Bank shall
immediately so notify the Administrative Agent, which notification shall be
given immediately by the Administrative Agent to the applicable Foreign
Borrower, and the requested Revolving Credit Loan shall instead be
denominated in Dollars. Subject to the foregoing and to the satisfaction of
the terms and conditions of Section 10 (in the case of such Revolving
Credit Loans to be made on the Closing Date) and Section 11, each Revolving
Credit Loan requested to be made in Pounds Sterling or Euros, as
applicable, will be made on the Drawdown Date specified therefor in the OC
Notice, in the currency requested in the OC Notice and, upon being so made,
will have the Interest Period requested in the OC Notice. With respect to
borrowings under any Overdraft Facility, the prior notice requirements may
be waived by the Fronting Bank.
2.10.2. EXCHANGE RATE. For purposes of this Credit Agreement the
amount in either Pounds Sterling or Euros which shall be equivalent on any
particular date to a specified amount in the other of Pounds Sterling or
Euros shall be that amount (as conclusively ascertained by the
Administrative Agent by its normal banking practices, absent manifest
error) in the first currency which is or could be purchased by the
Administrative Agent (in accordance with normal banking practices) with
such specified amount in the second currency in any recognized Eurocurrency
Interbank Market selected by the Administrative Agent in good faith for
delivery on such date at the spot rate of exchange prevailing at 10:00 a.m.
(London time) (or as soon thereafter as practicable) on such date.
2.10.3. MULTIPLE DENOMINATIONS. In the event that any portion of
the funds available under the terms of this Credit Agreement is denominated
in Dollars and/or in one or more of Pounds Sterling or Euros, the Dollar
Equivalent of such portion of the funds shall be calculated pursuant to the
definition of "Dollar Equivalent". The amount so determined shall then be
added to the amount already outstanding in Dollars for the purpose of
determining the remaining availability of funds under Section 2.1 and
Section 2.10.1 hereof and any required repayments under the following
Section 2.13 as a result of fluctuations in respective currency conversion
rates.
-55-
2.10.4. FUNDING. The Fronting Bank (or, after a Lender has
purchased its interest in any Fronted Loan, such Lender) may make any
Revolving Credit Loan denominated in Dollars, Pounds Sterling or Euros by
causing its Eurocurrency Lending Office or any of its foreign branches or
foreign affiliate to make such Revolving Credit Loan (whether or not such
lending office, branch or affiliate is named as a lending office on the
signature pages hereof); PROVIDED that in such event the obligation of the
applicable Foreign Borrower to repay such Revolving Credit Loan shall
nevertheless be to such Lender and shall, for all purposes of this Credit
Agreement (including without limitation for purposes of the definition of
the term "Required Lenders") be deemed made by such Lender to the extent of
such Revolving Credit Loan, for the account of such applicable lending
office, branch or affiliate.
2.11. FRONTING PROVISIONS.
2.11.1. APPLICATION OF INTEREST PAYMENTS FOR MULTICURRENCY LOANS.
As promptly as is practicable following each date upon which the
Administrative Agent or, with respect to Base Rate Loans advanced under any
Overdraft Facility, the Fronting Bank receives a payment of interest under
this Credit Agreement on account of any Multicurrency Loans denominated in
Dollars, Pounds Sterling or Euros made to any Foreign Borrower, the
Administrative Agent shall distribute to the Fronting Bank such amount
(except when the Fronting Bank has received such amount directly from any
Foreign Borrower). In consideration of the agreement of the Lenders to
purchase participating interests in any Multicurrency Loans, the Fronting
Bank hereby agrees to pay to the Administrative Agent, for the ratable
accounts of each Lender or, if approved by Administrative Agent, directly
to each Lender, a risk participation fee in an amount equal to (i) the
proceeds received by the Fronting Bank in the currency of such interest
payment or from a conversion of such currency to Dollars, as determined by
such Lender, of the Applicable Margin portion of such interest payment
(other than any such proceeds payable for the account of any Delinquent
Bank, which proceeds shall be retained by the Fronting Bank for its own
account) MINUS (ii) 0.125% of such proceeds received by the Fronting Bank
in such currency or from such conversion to Dollars, as applicable;
PROVIDED, HOWEVER, that with respect to each Lender which has funded the
purchase of participating interests in the extensions of credit on account
of which such interest was paid pursuant to Section 2.11.2, the Fronting
Bank shall instead pay to the Administrative Agent, for the account of such
Lender which has so funded such purchase or, if approved by Administrative
Agent, directly to each Lender, the amount equal to such Lender's
Commitment Percentage of the proceeds received by the Fronting Bank in such
currency or from such conversion, as applicable. Such amount shall be
payable to the Administrative Agent or Lender as applicable in Dollars,
Pounds Sterling, or Euros, as the case may be, promptly upon receipt by the
Fronting Bank of a distribution of such interest payment from the
Administrative Agent or the applicable Borrower or from the proceeds of
such conversion, as the case may be.
-56-
2.11.2. CURRENCY CONVERSIONS AND CONTINGENT FUNDING AGREEMENT.
(a) Each of the Lenders hereby unconditionally and irrevocably agrees to
purchase (in Dollars, or at the Fronting Bank's option with respect to
Revolving Credit Loans denominated in Pounds Sterling or Euros, in Pounds
Sterling or Euros, as the case may be) an undivided participating interest
in its ratable share, determined by reference to its Commitment Percentage,
of all Revolving Credit Loans denominated in Dollars, Pounds Sterling or
Euros made by the Fronting Bank, as the Administrative Agent may at any
time request PROVIDED that:
(i) the Administrative Agent and the Fronting Bank
hereby agree that, unless an Event of Default has occurred and is
continuing, such Persons will not request any such purchase of
participating interests; and
(ii) in the event that any Event of Default specified
in Sections 12.1(f) or (g) shall have occurred with respect to the
Borrowers, at the option of the Fronting Bank and Administrative Agent,
each Lender shall be deemed to have purchased, automatically and without
request, such participating interest in the Revolving Credit Loans
denominated in Dollars, Pounds Sterling or Euros made by the Fronting Bank
to the applicable Foreign Borrower.
Any such request shall be made in writing to each Lender and
shall specify the amount of Dollars, Pounds Sterling or Euros, as
applicable, (based upon the actual exchange rate at which the
Administrative Agent anticipates being able to obtain the relevant currency
on the relevant date, with any excess payment being refunded to the Lenders
and any deficiency remaining payable by the Lenders) required from such
Lender in order to effect the purchase by such Lender of a participating
interest in the amount equal to its Commitment Percentage times the
aggregate then outstanding principal amount (in Dollars, Pounds Sterling or
Euros, as the case may be) of the Revolving Credit Loans denominated in
Dollars, Pounds Sterling or Euros which have been fronted by the Fronting
Bank. Promptly upon receipt of such request, each Lender shall deliver to
the Administrative Agent or Fronting Bank (in immediately available funds)
the amount so specified by the Administrative Agent. The Administrative
Agent shall convert such amounts into the relevant currency, as applicable,
and shall promptly deliver the proceeds of such conversion to the Fronting
Bank in immediately available funds. Promptly following receipt thereof,
the Fronting Bank will deliver to each Lender (through the Administrative
Agent) a certificate setting forth the amount of the Revolving Credit Loans
purchased by such Lender, dated the date of receipt of such funds and in
such amount. From and after such purchase, (a)(i) all Base Rate Loans shall
continue as Base Rate Loans, and (ii) all outstanding Eurocurrency Rate
Loans (whether denominated in Dollars, Pounds Sterling or Euros and
including those Revolving Credit Loans advanced by the Fronting Bank) shall
be deemed to have been converted into Eurocurrency Rate Loans denominated
in the relevant currency with a one (1) month Interest Period (with such
conversion constituting, for purposes of Section 4.10, the making of a
payment of a Eurocurrency Rate Loan prior to the expiration of
-57-
the relevant Interest Period, as applicable), and (b) all amounts from time
to time accruing, and all amounts from time to time payable, on account of
such Revolving Credit Loans (including any interest and other amounts which
were accrued but unpaid on the date of such purchase) shall be payable in
the relevant currency and shall be distributed in the relevant currency or,
at the request of any Lender, in Dollars (after the conversion of such
currency into Dollars), by the Administrative Agent to the Lenders, on
account of such participating interests. Notwithstanding anything to the
contrary contained in this Section 2.11, the failure of any Lender to
purchase its participating interest in any Revolving Credit Loans shall not
relieve any other Lender of its obligations hereunder to purchase its
participating interest in a timely manner, but no Lender shall be
responsible for the failure of any other Lender to purchase the
participating interest to be purchased by such other Lenders on any date.
(b) If any amount required to be paid by any Lender pursuant
to Section 2.11.2(a) is not paid to the Administrative Agent within one (1)
Business Day following the date upon which such Lender receives a request
from the Administrative Agent that such Lender fund its participating
interest relating to such Revolving Credit Loan, such Lender shall pay to
the Administrative Agent on demand an amount equal to the product of (i)
such amount, times (ii) the average daily Overnight Rate, as quoted by the
Administrative Agent, during the period from and including the date such
payment is required to be made to the date on which such payment is
immediately available to the Administrative Agent, times (iii) a fraction
the numerator of which is the number of days that elapse during such period
and the denominator of which is 360. If any such amount required to be paid
by any Lender pursuant to Section 2.11.2(a) is not in fact made available
to the Administrative Agent within three (3) Business Days following the
date upon which such Lender receives a request from the Administrative
Agent that such Lender fund its participating interest relating to such
Revolving Credit Loan, the Administrative Agent shall be entitled to
recover from the applicable Foreign Borrower, on demand, such amount with
interest thereon calculated from such due date at the rate per annum
applicable to Revolving Credit Loans which are Base Rate Loans. A
certificate from the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section 2.11.2(b) shall be
conclusive in the absence of manifest error. Amounts payable by any Lender
pursuant to this Section 2.11.2(b) shall be paid to the Administrative
Agent, for the account of the Fronting Bank; PROVIDED that, if the
Administrative Agent (in its sole discretion) has elected to fund on behalf
of such Lender the amounts owing to the Fronting Bank then the amounts
shall be paid to the Administrative Agent, for its own account.
(c) Whenever, at any time after the Fronting Bank has
received from any Lender such Lender's participating interest in a
Revolving Credit Loan pursuant to Section 2.11.2(b) above, the Fronting
Bank receives any payment on account thereof, such Fronting Bank will
distribute to the Administrative Agent, for the account of such Lender,
such Lender's participating interest in such amount
-58-
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was
outstanding and funded) in like funds received, or at the request of such
Lender, in Dollars (at the then-applicable Exchange Rate); PROVIDED,
HOWEVER, that in the event that any such payment received by the Fronting
Bank is required to be returned, such Lender will return to the Fronting
Bank any portion thereof previously distributed by the Fronting Bank to the
Lender in like funds as such payment is required to be returned by the
Fronting Bank.
(d) Each Lender's obligation to purchase participating
interests pursuant to this Section 2.11 shall be absolute and unconditional
and shall not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the Fronting Bank, any Borrower or any other Person for any reason
whatsoever; (ii) the occurrence and continuation of any Default or Event of
Default; (iii) any adverse change in the condition (financial or otherwise)
of any Person party hereto; (iv) any breach of any of the Loan Documents by
any Person; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
2.11.3. RESIGNATION OF FRONTING BANK. The Fronting Bank may
resign at any time by giving sixty (60) days prior written notice thereof
to the Lenders and the Borrowers. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Fronting Bank. Unless a
Default or Event of Default shall have occurred and be continuing, such
successor Fronting Bank shall be reasonably acceptable to the Borrowers. If
no successor Fronting Bank shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days
after the retiring Fronting Bank's giving of notice of resignation, then
the retiring Fronting Bank may, on behalf of the Lenders, appoint a
successor Fronting Bank which shall be a financial institution having a
rating of not less than A or its equivalent by Standard & Poor's Ratings
Group. Upon the acceptance of any appointment as Fronting Bank hereunder by
a successor Fronting Bank such successor Fronting Bank shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Fronting Bank and the retiring Fronting shall be
discharged from its duties and obligations hereunder. After any retiring
Fronting Bank's resignation, the provisions of this Credit Agreement and
the other Loan Documents shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was
acting as Fronting Bank.
2.12. CHANGE IN BORROWING BASE. Each of the Domestic Borrowing Base, the
U.K. Borrowing Base, the Austrian Borrowing Base and the German Borrowing Base
shall be determined monthly (or at such other interval as may be specified
pursuant to Section 7.4(f)) by the Administrative Agent by reference to the
Borrowing Base Report, commercial finance examinations and collateral audit
reports, and the appraisals of Eligible Inventory delivered to the Lenders and
the Administrative Agent pursuant to
-59-
Sections 7.9.2 and 7.9.3 and other information obtained by or provided to the
Administrative Agent. The Administrative Agent shall give to the Borrowers
written notice of any change in the Domestic Borrowing Base, the U.K. Borrowing
Base, the Austrian Borrowing Base or the German Borrowing Base, as the case may
be, determined by the Administrative Agent.
2.13. REPAYMENT OF THE REVOLVING CREDIT LOANS.
2.13.1. MATURITY. Each Borrower promises to pay on the Maturity
Date, and there shall become absolutely due and payable on the Maturity
Date, all of the Revolving Credit Loans outstanding to such Borrower on
such date, together with any and all accrued and unpaid interest thereon.
2.13.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.
(a) If at any time the Dollar Equivalent of the outstanding
amount of the Revolving Credit Loans, the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the Total Commitment at such time,
then the Borrowers shall immediately pay the amount of such excess to the
Administrative Agent for the respective accounts of the Lenders and the
Fronting Bank for application: first, to any Swing Line Loans outstanding,
second, to any Unpaid Reimbursement Obligations; third, to the Revolving
Credit Loans which are Fronted Loans; fourth, to all other Revolving Credit
Loans; and fifth, to provide to the Issuing Bank cash collateral for
Reimbursement Obligations as contemplated by Section 3.2(b) and (c). Each
payment of any Unpaid Reimbursement Obligations or prepayment of Revolving
Credit Loans shall be allocated among the Lenders, in proportion, as nearly
as practicable, to each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Lender's Revolving Credit
Note or loan account, as the case may be, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.
(b) If at any time the Domestic Exposure exceeds the Domestic
Gross Availability at such time, then Hexcel shall immediately pay the
amount of such excess to the Administrative Agent for the respective
accounts of the Lenders for application: first, to any Swing Line Loans
outstanding, second, to any Unpaid Reimbursement Obligations; third, to all
other Revolving Credit Loans advanced to Hexcel; and fourth, to provide to
the Issuing Bank cash collateral for Reimbursement Obligations as
contemplated by Section 3.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Lenders, in proportion, as nearly as practicable, to
each Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Lender's Revolving Credit Note or loan account, as
the case may be, with adjustments to the extent practicable to equalize any
prior payments or repayments not exactly in proportion.
-60-
(c) If at any time (i) the U.K. Exposure exceeds the U.K.
Borrowing Base at such time or (ii) the aggregate outstanding amount of
Base Rate Loans advanced to the U.K. Borrower PLUS the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations with respect to Letters of
Credit Issued for the account of the U.K. Borrower exceeds the U.K.
Overdraft Facility Sublimit, then the U.K. Borrower shall immediately pay
the amount of such excess to the Administrative Agent or the applicable
Lender for the respective accounts of the applicable Lenders and the
Fronting Bank for application: first, to any Unpaid Reimbursement
Obligations; second, to the Revolving Credit Loans advanced to the U.K.
Borrower which are Fronted Loans; third, to all other Revolving Credit
Loans advanced to the U.K. Borrower; and fourth, to provide to the Issuing
Bank cash collateral for Reimbursement Obligations as contemplated by
Section 3.2(b) and (c). Each payment of any Unpaid Reimbursement
Obligations or prepayment of Revolving Credit Loans shall be allocated
among the Lenders, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Lender's Revolving Credit Note or loan account, as
the case may be, with adjustments to the extent practicable to equalize any
prior payments or repayments not exactly in proportion.
(d) If at any time (i) the Austrian Exposure (after giving
effect to all amounts requested) exceeds the Austrian Borrowing Base at
such time, or (ii) the aggregate outstanding amount of Base Rate Loans
advanced to the Austrian Borrower exceeds the Austrian Overdraft Facility
Sublimit, then the Austrian Borrower shall immediately pay the amount of
such excess to the Administrative Agent or the applicable Lender for the
respective accounts of the applicable Lenders and the Fronting Bank for
application: first, to any Unpaid Reimbursement Obligations; second, to the
Revolving Credit Loans advanced to the Austrian Borrower which are Fronted
Loans; third, to all other Revolving Credit Loans advanced to the Austrian
Borrower; and fourth, to provide to the Issuing Bank cash collateral for
Reimbursement Obligations as contemplated by Section 3.2(b) and (c). Each
payment of any Unpaid Reimbursement Obligations or prepayment of Revolving
Credit Loans shall be allocated among the Lenders, in proportion, as nearly
as practicable, to each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Lender's Revolving Credit
Note or loan account, as the case may be, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.
(e) If at any time (i) the German Exposure (after giving
effect to all amounts requested) exceeds the German Borrowing Base at such
time, or (ii) the aggregate outstanding amount of Base Rate Loans advanced
to the German Borrower exceeds the German Overdraft Facility Sublimit, then
the German Borrower shall immediately pay the amount of such excess to the
Administrative Agent or the applicable Lender for the respective accounts
of the applicable Lenders and the Fronting Bank for application: first, to
any Unpaid Reimbursement Obligations; second, to the Revolving Credit Loans
advanced to
-61-
the German Borrower which are Fronted Loans; third, to all other Revolving
Credit Loans advanced to the German Borrower; and fourth, to provide to the
Issuing Bank cash collateral for Reimbursement Obligations as contemplated
by Section 3.2(b) and (c). Each payment of any Unpaid Reimbursement
Obligations or prepayment of Revolving Credit Loans shall be allocated
among the Lenders, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Lender's Revolving Credit Note or loan account, as
the case may be, with adjustments to the extent practicable to equalize any
prior payments or repayments not exactly in proportion.
2.13.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The
Borrowers shall have the right, at their election, to repay the outstanding
amount of the Revolving Credit Loans, as a whole or in part, at any time
without penalty or premium, PROVIDED that any full or partial prepayment of
the outstanding amount of any Eurocurrency Rate Loans pursuant to this
Section 2.13.3 may be made only on the last day of the Interest Period
relating thereto unless breakage costs incurred by the Lenders in
connection therewith are paid by the Borrowers in accordance with Section
4.10. The applicable Borrower shall give the Administrative Agent, no later
than 10:00 a.m. (Hartford time), at least (a) one (1) Business Days prior
written notice of any proposed prepayment pursuant to this Section 2.13.3
of Base Rate Loans, and (b) three (3) Business Days notice of any proposed
prepayment pursuant to this Section 2.13.3 of Eurocurrency Rate Loans, in
each case specifying the proposed date of prepayment of Revolving Credit
Loans and the principal amount to be prepaid. Each such partial prepayment
of the Revolving Credit Loans shall be in an integral multiple of
$1,000,000, (or the Pounds Sterling Equivalent or the Euro Equivalent, as
applicable, in the case of Revolving Credit Loans denominated in Pounds
Sterling or Euros) shall be accompanied by the payment of accrued interest
on the principal prepaid to the date of prepayment and shall be applied, in
the absence of instruction by the applicable Borrower, FIRST to the
principal of Base Rate Loans which are Fronted Loans, SECOND to the
principal of all other Base Rate Loans, THIRD to the principal of
Eurocurrency Rate Loans which are Fronted Loans and FOURTH to the principal
of all other Eurocurrency Rate Loans. Each partial prepayment shall be
allocated among the Lenders and the Fronting Bank, in proportion, as nearly
as practicable, to the respective unpaid principal amount of each Lender's
Revolving Credit Note or loan account, as the case may be, with adjustments
to the extent practicable to equalize any prior repayments not exactly in
proportion. With respect to borrowings under any Overdraft Facility, the
prior notice requirements may be waived by the Fronting Bank.
2.13.4. AUSTRIAN BORROWER. The parties hereto agree that the
place of performance (ERFULLUNGSORT) for all rights and obligations under
this Credit Agreement shall be New York, New York or any other place
outside the Republic of Austria chosen by the Administrative Agent in
accordance with this Credit Agreement.
-62-
3. LETTERS OF CREDIT.
3.1. LETTER OF CREDIT COMMITMENTS.
3.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT; LC GUARANTY. (i)
Subject to the terms and conditions hereof and the execution and delivery
by any Borrower of a letter of credit application on the Issuing Bank's
customary form (a "LETTER OF CREDIT APPLICATION"), the Issuing Bank agrees,
in its individual capacity, to issue, extend and renew for the account of
such Borrower one or more standby or documentary letters of credit and, in
the case of the U.K. Borrower, bonds and guarantees (individually, a
"LETTER OF CREDIT"), denominated in Dollars or Pounds Sterling or Euros, as
applicable, in such form as may be requested from time to time by such
Borrower and agreed to by the Issuing Bank and Administrative Agent;
PROVIDED, HOWEVER, that, after giving effect to such request, (a) the sum
of the aggregate Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not exceed $50,000,000 at any one time, (b) the sum of
(i) the Maximum Drawing Amount on all Letters of Credit, (ii) all Unpaid
Reimbursement Obligations and (iii) the Dollar Equivalent of the
outstanding amount of all Revolving Credit Loans shall not exceed the Total
Commitment at any time, and (c)(i) the Domestic Exposure (after giving
effect to all amounts requested) shall not at any time exceed the Domestic
Gross Availability at such time, (ii)(A) the U.K. Exposure (after giving
effect to all amounts requested) shall not at any time exceed the U.K.
Borrowing Base at such time and (B) the aggregate outstanding amount of
Base Rate Loans advanced to the U.K. Borrower PLUS the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations with respect to Letters of
Credit Issued for the account of the U.K. Borrower shall not at any time
exceed the U.K. Overdraft Facility Sublimit, (iii)(A) the Austrian Exposure
(after giving effect to all amounts requested) shall not at any time exceed
the Austrian Borrowing Base at such time and (B) the aggregate outstanding
amount of Base Rate Loans advanced to the Austrian Borrower shall not at
any time exceed the Austrian Overdraft Facility Sublimit, and (iv)(A) the
German Exposure (after giving effect to all amounts requested) shall not at
any time exceed the German Borrowing Base at such time and (B) the
aggregate outstanding amount of Base Rate Loans advanced to the German
Borrower shall not at any time exceed the German Overdraft Facility
Sublimit.
(ii) The Administrative Agent agrees, on behalf of the Lenders
and in reliance upon the agreement of the Lenders set forth in subsection
3.1.4 below and upon the representations and warranties of the Credit
Parties contained herein, to enter into an LC Guaranty with the Issuing
Bank, if the Issuing bank so requires, to support the reimbursement
obligations of the Borrowers with respect to any Letter of Credit.
(iii) Payments by Lenders hereunder will be made to the
Administrative Agent or the Issuing Bank in the currency in which the
-63-
Administrative Agent or the Issuing Bank made payment in respect of such
Letter of Credit.
3.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Issuing Bank and
Administrative Agent. In the event that any provision of any Letter of
Credit Application shall be inconsistent with any provision of this Credit
Agreement, then the provisions of this Credit Agreement shall, to the
extent of any such inconsistency, govern.
3.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (b) have an expiry date no later than the date which
is fourteen (14) days (or, if the Letter of Credit is confirmed by a
confirmer or otherwise provides for one or more nominated persons,
forty-five (45) days) prior to the Maturity Date, PROVIDED that (i) each
standby Letter of Credit (including any bonds or guarantees issued for the
account of the U.K. Borrower) shall have an expiry date no later than 365
days after the issuance, extension or renewal of such Letter of Credit and
may provide for customary evergreen renewals thereof for additional 365-day
periods, and (ii) each documentary Letter of Credit shall have an expiry
date no later than 180 days after the issuance, extension or renewal of
such Letter of Credit. Each Letter of Credit so issued, extended or renewed
shall be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500 or any successor version thereto adopted by the Issuing Bank in the
ordinary course of its business as a letter of credit issuer and in effect
at the time of issuance of such Letter of Credit (the "UNIFORM CUSTOMS")
or, in the case of a standby Letter of Credit, either the Uniform Customs
or the International Standby Practices (ISP98), International Chamber of
Commerce Publication No. 590, or any successor code of standby letter of
credit practices among banks adopted by the Issuing Bank in the ordinary
course of its business as a standby letter of credit issuer and in effect
at the time of issuance of such Letter of Credit.
3.1.4. REIMBURSEMENT OBLIGATIONS OF LENDERS; PARTICIPATION IN LC
GUARANTY. (i) Each Lender severally agrees that it shall be absolutely
liable, without regard to the occurrence of any Default or Event of Default
or any other condition precedent whatsoever, to the extent of such Lender's
Commitment Percentage, to reimburse the Administrative Agent, for the
account of the Issuing Bank, on demand for the amount of each draft paid by
the Issuing Bank under each Letter of Credit to the extent that such amount
is not reimbursed by applicable Borrower pursuant to Section 3.2 (such
agreement for a Lender being called herein the "LETTER OF CREDIT
PARTICIPATION" of such Lender).
(ii) By the issuance of the LC Guaranty by the Administrative
Agent, and without any further action on the part of the Administrative
Agent, the Administrative Agent hereby grants to each Lender, and each
Lender hereby
-64-
acquires from the Administrative Agent, a participation in the LC Guaranty
equal to such Lender's Commitment Percentage of the aggregate amount
guaranteed under the LC Guaranty. In the event the Administrative Agent is
required to make any payment to the Issuing Bank under the LC Guaranty,
each Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent such Lender's Commitment Percentage of each such
payment made by the Administrative Agent and not reimbursed by the
applicable Borrowers pursuant Section 3.2, or of any reimbursement payment
required to be refunded to the applicable Borrower for any reason, and each
Lender severally agrees that it shall be absolutely liable, without regard
to the occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Lender's Commitment Percentage,
to reimburse the Administrative Agent on demand for such payment. In the
event that no LC Guaranty is issued with respect to any Letter of Credit
each Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Lender's Commitment Percentage of the
Maximum Drawing Amount under such Letter of Credit.
3.1.5. PARTICIPATIONS OF LENDERS. Each such payment made by a
Lender shall be made in the currency in which such payment was made by the
Issuing Bank and/or the Administrative Agent or, at the Administrative
Agent's option, in Dollars, and shall be treated as the purchase by such
Lender of a participating interest in the applicable Borrowers'
Reimbursement Obligation under Section 3.2 in an amount equal to such
payment. Each Lender shall share in accordance with its participating
interest in any interest which accrues pursuant to Section 3.2.
3.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Issuing Bank to issue, extend and renew each Letter of Credit, the
Administrative Agent to enter into the LC Guaranty with the Issuing Bank and the
Lenders to participate therein, each Borrower hereby agrees to reimburse or pay
to the Administrative Agent or the Issuing Bank, for the account of the Issuing
Bank or (as the case may be) the Administrative Agent or the applicable Lenders,
with respect to each Letter of Credit issued, extended or renewed by the Issuing
Bank hereunder,
(a) except as otherwise expressly provided in Section 3.2(b)
and (c), on each date that any draft presented under such Letter of Credit
is honored by the Issuing Bank, or the Issuing Bank otherwise makes a
payment with respect thereto or the Administrative Agent shall make any
payment under the LC Guaranty, (i) the amount paid by the Issuing Bank or
the Administrative Agent, as the case may be, under or with respect to such
Letter of Credit, and (ii) the amount of any taxes, fees, charges or other
costs and expenses whatsoever incurred by the Issuing Bank, the
Administrative Agent or any Lender in connection with any payment made by
the Issuing Bank, the Administrative Agent or any Lender under, or with
respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an
-65-
amount equal to such difference, which amount shall be held by the
Administrative Agent for the benefit of the Issuing Bank, the
Administrative Agent and Lenders as cash collateral for all Reimbursement
Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all Letters
of Credit in accordance with Section 12, an amount equal to the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be held
by the Administrative Agent for the benefit of the Issuing Bank, the
Administrative Agent and Lenders as cash collateral for all Reimbursement
Obligations.
Each Borrower is responsible for payment in respect of Letters of Credit issued
for such Borrower's account. Each such payment shall be made to the
Administrative Agent at the Administrative Agent's Office or, as applicable by
the U.K. Borrower, to the Issuing Bank, in immediately available funds. Interest
on any and all amounts remaining unpaid by applicable Borrower under this
Section 3.2 at any time from the date such amounts become due and payable
(whether as stated in this Section 3.2, by acceleration or otherwise) until
payment in full (whether before or after judgment) shall be payable to the
Administrative Agent on demand at the rate specified in Section 4.11 for overdue
principal on the Revolving Credit Loans.
3.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Issuing Bank
shall notify the applicable Borrower of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to pay
such draft or honor such demand for payment. If the applicable Borrower fails to
reimburse the Issuing Bank as provided in Section 3.2 on or before the date that
such draft is paid or other payment is made by the Issuing Bank, the Issuing
Bank may at any time thereafter notify the Administrative Agent of the amount of
any such Unpaid Reimbursement Obligation and the Administrative Agent shall
notify the Lenders thereof. Subject to Section 2.1 hereof, the applicable
Borrower shall be entitled to reimburse the Issuing Bank for any Unpaid
Reimbursement Obligations by applying funds from Revolving Credit Loans
hereunder. The Administrative Agent shall also be entitled to reimburse the
Issuing Bank for any Unpaid Reimbursement Obligation by causing the debit of any
account maintained by the Borrowers or any of their Subsidiaries with the
Administrative Agent or any other institution with which the Administrative
Agent shall have entered into an agency account agreement (it being understood
and agreed that, notwithstanding anything in this Credit Agreement or any of the
other Loan Document to the contrary, cash or depository accounts of any Foreign
Subsidiary (including any Foreign Borrower) will not serve at any time, directly
or indirectly, to collateralize the obligations of Hexcel or any Domestic
Subsidiary, and, in addition, the cash or depositary accounts of a Foreign
Subsidiary will only serve to collateralize the obligations of another Foreign
Borrower if such Foreign Subsidiary is owned by such Foreign Borrower). No later
than 3:00 p.m. (Hartford time) on the Business Day next following the receipt of
such notice, (i) the Administrative Agent, as guarantor under the LC Guaranty,
shall make available to the Issuing Bank at the Administrative Agent's Office,
in immediately available funds, the
-66-
amount of such Unpaid Reimbursement Obligation, together with an amount equal to
the product of (a) the average, computed for the period referred to in clause
(c) below, of the weighted average Overnight Rate for each day included in such
period, TIMES (b) the amount equal to such Unpaid Reimbursement Obligation,
TIMES (c) a fraction, the numerator of which is the number of days that elapse
from and including the date the Issuing Bank paid the draft presented for honor
or otherwise made payment to the date on which such Unpaid Reimbursement
Obligation shall become immediately available to the Issuing Bank, and the
denominator of which is 360 and (ii) each Lender shall make available to the
Administrative Agent, at the Administrative Agent's Office, in immediately
available funds, such Lender's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average Overnight Rate for each day included in such period, TIMES (b)
the amount equal to such Lender's Commitment Percentage of such Unpaid
Reimbursement Obligation, TIMES (c) a fraction, the numerator of which is the
number of days that elapse from and including the date the Issuing Bank paid the
draft presented for honor or otherwise made payment to the date on which such
Lender's Commitment Percentage of such Unpaid Reimbursement Obligation shall
become immediately available to the Issuing Bank, and the denominator of which
is 360. The responsibility of the Issuing Bank to the Borrowers, the
Administrative Agent and the Lenders shall be only to determine that the
documents (including each draft) delivered under each Letter of Credit in
connection with such presentment shall be in conformity in all material respects
with such Letter of Credit.
3.4. OBLIGATIONS ABSOLUTE. The Borrowers' obligations under this Section 3
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which any Borrower may have or have had against the Issuing Bank, the
Administrative Agent, any Lender or any beneficiary of a Letter of Credit. Each
Borrower further agrees with the Issuing Bank, the Administrative Agent and the
Lenders that the Issuing Bank, the Administrative Agent and the Lenders shall
not be responsible for, and each Borrower's Reimbursement Obligations under
Section 3.2 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, fraudulent or forged,
or any dispute between or among any Borrower, the beneficiary of any Letter of
Credit or any financing institution or other party to which any Letter of Credit
may be transferred or any claims or defenses whatsoever of any Borrower against
the beneficiary of any Letter of Credit or any such transferee. The Issuing
Bank, the Administrative Agent and the Lenders shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit. Each Borrower agrees that any action taken or omitted by the Issuing
Bank, the Administrative Agent or any Lender under or in connection with each
Letter of Credit and the related drafts and documents, if done in good faith and
absent gross negligence and willful misconduct, shall be binding upon such
Borrower and shall
-67-
not result in any liability on the part of the Issuing Bank, the Administrative
Agent or any Lender to such Borrower.
3.5. RELIANCE BY ISSUER. To the extent not inconsistent with Section 3.4,
the Issuing Bank shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Issuing Bank. The Issuing Bank shall be fully
justified in failing or refusing to take any action under this Credit Agreement
unless it shall first have received such advice or concurrence of the Required
Lenders as it reasonably deems appropriate or it shall first be indemnified to
its reasonable satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Issuing Bank shall in all cases be fully protected in
acting, or in refraining from acting, under this Credit Agreement in accordance
with a request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Lenders and all future
holders of the Revolving Credit Notes or of a Letter of Credit Participation.
3.6. LETTER OF CREDIT FEE. The Borrowers shall pay a fee (in each case, a
"LETTER OF CREDIT FEE") to the Administrative Agent, though its Treasury and
International Services Group or, as applicable by the U.K. Borrower, to the
Issuing Bank, in respect of each Letter of Credit outstanding an amount equal to
the Applicable Margin for Eurocurrency Loans denominated in the currency of such
Letter of Credit per annum of the available amount of such Letter of Credit,
which Letter of Credit Fee, in each case, shall be for the accounts of the
Lenders in accordance with their respective Commitment Percentages. In respect
of each Letter of Credit, the applicable Borrower shall also pay to the Issuing
Bank for the Issuing Bank's own account a fronting fee (in each case, the
"FRONTING FEE") calculated at the per annum rate of 0.125% of the Maximum
Drawing Amount under such Letter of Credit and, at such other time or times as
such charges are customarily made by the Issuing Bank, the Issuing Bank's
customary issuance, amendment, negotiation or document examination and other
administrative fees as in effect from time to time. The Letter of Credit Fee,
the Fronting Fee and any other fees payable under this Section 3.6 shall be
payable in the currency of the applicable Letter of Credit or, at the option of
the Administrative Agent, in Dollars. All fees under this Section 3.6 shall be
due and payable on the first Business Day of each month in arrears or as advised
by the Administrative Agent or Issuing Bank, as applicable.
4. CERTAIN GENERAL PROVISIONS.
4.1. CLOSING FEE. Hexcel agrees to pay to the Administrative Agent on the
Closing Date an underwriting fee and a structuring fee (the "CLOSING FEE") in
the amount and at the times specified in the Fee Letter.
-68-
4.2. ADMINISTRATIVE AGENT'S FEE. Hexcel agrees to pay to the Administrative
Agent, for the Administrative Agent's own account, an agency fee (the
"ADMINISTRATIVE AGENT'S FEE") in the amount and at the times specified in the
Fee Letter.
4.3. FUNDS FOR PAYMENTS.
4.3.1. PAYMENTS TO ADMINISTRATIVE AGENT. All payments of
principal and interest on Revolving Credit Loans and all Reimbursement
Obligations which are denominated in Dollars and all Fees (except payments
of principal and interest on any Overdraft Facility, Letter of Credit Fees
and Fronting Fees with respect to Letters of Credit issued for the account
of any Foreign Borrower shall be made to the applicable Fronting Bank or
applicable Issuing Bank, as the case may be, for the respective accounts of
the Lenders and the Administrative Agent, as the case may be) and any other
amounts due hereunder or under any of the other Loan Documents shall be
made on the due date thereof to the Administrative Agent, for the
respective accounts of the Lenders and the Administrative Agent, as the
case may be, in Dollars, at the Administrative Agent's Office or at such
other place that the Administrative Agent may from time to time designate,
in each case at or about 11:00 a.m. (Hartford, Connecticut time or other
local time at the place of payment) and in Same Day Funds. All payments of
principal and interest on Revolving Credit Loans and all Reimbursement
Obligations and any other fees (except payments of principal and interest
on any Overdraft Facility, Letter of Credit Fees and Fronting Fees with
respect to Letters of Credit issued for the account of any Foreign Borrower
shall be made to the applicable Fronting Bank or applicable Issuing Bank,
as the case may be, for the respective accounts of the Lenders and the
Administrative Agent, as the case may be) due hereunder which are
denominated in Pounds Sterling or Euros shall be made by the applicable
Foreign Borrower to the Administrative Agent, for the respective account of
the Lenders and the Administrative Agent, as the case may be, in Pounds
Sterling or Euros, as the case may be, at the Administrative Agent's Office
or at such other place that the Administrative Agent may from time to time
designate, in each case of or about 11:00 a.m. (London time or other local
time at the place of payment) and in Same Day Funds. All payments of
principal and interest on any Overdraft Facility, Letter of Credit Fees and
Fronting Fees with respect to Letters of Credit issued for the account of
any Foreign Borrower shall be made on the due date thereof to the
applicable Fronting Bank or applicable Issuing Bank, as the case may be,
for the respective accounts of the Lenders and the Administrative Agent, as
the case may be, in Dollars, Pounds Sterling or Euros, as applicable, at
such other place that applicable Fronting Bank or applicable Issuing Bank
may from time to time designate, in each case at or about 11:00 a.m.
(London time or other local time at the place of payment) and in Same Day
Funds. Each payment in respect of any Revolving Credit Loan made by a
Borrower shall be made in the same currency in which such Revolving Credit
Loan was made. Each of Hexcel and the Guarantors authorizes the
Administrative Agent to debit any account maintained by Hexcel and/or the
Guarantors with the Administrative Agent
-69-
and/or to charge the loan account of Hexcel for any payment required to be
made hereunder with respect to Hexcel or any Guarantor. With respect to
interest payable by the U.K. Borrower to the Administrative Agent or any
Lender, the Administrative Agent or any Lender shall, at its option and
with the consent of the U.K. Borrower, have the ability to defer such
interest payments until such time as the Administrative Agent has received
an exemption from any withholding taxes with respect to such interest
payments.
4.3.2. NO OFFSET, ETC. All payments by the Borrowers hereunder
and under any of the other Loan Documents shall be made without recoupment,
setoff or counterclaim and free and clear of, and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
of any nature now or hereafter imposed, levied, collected, withheld or
collected by any jurisdiction or any political subdivision thereof or
taxing or other authority therein ("Non-Excluded Taxes"), excluding net
income taxes, franchise taxes (imposed in lieu of net income taxes) and
branch profits taxes imposed on the Administrative Agent or any Lender as a
result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction or the governmental authority imposing
such tax or any political subdivision or taxing authority thereof or
therein ("Excluded Taxes"). If any such Non-Excluded Taxes are required to
be withheld from any amounts payable to the Administrative Agent or any
Lender hereunder or under any of the other Loan Documents, the Borrowers
will pay to the Administrative Agent, for the account of the Lenders or (as
the case may be) the Administrative Agent, on the date on which such amount
is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars or at the Administrative Agent's option,
Pounds Sterling or Euros, as shall be necessary to enable the Lenders, the
Fronting Bank, the Issuing Bank or the Administrative Agent to receive the
same net amount which the Lenders or the Administrative Agent would have
received on such due date had no such obligation been imposed upon the
Borrowers, provided, however that the Borrowers shall be entitled to deduct
and withhold and shall not be required to increase any such amounts payable
to an Administrative Agent or Lender that is not a United States person
defined in section 7701((A)(30) of the Code (a "NON-U.S. LENDER") for the
amount of any incremental taxes, levies, imposts, duties, charges, fees,
deductions or withholdings which result from failure by the Administrative
Agent or Lender, as the case may be, to comply with the requirements of
Section 4.3.3. The Borrowers will deliver promptly to the Administrative
Agent certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrowers
hereunder or under such other Loan Document.
Each Borrower shall indemnify the Lenders for the amount of any
incremental taxes, interest and penalties that may become payable by the
Administrative Agent or the Lender as a result of any failure by such
Borrower to pay any Non-Excluded taxes as required by this provision, and
any taxes
-70-
levied or imposed with respect to any indemnity payment made under this
provision. Any such indemnification payment shall be made within
(30)Business days after the date a Lender makes written demand therefor.
Each Borrower's obligations under this provision shall survive
payment or satisfaction in full of all other Obligations.
4.3.3. NON-U.S. LENDERS. Each Lender and the Administrative Agent
that is not a U.S. Person as defined in Section 7701(a)(30) of the Code for
federal income tax purposes (a "NON-U.S. LENDER") hereby agrees that it
shall prior to the Closing Date, deliver to the Administrative Agent, if
required by applicable law, and to Hexcel such certificates, documents or
other evidence, as and when required by the Code or Treasury Regulations
issued pursuant thereto, including (a) in the case of a Non-U.S. Lender
that is a "BANK" for purposes of Section 881(c)(3)(A) of the Code, two (2)
duly completed copies of Internal Revenue Service Form W-8BEN or Form
W-8ECI and Form W-9, and any other certificate or statement of exemption
required by Treasury Regulations, or any subsequent versions thereof or
successors thereto, properly completed and validly executed by such Lender
or the Administrative Agent establishing that with respect to all payments
by the Borrowers hereunder and under any of the other Loan Documents it is
(i) not subject to United States federal withholding tax and backup
withholding tax under the Code because such payment is effectively
connected with the conduct by such Lender or Administrative Agent of a
trade or business in the United States or (ii) totally exempt from United
States federal withholding tax under a provision of an applicable tax
treaty and (b) in the case of a Non-U.S. Lender that is not a "BANK" for
purposes of Section 881(c)(3)(A) of the Code, a certificate in form and
substance reasonably satisfactory to the Administrative Agent and the
Borrowers and to the effect that (i) such Non-U.S. Lender is not a "BANK"
for purposes of Section 881(c)(3)(A) of the Code, is not subject to
regulatory or other legal requirements as a bank in any jurisdiction, and
has not been treated as a bank for purposes of any tax, securities law or
other filing or submission made to any governmental authority, any
application made to a rating agency or qualification for any exemption from
any tax, securities law or other legal requirements, (ii) is not a ten
percent (10%) shareholder for purposes of Section 881(c)(3)(B) of the Code
and (iii) is not a controlled foreign corporation receiving interest from a
related person for purposes of Section 881(c)(3)(C) of the Code, together
with a properly completed and validly executed Internal Revenue Service
Form W-8 BEN (or successor form). Each Lender or the Administrative Agent
agrees that it shall, prior to a change of its lending office or the
selection of any additional lending office, to the extent the forms
previously delivered by it pursuant to this section are no longer
effective, and prior to the date any such forms expire or otherwise become
obsolete deliver to the Administrative Agent, if required by applicable law
and to Hexcel, a properly completed and validly executed Internal Revenue
Service forms X-0XXX, X-0XXX or W-9, as applicable (or any successor forms
thereto). The Lender shall certify (i) in the case of any initial or
replacement Form W-8BEN (or
-71-
successor form thereto), that the Lender is entitled to receive all
payments from the Borrowers hereunder and under any of the other Loan
Documents without deduction or withholding of any United States federal
income taxes, (ii) in the case of any initial or replacement Form W-8ECI
(or successor form thereto), that all payments from the Borrowers hereunder
and under any of the other Loan Documents are effectively connected with
the Lender's conduct of a trade or business within the United States, and
(iii) and in the case of any initial or replacement Form W-9 (or successor
form thereto), that the Lender is exempt from United States backup
withholding tax.
4.3.4. REFUNDS. If a Lender or the Administrative Agent shall
become aware that it is entitled to receive a refund (including interest
and penalties, if any) in respect of Non-Excluded Taxes as to which a
Borrower has paid pursuant to Section 4.3.2, it shall promptly notify in
writing such Borrower of the availability of such refund (including
interest and penalties, if any), shall, within 30 days after the receipt of
a request by such Borrower, apply for such refund at such Borrower's
expense, and shall within 30 days of receiving such refund, remit the
amount of such refund (including interest and penalties, if any) to the
applicable Borrower.
4.4. COMPUTATIONS. All computations of interest on (a) Base Rate Loans
advanced to Hexcel, the Austrian Borrower or the German Borrower and (b) Base
Rate Loans denominated in Pounds Sterling advanced to the U.K. Borrower shall be
based on a 365-day year, and paid for the actual number of days elapsed, and all
computations of interest on (i) Eurocurrency Rate Loans, (ii) Base Rate Loans
denominated in Dollars and Euros advanced to any Foreign Borrower and (iii) of
Fees shall be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "INTEREST
PERIOD" with respect to Eurocurrency Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Revolving Credit Loans as reflected on the Records
from time to time shall be considered correct and binding on the Borrowers
unless within five (5) Business Days after receipt of any notice by the
Administrative Agent or any of the Lenders of such outstanding amount, the
Administrative Agent or such Lender shall notify the Borrowers to the contrary.
4.5. INABILITY TO DETERMINE EUROCURRENCY RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurocurrency Rate Loan, the
Administrative Agent shall determine or be notified by the Fronting Bank or, in
the case of a Eurocurrency Loan denominated in Dollars advanced to Hexcel, by
any Lender that (a) adequate and reasonable methods do not exist for
ascertaining the Eurocurrency Rate that would otherwise determine the rate of
interest to be applicable to any Eurocurrency Rate Loan during any Interest
Period or deposits in Dollars, Pounds Sterling or Euros in the relevant Interest
Period are not are not available to the Administrative Agent, the Fronting Bank
or the Lenders in any Eurocurrency Interbank Market, or (b) the
-72-
Eurocurrency Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to the Fronting Bank or the Lenders
of making or maintaining their Eurocurrency Rate Loans during such period, the
Administrative Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrowers and the Lenders) to the
Borrowers and the Lenders. In such event (i) any Loan Request, Conversion
Request or OC Notice with respect to Eurocurrency Rate Loans shall be
automatically withdrawn and, (A) in the case of Revolving Credit Loans
denominated in Dollars, shall be deemed a request for Base Rate Loans, and (B)
in the case of Revolving Credit Loans denominated in Pounds Sterling or Euros
advanced to any Foreign Borrower shall be deemed a request for Base Rate Loans
for such currency, in an amount not to exceed the then-available applicable
Overdraft Facility Sublimit, and, in each case, the Administrative Agent shall
have the ability to increase any applicable Overdraft Facility Sublimit to the
amount required to accommodate such requested Revolving Credit Loans, (ii) each
Eurocurrency Rate Loan shall, on the last day of the then current Interest
Period relating thereto, (A) if denominated in Dollars, automatically become a
Base Rate Loan, and (B) if denominated in Pounds Sterling or Euros and advanced
to any Foreign Borrower, automatically become a Base Rate Loan denominated in
Pounds Sterling or Euros, as the case may be, in an amount not to exceed the
then-available applicable Overdraft Facility Sublimit, and, in each case, the
Administrative Agent shall have the ability to increase any applicable Overdraft
Facility Sublimit to the amount required to accommodate such requested Revolving
Credit Loans and (iii) the obligations of the Lenders to make Eurocurrency Rate
Loans shall be suspended until the Administrative Agent, the Fronting Bank or
the Required Lenders determine that the circumstances giving rise to such
suspension no longer exist, whereupon the Administrative Agent or, as the case
may be, the Administrative Agent upon the instruction of the Fronting Bank or
the Required Lenders, as applicable, shall so notify the Borrowers and the
Lenders.
4.6. ILLEGALITY. Notwithstanding any other provisions herein, if the
adoption or change in any law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurocurrency Rate Loans or perform its obligations in respect
of any Eurocurrency Rate Loans, such Lender shall forthwith give notice of such
circumstances to the Borrowers and the other Lenders and thereupon (a) the
commitment of such Lender to make Eurocurrency Rate Loans or convert Base Rate
Loans to Eurocurrency Rate Loans shall forthwith be suspended and (b) such
Lender's Revolving Credit Loans then outstanding as Eurocurrency Rate Loans
denominated in Dollars, if any, shall be converted automatically to Base Rate
Loans on the last day of each Interest Period applicable to such Eurocurrency
Rate Loans or within such earlier period as may be required by law, and the
Eurocurrency Rate Loans denominated in Pounds Sterling or Euros then
outstanding, if any, shall be converted automatically to Base Rate Loans
denominated in such currency on the last day of each Interest Period applicable
to such Eurocurrency Rate Loans or within such earlier period as may be required
by law, in an amount not to exceed the then-available applicable Overdraft
Facility Sublimit and the Administrative Agent shall have the ability to
increase any applicable Overdraft Facility Sublimit to the amount required to
accommodate such converted Revolving Credit Loans. The Borrowers hereby
severally
-73-
agree promptly to pay the Administrative Agent for the account of such Lender,
upon demand by such Lender, any additional amounts necessary to compensate such
Lender with respect to such Borrower for any costs incurred by such Lender in
making any conversion in accordance with this Section 4.6, including any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its Eurocurrency Rate Loans hereunder.
4.7. ADDITIONAL COSTS ARISING FROM CHANGE IN LAW, ETC. If the adoption or
change in any applicable law, which expression, as used herein, includes
statutes, rules, orders and regulations thereunder and interpretations thereof
by any competent court or by any governmental or other regulatory body or
official charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Lender or the Administrative
Agent by any central bank or other fiscal, monetary or other authority (whether
or not having the force of law), shall:
(a) subject any Lender or the Administrative Agent to any
tax, levy, impost, duty, charge, fee, deduction or withholding of any
nature with respect to this Credit Agreement, the other Loan Documents, any
Letters of Credit, such Lender's Commitment or the Revolving Credit Loans
(other than Excluded Taxes as defined in Section 4.3.2), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits and other Excluded Taxes) of payments
to any Lender of the principal of or the interest on any Revolving Credit
Loans or any other amounts payable to any Lender or the Administrative
Agent under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law) against
assets held by, or deposits in or for the account of, or loans by, or
letters of credit issued by, or commitments of an office of any Lender, or
(d) impose on any Lender or the Administrative Agent any
other conditions or requirements with respect to this Credit Agreement, the
other Loan Documents, the Revolving Credit Loans, such Lender's Commitment,
any Letters of Credit or any class of loans, letters of credit or
commitments of which any of the Revolving Credit Loans or such Lender's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Lender of making,
funding, issuing, renewing, extending or maintaining any of the
Revolving Credit Loans or such Lender's Commitment or any Letter
of Credit, or
-74-
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Lender or the
Administrative Agent hereunder on account of such Lender's Commitment,
any Letter of Credit or any of the Revolving Credit Loans, or
(iii) to require such Lender or the Administrative Agent to make
any payment or to forego any interest or Reimbursement Obligation or
other sum payable hereunder, the amount of which payment or foregone
interest or Reimbursement Obligation or other sum is calculated by
reference to the gross amount of any sum receivable or deemed received
by such Lender or the Administrative Agent from the Borrowers
hereunder, or
(e) impose on any Lender or the Administrative Agent any Mandatory
Costs with respect to this Credit Agreement, the other Loan Documents, such
Lender's Commitment or the Revolving Credit Loans,
then, and in each such case, each Borrower will, upon demand made by such Lender
or (as the case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the Administrative Agent the amount incurred with respect to each
Borrower for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum.
4.8. CAPITAL ADEQUACY. If after the date hereof any Lender or the
Administrative Agent determines that (a) the adoption of or change in any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital requirements for Lenders or Lender
holding companies or any change in the interpretation or application thereof by
a Governmental Authority with appropriate jurisdiction, or (b) compliance by
such Lender or the Administrative Agent or any corporation controlling such
Lender or the Administrative Agent with any law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) of any
such entity regarding capital adequacy, has the effect of reducing the return on
such Lender's or the Administrative Agent's commitment with respect to any
Revolving Credit Loans to a level below that which such Lender or the
Administrative Agent could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or the Administrative
Agent's then existing policies with respect to capital adequacy and assuming
full utilization of such entity's capital) by any amount deemed by such Lender
or (as the case may be) the Administrative Agent to be material, then such
Lender or the Administrative Agent may notify the Borrowers of such fact. To the
extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrowers severally agree to pay such Lender or
(as the case may be) the Administrative Agent for the amount incurred with
respect to such Borrower of such reduction in the return on capital as and when
such reduction is determined upon presentation by such Lender or (as the case
may be) the
-75-
Administrative Agent of a certificate in accordance with Section 4.9 hereof.
Each Lender shall allocate such cost increases among its customers in good faith
and on an equitable basis.
4.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 4.7 or 4.8 and a brief explanation of such amounts
which are due, submitted by any Lender or the Administrative Agent to the
Borrowers, shall be conclusive, absent manifest error, that such amounts are due
and owing.
4.10. INDEMNITY. Each Borrower agrees to indemnify each Lender and to hold
each Lender harmless from and against any loss, cost or expense (including loss
of anticipated profits) that such Lender may sustain or incur as a consequence
of (a) default by such Borrower in payment of the principal amount of or any
interest on any Eurocurrency Rate Loans as and when due and payable, including
any such loss or expense arising from interest or fees payable by such Lender to
banks of funds obtained by it in order to maintain its Eurocurrency Rate Loans,
(b) default by such Borrower in making a borrowing or conversion after such
Borrower has given (or is deemed to have given) a Loan Request or a Conversion
Request relating thereto in accordance with Section 2.6 or Section 2.7 or (c)
the making of any payment (including, without limitation, any prepayment) of a
Eurocurrency Rate Loan or the making of any conversion of any such Revolving
Credit Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Lender to lenders of funds obtained by it in order to maintain
any such Revolving Credit Loans.
4.11. INTEREST AFTER DEFAULT.
During the continuance of Event of Default under Sections 12.1(a) or
12.1(b), principal of and (to the extent permitted by applicable law) interest
on the Revolving Credit Loans and all other amounts payable hereunder
(including, without limitation, any Unpaid Reimbursement Obligations and
interest) or under any of the other Loan Documents shall, at the option of the
Administrative Agent and/or the Required Lenders, bear interest compounded
monthly and payable on demand at a rate per annum equal to two percent (2%)
above the rate of interest then applicable to the Revolving Credit Loans until
such amount shall be paid in full (after as well as before judgment) and the
Letter of Credit Fees shall accrue at a rate per annum equal to two percent (2%)
above the rate applicable thereto.
4.12. CURRENCY MATTERS.
Dollars are the currency of account and payment for each and every sum at
any time due from the Borrowers hereunder; PROVIDED that:
(a) except as expressly provided in this Credit Agreement, each repayment
of a Revolving Credit Loan or a part thereof shall be made in the currency in
which such Revolving Credit Loan is denominated at the time of that repayment;
-76-
(b) each payment of interest shall be made in the currency in which such
principal or other sum in respect of which such interest is payable, is
denominated;
(c) each payment of any Fees shall be in Dollars (except Letter of Credit
Fees and the Fronting Fees pursuant to Section 3.6);
(d) each payment of Letter of Credit Fees and Fronting Fees shall be
payable in the currency of the underlying Letter of Credit;
(e) each payment in respect of costs, expenses and indemnities shall be
made in the currency in which the same were incurred; and
(f) any amount expressed to be payable in Pounds Sterling or Euros shall be
paid in such currency.
No payment to the Administrative Agent or any Lender (whether under any
judgment or court order or otherwise) shall discharge the obligation or
liability in respect of which it was made unless and until the Administrative
Agent or such Lender shall have received payment in full in the currency in
which such obligation or liability was incurred, and to the extent that the
amount of any such payment shall, on actual conversion into such currency, fall
short of such obligation or liability actual or contingent expressed in that
currency, each Borrower agrees to indemnify and hold harmless the Administrative
Agent or such Lender, as the case may be, with respect to the amount of the
shortfall with respect to amounts payable by such Borrower hereunder, with such
indemnity surviving the termination of this Credit Agreement and any legal
proceeding, judgment or court order pursuant to which the original payment was
made which resulted in the shortfall.
4.13. LENDING OFFICE. Each Revolving Credit Loan made by any Lender in
Pounds Sterling or Euros, and each payment by any Foreign Borrower in respect
thereof, shall be made by, or, as the case may be, for the account of, such
applicable lending office of the Administrative Agent as the Administrative
Agent shall designate.
4.14. CURRENCY FLUCTUATIONS.
(a) Not later than 1:00 p.m. (Hartford, Connecticut time) on the last
Business Day of each calendar month or, in the event that the Exchange Rate
fluctuates in excess of 10% during such calendar month, any other Business
Day (up to one additional time per month with respect to Pounds Sterling or
Euros, as the case may be) in the discretion of the Administrative Agent
(the "CALCULATION DATE"), the Administrative Agent shall determine the
Exchange Rate as of such date. The Exchange Rate so determined shall become
effective on the first Business Day immediately following such
determination (a "RESET DATE") and shall remain effective until the next
succeeding Reset Date. Nothing contained in this Section 4.14 shall be
construed to require the Administrative Agent to calculate compliance under
this Section 4.14 more frequently than once each month.
-77-
(b) Not later than 4:00 p.m. (Hartford time) on each Reset Date, the
Administrative Agent shall determine the Dollar Equivalent of the Revolving
Credit Loans advanced to each of the Foreign Borrowers and the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations with respect to
Letters of Credit issued for the account of such Borrower.
(c) If, on any Reset Date, (A) the Dollar Equivalent of the U.K.
Exposure exceeds the U.K. Borrowing Base or (B) (ii) the Dollar Equivalent
of the aggregate outstanding amount of Base Rate Loans advanced to the U.K.
Borrower exceeds the Overdraft Facility Sublimit (in each case, the amount
of such excess referred to herein as the "U.K. EXCESS AMOUNT") by more than
one percent (1%) of the amount of the U.K. Borrowing Base or the Overdraft
Facility Sublimit, as the case may be, then (A) the Administrative Agent
shall give notice thereof to the U.K. Borrower, the Fronting Bank and the
applicable Lenders and (B) within two (2) Business Days thereafter, the
U.K. Borrower shall repay or prepay such Revolving Credit Loans and Unpaid
Reimbursement Obligations and provide cash collateral for such Maximum
Drawing Amounts in accordance with this Credit Agreement in an aggregate
principal amount such that, after giving effect thereto, the U.K. Exposure
no longer exceeds the U.K. Borrowing Base or the Overdraft Facility
Sublimit, as applicable.
(d) If, on any Reset Date, the Austrian Exposure exceeds the Austrian
Borrowing Base (the amount of such excess referred to herein as the
"AUSTRIAN EXCESS AMOUNT") by more than one percent (1%) of the amount of
the Austrian Borrowing Base, then (A) the Administrative Agent shall give
notice thereof to the Austrian Borrower, the Fronting Bank and the Lenders
and (B) within two (2) Business Days thereafter, the Austrian Borrower
shall repay or prepay such Revolving Credit Loans and Unpaid Reimbursement
Obligations and provide cash collateral for such Maximum Drawing Amounts in
accordance with this Credit Agreement in an aggregate principal amount such
that, after giving effect thereto, the Austrian Exposure no longer exceeds
the Austrian Borrowing Base.
(e) If, on any Reset Date, the German Exposure exceeds the German
Borrowing Base (the amount of such excess referred to herein as the "GERMAN
EXCESS AMOUNT") by more than one percent (1%) of the amount of the German
Borrowing Base, then (A) the Administrative Agent shall give notice thereof
to the German Borrower, the Fronting Bank and the Lenders and (B) within
two (2) Business Days thereafter, the German Borrower shall repay or prepay
such Revolving Credit Loans and Unpaid Reimbursement Obligations and
provide cash collateral for such Maximum Drawing Amounts in accordance with
this Credit Agreement in an aggregate principal amount such that, after
giving effect thereto, the German Exposure no longer exceeds the German
Borrowing Base.
4.15. LENDERS' OBLIGATION TO MITIGATE; REPLACEMENT OF LENDER.
(a) If any Lender requests compensation under Sections 4.6 or
4.7, or if the Borrower is required to pay any additional amount to the
Administrative Agent
-78-
or any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 4.3.2, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans
hereunder, or to assign its rights and obligations hereunder to another of
its offices, branches or Affiliates, if, in the reasonable judgment of such
Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Sections 4.3.2, 4.6 or 4.7, as the case may be,
and (ii) would not subject such Lender to any material unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment.
Notwithstanding anything to the contrary contained herein, no Lender shall
be entitled to receive any amount under subsection 4.3.2, 4.6, or 4.7 as a
result of a change in any lending office which is greater than such Lender
would have been entitled to receive immediately prior thereto, unless the
transfer occurred at a time when circumstances giving rise to the claim for
such greater amount did not exist.
(b) If any Lender requests compensation under Section 4.7, or
if any Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 4.3.2, or if any Lender defaults in its obligation to fund
Revolving Credit Loans hereunder, then such Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 14,
all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the
Borrower shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld or
delayed, (ii) such Lender shall have received payment of an amount equal to
the outstanding principal of its Revolving Credit Loans (and its Commitment
Percentage of any Unpaid Reimbursement Obligations), accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from
the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for
compensation under Section 4.7 or payments required to be made pursuant to
Section 4.3.2, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
5. COLLATERAL SECURITY AND GUARANTIES.
The Borrowers covenant and agree that:
-79-
5.1. GENERAL. The Obligations shall be secured pursuant to the terms of the
Security Documents, as further described in Section 5.2, and shall be guaranteed
pursuant to the terms of the Guaranties as further described in Section 5.3.
5.2. SECURITY OF BORROWERS AND GUARANTORS. (a) The Obligations of Hexcel
shall be secured by a perfected first priority security interest (subject only
to Permitted Liens entitled to priority under applicable law) in (x) all of the
accounts receivable, cash, cash equivalents, bank accounts (subject to the
limitations described in Section 7.17.1) and inventory of Hexcel, together with
all rights under contracts of sale relating to or affecting the creation or
collection of any such accounts or the completion or sale of any such inventory,
whether now owned or hereafter acquired, and all products and proceeds thereof,
pursuant to the terms of the Security Documents to which Hexcel is a party and a
first priority perfected pledge (or the equivalent thereof under local law as
determined by the Administrative Agent) of 65% of the capital stock (issued
share capital) or other equity interests of each of its first tier Material
Foreign Subsidiaries; PROVIDED HOWEVER, that to the extent that any such first
tier Material Foreign Subsidiary is treated as a disregarded entity for United
States federal income tax purposes, Hexcel shall, in addition, pledge 65% of the
capital stock of any Material Foreign Subsidiary directly owned by such
disregarded first tier Material Foreign Subsidiary; and (y) all of the accounts
receivable, cash, cash equivalents, bank accounts and inventory of each of the
Subsidiary Guarantors, together with all rights under contracts of sale relating
to or affecting the creation or collection of any such accounts or the
completion or sale of any such inventory, whether now owned or hereafter
acquired, and all products and proceeds thereof, pursuant to the terms of the
Security Documents to which each such Guarantor is a party, (b) the Obligations
of the U.K. Borrower with respect to the U.K. Exposure (only) shall be secured
by a perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the accounts receivable,
cash, cash equivalents, bank accounts (subject to the limitations described in
Section 7.17.1) and inventory of the U.K. Borrower, together with all rights
under contracts of sale relating to or affecting the creation or collection of
any such accounts or the completion or sale of any such inventory, whether now
owned or hereafter acquired, and all products and proceeds thereof, pursuant to
the terms of the U.K. Security Documents, (c) the Obligations of the Austrian
Borrower with respect to the Austrian Exposure (only) shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the accounts receivable,
cash, cash equivalents and bank accounts (subject to the limitations described
in Section 7.17.1) of the Austrian Borrower, whether now owned or hereafter
acquired, and all products and proceeds thereof, together with all rights under
contracts of sale relating to or affecting the creation or collection of any
such accounts, pursuant to the terms of the Austrian Security Documents, and (d)
the Obligations of the German Borrower with respect to the German Exposure
(only) shall be secured by a perfected first priority security interest (subject
only to Permitted Liens entitled to priority under applicable law) in all of the
accounts receivable, cash, cash equivalents, and bank accounts (subject to the
limitations described in Section 7.17.1) of the German Borrower, whether now
owned or hereafter acquired, and all products and proceeds thereof, together
with all rights under
-80-
contracts of sale relating to or affecting the creation or collection of any
such accounts, pursuant to the terms of the German Security Documents.
5.3. GUARANTY. For value received and hereby acknowledged and as an
inducement to the Lenders to make Revolving Credit Loans to the Borrowers,
including the Foreign Borrowers, each of the Guarantors hereby unconditionally
and irrevocably guarantees: (i) the full punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all Obligations of each
Borrower now or hereafter existing hereunder whether for principal, interest,
fees, expenses or otherwise, and (ii) the strict performance and observance by
each such Borrower of all agreements, warranties and covenants in this Credit
Agreement applicable to each such Borrower (such obligations collectively being
the "GUARANTEED OBLIGATIONS"). The obligations of each Guarantor under this
Section 5 are an absolute, unconditional and continuing guaranty of the full and
punctual payment and performance of all of the Guaranteed Obligations and not of
their collectibility only and is in no way conditioned upon any requirement that
the Administrative Agent or any Lender first attempt to collect any of the
Obligations from the Company or resort to any collateral security or other means
of obtaining payment. The obligations of Hexcel under this Section 5 shall be
joint and several with the obligations of the Guarantors under the Guaranties.
5.4. GUARANTY ABSOLUTE. Each of the Guarantors guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms
hereof, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Administrative
Agent or any Lender with respect thereto. The liability of the Guarantors under
this guaranty with regard to the Guaranteed Obligations of each Borrower shall
be absolute and unconditional irrespective of:
(a) any lack of authorization, execution, validity or
enforceability or any illegality of such Borrower to become a Borrower
hereunder, this Credit Agreement and any amendment hereof (with regard to
such Guaranteed Obligations), or any other obligation, agreement or
instrument relating thereto (it being agreed by each Guarantor that the
Guaranteed Obligations shall not be discharged prior to the final and
complete satisfaction of all of the Obligations of the Borrowers) or any
failure to obtain any necessary governmental consent or approvals or
necessary third party consents or approvals;
(b) the Administrative Agent's or any Lender's exercise or
enforcement of, or failure or delay in exercising or enforcing, legal
proceedings to collect the Obligations or the Guaranteed Obligations, as
the case may be, or any power, right or remedy with respect to any of the
Obligations or the Guaranteed Obligations, as the case may be, including
(i) any suspension of the Administrative Agent's or any Lender's right to
enforce against any other Borrower of the Guaranteed Obligations or (ii)
any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations or any other amendment or
waiver of or any consent to departure from this Credit Agreement or the
other Loan Documents (with regard to such
-81-
Guaranteed Obligations) or any other agreement or instrument governing or
evidencing any of the Guaranteed Obligations;
(c) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any change in ownership of any Borrower;
(e) any acceptance of any partial payment(s) from any
Borrower;
(f) any insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit of creditors,
appointment of a receiver, examiner or trustee for all or any part of any
Borrower's assets;
(g) any assignment, participation or other transfer, in whole
or in part, of the Administrative Agent's or any Lender's interest in and
rights under this Credit Agreement or any other Loan Document, or of the
Administrative Agent's or any Lender's interest in the Obligations or the
Guaranteed Obligations;
(h) any cancellation, renunciation or surrender of any
pledge, guaranty or any debt instrument evidencing the Obligations or the
Guaranteed Obligations, as the case may be;
(i) the Administrative Agent's or any Lender's vote, claim,
distribution, election, acceptance, action or inaction in any bankruptcy or
reorganization case related to the Obligations or the Guaranteed
Obligations, as the case may be; or
(j) any other action or circumstance, other than payment,
which might otherwise constitute a defense available to, or a discharge of,
any Borrower in respect of its Guaranteed Obligations.
This guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any Guaranteed Obligation is rescinded or
must otherwise be returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy or reorganization, examination of any Borrower or
otherwise, all as though such payment had not been made.
5.5. EFFECTIVENESS, ENFORCEMENT. The guaranty herein of each of the
Guarantors shall be effective and shall be deemed to be made with respect to
each Revolving Credit Loan made to any Borrower as of the time it is made and
each Reimbursement Obligation of any Borrower as of the time it is incurred. No
invalidity, irregularity or unenforceability by reason of any bankruptcy or
similar law, or any law or order of any government or agency thereof purporting
to reduce, amend or otherwise affect any liability of a Borrower, and no defect
in or insufficiency or want of powers of any
-82-
Borrower or irregular or improperly recorded exercise thereof, shall impair,
affect, be a defense to or claim against such guaranty. This guaranty is a
continuing guaranty and shall (a) survive any termination of this Credit
Agreement and (b) remain in full force and effect until payment in full and
performance of all Guaranteed Obligations and all other amounts payable under
this guaranty. This guaranty is made for the benefit of the Administrative Agent
and each of the Lenders and their respective successors and assigns, and may be
enforced from time to time as often as occasion therefor may arise and without
requirement on the part of the Administrative Agent or any Lender first to
exercise any rights against any Borrower or to exhaust any remedies available to
it against any Borrower or to resort to any other source or means of obtaining
payment of any of the Guaranteed Obligations, or to elect any other remedy. In
the event that acceleration of the time for payment (or the giving of notice of
such acceleration) of the Guaranteed Obligations of any Borrower is stayed upon
the insolvency, bankruptcy, examination or reorganization, of such Borrower or
for any other reason, all such amounts otherwise subject to acceleration under
the terms of this Credit Agreement shall be immediately due and payable by
Hexcel under the guaranty herein provided.
5.6. WAIVER. Each of the Guarantors hereby waives promptness, diligence,
protest, notice of protest, all suretyship defenses, notice of acceptance and
any other notice with respect to any of the Guaranteed Obligations and this
guaranty and any requirement that the Administrative Agent or any Lender secure,
perfect or protect any security interest or lien or any property subject thereto
or exhaust any right or take any action against any Borrower or any other person
or any collateral. Each of the Guarantors also irrevocably waives, to the
fullest extent permitted by law, all defenses which at any time may be available
to it in respect of the Guaranteed Obligations by virtue of any statute of
limitations, valuation, stay, moratorium law or other similar law now or
hereafter in effect.
5.7. SUBORDINATION; SUBROGATION. Until the payment and performance in full
of all the Obligations: each of the Guarantors shall not exercise and hereby
waives any rights against any Borrower as a result of payment by such Guarantor
hereunder, by way of subrogation, reimbursement, restitution, contribution or
otherwise, and each Guarantor will not prove any claim in competition with the
Administrative Agent or any Lender in respect of any payment hereunder in
bankruptcy, insolvency or reorganization proceedings of any nature; each
Guarantor will not claim any set-off, recoupment or counterclaim against any
Borrower in respect of any liability of such Guarantor to such Borrower; and
each Guarantor waives any benefit of and any right to participate in any
collateral which may be held by the Administrative Agent and any Lender. Each
Guarantor agrees that after the occurrence of any default in the payment or
performance of the Guaranteed Obligations such Guarantor will not demand, xxx
for, or otherwise attempt to collect any such Indebtedness of any Borrower to
such Guarantor until the Guaranteed Obligations then due shall have been paid in
full. If, notwithstanding the foregoing sentence, any Guarantor shall collect or
receive any amounts in respect of such indebtedness, such amounts shall be
collected and received by such Guarantor as trustee for the Administrative Agent
and the Lenders and be paid over to the Administrative Agent for the respective
accounts of the Administrative
-83-
Agent and the Lenders on account of the Guaranteed Obligations without affecting
in any manner the liability of the such Guarantor under the other provisions of
this Section 5. The provisions of this section shall survive the expiration or
termination of the Credit Agreement and the other Loan Documents and the
provisions of this section shall be supplemental to and not in derogation of any
rights and remedies of the Administrative Agent or any Lender under any other
separate subordination agreement which the Administrative Agent or any Lender
may at any time and from time to time entered into with any Guarantor for the
benefit of the Administrative Agent or any Lender.
5.8. PAYMENTS. Should the Borrowers default in the payment or performance
of any of the Guaranteed Obligations, the obligations of each Guarantor
hereunder with respect to such Guaranteed Obligations in default shall, upon
demand by the Administrative Agent, become immediately due and payable to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, without demand or notice of any nature, all of which are expressly waived
by each Guarantor. Payments by each Guarantor hereunder may be required by the
Administrative Agent on any number of occasions. All payments by any Guarantor
hereunder shall be made to the Administrative Agent, in the manner and at the
place of payment specified therefor in this Credit Agreement, for the account of
the Lenders and the Administrative Agent. All payments made by the Guarantors
pursuant to this Section 5 in respect of any Revolving Credit Loans made to any
Borrower or any Reimbursement Obligations incurred by any Borrower shall be made
in the same currency in which such Revolving Credit Loan or such Reimbursement
Obligation was made, unless otherwise agreed to in writing by the Administrative
Agent. Regardless of the adequacy of any collateral security or other means of
obtaining payment of any of the Obligations, each of the Administrative Agent
and the Lenders is hereby authorized at any time and from time to time, without
notice to the applicable Guarantor (any such notice being expressly waived by
such Guarantor) and to the fullest extent permitted by law, to set off and apply
such deposits and other sums against the obligations of the Guarantor under this
Section 5, whether or not the Administrative Agent or such Lender shall have
made any demand hereunder.
5.9. GUARANTORS' AGREEMENT TO PAY ENFORCEMENT COSTS. Each Guarantor further
agrees, as the principal obligor and not as a guarantor only, to pay to the
Administrative Agent, on demand, all reasonable and documented out-of-pocket
costs and expenses (including court costs and legal expenses) incurred or
expended by the Administrative Agent or any Lender in connection with the
Guaranteed Obligations, this Section 5 and the enforcement thereof, together
with interest on amounts recoverable under this Section 5 from the time when
such amounts become due until payment, whether before or after judgment, at the
rate of interest then in effect hereunder, PROVIDED that if such interest
exceeds the maximum amount permitted to be paid under applicable law, then such
interest shall be reduced to such maximum permitted amount.
5.10. RECEIPT OF INFORMATION. Each of the Guarantors acknowledges and
confirms that each Guarantor itself has established its own adequate means of
obtaining from each Borrower on a continuing basis all information desired by
such Guarantor concerning the financial condition of such Borrower and that such
Guarantor will look
-84-
to such Borrower and not to the Administrative Agent or any Lender in order for
such Guarantor to keep adequately informed of changes in such Borrower's
financial condition.
5.11. TERMINATION. (a) The Guaranties shall automatically be discharged and
released with respect to all Guarantors hereunder upon the payment in full in
cash of all of the Obligations arising under the Credit Documents and the
termination of the Commitments, without any further action by the Administrative
Agent, any Fronting Bank, any Issuing Bank, any Lender or any other Person.
(b) Upon any termination of any Guaranty, the Administrative Agent will, at
the expense of the applicable Guarantor, execute and deliver to such Guarantor
such documents as such Guarantor shall reasonably request to evidence
termination of this Credit Agreement and/or such Guaranty, as the case may be.
6. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers represents and warrants (as to itself and, to the
extent required by the context, its Subsidiaries only)to the Lenders and the
Administrative Agent as follows:
6.1. CORPORATE AUTHORITY.
6.1.1. INCORPORATION; GOOD STANDING. Each of the Borrowers and
its Subsidiaries (a) is a corporation (or similar business entity) duly
organized, validly existing and (where applicable with respect to a Foreign
Borrower) in good standing under the laws of its jurisdiction of
incorporation or formation (or the equivalent status for each Foreign
Subsidiary), (b) has all requisite corporate (or the equivalent company)
power to own its property and conduct its business as now conducted and as
presently contemplated, and (c) is in good standing as a foreign
corporation (or similar business entity) and is duly authorized to do
business in each jurisdiction where such qualification is necessary except
where a failure to be so qualified would not have a Material Adverse
Effect.
6.1.2. AUTHORIZATION. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which the Borrowers
or any of their Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the corporate
(or the equivalent company) authority of such Person, (b) have been duly
authorized by all necessary corporate (or the equivalent company)
proceedings, (c) do not and will not conflict with or result in any breach
or contravention of any provision of law, statute, rule or regulation to
which such Person is subject or any judgment, order, writ, injunction,
license or permit applicable to such Person, which individually or in the
aggregate, would have a Material Adverse Effect, (d) do not require any
consents or approvals by any of such Person's shareholders (except such as
will be duly obtained on or prior to the Closing Date and will be in full
force and effect on and as of such date), and (e) do not conflict with any
-85-
provision of the Governing Documents of, or any agreement or other
instrument binding upon, such Person.
6.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Borrowers or any of
their Subsidiaries is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws relating to
or affecting generally the enforcement of creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity
or at law) and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of
the court before which any proceeding therefor may be brought.
6.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by the
Borrowers and any of their Subsidiaries of this Credit Agreement and the other
Loan Documents to which such Person is or is to become a party and the
transactions contemplated hereby and thereby do not require the approval,
consent, order, authorization or license by, or giving of notice to, or taking
any other action with respect to or filing with, any Governmental Authority of
any jurisdiction, or other fiscal, monetary or other authority under any
provision of any laws or governmental rules, regulations, orders or decrees of
any jurisdiction or the central bank of any jurisdiction or other fiscal,
monetary or other authority under any provisions of any laws or governmental
rules, regulations, orders or decrees of any jurisdiction applicable to or
binding on any Person other than those already obtained or which individually or
in the aggregate, would not have a Material Adverse Effect.
6.3. TITLE TO PROPERTIES; LEASES. Except with respect to assets on Hexcel's
balance sheet which are subject to Capitalized Leases, Hexcel and its
Subsidiaries own all of the assets reflected in the consolidated balance sheet
of the Borrowers and their Subsidiaries as at the Balance Sheet Date or acquired
since that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date and other than minor irregularities
or deficiencies in title, which individually or in the aggregate would not have
a Material Adverse Effect), subject to no Liens or other rights of others,
except Permitted Liens.
6.4. FINANCIAL STATEMENTS AND PROJECTIONS.
6.4.1. FISCAL YEAR. The Borrowers and each of their Subsidiaries
have a fiscal (or financial) year which is the twelve (12) months ending on
or around December 31 of each calendar year.
6.4.2. FINANCIAL STATEMENTS. There has been furnished to the
Administrative Agent a consolidated balance sheet of Hexcel and its
Subsidiaries as at the Balance Sheet Date, and a consolidated statement of
income of Hexcel and its Subsidiaries for the fiscal year then ended,
certified by
-86-
PricewaterhouseCoopers LLP. Such balance sheet and statement of income have
been prepared in accordance with GAAP and fairly present the financial
condition of Hexcel and its Subsidiaries as at the close of business on the
date thereof and the results of operations for the fiscal year then ended.
There are no contingent liabilities of Hexcel or any of its Subsidiaries as
of such date involving material amounts, known to the officers of Hexcel,
which were not disclosed in such balance sheet and the notes related
thereto.
6.4.3. PROJECTIONS. There has been furnished to the
Administrative Agent a copy of the projections of the annual operating
budgets of Hexcel and its Subsidiaries on a consolidated basis, balance
sheets and cash flow statements for the 2003 to 2007 fiscal (or financial)
years, prepared on a monthly basis for 2003 and on an annual basis for 2004
to 2007. Hexcel and its Subsidiaries have disclosed all material
assumptions made with respect to general economic, financial and market
conditions used in formulating such projections and such projections. The
projections reflect the reasonable estimates of Hexcel and its Subsidiaries
of the results of operations and other information projected therein. It is
recognized by the Administrative Agent and the Lenders that such
projections are subject to significant uncertainties and contingencies,
many of which are beyond the control of the Borrowers and that no assurance
is or can be given that the projections will actually be realized.
6.4.4. SOLVENCY. Hexcel and its Subsidiaries, on a consolidated
and consolidating basis, both before and after giving effect to the
transactions contemplated by this Credit Agreement, the other Loan
Documents and all contribution arrangements among Hexcel and its
Subsidiaries (a) are solvent, (b) the fair value of the property of such
Person exceeds its total liabilities (including contingent liabilities but
without duplication of any underlying liability related thereto), (c) the
present fair saleable value on a going concern basis of the assets of such
Person is not less than the amount required to pay its probable liabilities
on its debts as they become absolute and mature, (d) does not intend to,
and does not believe that it will, incur debts or liabilities beyond its
ability to pay as such debts and liabilities mature, and (e) is not
engaged, and is not about to engage, in business or a transaction for which
its property would constitute unreasonably small capital.
6.5. NO MATERIAL ADVERSE CHANGES, ETC. Since the Balance Sheet Date there
has been no event or occurrence which has had a Material Adverse Effect.
6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrowers and each of their
Subsidiaries owns or holds a valid right to use all material franchises,
patents, copyrights, trademarks, trade names, licenses and permits, and rights
in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without any material known infringement with any
rights of others except as disclosed in SCHEDULE 6.6.
-87-
6.7. LITIGATION. Except as set forth in SCHEDULE 6.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
in writing against the Borrowers or any of their Subsidiaries before any
Governmental Authority, that, (a) except for those actions, suits, proceedings
or investigations disclosed in Hexcel's public filings with the Securities and
Exchange Commission, if adversely determined, might, either in any case or in
the aggregate, have a Material Adverse Effect, or (b) which question the
validity of this Credit Agreement or any of the other Loan Documents, or any
action taken or to be taken pursuant hereto or thereto.
6.8. TAX STATUS. The Borrowers and their Subsidiaries (a) have filed or
caused to be filed all material tax returns required to be filed, (b) have paid
all taxes and other governmental assessments and charges shown to be due and
payable on such returns except those being contested in good faith by
appropriate proceedings or except where the failure to pay could not reasonably
be expected to have a Material Adverse Effect, and (c) have maintained on their
books adequate reserves in accordance with GAAP for the payment of all taxes for
periods subsequent to the periods to which such returns apply except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect. Such reserves are adequate for the payment of all of such obligations.
6.9. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
is continuing.
6.10. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrowers
nor any of their Subsidiaries is a "HOLDING COMPANY", or a "SUBSIDIARY COMPANY"
of a "HOLDING COMPANY", or an "AFFILIATE" of a "HOLDING COMPANY", as such terms
are defined in the Public Utility Holding Company Act of 1935; nor is it an
"INVESTMENT COMPANY", or an "AFFILIATED COMPANY" or a "PRINCIPAL UNDERWRITER" of
an "INVESTMENT COMPANY", as such terms are defined in the Investment Company Act
of 1940.
6.11. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, registration statement,
security agreement, chattel mortgage, real estate mortgage, fixed charge,
floating charge, legal charge, equitable mortgage, legal mortgage, pledge or
analogous type of security interest applicable in such foreign jurisdiction or
other document filed or recorded with any filing records, registry or other
public office, that purports to cover, affect or give notice of any present or
possible future Lien on any assets or property of the Borrowers or any of their
Subsidiaries or any rights relating thereto except for any such Lien which would
not reasonably be expected to have a Material Adverse Effect.
6.12. CERTAIN TRANSACTIONS. Except for (a) arm's length transactions and
transactions with Affiliates pursuant to which the Borrowers or any of their
Subsidiaries makes payments in the ordinary course of business upon terms no
less favorable than the Borrowers or such Subsidiaries could obtain from third
parties and (b) transactions permitted pursuant to Section 8.11, none of the
officers, directors, or employees of the Borrowers or any of their Subsidiaries
is presently a party to any transaction with the
-88-
Borrowers or any of their Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
6.13. EMPLOYEE BENEFIT PLANS.
6.13.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance in
all material respects with the provisions of ERISA and all Applicable
Pension Legislation and, to the extent applicable, the Code, including but
not limited to the provisions thereunder respecting prohibited transactions
and the bonding of fiduciaries and other persons handling plan funds as
required by Section 412 of ERISA. Hexcel has heretofore delivered to the
Administrative Agent the most recently completed annual report, Form 5500,
with all required attachments, and actuarial statement required to be
submitted under Section 103(d) of ERISA, with respect to each Guaranteed
Pension Plan.
6.13.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan,
which is an employee welfare benefit plan within the meaning of Section
3(1) or Section 3(2)(B) of ERISA, provides benefit coverage subsequent to
termination of employment, except as required by Title I, Part 6 of ERISA
or the applicable state insurance laws. Each of the Borrowers may terminate
each such Plan in accordance with the terms of such Plan at any time (or at
any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of Hexcel without liability to any Person
other than for claims arising prior to termination.
6.13.3. GUARANTEED PENSION PLANS. Each contribution required to
be made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of Section 302(f) of ERISA, or otherwise, has been timely made.
No waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
neither the Borrowers nor any ERISA Affiliate is obligated to or has posted
security in connection with an amendment to a Guaranteed Pension Plan
pursuant to Section 307 of ERISA or Section 401(a)(29) of the Code. No
liability to the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by Hexcel or any ERISA Affiliate with
respect to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event (other than an ERISA Reportable Event as to which the
requirement of 30 days notice has been waived), or any other event or
condition which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed
Pension Plan (which in each case occurred within twelve months of the date
of
-89-
this representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of Section 4001 of ERISA did
not exceed the aggregate value of the assets of all such Guaranteed Pension
Plans.
6.13.4. MULTIEMPLOYER PLANS. Neither the Borrowers nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as a
result of a sale of assets described in Section 4204 of ERISA. Neither the
Borrowers nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
Section 4241 or Section 4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan
intends to terminate or has been terminated under Section 4041A of ERISA.
6.14. USE OF PROCEEDS.
6.14.1. GENERAL. The proceeds of the Revolving Credit Loans and
any Letters of Credit shall be used to refinance certain existing
Indebtedness of the Borrowers and for working capital and general corporate
purposes.
6.14.2. REGULATIONS U AND X. No portion of any Revolving Credit
Loan and no portion of any Letter of Credit is to be used for the purpose
of purchasing or carrying any "MARGIN SECURITY" or "MARGIN STOCK" as such
terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.
6.14.3. INELIGIBLE SECURITIES. No portion of the proceeds of any
Revolving Credit Loan is to be used, and no portion of any Letter of Credit
is to be obtained, for the purpose of knowingly purchasing, or providing
credit support for the purchase of, during the underwriting or placement
period or within thirty (30) days thereafter, any Ineligible Securities
underwritten or privately placed by a Financial Affiliate.
6.15. ENVIRONMENTAL COMPLIANCE. The Borrowers have taken commercially
reasonable steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon and, based upon such
investigation, has determined that, except as set forth on SCHEDULE 6.15 hereto:
(a) none of the Borrowers, their Subsidiaries or, to the
knowledge of the Borrowers or any Subsidiary any operator of any Real
Estate owned by the Borrowers or any Subsidiary, or not owned by the
Borrowers or any Subsidiary (but with respect to operators who are not
Borrowers or Subsidiaries, limited to the period when a Borrower or
Subsidiary, owned or leased such Real Estate), or any operations on Real
Estate operated by the Borrowers or any Subsidiary is in violation, or
alleged violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to health, safety or environmental matters, including
-90-
without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act or
any state, local or any foreign law, statute, regulation, ordinance, order
or decree (hereinafter "ENVIRONMENTAL LAWS"), which violation could
reasonably be expected to have a Material Adverse Effect;
(b) except in cases which could not reasonably be expected to
have a Material Adverse Effect, neither the Borrowers nor any of their
Subsidiaries has received notice from any third party including, without
limitation, any Governmental Authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed
on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (ii) that
any hazardous waste, as defined by 42 U.S.C. Section 6903(5), any hazardous
substances as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous SUBSTANCES") which any one
of them has generated, transported or disposed of has been found at any
site at which a Governmental Authority has conducted or has ordered that
any Borrower or any of its Subsidiaries conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law; or
(iii) that it is or shall be a named party to any claim, action, cause of
action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of
costs, expenses, losses or damages of any kind whatsoever in connection
with the release of Hazardous Substances; and
(c) (i) to the knowledge of each of the Borrowers and its
Subsidiaries, no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws or except where the failure
to have done so has not had (and could not reasonably be expected to have)
a Material Adverse Effect; (ii) in the course of any activities conducted
by the Borrowers, their Subsidiaries or, to the knowledge of the Borrowers
and their Subsidiaries, without independent investigation, operators of its
properties, no Hazardous Substances have been generated or are being used
on the Real Estate except in accordance with applicable Environmental Laws
or except where any noncompliance with such Environmental Laws could not
reasonably be expected to have a Material Adverse Effect; (iii) there have
been no releases (i.e., any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping (a "RELEASE")) or threatened Releases of Hazardous
Substances on, upon, into or from the properties of the Borrowers or their
Subsidiaries by the Borrowers or their Subsidiaries or, to their knowledge,
by operators of its properties or any other Person, which Releases could
-91-
reasonably be expected to have a Material Adverse Effect; (iv) to the
Borrowers' and their Subsidiaries' knowledge, there have been no Releases
on, upon, from or into any real property in the vicinity of any of the Real
Estate which, through soil or groundwater contamination, may have come to
be located on, and which would have a Material Adverse Effect; and (v) any
Hazardous Substances that have been generated on any of the Real Estate by
the Borrowers, their Subsidiaries or any of their respective operators have
been managed or disposed of in compliance with all applicable Environmental
Laws, except where any such noncompliance could not reasonably be expected
to have a Material Adverse Effect and, to the Borrowers and their
Subsidiaries knowledge, without independent investigation, the transporters
and facilities utilized by the Borrowers or any of their Subsidiaries to
transport or dispose of such Person's Hazardous Substances have not failed
to operate in compliance with any permits authorizing such activities and
are not in violation of any applicable Environmental Laws, except where any
such noncompliance could not reasonably be expected to have a Material
Adverse Effect.
6.16. SUBSIDIARIES, ETC. (a) SCHEDULE 6.16(a) sets forth a true and
complete list of each Subsidiary of the Borrowers as of the date hereof,
together with the jurisdiction of incorporation/formation and principal place of
business or registered office of each such Subsidiary. Except as set forth on
SCHEDULE 6.16(b) hereto, as of the date hereof neither the Borrowers nor any
Subsidiary is engaged in any joint venture or partnership with any other Person.
(b) Each Material Domestic Subsidiary of the Borrowers is a Guarantor
hereunder.
6.17. BANK ACCOUNTS. SCHEDULE 6.17 sets forth the account numbers and
location of all Local Accounts, Interim Concentration Accounts and other bank
accounts of the Borrowers and the Guarantors other than the Asset Sale Proceeds
Account.
6.18. DISCLOSURE. Neither this Credit Agreement nor any of the other Loan
Documents, taken as a whole, contains any untrue statement of a material fact or
omits to state a material fact (known to the Borrowers or any of their
Subsidiaries in the case of any document or information not furnished by it or
any of its Subsidiaries in either case, as of the date hereof) necessary in
order to make the statements herein or therein not misleading in light of the
circumstances in which the same were made. There is no fact known to the
Borrowers or any of their Subsidiaries, as of the date hereof, which has a
Material Adverse Effect, or which is reasonably likely in the future to have a
Material Adverse Effect, exclusive of effects resulting from changes in general
economic conditions, legal standards or regulatory conditions.
6.19. INSURANCE. The Borrowers and each of their Subsidiaries maintain with
financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices in accordance with industry standards.
-92-
6.20. PERFECTION OF SECURITY INTEREST.
Subject to Section 7.17, all filings, assignments, pledges and deposits of
documents or instruments have been made and all other actions have been taken
that are necessary or advisable, under applicable law, to establish and perfect
the Administrative Agent's security interest in the Collateral. The Collateral
and the Administrative Agent's rights with respect to the Collateral are not
subject to any setoff, claims, withholdings or other defenses. Each Borrower or
each Guarantor party to the Security Documents is the owner of the Collateral
free from any Lien, except for Permitted Liens.
6.21. ACCOUNTS RECEIVABLE.
The Administrative Agent may rely, in determining which accounts receivable
are Eligible Accounts, on all statements and representations made by the Credit
Parties with respect to such accounts receivable. Unless otherwise indicated to
the Administrative Agent in writing:
(a) Each account receivable which is an Eligible Account is
genuine and in all respects what it purports to be, and it is not evidenced
by a judgment;
(b) Each account receivable which is an Eligible Account
arises out of a completed, bona fide sale and delivery of goods or
rendition of services by a Credit Party in the ordinary course of its
business and in accordance with the terms and conditions of all purchase
orders, contracts or other documents relating thereto and forming a part of
the contract between such Credit Party and the account debtor, and, in the
case of goods, title to the goods has passed from the Credit Party to the
account debtor;
(c) Each account receivable which is an Eligible Account is
for a liquidated amount maturing as stated in the duplicate invoice
covering such sale or rendition of services, a copy of which has been
furnished or is available to the Administrative Agent; and
(d) Each account receivable which is an Eligible Account, and
the Administrative Agent's security interest therein, is not, and will not
(by voluntary act or omission of the Credit Parties) be in the future,
subject to any offset (to the extent that any offset is asserted or
exercised by the account debtor), Lien, deduction, defense, dispute,
counterclaim or any other adverse condition except for disputes resulting
in returned goods where the amount in controversy is deemed by the
Administrative Agent to be immaterial, and each such account receivable is
absolutely owing to one of the Credit Parties and is not contingent in any
respect or for any reason.
6.22. EQUITY OFFERING DOCUMENTS, SENIOR SECURED NOTE DOCUMENTS, FRENCH
FACILITY AND SUBORDINATED DEBT DOCUMENTS. The Credit Parties have heretofore
furnished to the Administrative Agent true, complete and correct copies of each
of the Equity Offering Documents, the Senior Secured Note Documents, the French
Facility
-93-
Documents and all documents executed or delivered in connection with the
Subordinated Debt (including schedules, exhibits and annexes thereto). The
Equity Offering Documents, the Senior Secured Note Documents, the French
Facility Documents and the documents executed or delivered in connection with
the Subordinated Debt have not been amended, supplemented or modified, and
constitute the complete understanding among the parties thereto in respect of
the matters and transactions covered thereby, except for amendments thereto
delivered to the Administrative Agent prior to the Closing Date. Each of the
Equity Offering Documents, the Senior Secured Note Documents, the French
Facility Documents and the documents executed or delivered in connection with
the Subordinated Debt is in full force and effect, and neither the Borrowers nor
any of their Subsidiaries is in default under any of such documents. The
representations and warranties concerning the French Facility and the French
Facility Documents shall only be effective upon and after the consummation of
the French Facility.
6.23. FRENCH FACILITY UPSTREAM LIMITATION. The French Facility does not
restrict the ability of Hexcel Composites S.A., Hexcel Fabrics S.A. or any other
Subsidiary of Hexcel which is a party thereto to pay or make dividends or
distributions in cash or kind to Hexcel or its Subsidiaries, to make loans,
advances or other payments of whatsoever nature to Hexcel or its Subsidiaries,
or to make transfers or distributions of all or any part of its assets to Hexcel
or its Subsidiaries, in each case consistent with the past practices of Hexcel
or its Subsidiaries, other than restrictions reasonably acceptable to the
Administrative Agent or imposed by applicable law or as a result of the
fiduciary duty of directors to such Subsidiaries.
7. AFFIRMATIVE COVENANTS.
Each of the Borrowers covenants and agrees that, so long as any Revolving
Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving
Credit Note is outstanding or any Lender has any obligation to make any
Revolving Credit Loans or the Issuing Bank has any obligation to issue, extend
or renew any Letters of Credit:
7.1. PUNCTUAL PAYMENT. Each of the Borrowers will, duly and punctually pay
or cause to be paid the principal and interest on the Revolving Credit Loans
advanced to such Borrower, all Reimbursement Obligations of such Borrower, and
such Borrower's share of the Fees and all other amounts provided for in this
Credit Agreement and the other Loan Documents to which the Borrowers are
parties, all in accordance with the terms of this Credit Agreement and such
other Loan Documents.
7.2. MAINTENANCE OF OFFICE. (a) Hexcel will maintain its chief executive
office in Stamford, Connecticut, (b) U.K. Borrower will maintain its registered
office in Cambridgeshire, United Kingdom, (c) Austrian Borrower will maintain
its registered office in Pasching, Austria, and (d) German Borrower will
maintain its domicile in Stade, Germany, or, in each case, at such other place
as such Person(s) shall designate upon written notice to the Administrative
Agent, where notices, presentations and demands
-94-
to or upon the such Person(s) in respect of the Loan Documents to which the such
Person(s) is a party may be given or made.
7.3. RECORDS AND ACCOUNTS. Hexcel will keep, and cause each of its Domestic
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with GAAP, and at all
times engage PricewaterhouseCoopers LLP or other independent certified public
accountants of nationally recognized standing as the independent certified
public accountants of the Borrowers and their Subsidiaries and will not permit
more than thirty (30) days to elapse between the cessation of such firm's (or
any successor firm's) engagement as the independent certified public accountants
of the Borrowers and their Subsidiaries and the appointment in such capacity of
a successor firm of nationally recognized standing.
7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. Hexcel will
deliver to each of the Lenders:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of Hexcel (commencing
with the fiscal year ending on December 31, 2003), the consolidated balance
sheet of Hexcel and its Subsidiaries as at the end of such year, and the
related consolidated statement of income and consolidated statement of cash
flow for such year, each setting forth in comparative form the figures for
the previous fiscal year and all such consolidated statements to be in
reasonable detail, prepared in accordance with GAAP, certified, without
qualification and without an expression of uncertainty as to the ability of
Hexcel or any of its Subsidiaries to continue as going concerns, by
PricewaterhouseCoopers LLP or by other independent certified public
accountants of nationally recognized standing, together with a written
statement from such accountants to the effect that they have this Credit
Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Event of Default, or,
if such accountants shall have obtained knowledge of any then existing
Event of Default they shall disclose in such statement any such Event of
Default; PROVIDED that such accountants shall not be liable to the Lenders
for failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three (3) fiscal
quarters of each fiscal year of Hexcel (commencing with the first fiscal
quarter of 2003), copies of the unaudited consolidated balance sheet of
Hexcel and its Subsidiaries as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash flow
for the portion of Hexcel's fiscal year then elapsed, together with, in the
case of the consolidated statements, comparisons to the corresponding
quarterly and year-to-date periods for the previous year and comparisons to
the financial projections of Hexcel and its Subsidiaries previously
provided to the Administrative Agent, prepared in accordance with GAAP, all
in reasonable detail and prepared in accordance with GAAP (subject to
customary exceptions for interim financial statements and the absence of
footnotes),
-95-
together with a certification by the principal financial or accounting
officer, treasurer or controller of Hexcel that the information contained
in such financial statements fairly presents the financial position of
Hexcel and its Subsidiaries in all material respects on the date thereof
(subject to year-end adjustments);
(c) as soon as practicable, but in any event within thirty
(30) days after the end of each month in each fiscal year of Hexcel
commencing with the month ending March 30, 2003, unaudited monthly and
year-to-date consolidated financial statements of Hexcel and its
Subsidiaries for such month and unaudited monthly and year-to-date
consolidating financial statements Hexcel and its Subsidiaries for such
month, together with, in the case of the consolidated statements,
comparisons to the financial projections of Hexcel and its Subsidiaries
previously provided to the Administrative Agent, prepared in accordance
with GAAP (subject to customary exceptions for interim financial statements
and the absence of footnotes), together with a certification by the
principal financial or accounting officer of Hexcel that the information
contained in such financial statements fairly presents the financial
condition of Hexcel and its Subsidiaries in all material respects on the
date thereof (subject to year-end adjustments);
(d) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer, treasurer or
controller of Hexcel in substantially the form of EXHIBIT D hereto (a
"COMPLIANCE CERTIFICATE") and setting forth in reasonable detail
computations evidencing compliance with certain covenants contained in
Section 8 and with the covenants contained in Section 9;
(e) promptly after the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders generally of Hexcel;
(f) within fifteen (15) days after the end of each calendar
month, a Borrowing Base Report setting forth the Domestic Borrowing Base,
the U.K. Borrowing Base, the Austrian Borrowing Base, the German Borrowing
Base and the Excess Availability as at the end of such calendar month and
certifying and providing reasonable backup evidence to demonstrate that all
Investments held by Hexcel and its Subsidiaries pursuant to Sections 8.3(a)
through 8.3(e) are permitted Investments in accordance with Section 8.3(a)
through (e); PROVIDED that if at any time (i) the Excess Availability
hereunder is less than $20,000,000, or (ii) the Fixed Charge Coverage Ratio
is less than the Minimum Ratio or (iii) an Event of Default has occurred
and is continuing, if requested by the Administrative Agent, then (x)
within five (5) days after the end of each calendar week, a Borrowing Base
Report setting forth the Domestic Borrowing Base, the U.K. Borrowing Base,
the Austrian Borrowing Base, the German Borrowing Base and the Excess
Availability as at the end of such calendar week (it being understood that
such weekly Borrowing Base Reports shall reflect changes in accounts
receivable and that changes in inventory and ineligible receivables and
inventory
-96-
will continue to be updated on a monthly basis), and (y) together with such
other information relating to the Collateral as the Administrative Agent
shall reasonably request, and accompanied by such supporting detail and
documentation as the Administrative Agent shall reasonably request;
(g) contemporaneously with any delivery made in connection
with clause (f) of this Section 7.4 , an Accounts Receivable aging report
on a business unit basis and an inventory summary;
(h) as soon as practicable, but in any event not later than
thirty (30) days after each fiscal year of Hexcel or at such earlier time
as the Administrative Agent may reasonably request, projections of Hexcel
and its Subsidiaries updating those projections delivered to the Lenders
and referred to in Section 6.4.3, prepared on a monthly basis for the
then-next fiscal year or, if applicable, updating any later such
projections delivered in response to a request pursuant to this Section
7.4(i);
(i) within fifteen (15) days after the end of each calendar
month, a report setting forth in reasonable detail the Foreign Subsidiary
Borrowing Base as at the end of such month; (j) annually, within thirty
(30) days after each anniversary of the Closing Date, an updated Restricted
IP Schedule as of such anniversary of the Closing Date; and
(k) from time to time such other financial data and
information (including accountants' management letters) regarding the
operation, business affairs and financial conditions of Hexcel and its
Subsidiaries as the Administrative Agent, the Lead Arranger or any Lender
(acting through the Administrative Agent) may reasonably request.
7.5. NOTICES.
7.5.1. DEFAULTS. The Borrowers will, promptly notify the
Administrative Agent and each of the Lenders in writing of the occurrence
of any Default or Event of Default , together with a reasonably detailed
description thereof, and the actions such Person proposes to take with
respect thereto.
7.5.2. ENVIRONMENTAL EVENTS. The Borrowers will, and will cause
each of their Subsidiaries to, promptly give notice to the Administrative
Agent and each of the Lenders (a) of any violation of any Environmental Law
that has the likely potential to have a Material Adverse Effect and that
the Borrowers or any of their Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any Governmental Authority and
(b) upon becoming aware thereof, of any inquiry, proceeding, investigation,
or other action, including a notice from any agency of
-97-
potential environmental liability, of any Governmental Authority that has
the likely potential to have a Material Adverse Effect.
7.5.3. NOTIFICATION OF CLAIM AGAINST ASSETS. The Borrowers will,
and will cause each of their Subsidiaries to, promptly upon becoming aware
thereof, notify the Administrative Agent and each of the Lenders in writing
of any setoff, claims, or other defenses to which any of the Borrower's or
such Subsidiary's assets are subject if any such setoff, claim, or other
defense would reasonably be expected to have a Material Adverse Effect.
7.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrowers will,
and will cause each of their Subsidiaries to, give notice to the
Administrative Agent in writing within fifteen (15) days of becoming aware
of any litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting the Borrowers or any of their
Subsidiaries or to which the Borrowers or any of their Subsidiaries is or
becomes a party, in each case involving an uninsured claim against any of
the Borrowers or any of their Subsidiaries that could reasonably be
expected to have a Material Adverse Effect, such notice to state the nature
and status of such litigation or proceedings.
7.6. LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES. Each of the Borrowers (a)
will do or cause to be done all things necessary to preserve and keep in full
force and effect its legal existence, rights and franchises and those of their
Subsidiaries, (b) will cause all of its properties and those of their
Subsidiaries used or useful in the conduct of its business or the business of
their Subsidiaries to be maintained and kept in good condition, repair and
working order, ordinary wear and tear excepted, (c) will cause to be made all
necessary repairs, renewals and replacements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly conducted at all times, and (d) will, and will cause
each of its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; PROVIDED that nothing in this 7.6
shall prevent (i) any Borrower from discontinuing the operation and maintenance
of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of such Borrower, desirable in the conduct of
its or their business and that do not in the aggregate have a Material Adverse
Effect or (ii) any Borrower or any of its Subsidiaries from consummating any
transaction permitted by Section 8.5.
7.7. INSURANCE. The Borrowers will, and will cause each of their
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses of similar size and financial strength engaged in similar activities
in similar geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent.
7.8. TAXES. The Borrowers will, and will cause each of their Subsidiaries
to, timely pay and discharge, or cause to be timely paid and discharged, all
material taxes, assessments and other governmental charges imposed upon it and
its Real Estate, sales
-98-
and activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a Lien or charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the applicable Borrower or such Subsidiary shall maintain on its books
adequate reserves in accordance with GAAP with respect thereto; and PROVIDED
FURTHER that the Borrowers and each Subsidiary of the Borrowers will pay all
such taxes, assessments, charges, levies or claims on any Collateral forthwith
upon the commencement of proceedings to foreclose any Lien that may have
attached as security therefor.
7.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
7.9.1. GENERAL. Subject to requirements of applicable law
concerning classified information and to the rights of tenants or licensees
of such property, the Borrowers shall permit the Lenders, through the
Administrative Agent or its designated representatives or, after the
occurrence and during the continuance of an Event of Default, any of the
Lenders' designated representatives, to visit and inspect any of the
properties of the Borrowers or any of their Subsidiaries, to examine the
books of account (to the extent any such materials are identified as not
confidential to the Person making such examination at such time, and if any
such materials are identified as confidential to the Person making such
examination at such time, such materials shall be handled in accordance
with Section 15.4) of the Borrowers and their Subsidiaries (and, subject to
the foregoing, to make copies thereof and extracts therefrom), and to
discuss the business operation, properties, finances and accounts of the
Borrowers and their Subsidiaries with, and to be advised as to the same by,
its and their officers all at such reasonable times and intervals and
during regular business hours as the Administrative Agent or such Lender
may reasonably request upon reasonable prior written notice.
7.9.2. COLLATERAL REPORTS. The Borrower will cooperate with the
Administrative Agent in the Administrative Agent's obtaining a collateral
value report of an independent collateral auditor reasonably satisfactory
to the Administrative Agent (which may be affiliated with one of the
Lenders) with respect to the Accounts Receivable and inventory components
included in the Domestic Borrowing Base, the U.K. Borrowing Base, the
Austrian Borrowing Base or the German Borrowing Base, as the case may be,
which report shall indicate whether or not the information set forth in the
Borrowing Base Report most recently delivered is accurate and complete in
all material respects based upon a review by such collateral auditor of the
Accounts Receivable (including verification with respect to the amount,
aging, identity and credit of the respective account debtors and the
billing practices of the Borrowers or its applicable Subsidiary) and
inventory (including verification as to the value, location and respective
types). Such collateral value reports shall be conducted at the Borrowers'
expense no more frequently than two times during each
-99-
calendar year (it being anticipated that one such collateral report shall
be limited to the Collateral of Hexcel and the Guarantors), or more
frequently as determined by the Administrative Agent if at any time (x) the
Excess Availability hereunder is less than $20,000,000, or (y) the Fixed
Charge Coverage Ratio is less than the Minimum Ratio, or (z) any Event of
Default shall have occurred and be continuing; PROVIDED that, unless an
Event of Default shall have occurred and be continuing the Administrative
Agent shall not obtain more than four (4) collateral reports in any
calendar year.
7.9.3. APPRAISALS. The Borrowers will cooperate with the
Administrative Agent in the Administrative Agent's obtaining, appraisal
reports in form and substance and from appraisers reasonably satisfactory
to the Administrative Agent, stating the then-current orderly liquidation
value of all or any portion of the inventory owned by the Borrowers or any
of their Subsidiaries. Such appraisals shall be conducted at the Borrowers'
expense no more frequently than (i) one (1) time during each calendar year
on a desktop basis and (ii) one (1) time per year on a complete inspection
and appraisal basis, or, in each case, more frequently as determined by the
Administrative Agent if at any time (x) the Excess Availability hereunder
is less than $20,000,000, or (y) the Fixed Charge Coverage Ratio is less
than the Minimum Ratio, or (z) any Event of Default shall have occurred and
be continuing; PROVIDED that unless an Event of Default shall have occurred
and be continuing the Administrative Agent shall not obtain more than three
(3) such appraisals in any calendar year.
7.9.4. COMMUNICATIONS WITH ACCOUNTANTS. Each of the Borrowers
and their Subsidiaries authorizes the Administrative Agent and the Lenders
(a) to obtain from the Borrowers' and their Subsidiaries' independent
certified public accountants copies of any and all accountants' management
letters prepared with respect to the Borrowers or any of their
Subsidiaries, (b) to communicate directly with such accountants with regard
to matters disclosed in such management letters, and (c) with the consent
of the Borrowers or any Subsidiaries, which consent shall not be
unreasonably withheld or delayed, to communicate directly with such
accountants with regard to all other matters concerning the business,
financial condition and other affairs of the Borrowers or any of its
Subsidiaries. The German Borrower shall provide to the Administrative Agent
and the Lenders a letter, in form and in substance satisfactory to the
Administrative Agent, evidencing that no consent of any kind whatsoever
shall be required with respect to the rights determined under (c) and that
such accountant shall be released from any confidentiality obligation with
respect to such communications (the "ACCOUNTANT RELEASE LETTER"); PROVIDED
that the Administrative Agent and the Lenders shall use rights to
information granted in this clause only after the occurrence and during the
continuance of a Default or an Event of Default.
7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of
Borrowers will, and will cause each of their Subsidiaries to, comply with (i)
the
-100-
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, except where the failure to comply could not reasonably
be expected to have a Material Adverse Effect, (ii) the provisions of its
Governing Documents, (iii) all agreements and instruments by which it or any of
its properties may be bound, except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect, and (iv) all
applicable decrees, orders and judgments, except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect. If any
authorization, consent, approval, permit or license from any Governmental
Authority shall become necessary or required in order that the Borrowers or any
of their Subsidiaries may fulfill any of its obligations hereunder or any of the
other Loan Documents to which any Borrower or such Subsidiary is a party, such
Borrowers will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
such Borrower or such Subsidiary to obtain such authorization, consent,
approval, permit or license and furnish the Administrative Agent and the Lenders
with evidence thereof.
7.11. EMPLOYEE BENEFIT PLANS. The Borrowers will upon the request of the
Administrative Agent (a) promptly upon filing the same with the Department of
Labor or Internal Revenue Service, furnish to the Administrative Agent a copy of
the most recent actuarial statement required to be submitted under Section
103(d) of ERISA and Annual Report, Form 5500, with all required attachments, in
respect of each Guaranteed Pension Plan, (b) promptly upon receipt or dispatch,
furnish to the Administrative Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under Sections 302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under Sections 4041A, 4202, 4219, 4242, or 4245 of ERISA and (c) promptly
furnish to the Administrative Agent a copy of all actuarial statements required
to be submitted under all Applicable Pension Legislation.
7.12. USE OF PROCEEDS. The Borrowers will use the proceeds of the Revolving
Credit Loans and obtain Letters of Credit solely for the purposes set forth in
Section 6.14.1.
7.13. FAIR LABOR STANDARDS ACT. The Borrowers will, and will cause each of
their Subsidiaries to, at all times operate its business in compliance with all
material applicable provisions of the Fair Labor Standards Act of 1938, as
amended, or other similar legislation in the jurisdiction in which the Borrowers
or any of their Subsidiaries operates ("OTHER LABOR REGULATIONS") as the case
may be, except where failure to comply could not reasonably be expected to have
a Material Adverse Effect or materially impair the value of the Collateral. None
of the inventory or services provided by the Borrowers or any of their
Subsidiaries is or will be produced by employees of the Borrowers or any of
their Subsidiaries who are employed in violation of the applicable minimum wage
or maximum hour provisions of the Fair Labor Standards Act (29 U.S.C. Sections
206 and 207) or any regulations promulgated thereunder or Other Labor
Regulations, in each case, as in effect from time to time, except where failure
to comply could not reasonably be expected to have a Material Adverse Effect or
materially impair the value of the Collateral.
-101-
7.14. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the Borrowers or
any of their Subsidiaries creates or acquires, either directly or indirectly,
any Subsidiary, it will promptly (but in any event no later than fifteen
Business Days (15) days after such creation or acquisition) notify the
Administrative Agent of such creation or acquisition, as the case may be, and
provide the Administrative Agent with an updated SCHEDULE 6.16(a) hereto and
take all other action required by Section 7.15.
7.15. NEW GUARANTORS; NEW STOCK PLEDGES. (a) Except as otherwise provided
in Section 7.20, the Borrowers will cause each Material Domestic Subsidiary
created, acquired or otherwise existing on or after the Closing Date, to
immediately become a Guarantor hereunder and shall cause such Subsidiary to
execute and deliver to the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, an Instrument of Assumption and Joinder
and certified copies of such Subsidiary's Governing Documents, together with
legal opinions in form and substance reasonably satisfactory to the
Administrative Agent opining as to authorization, validity and enforceability of
such Guaranty. In addition, the Borrowers will not at any time permit either (i)
the aggregate revenue generated by all Domestic Subsidiaries which are not
Guarantors (which are not Domestic Foreign Holding Companies) to equal or exceed
$30,000,000 for the period of four (4) consecutive fiscal quarters most recently
ended, or (ii) the aggregate book value of the assets of all Domestic
Subsidiaries which are not Guarantors (which are not Domestic Foreign Holding
Companies) to exceed $10,000,000 at such time. The Borrowers shall require
certain Domestic Subsidiaries which are not Guarantors to become Guarantors
hereunder to the extent necessary to comply at all times with this clause (a),
and such Subsidiary shall remain a Guarantor hereunder (except as otherwise
provided herein).
(b) The Borrowers will cause the direct parent of each first tier Material
Foreign Subsidiary created, acquired or otherwise existing on or after the
Closing Date, to immediately provide a first priority perfected pledge to the
Administrative Agent (or the equivalent thereof under local law as determined by
the Administrative Agent) of 65% of the capital stock (issued share capital) or
other equity interests of such first tier Material Foreign Subsidiaries;
PROVIDED that to the extent that any such first tier Material Foreign Subsidiary
is treated as a disregarded entity for United States federal income tax
purposes, such disregarded entity shall, in addition, pledge 65% of the capital
stock of any Material Foreign Subsidiary directly owned by such disregarded
first tier Material Foreign Subsidiary, hereunder, together with legal opinions
and such other documents as the Administrative Agent shall request, each in form
and substance satisfactory to the Administrative Agent opining as to
authorization, validity, and enforceability of such Stock Pledge Agreement. In
addition, the Borrowers will not at any time permit either (i) the aggregate
revenue generated by all first tier Foreign Subsidiaries whose equity interest
are not pledged to the Administrative Agent hereunder to equal or exceed
$30,000,000 for the period of four (4) consecutive fiscal quarters most recently
ended, or (ii) the aggregate book value of the assets of all first tier Foreign
Subsidiaries whose equity interest are not pledged to the Administrative Agent
hereunder to exceed $10,000,000 at such time. Subject to the proviso above with
respect to disregarded entities, the Lenders agree to release any pledge they
may have with respect to the stock
-102-
of any Foreign Subsidiary that is contributed, sold or otherwise transferred by
Hexcel or another Domestic Subsidiary to another Foreign Subsidiary
("transferee") in exchange for receiving a pledge of 65% of the stock of the
transferee.
7.16. AMENDMENTS TO GOVERNING DOCUMENTS. The Borrowers will, and will cause
each of the other Credit Parties to, promptly furnish to the Administrative
Agent any amendment, supplement or modification to any of such Credit Parties'
Governing Documents permitted by Section 8.12.
7.17. BANK ACCOUNTS.
7.17.1. GENERAL.
7.17.1.1. HEXCEL AND THE U.K. BORROWER. (a) On or prior
to the Closing Date Hexcel will, and will cause each of the
Guarantors to, establish and thereafter maintain a depository
account (the "FCC CONCENTRATION ACCOUNT") under the control of
the Administrative Agent for the benefit of the Lenders and the
Administrative Agent, in the name of Hexcel and the Guarantors
(as further described in Section 5.2(a)), (b) on or prior to the
Closing Date the U.K. Borrower will establish and thereafter
maintain a depository account (the "U.K. CONCENTRATION ACCOUNT")
under the control of Fleet U.K. for the benefit of the Lenders
and the Administrative Agent, in the name of the U.K. Borrower
(as further described in Section 5.2(b)), (c) on or prior to
March 31, 2003, and at all times thereafter, Hexcel, the
Guarantors and the U.K. Borrower will instruct all account
debtors and other obligors, pursuant to notices of assignment and
instruction letters in form and substance satisfactory to the
Administrative Agent, to remit all cash proceeds of Accounts
Receivable to the FCC Concentration Account or the U.K.
Concentration Account, (d) from and after the Closing Date,
Hexcel, the Guarantors and the U.K. Borrower will direct all
depository institutions with local depository accounts to cause
all funds held in each such local depository account to be
transferred no less frequently than once each day to, and only
to, with respect to Hexcel and the Guarantors the FCC
Concentration Account or, with respect to the U.K. Borrower, only
to the U.K. Concentration Account; provided however that prior to
May 19, 2003, such Persons shall only be required to use
commercially reasonable efforts to effect such transfers; and (e)
from and after May 19, 2003, Hexcel, the Guarantors and the U.K.
Borrower will ensure that, immediately upon Hexcel's, the U.K.
Borrower's or any of the Guarantors' receipt of any funds
constituting or cash proceeds of any Collateral, all such amounts
shall have been deposited in the FCC Concentration Account or the
U.K. Concentration Account or a local depository account with
financial institutions which have entered into agency account
agreements and, if applicable, lock box agreements (collectively,
"AGENCY ACCOUNT AGREEMENTS") in form and substance satisfactory
to the Administrative Agent; PROVIDED that, Hexcel, the
Guarantors and the U.K. Borrower shall
-103-
be permitted to maintain (i) payroll accounts and other related
accounts not subject to the Administrative Agent's control so
long as the aggregate amount of funds on deposit in all such
payroll accounts does not materially exceed estimated payroll for
the next payroll period, (ii)(A) local domestic bank accounts in
the United States not subject to the Administrative Agent's
control so long as the aggregate amount of funds on deposit in
all such local bank accounts does not exceed $1,000,000, and (B)
local foreign bank accounts in the United Kingdom not subject to
the Administrative Agent's control so long as the aggregate
amount of funds on deposit in all such local foreign bank
accounts does not exceed the equivalent of $250,000 and (iii) the
Asset Sale Proceeds Account not subject to the Administrative
Agent's control. Hexcel covenants and agrees that it shall not,
and shall not permit any of its Subsidiaries to, (I) deposit any
proceeds of Collateral in the Asset Sale Proceeds Account or (II)
maintain any amounts in the Asset Sale Proceeds Account in excess
of the amounts required to be maintained therein in accordance
with the terms of the Senior Secured Notes.
7.17.1.2. THE AUSTRIAN BORROWER AND THE GERMAN
BORROWER. On or prior to the Closing Date or at any time
thereafter on a post-closing basis, the Austrian Borrower and the
German Borrower respectively will use their reasonable best
efforts to, on terms and conditions satisfactory to the
Administrative Agent, establish depository accounts under the
control of the Administrative Agent (as further described in
Section 5.2(c) and Section 5.2(d), respectively) in the name of
each of the Austrian Borrower and the German Borrower; PROVIDED
that if any time (a) an Event of Default has occurred and is
continuing, or (b) the Excess Availability hereunder is less than
$20,000,000 at such time, at the request of the Administrative
Agent, the cash of each of the Austrian Borrower and the German
Borrower, respectively, will be concentrated in accounts under
the control of the Administrative Agent, in the name of each of
the Austrian Borrower and the German Borrower, respectively, in
the United Kingdom or such other jurisdiction in which control
over such accounts can be implemented; PROVIDED FURTHER that,
whether or not such control over such accounts is implemented,
(i) the Austrian Borrower shall be permitted to maintain local
foreign bank accounts in Austria not subject to the
Administrative Agent's control so long as the aggregate amount of
funds on deposit in all such local foreign bank accounts does not
exceed the equivalent of $250,000, (ii) the German Borrower shall
be permitted to maintain local foreign bank accounts in Germany
not subject to the Administrative Agent's control so long
as the aggregate amount of funds on deposit in all such local
foreign bank accounts does not exceed the equivalent of $250,000
and (iii) the Austrian Borrower and the German Borrower shall be
permitted to maintain payroll accounts and other related accounts
not subject to the Administrative Agent's control so long
-104-
as the aggregate amount of funds on deposit in all such payroll
accounts does not materially exceed estimated payroll for the
next payroll period.
7.17.2. ACKNOWLEDGMENT OF APPLICATION. The Borrower hereby agrees
that the Administrative Agent has exclusive control over the FCC
Concentration Account and Fleet U.K. has exclusive control over the
U.K. Concentration Account, as further described in Section 5.2.
Notwithstanding anything in this Credit Agreement or any of the other
Loan Documents to the to the contrary, the cash or depositary accounts
of any Foreign Subsidiary of Hexcel (including any Foreign Borrower)
will not serve at any time, directly or indirectly, to collateralize
the obligations of Hexcel or any Domestic Subsidiary of Hexcel. In
addition, the cash or depositary accounts of a Foreign Subsidiary of
Hexcel will only serve to collateralize the obligations of another
Foreign Borrower if such Foreign Subsidiary is owned by such Foreign
Borrower.
7.18. SENIOR INDEBTEDNESS. Hexcel shall designate this Credit
Agreement and the Obligations hereunder as "Designated Senior Indebtedness"
under the Indenture referred to in clause (i) of the definition of "Subordinated
Debt."
7.19. FURTHER ASSURANCES. The Borrowers will, and will cause each of
their Subsidiaries to, cooperate with the Lenders and the Administrative Agent
and execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Credit Agreement and the other Loan
Documents.
7.20. POST-CLOSING COVENANTS. (a) Upon the consummation of the French
Facility, the Credit Parties shall furnish to the Administrative Agent true,
complete and correct copies of each of the French Facility Documents (including
schedules, exhibits and annexes thereto).
(b) On or before April 11, 2003, Hexcel shall deliver to the
Administrative Agent the Restricted IP Schedule. Until delivery of such
Restricted IP Schedule, the Borrowers shall maintain Excess Availability of not
less than $30,000,000.
8. CERTAIN NEGATIVE COVENANTS.
Each of the Borrowers covenants and agrees that, so long as any
Revolving Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or
Revolving Credit Note is outstanding or any Lender has any obligation to make
any Revolving Credit Loans or the Issuing Bank has any obligation to issue,
extend or renew any Letters of Credit:
8.1. RESTRICTIONS ON INDEBTEDNESS. The Borrowers will not, and will
not permit any of their Subsidiaries to, create, incur, assume, guarantee or be
or remain liable, contingently or otherwise, with respect to any Indebtedness
other than:
-105-
(a) Indebtedness to the Lenders and the Administrative Agent arising
under any of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(c) Indebtedness of Hexcel and its Material Domestic Subsidiaries in
respect of the Senior Secured Notes or any additional Indebtedness
permitted to be incurred in accordance with the Senior Secured Note
Documents (as in effect on the date hereof);
(d) Indebtedness of Hexcel Composites S.A. and Hexcel Fabrics S.A. in
respect of the French Facility;
(e) Subordinated Debt; and any refinancings, refundings, renewals or
extensions thereof; PROVIDED that (1) the aggregate principal amount of
replacement Indebtedness is not greater than the principal amount of the
Indebtedness being so replaced, and (2) the terms and conditions of such
replacement Indebtedness are no less favorable to Hexcel or the Lenders, as
determined by the Administrative Agent, than the terms and conditions of
the Indebtedness so replaced;
(f) purchase money Indebtedness incurred in connection with the
acquisition after the date hereof of any real or personal property by the
Borrowers or such Subsidiary or Indebtedness under any Capitalized Lease,
and Indebtedness incurred to refinance such purchase money Indebtedness or
Indebtedness under Capitalized Leases, PROVIDED that (x) the Borrowers and
their Subsidiaries shall be in compliance on a PRO FORMA basis (after
giving effect to the incurrence of such Indebtedness) with the provisions
of Sections 9.1, 9.2 and 9.3 hereof (determined for the most-recently ended
fiscal quarter and the then-current fiscal quarter); and (y) the amount of
such Indebtedness incurred by the Borrowers and their Subsidiaries shall
not exceed $10,000,000 during the 2003 fiscal year, $12,000,000 during the
2004 fiscal year, $12,000,000 during the 2005 fiscal year, $15,000,000
during the 2006 fiscal year, and $15,000,000 during the 2007 fiscal year;
(g) Indebtedness in respect of hedging agreements (including, without
limitation, the Hedging Agreements) so long as such arrangements are in the
ordinary course of business and are not for speculative purposes;
(h) Indebtedness existing on the date hereof and listed and described
on SCHEDULE 8.1 hereto and any refinancings, refundings, renewals or
extensions thereof; PROVIDED that (x) the aggregate principal amount of
replacement Indebtedness is not greater than the principal amount of the
Indebtedness being so replaced and (y) the terms of such replacement
Indebtedness (i) are, in the aggregate, not materially less favorable to
the Borrower or such Subsidiary than
-106-
the terms of the Indebtedness being so replaced or (ii) are approved in
writing by the Administrative Agent;
(i) Indebtedness of Foreign Subsidiaries with respect to foreign
borrowing facilities and standby and commercial letters of credit issued by
foreign local banks; PROVIDED that (i) such Indebtedness shall be unsecured
and (ii) the aggregate outstanding amount of such Indebtedness shall not
exceed $25,000,000 at any time;
(j) Indebtedness in respect of the CSI Leasing Trust Assets and any
refinancing of such Indebtedness on or before September 30, 2003; PROVIDED
that such refinancing shall be (i) on terms and conditions reasonably
acceptable to the Administrative Agent and (ii) in a principal amount not
to exceed the amount required to refinance such Indebtedness under the CSI
Leasing Trust Capital Lease;
(k) Indebtedness of Hexcel or any of its Subsidiaries to Hexcel or
any of its Subsidiaries, PROVIDED that the Investment corresponding to such
Indebtedness shall be permitted under Section 8.3(h), (i), (k) or (o)
hereof;
(l) Indebtedness of a Person which becomes a Subsidiary after the
Closing Date; PROVIDED that (i) such Indebtedness existed at the time such
Person became a Subsidiary and was not created in anticipation thereof,
(ii) immediately after giving effect to the acquisition of such Person by
Hexcel and/or its Subsidiaries no Default or Event of Default shall have
occurred and be continuing, and (iii) such Indebtedness is incurred in a
transaction permitted pursuant to Section 8.5.1, and any refinancings,
refundings, or renewals or extensions thereof; PROVIDED that the amount of
such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension;
(m) Indebtedness of the Borrowers or their Subsidiaries owing to
employees of the Borrowers or their Subsidiaries on account of employee
contributions to a non-qualified benefit plan;
(n) Indebtedness incurred in connection with an acquisition permitted
pursuant to Section 8.5.1; and
(o) additional Indebtedness in an aggregate principal amount not to
exceed $15,000,000 (or the local equivalent thereof based on the foreign
currency exchange rates at the time such Indebtedness is incurred) at any
time outstanding; PROVIDED that the terms of such Indebtedness do not
restrict the ability of any Subsidiary to pay or make dividends or
distributions to the Credit Parties, to make loans, advances or other
payments of whatsoever nature to the Credit Parties, or to make transfers
or distributions of all or any part of its assets to the Credit Parties.
8.2. RESTRICTIONS ON LIENS.
-107-
8.2.1. PERMITTED LIENS. The Borrowers will not, and will not permit
any of their Subsidiaries to, create or incur or suffer to be created or
incurred or to exist any Lien upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or
profits therefrom including, without limitation, on the Capital Stock of
any Subsidiary (including, without limitation, Xxxxx-Xxxxxxxx Holding
Corp., Xxxxx-Xxxxxxxx Corporation or Hexcel Pottsville Corporation);
PROVIDED that the Borrowers and their Subsidiaries may create or incur or
suffer to be created or incurred or to exist:
(i) Liens in favor of the Administrative Agent for the benefit of
the Lenders and the Administrative Agent under the Loan Documents and any
Hedging Agreements and, with respect to the Capital Stock of any first tier
Material Foreign Subsidiaries, in favor of the Lenders, Administrative
Agent and the trustee in respect of the Senior Secured Notes;
(ii) Liens on assets of non-Credit Parties securing Indebtedness
with respect to hedging agreements of any Subsidiary that is not a Credit
Party which Indebtedness, in the aggregate, does not exceed $5,000,000 at
any time outstanding;
(iii) Liens securing the Senior Secured Notes and any additional
Indebtedness secured by such Liens in accordance with the Senior Secured
Note Documents (as in effect on the date hereof) or any additional
Indebtedness permitted thereunder;
(iv) Liens on the assets of Hexcel Composites S.A. and Hexcel
Fabrics S.A. securing the French Facility in accordance with the French
Facility Documents;
(v) Liens for taxes, assessments and other government charges not
yet due or which are being contested in good faith by appropriate
proceedings or Liens on properties to secure claims for labor, material or
supplies in respect of obligations not overdue;
(vi) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations and deposits securing
liability to insurance carriers under insurance or self-insurance
arrangements;
(vii) Liens in respect of judgments or awards that do not constitute
an Event of Default under Section 12.1(e) and Liens that have been in force
for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which any Borrower or
such Subsidiary shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall
have been obtained pending such appeal or review;
-108-
(viii) Liens of carriers, warehousemen, mechanics and materialmen,
and other like Liens on properties, in existence less than one hundred
twenty (120) days from the date of creation thereof in respect of
obligations not yet due or which are being contested in good faith by
appropriate proceedings;
(ix) encumbrances on Real Property consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens and other minor Liens, PROVIDED that none of such Liens (A)
interferes materially with the use of the property affected in the ordinary
conduct of the business of the Borrowers and their Subsidiaries, and (B)
individually or in the aggregate have a Material Adverse Effect;
(x) Liens existing on the date hereof and listed on SCHEDULE 8.2
hereto;
(xi) purchase money security interests in or purchase money
mortgages on real or personal property acquired (in the case of purchase
money security interests) or leased (in the case of Capitalized Leases) to
secure purchase money Indebtedness or Capitalized Leases of the type and
amount permitted by Section 8.1(f), which security interests or mortgages
cover only the real or personal property so acquired or leased;
(xii) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(xiii) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Company and its Subsidiaries in the ordinary course of business;
(xiv) Liens in favor of banking institutions arising as a matter of
law and encumbering the deposits (including the right of setoff) held by
such banking institutions in the ordinary course of business and which are
within the general parameters customary in the banking industry;
(xv) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection with
the importation of goods;
(xvi) Liens on the property or assets of a Person which becomes a
Subsidiary after the Closing Date securing Indebtedness permitted by
Section 8.1(l); PROVIDED that (i) such Liens existed at the time such
Person became a Subsidiary and were not created in anticipation thereof,
(ii) any such Lien is not spread to cover any property or assets of such
Person after the time such Person becomes a Subsidiary, and (iii) the
amount of Indebtedness secured thereby is not increased;
-109-
(xvii) Liens on the Capital Stock of Interglas Technologies AG owned
by Hexcel or its Subsidiaries;
(xviii) Liens on assets of Foreign Subsidiaries securing Indebtedness
of any Foreign Subsidiary permitted pursuant to Section 8.1(o);
(xix) Liens on assets other than Collateral securing Indebtedness of
Hexcel or any Domestic Subsidiary which Indebtedness, in the
aggregate, does not exceed $250,000 at any time outstanding; and
(xx) Liens in respect of the amounts deposited in respect of the
defeasance of the 7.00% Convertible Notes due 2003.
8.2.2. RESTRICTIONS ON NEGATIVE PLEDGES AND UPSTREAM LIMITATIONS. The
Borrowers will not, nor will it permit any of their Subsidiaries to, (a)
enter into or permit to exist any arrangement or agreement (excluding the
Credit Agreement and the other Loan Documents) which directly or indirectly
prohibits the Borrowers or any of their Subsidiaries from creating,
assuming or incurring any Lien upon its properties, revenues or assets or
those of any of its Subsidiaries whether now owned or hereafter acquired,
other than (i) restrictions imposed by the Senior Secured Note Documents,
(ii) restrictions imposed by the CSI Lease, and (iii) restrictions imposed
by the terms of the documents governing any Subordinated Debt, (iv)
restrictions on specific assets which assets are the subject of purchase
money security interests to the extent permitted under Section 8.2.1, (v)
customary anti-assignment provisions contained in leases and licensing
agreements entered into by the Borrowers or such Subsidiary in the ordinary
course of its business, (vi) restrictions imposed by applicable law or as a
result of the fiduciary duty of directors to such Subsidiaries, (vii) with
respect to the French Facility, restrictions imposed by the terms of the
French Facility that are acceptable to the Administrative Agent in its sole
discretion and identified in writing to the Administrative Agent prior to
the consummation thereof, and (viii) customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such
sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder or (b)
enter into any agreement, contract or arrangement (excluding the Credit
Agreement and the other Loan Documents) restricting the ability of any
Subsidiary of the Borrowers, any Borrower or any Guarantor to pay or make
dividends or distributions in cash or kind to the Borrowers or any
Guarantor or to make loans, advances or other payments of whatsoever nature
to the Borrowers or any Guarantor, or to make transfers or distributions of
all or any part of its assets to the Borrowers or any Guarantor, other than
restrictions contained in clauses (a)(iv) through (a)(viii).
8.3. RESTRICTIONS ON INVESTMENTS. The Borrowers will not, and will not
permit any of their Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
-110-
(a) Investments in U.S. government obligations;
(b) Investments in time deposit accounts, certificates of deposit
and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which, at the time
such Investment is made, is organized under the laws of the United States
of America, any State thereof or any foreign country recognized by the
United States of America having capital, surplus and undivided profits
aggregating in excess of $50.0 million (or the U.S. dollar equivalent
thereof) and whose long-term debt is rated "A-" or higher (or such
equivalent rating) by at least one "nationally recognized statistical
rating organization" (as defined in Rule 436 under the Securities Act);
(c) Investments in repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (a)
above entered into with a bank meeting the qualifications described in
clause (b) above at the time such Investment is made;
(d) Investments in commercial paper, maturing not more than 90
days after the date of acquisition, issued by a corporation (other than an
affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country with a rating at the time
as of which any investment therein is made of "P-1" (or higher) according
to Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according to
Standard & Poor's Ratings Group;
(e) Investments in securities with maturities of six months or
less from the date of acquisition issued or fully guaranteed by any State,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated, at the time
such Investment is made, at least "A" by Standard & Poor's Ratings Group or
"A" by Xxxxx'x Investors Service, Inc.;
(f) Investments existing on the date hereof and listed on SCHEDULE
8.3(f) hereto and any extension or renewal thereof; PROVIDED that such
extended or renewed Investment is of a similar type;
(g) Investments consisting of Guaranties;
(h) Investments by any Credit Party in any Subsidiary of the
Borrowers that is not a Credit Party, to the extent consisting of cash,
Cash Equivalents or other assets (other than capital stock and intercompany
notes); PROVIDED that the aggregate amount of such Investments shall not
exceed $10,000,000 at any time;
(i) Investments by any Credit Party in any other Credit Party;
PROVIDED that Investments by Hexcel or any Guarantor in any Foreign
Subsidiary that is a Credit Party, to the extent consisting of cash, Cash
Equivalents or other
-111-
assets (other than capital stock and intercompany notes) shall not exceed
$10,000,000 at any time;
(j) Investments by any Credit Party in any Subsidiary of the
Borrowers consisting of capital stock and/or intercompany notes so long as
such Investment is implemented to achieve cash repatriation strategies;
(k) (i) Investments with respect to Restricted Payments permitted
by Section 8.4, (ii) Investments with respect to acquisitions permitted
pursuant to Section 8.5.1, and (iii) Investments with respect to any
transaction permitted by Sections 8.11 or 8.13;
(l) Investments by Subsidiaries that are not Credit Parties in
Hexcel or any of its Subsidiaries;
(m) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business so long as such loans and such advances are in
accordance with applicable law;
(n) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(o) extensions of trade credit in the ordinary course of business;
and
(p) additional Investments by the Borrowers and their Subsidiaries
in an aggregate amount not to exceed $15,000,000; PROVIDED that if after
giving effect to any Investment the pro forma Excess Availability hereunder
is less than $25,000,000, Investments made pursuant to this Section 8.3(o)
shall not exceed an aggregate amount of $1,000,000,
PROVIDED that, subject to Section 7.17, with respect to clauses (a) through
(e) above, such Investments shall be permitted hereunder only to the extent
such Investments (if held by a Credit Party) are subject to a first
priority perfected Lien in favor of the Administrative Agent securing the
Obligations.
8.4. RESTRICTED PAYMENTS. Neither the Borrowers nor any of their
Subsidiaries will make any Restricted Payments except that, (a) any Borrower
(other than Hexcel) and any Subsidiary of the Borrowers may make or pay any
dividends to the direct or indirect holder of the equity interest in such
Borrower or such Subsidiary (excluding the holders of equity interests in
Hexcel), (b) so long as no Default or Event of Default then exists or would
result from such payment, Hexcel may make Restricted Payments with respect to
(i) employee or director stock options, stock incentive plans or restricted
stock plans of Hexcel which are compensatory in nature, made in the ordinary
course of business and consistent with the past practices of Hexcel, (ii) the
purchase from time to time by Hexcel of its common stock (for not more than
market price) with the proceeds
-112-
of the exercise by grantees under any equity-based incentive plan, (iii) other
purchases from time to time by Hexcel of its common stock under this clause
(b)(iii)not to exceed $40,000,000 in the aggregate since the date hereof;
provided that Hexcel may make such purchase of its common stock only if after
giving effect to such purchase (including any borrowings made or to be made in
connection therewith) (A) the Excess Availability hereunder would be equal to or
greater than $25,000,000, and (B) the Fixed Charge Coverage Ratio would not be
less than 1.20:1.00 determined on a pro forma basis for the most-recently ended
fiscal quarter and the then-current fiscal quarter of the Borrowers during which
such purchase was made, (c) the Borrowers and their Subsidiaries may make
Restricted Payments with respect to transactions otherwise permitted pursuant to
Section 8.13, and (d) so long as no Default or Event of Default then exists or
would result from such payment, Hexcel may make interest or dividend payments in
respect of Convertible Preferred Stock in the form of (i) Convertible Preferred
Stock (or incremental redemption value), (ii) cash, or (iii) common stock (in
accordance with the terms of the Certificate of Designations with respect to the
Convertible Preferred Stock); PROVIDED that Hexcel may make such cash interest
or dividend payments pursuant to this clause (d)(ii) of this Section 8.4 only
(x) after March 19, 2006, and (y) if after giving effect to such cash interest
or dividend payment (including any borrowings made or to be made in connection
therewith) (A) the Excess Availability hereunder would be equal to or greater
than $25,000,000, and (B) the Fixed Charge Coverage Ratio would not be less than
1.20:1.00 determined on a pro forma basis for the most-recently ended fiscal
quarter and the then-current fiscal quarter of the Borrowers during which such
cash interest payment was made.
8.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
8.5.1. MERGERS AND ACQUISITIONS. The Borrowers will not, and will not
permit any of their Subsidiaries to, become a party to any merger,
amalgamation or consolidation, or agree to or effect any asset acquisition
or stock acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except, in each case: to
the extent that the Investment corresponding to such merger or
consolidation or asset or stock acquisition is permitted pursuant to
Section 8.3, the merger or consolidation of one or more of the Subsidiaries
of any Borrower with and into such Borrower, or the merger of a Subsidiary
of any Borrower into a Credit Party so long as the Credit Party is the
surviving entity, or the merger of a Domestic Subsidiary that is a Credit
Party with Hexcel or another Domestic Subsidiary that is a Credit Party, or
the merger of any Subsidiary of the Borrowers that is not a Credit Party
into any other any Subsidiary of the Borrowers that is not a Credit Party;
PROVIDED that the Borrowers shall be permitted to make any asset
acquisition or stock acquisition so long as (A) the aggregate consideration
for all such acquisitions does not exceed (x) $10,000,000 in any fiscal
year (PLUS, for any year, an amount equal to the amount by which Capital
Expenditures permitted to be made during the prior year pursuant to Section
9.4 exceeds the actual amount of Capital Expenditures made during such
year) or (y) $30,000,000 from and after the Closing Date (which amount
shall be increased by the amount allocated to permitted Capital
-113-
Expenditures and actually used for acquisitions under this Section 8.5.1,
up to an additional $10,000,000), and (B) after giving effect to such
acquisition (x) the Excess Availability hereunder would be equal to or
greater than $25,000,000, and (y) the Fixed Charge Coverage Ratio would not
be less than 1.20:1.00 determined on a pro forma basis for the
most-recently ended fiscal quarter and the then-current fiscal quarter of
the Borrowers during which such acquisition was made.
8.5.2. DISPOSITION OF ASSETS. The Borrowers will not, and will not
permit any of their Subsidiaries to, become a party to or agree to or
effect any Asset Sale PROVIDED that, (a) Hexcel shall be permitted to
consummate the sale of its 33.3% interest in the Asahi-Xxxxxxxx joint
venture in the 2003 calendar year, and (b) the Borrowers and any of their
Subsidiaries shall be permitted to consummate (i) any Asset Sale identified
on SCHEDULE 8.5.2, (ii) any transaction permitted by Sections 8.3 or 8.6,
(iii) the sale of inventory in the ordinary course of business, (iv) the
sale or other disposition of obsolete or worn out property in the ordinary
course of business, (v) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection with
the compromise or collection thereof, (vi) assignments and licenses of
intellectual property of the Borrowers and their Subsidiaries, (A) among
the Borrowers and their Subsidiaries, (B) to joint ventures, (C) in the
ordinary course of business or (D) pursuant to the Strategic Alliance
Agreement, PROVIDED that, in each case, such assignments and such licenses
are not inconsistent with the rights of the Administrative Agent under the
Intellectual Property License Agreement, (vii) leases of owned real
property and subleases of leased real property, in each case, not used in
the operations of Hexcel and its Subsidiaries, (viii) any transfer of
receivables under the French Facility and (ix) additional Asset Sales
having a net book value on Hexcel's books and records not in excess of
$10,000,000 (or the local equivalent thereof) in any fiscal year.
8.6. SALE AND LEASEBACK. The Borrowers will not, and will not permit any of
their Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrowers or any of their Subsidiaries shall sell or transfer any
property owned by it in order then or thereafter to lease such property or lease
other property that the Borrower or any of its Subsidiaries intends to use for
substantially the same purpose as the property being sold or transferred, other
than any such transactions relating to the sale and lease of equipment (i) upon
terms and subject to conditions satisfactory to the Administrative Agent and
(ii) to the extent that the aggregate fair market value of all equipment sold
from and after the date hereof does not exceed $20,000,000 (or the local
equivalent thereof).
8.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except in compliance with all
applicable Environmental Laws or except as could not reasonably be expected to
have a Material Adverse Effect, the Borrowers will not, and will not permit any
of their Subsidiaries to, (a) use any of the Real Estate or any portion thereof
for the handling, processing, storage or disposal of Hazardous Substances, (b)
cause or permit to be located on any of the Real Estate any underground tank or
other underground storage
-114-
receptacle for Hazardous Substances, (c) generate any Hazardous Substances on
any of the Real Estate, (d) conduct any activity at any Real Estate or use any
Real Estate in any manner so as to cause a Release or threatened Release of
Hazardous Substances on, upon or into the Real Estate, or (e) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law.
8.8. EMPLOYEE BENEFIT PLANS. Neither the Borrowers nor any ERISA Affiliate
will:
(a) engage in any "PROHIBITED TRANSACTION" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for the Borrowers or any of their Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "ACCUMULATED
FUNDING DEFICIENCY", as such term is defined in Section 302 of ERISA,
whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrowers or any of their Subsidiaries pursuant to Section 302(f) or
Section 4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring
the posting of security pursuant to Section 307 of ERISA or Section
401(a)(29) of the Code;
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any such Guaranteed Pension Plan with assets in
excess of benefit liabilities, by more than the amount set forth in Section
6.15.3; or
(f) permit or take any action which would contravene any
Applicable Pension Legislation.
8.9. BUSINESS ACTIVITIES. The Borrowers will not, and will not permit any
of their Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
8.10. FISCAL YEAR. The Borrowers will not, and will not permit any of their
Subsidiaries to, change the date of the end of its fiscal (or financial) year
from that set forth in Section 6.4.1.
8.11. TRANSACTIONS WITH AFFILIATES. The Borrowers will not, and will not
permit any of their Subsidiaries to, engage in any transaction with any
Affiliate (other than for
-115-
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such Affiliate or, to the knowledge of the
Borrowers, any corporation, partnership, trust or other entity in which any such
Affiliate has a substantial interest or is an officer, director, trustee or
partner, on terms more favorable to such Person than would have been obtainable
on an arm's-length basis, except transactions permitted by Sections 8.1,
8.2.1(xvii), 8.3, 8.4, or 8.5.
8.12. MODIFICATION OF GOVERNING DOCUMENTS. Neither the Borrowers nor any of
the other Credit Parties will consent to or agree to any amendment, supplement
or other modification to the Governing Documents without the prior written
consent of the Administrative Agent unless such amendment, supplement or
modification (x) could not reasonably be expected to have a Material Adverse
Effect on the Administrative Agent's or the Lenders rights under the Loan
Documents or the Borrowers' or any of the other Credit Parties' obligations
under the Loan Documents and (y) does not in any way limit or restrict the
ability of any Subsidiary of the Borrowers to pay or make dividends or
distributions in cash or kind to the Borrowers or to make loans, advances or
other payments of whatsoever nature to the Borrowers, or to make transfers or
distributions of all or any part of its assets to the Borrowers.
8.13. EQUITY OFFERING; SUBORDINATED DEBT; SENIOR SECURED NOTES; FRENCH
FACILITY AND CAPITALIZED LEASES. The Borrowers will not, and will not permit any
of their Subsidiaries to, (a) amend, supplement or otherwise modify the terms of
any of the Equity Offering, the Subordinated Debt, the Senior Secured Notes or
the French Facility other than amendments, supplements or modifications to the
Equity Offering and the French Facility which could not reasonably be expected
to have a Material Adverse Effect on the Administrative Agent's or the Lenders
rights under the Loan Documents or the Borrowers' or any of their Subsidiaries'
obligations under the Loan Documents; PROVIDED that any amendment or
modification of the French Facility shall not restrict the ability of Hexcel
Composites S.A., Hexcel Fabrics S.A. or any other Subsidiary of Hexcel which is
a party thereto to pay or make dividends or distributions in cash or kind to
Hexcel or its Subsidiaries, to make loans, advances or other payments of
whatsoever nature to Hexcel or its Subsidiaries, or to make transfers or
distributions of all or any part of its assets to Hexcel or its Subsidiaries, in
each case consistent with the past practices of Hexcel or its Subsidiaries; or
(b) prepay, redeem or repurchase any of the Senior Secured Notes, the
Subordinated Debt, the Convertible Preferred Stock or any Capitalized Lease;
PROVIDED that the Borrowers may (i) redeem or prepay up to $63,000,000 in
Subordinated Debt; PROVIDED that (A) no Default or Event of Default shall have
occurred and be continuing, after giving effect to such redemption or prepayment
(including any borrowings made or to be made in connection therewith), (B) the
Fixed Charge Coverage Ratio would not be less than 1.20:1.00 determined on a pro
forma basis for the most-recently ended fiscal quarter and the then-current
fiscal quarter of the Borrowers during which such redemption or such prepayment
was made and (C) the pro forma Excess Availability hereunder would be equal to
or greater than (x) at all times prior to March 19, 2004,
-116-
$40,000,000 and (y) at all times on and after March 19, 2004, $25,000,000, (ii)
make redemptions or prepayments of the Senior Secured Notes PROVIDED, that (A)
no Default or Event of Default shall have occurred and be continuing, after
giving effect to the proposed prepayment (including any borrowings made or to be
made in connection therewith), (B) the Fixed Charge Coverage Ratio would not be
less than 1.20:1.00 determined on a pro forma basis for the most-recently ended
fiscal quarter and the then-current fiscal quarter of the Borrowers during which
such prepayment was made, and (C) Excess Availability hereunder would be equal
to or greater than (x) at all times prior to March 19, 2004, $40,000,000 and (y)
at all times on and after March 19, 2004, $25,000,000, (iii) prepay Indebtedness
with respect to the CSI Leasing Trust Capital Lease, (iv) make sinking fund
payments and open market purchases in an aggregate amount not to exceed
$1,800,000 during each fiscal year in respect of the 7.00% Convertible
Subordinated Debentures due 2011, pursuant to the terms of that certain
Indenture, dated as of August 1, 1986, and (v) make prepayments of the Senior
Secured Notes with the proceeds of Asset Sales of assets other than Collateral,
PROVIDED that (A) such Asset Sale is permitted pursuant to Section 8.5.2 and (B)
such prepayment is required pursuant to the terms of the Senior Secured Notes
(as in effect on the date hereof).
8.14. BANK ACCOUNTS. The Borrowers will not, and will not permit any of
their Subsidiaries to establish any bank accounts in violation of Section 7.17.
8.15. FOREIGN SUBSIDIARY BORROWINGS. The Borrowers will not, at any time,
permit the outstanding principal amount of all Foreign Subsidiary Indebtedness
to exceed the Foreign Subsidiary Borrowing Base.
9. FINANCIAL COVENANTS.
Each of the Borrowers covenants and agrees that, so long as any Revolving
Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving
Credit Note is outstanding or any Lender has any obligation to make any
Revolving Credit Loans or the Issuing Bank has any obligation to issue, extend
or renew any Letters of Credit:
9.1. LEVERAGE RATIO. The Borrowers will not permit the Leverage Ratio for
any fiscal quarter ending during any period described in the table set forth
below to exceed the ratio set forth opposite such period in such table:
PERIOD RATIO
-----------------------------------------------------------------------------
Closing Date through September 30, 2004 6.00 to 1.00
-----------------------------------------------------------------------------
December 31, 2004 through September 30, 2005 5.75 to 1.00
-----------------------------------------------------------------------------
December 31, 2005 through September 30, 2006 5.50 to 1.00
-----------------------------------------------------------------------------
-117-
December 31, 2006 through September 30, 2007 5.00 to 1.00
-----------------------------------------------------------------------------
December 31, 2007 and each fiscal quarter ending thereafter 4.5 to 1.00
-----------------------------------------------------------------------------
PROVIDED that, with respect to each Reference Period including results from one
or more fiscal quarters ending on or prior to March 31, 2003 (the "Legacy
Quarters"), the Leverage Ratio shall be calculated on a pro forma basis giving
effect to the amounts set forth on SCHEDULE 9.
9.2. SENIOR LEVERAGE RATIO. The Borrowers will not permit the Senior
Leverage Ratio for any fiscal quarter ending during any period described in the
table set forth below to exceed the ratio set forth opposite such period in such
table:
PERIOD RATIO
-----------------------------------------------------------------------------
Closing Date through September 30, 2006 2.25 to 1.00
-----------------------------------------------------------------------------
December 31, 2006 through September 30, 2007 2.00 to 1.00
-----------------------------------------------------------------------------
December 31, 2007 and each fiscal quarter ending thereafter 1.50 to 1.00
-----------------------------------------------------------------------------
PROVIDED that, with respect to each Reference Period including results from one
or more Legacy Quarters, the Senior Leverage Ratio shall be calculated on a pro
forma basis giving effect to the amounts set forth on SCHEDULE 9.
9.3. FIXED CHARGE COVERAGE RATIO. The Borrowers shall not permit the Fixed
Charge Coverage Ratio through any fiscal quarter ending during any period
described in the table set forth below to be less than the minimum ratio (the
"MINIMUM RATIO") set forth opposite such period in such table:
PERIOD MINIMUM RATIO
---------------------------------------------------------------------------
Closing Date through September 30, 2007 1.00 to 1.00
---------------------------------------------------------------------------
December 31, 2007 and each fiscal quarter ending thereafter 1.10 to 1.00
---------------------------------------------------------------------------
PROVIDED that, (a) until such time as the CSI Leasing Trust Capital Lease has
been repaid, for any two (2) consecutive fiscal quarters, not to exceed a total
of four (4) fiscal quarters from and after the Closing Date, if as at the last
day of any fiscal quarter and at all times until the Borrowers are in compliance
with the Fixed Charge Coverage Ratio the
-118-
Borrowers have Additional Availability of not less than $30,000,000, the
Borrowers may deduct from the aggregate of Total Debt Service (Consolidated)
included in the calculation of the Fixed Charge Coverage Ratio for such period
an amount of amortization expenses in respect of the CSI Leasing Trust Capital
Lease during such period such that (after giving effect to such deduction) the
Fixed Charge Coverage Ratio for such fiscal quarter would not be less than the
Minimum Ratio specified above opposite such fiscal period; (b) that during each
quarter a reserve to the Domestic Borrowing Base equal to the amount of
principal payments projected to be excluded from the calculation of Total Debt
Service (pursuant to clause (c) of the definition of "Total Debt Service") in
the following quarter shall have been established by the Administrative Agent;
(c) such amount of amortization expenses so excluded from the calculation of
Total Debt Service shall not exceed $2,000,000 over the term of this Credit
Agreement, and such reserve shall be maintained until the end of the quarter in
which Hexcel can satisfy the Fixed Charge Coverage Ratio without the exclusion
of such amortization expenses; and (d) with respect to each Reference Period
including results from one or more Legacy Quarters, the Fixed Charge Coverage
Ratio shall be calculated on a pro forma basis giving effect to the amounts set
forth on SCHEDULE 9.
9.4. CAPITAL EXPENDITURES. Hexcel will not make, or permit any Subsidiary
to make, Capital Expenditures in any fiscal year described in the table set
forth below to exceed the amount set forth opposite such fiscal year in such
table:
FISCAL YEAR AMOUNT
-------------------------------------------
2003 $ 22,500,000
-------------------------------------------
2004 $ 28,000,000
-------------------------------------------
2005 $ 30,000,000
-------------------------------------------
2006 $ 40,000,000
-------------------------------------------
2007 $ 40,000,000
-------------------------------------------
PROVIDED that, (x) during the 2003 fiscal year, if the Fixed Charge Coverage
Ratio through the most-recently ended fiscal quarter of Hexcel, calculated on a
year-to-date basis, is not less than 1.30:1.00 and (y) at all times thereafter,
if the Fixed Charge Coverage Ratio for the most recently ended fiscal year of
Hexcel, is not less than 1.30:1.00, the amount set forth opposite each fiscal
year in the table above shall be increased by $5,000,000 for the 2003 fiscal
year, $5,000,000 for the 2004 fiscal year, $7,500,000 for the 2005 fiscal year,
$10,000,000 for the 2006 fiscal year and $10,000,000 for the 2007 fiscal year.
-119-
10. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Revolving Credit Loans
and of the Issuing Bank to issue any initial Letters of Credit shall be subject
to the satisfaction of the following conditions precedent on or prior to April
30, 2003:
10.1. LOAN DOCUMENTS, ETC. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed copy of each such Loan
Document.
10.2. CERTIFIED COPIES OF GOVERNING DOCUMENTS; GOOD STANDING CERTIFICATES.
The Administrative Agent shall have received from each Credit Party (i) a copy,
certified by a duly authorized officer of such Person to be true and complete on
the Closing Date, of each of its Governing Documents as in effect on such date
of certification and (ii) a certificate as to the good standing of each of
Hexcel and the Guarantors from the Secretary of State or other appropriate
official of the jurisdiction of its organization, dated no earlier than March 1,
2003 and each jurisdiction where Hexcel and each of the Guarantors conducts
business and in any other jurisdiction in which the failure of Hexcel and each
of the Guarantors to so qualify could have a materially adverse effect on the
business, operations, property or financial or other condition of such Credit
Party.
10.3. CORPORATE OR OTHER ACTION. All corporate (or other) action necessary
for the valid execution, delivery and performance by each of the Borrowers and
each of their Subsidiaries of this Credit Agreement and the other Loan Documents
to which it is or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Lenders shall have been provided
to the Administrative Agent.
10.4. INCUMBENCY CERTIFICATE. The Administrative Agent shall have received
from each Credit Party an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of such Person, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (a) to
sign, in the name and on behalf of such Person, each of the Loan Documents to
which such Person is or is to become a party; (b) in the case of the Borrowers,
to make Loan Requests and Conversion Requests and to apply for Letters of
Credit; and (c) to give notices and to take other action on its behalf under the
Loan Documents.
10.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Administrative Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under applicable law) security
interest in and Lien upon the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the
Administrative Agent to protect and preserve such security interests shall have
been duly effected. The Administrative Agent shall have received evidence
thereof in form and substance satisfactory to the Administrative Agent.
-120-
10.6. CAPITALIZATION. The Administrative Agent shall have received evidence
satisfactory to the Administrative Agent that (a) Hexcel shall have received
gross proceeds of an equity investment of not less than $125,000,000 in
connection with the Equity Offering and consummated the transaction contemplated
by the Equity Offering Documents, and (b) Hexcel shall have received the gross
proceeds from the issuance of the Senior Secured Notes in an aggregate amount of
not less than $125,000,000 and consummated the transaction contemplated by the
Senior Secured Note Documents, in the case of (b) on terms and conditions which
are reasonably satisfactory to the Administrative Agent in all respects. Nothing
shall have come to the attention of the Administrative Agent to cause the
Administrative Agent to reasonably believe that the past practices of Hexcel
Composites S.A., Hexcel Fabrics S.A. or any other Subsidiary which is a party to
the French Facility with respect to upstreaming funds to Hexcel and its
Subsidiaries have not been in compliance with applicable law. Each Lender shall
have received a fully executed copy of the Equity Offering Documents, the Senior
Secured Note Documents, and all documents executed or delivered in connection
with the Subordinated Debt (including schedules, exhibits and annexes thereto).
10.7. CONSENTS AND APPROVALS. The Administrative Agent shall have received
evidence that all consents and approvals necessary to complete all transactions
contemplated hereby have been obtained.
10.8. AVAILABILITY. The Administrative Agent shall have received evidence
that on the Closing Date, after giving effect to the transactions contemplated
hereby (including, without limitation, after giving effect to all borrowings
under the Credit Agreement and all credit exposure), that the Additional
Availability hereunder would be equal to or greater than $30,000,000.
10.9. LIEN SEARCHES. The Administrative Agent shall have received from each
Credit Party a completed and fully executed perfection certificate and the
results of Uniform Commercial Code searches (and the equivalent thereof in all
applicable foreign jurisdictions, to the extent such searches can be conducted)
indicating no Liens other than Permitted Liens, and otherwise in form and
substance reasonably satisfactory to the Administrative Agent.
10.10. CERTIFICATES OF INSURANCE. The Administrative Agent shall have
received a certificate of insurance from an independent insurance broker dated
as of the Closing Date, identifying insurers, types of insurance, insurance
limits, and otherwise describing the insurance obtained in accordance with the
provisions of the Security Documents, and naming the Administrative Agent as
loss payee and/or additional insured, as its interest may appear.
10.11. BORROWING BASE REPORT. The Administrative Agent shall have received
from the Borrowers the initial Borrowing Base Report dated as of the Closing
Date.
10.12. ACCOUNTS RECEIVABLE AGING REPORT AND INVENTORY SUMMARY. The
Administrative Agent shall have received from the Borrowers the most recent
Accounts Receivable aging report and inventory summary of the Borrowers and
their Subsidiaries
-121-
dated as of a date which shall be no more than twenty (20) days prior to the
Closing Date and the Borrowers shall have notified the Administrative Agent in
writing on the Closing Date of any material deviation from the Accounts
Receivable or inventory values reflected in such Accounts Receivable aging
report and such inventory summary and shall have provided the Administrative
Agent with such supplementary documentation as the Administrative Agent may
reasonably request.
10.13. SOLVENCY CERTIFICATE. Each of the Lenders shall have received an
officer's certificate of the Borrowers dated as of the Closing Date as to the
solvency of the Borrowers and their Subsidiaries following the consummation of
the transactions contemplated herein and in form and substance reasonably
satisfactory to the Lenders.
10.14. OPINIONS OF COUNSEL. Each of the Lenders and the Administrative
Agent shall have received a favorable legal opinion addressed to the Lenders and
the Administrative Agent, dated as of the Closing Date, in form and substance
reasonably satisfactory to the Lenders and the Administrative Agent, from:
(i) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, U.S. counsel to
Hexcel and its Subsidiaries;
(ii) Xxxxx & XxXxxxxx, U.K. counsel to the U.K. Borrower;
(iii) Freshfields Bruckhaus Xxxxxxxx, Austrian counsel to the
Austrian Borrower;
(iv) Xxxxx & XxXxxxxx, German counsel to the German Borrower; and
(v) Dechert, Price & Xxxxxx, French counsel to Hexcel and its
Subsidiaries.
10.15. PAYMENT OF FEES. The Borrowers shall have paid to the Lenders or the
Administrative Agent, as appropriate, the Fees pursuant to Sections 4.1 and 4.2.
10.16. PAYOFF LETTER. The Administrative Agent shall have received a payoff
letter from Credit Suisse First Boston, in form and substance reasonably
satisfactory to the Administrative Agent, indicating that the obligations under
the Existing Credit Agreement have been repaid in full on or prior to the
Closing Date and all commitments thereunder have been terminated.
11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Revolving Credit Loans and of
the Issuing Bank to issue, extend or renew any Letter of Credit, in each case
whether on or after the Closing Date, shall also be subject to the satisfaction
of the following conditions precedent:
11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrowers and their Subsidiaries
contained in this Credit
-122-
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Credit Agreement shall be true as of the
date as of which they were made and shall also be true at and as of the time of
the making of such Revolving Credit Loan or the issuance, extension or renewal
of such Letter of Credit, with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions contemplated or
permitted by this Credit Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse, and to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing.
11.2. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Lenders and to the Administrative Agent, and the Administrative
Agent shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.
11.3. BORROWING BASE REPORT. The Administrative Agent shall have received
the most recent Borrowing Base Report required to be delivered to the
Administrative Agent in accordance with Section 7.4(f).
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("EVENTS OF DEFAULT" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "DEFAULTS") shall occur:
(a) (i) any Borrower shall fail to pay any principal of the
Revolving Credit Loans or any Reimbursement Obligation when the same shall
become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment, (ii)
Hexcel or any Guarantor shall fail to pay any interest on the Revolving
Credit Loans, any Fees, or other sums due hereunder or under any of the
other Loan Documents when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment or (iii) any of the U.K. Borrower, the
Austrian Borrower and the German Borrower shall fail to pay any interest on
the Revolving Credit Loans, any Fees, or other sums due hereunder or under
any of the other Loan Documents when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment and such failure shall continue for
three (3) days;
(b) any Credit Party shall fail to comply with any of its
covenants contained in Sections 7.1, 7.5.1, the first sentence of 7.6,
7.9.1, 7.12, 7.14, 7.15, 8 or 9;
-123-
(c) any Credit Party shall fail to perform any term, covenant
or agreement contained herein or in any of the other Loan Documents (other
than those specified elsewhere in this Section 12.1) for thirty (30) days
after written notice of such failure has been given to the Borrowers by the
Administrative Agent or any Lender entitled to give such notice; PROVIDED
that with respect to any failure to perform any covenant under Section 7.7
with respect to any Collateral, such period shall be ten (10) days after
any written notice of such failure has been given;
(d) any representation or warranty of any Credit Party in
this Credit Agreement or any of the other Loan Documents or in any other
document or instrument delivered pursuant to or in connection with this
Credit Agreement shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated;
(e) any Credit Party shall fail to pay at maturity, or within
any applicable period of grace, any obligation for borrowed money or credit
received, which, when taken in the aggregate, exceeds $5,000,000,
including, without limitation, the Senior Secured Notes or the French
Facility, or in respect of any Capitalized Leases, or fail to observe or
perform any material term, covenant or agreement contained in any agreement
by which it is bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases, in each case, when taken
in the aggregate, exceeds $5,000,000 for such period of time as would
permit (assuming the giving of appropriate notice if required) the holder
or holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof, or any such holder or holders shall rescind or shall
have a right to rescind the purchase of any such obligations;
(f) any Credit Party shall make an assignment for the benefit
of creditors, or admit in writing its inability to pay or generally fail to
pay its debts as they mature or become due, or shall petition or apply for
the appointment of a trustee or other custodian, liquidator or receiver of
any Credit Party or of any substantial part of the assets of any Credit
Party or shall commence any case or other proceeding relating to any Credit
Party under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction (other than solvent reorganisation of the Austrian Borrower
under the Austrian Act on Solvent Reorganization
(UNTERNEHMENSREORGANSIATIONSGESETZ), now or hereafter in effect, or shall
take any action to authorize or in furtherance of any of the foregoing, or
if any such petition or application shall be filed or any such case or
other proceeding shall be commenced against any Credit Party and any Credit
shall indicate its approval thereof, consent thereto or acquiescence
therein or such petition or application shall not have been dismissed
within forty-five (45) days following the filing thereof;
(g) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Credit Party bankrupt
or insolvent, or approving a petition in any such case or other proceeding,
or a
-124-
decree or order for relief is entered in respect of any Credit Party in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(h) there shall remain in force, undischarged, unsatisfied
and unstayed, for more than sixty (60) days, whether or not consecutive,
any final judgment (exclusive of amounts covered by insurance), against any
Credit Party that, with other outstanding final judgments, undischarged, of
any Credit Party exceeds in the aggregate $5,000,000;
(i) an offer is required to be made to prepay, redeem or
repurchase the Subordinated Debt or the Senior Secured Notes or the
Convertible Preferred Stock in excess of the amounts permitted to be repaid
pursuant to Section 8.13 hereof;
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded other than in accordance with the terms
thereof or with the express prior written agreement, consent or approval of
the Lenders, or any action at law, suit or in equity or other legal
proceeding to cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of the Borrowers or any of their Subsidiaries
party thereto or any of their respective stockholders, or any court or any
other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order,
decree or ruling to the effect that, any one or more of the Loan Documents
is illegal, invalid or unenforceable in accordance with the terms thereof;
(k) to the extent not insured, the Borrowers or any ERISA
Affiliate incurs any liability to the PBGC or a Guaranteed Pension Plan
pursuant to Sections 4062-4064 of ERISA in an aggregate amount exceeding
$5,000,000, or the Borrowers or any ERISA Affiliate is assessed withdrawal
liability pursuant to Title IV of ERISA by a Multiemployer Plan requiring
current aggregate annual payments exceeding $5,000,000, or any of the
following occurs with respect to a Guaranteed Pension Plan: (i) an ERISA
Reportable Event, or a failure to make a required installment or other
payment (within the meaning of Section 302(f)(1) of ERISA), PROVIDED that
the Administrative Agent determines in its reasonable discretion that such
event (A) could reasonably be expected to result in liability of the
Borrowers or any of their Subsidiaries to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding $5,000,000 and (B) could
reasonably constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC, for the appointment by the appropriate United
States District Court of a trustee to administer such Guaranteed Pension
Plan or for the imposition of a lien in favor of such Guaranteed Pension
Plan; or (ii) the appointment by a United States District Court of a
trustee to administer such Guaranteed Pension Plan; or (iii) the
institution by the PBGC of proceedings to terminate such Guaranteed Pension
Plan;
(l) a Change of Control shall occur; or
-125-
(m) an Insolvency Event shall occur,
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice in writing to the Borrowers declare all amounts owing with respect to
this Credit Agreement, the Revolving Credit Notes and the other Loan Documents
and all Reimbursement Obligations to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by each of
the Borrowers; PROVIDED that in the event of any Event of Default specified in
Sections 12.1(f) or 12.1(g), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the
Administrative Agent or any Lender. Upon demand by the Required Lenders after
the occurrence of any Event of Default, and automatically without the necessity
of demand in the event of any Event of Default specified in Sections 12.1(f) or
12.1(g), the Borrowers shall immediately provide to the Administrative Agent
cash in an amount equal to the aggregate Maximum Drawing Amount on all then
outstanding Letters of Credit to be held by the Administrative Agent as
collateral security for the Obligations.
12.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 12.1(f) or Section 12.1(g) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the
Lenders shall be relieved of all further obligations to make Revolving Credit
Loans to the Borrowers and the Administrative Agent shall be relieved of all
further obligations to issue, extend or renew Letters of Credit. If any other
Event of Default shall have occurred and be continuing, or if on any Drawdown
Date or other date for issuing, extending or renewing any Letter of Credit the
conditions precedent to the making of the Loans to be made on such Drawdown Date
or (as the case may be) to issuing, extending or renewing such Letter of Credit
on such other date are not satisfied, the Administrative Agent may and, upon the
request of the Required Lenders, shall, by notice to the Borrowers, terminate
the unused portion of the credit hereunder, and upon such notice being given
such unused portion of the credit hereunder shall terminate immediately and each
of the Lenders shall be relieved of all further obligations to make Revolving
Credit Loans and the Administrative Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Borrowers or any of their Subsidiaries of any
of the Obligations.
12.3. REMEDIES. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Revolving Credit Loans pursuant to Section 12.1,
each Lender, if owed any amount with respect to the Revolving Credit Loans, may,
with the consent of the Required Lenders but not otherwise, proceed to protect
and enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced,
including as permitted by applicable law the obtaining of the EX PARTE
appointment of a receiver, and, if such amount shall have become due, by
-126-
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. No remedy herein conferred upon any
Lender or the Administrative Agent or the holder of any Revolving Credit Note or
purchaser of any Letter of Credit Participation is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
12.4. DISTRIBUTION OF PROCEEDS. In the event that, following the occurrence
or during the continuance of any Default or Event of Default, the Administrative
Agent or any Lender, as the case may be, receives any monies in connection with
the enforcement of its rights hereunder or under any of the other Loan Documents
(with payment received from any Foreign Borrower to be applied to its respective
obligations only), such monies shall be distributed for application as follows:
(a) FIRST, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of all
reasonable costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Administrative Agent in connection with the
collection of such monies by the Administrative Agent, for the exercise,
protection or enforcement by the Administrative Agent of all or any of the
rights, remedies, powers and privileges of the Administrative Agent under
this Credit Agreement or any of the other Loan Documents in support of any
provision of adequate indemnity to the Administrative Agent against any
taxes or liens which by law shall have, or may have, priority over the
rights of the Administrative Agent to such monies;
(b) SECOND, to all other Obligations (other than Obligations
arising under any Hedging Agreement or the Cash Management Services) in
such order or preference as the Required Lenders may determine; PROVIDED,
HOWEVER, that (i) distributions shall be made (A) PARI PASSU among
Obligations with respect to the Administrative Agent's Fee and all other
Obligations and (B) with respect to each type of Obligation owing to the
Lenders, such as interest, principal, fees and expenses, among the Lenders
PRO RATA, and (ii) the Administrative Agent may in its discretion make
proper allowance to take into account any Obligations not then due and
payable; and
(c) THIRD, to obligations of the Borrowers and their
Subsidiaries to any of the Lenders and/or the Administrative Agent and/or
any of their Affiliates with respect to Obligations relating to Hedging
Agreements and the Cash Management Services; and
(d) FOURTH, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the
Administrative Agent of all of the Obligations, to the payment of any
obligations required to be paid pursuant to Section 9-504(1)(c) of the
Uniform Commercial Code of the State of New York; and
-127-
(e) FIFTH, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
12.5. JUDGEMENT CURRENCY. If, for the purpose of obtaining judgment in any
court or obtaining an order enforcing a judgment, it becomes necessary to
convert any amount due under this Credit Agreement in Dollars or in any other
currency (hereinafter in this Section 12.5 called the "FIRST CURRENCY") into any
other currency (hereinafter in this Section 12.5 called the "SECOND CURRENCY"),
then the conversion shall be made at the Administrative Agent's spot rate of
exchange for buying the first currency with the second currency prevailing at
the Administrative Agent's close of business on the Business Day next preceding
the day on which the judgment is given or (as the case may be) the order is
made. Any payment made to the Administrative Agent or any Lender pursuant to
this Credit Agreement in the second currency shall constitute a discharge of the
obligations of the Borrowers to pay to the Administrative Agent and the Lenders
any amount originally due to the Administrative Agent and the Lenders in the
first currency under this Credit Agreement only to the extent of the amount of
the first currency which the Administrative Agent and each of the Lenders is
able, on the date of the receipt by it of such payment in any second currency,
to purchase, in accordance with the Administrative Agent's and such Lender's
normal banking procedures, with the amount of such second currency so received.
If the amount of the first currency falls short of the amount originally due to
the Administrative Agent and the Lenders in the first currency under this Credit
Agreement, each of the Borrowers, with respect to itself and its Subsidiaries,
agrees that it will indemnify the Administrative Agent and each of the Lenders
against and save the Administrative Agent and each of the Lenders harmless from
any shortfall so arising. This indemnity shall constitute an obligation of each
such Borrower separate and independent from the other obligations contained in
this Credit Agreement, shall give rise to a separate and independent cause of
action and shall continue in full force and effect notwithstanding any judgment
or order for a liquidated sum or sums in respect of amounts due to the
Administrative Agent or any Lender under this Credit Agreement or under any such
judgment or order. Any such shortfall shall be deemed to constitute a loss
suffered by the Administrative Agent and each such Lender, as the case may be,
and the Borrowers shall not be entitled to require any proof or evidence of any
actual loss. The covenant contained in this Section 12.5 shall survive the
payment in full of all of the other obligations of the Borrower under this
Credit Agreement.
12.6. PARALLEL DEBT. Without prejudice to the provisions of this Credit
Agreement and for the purpose of ensuring and preserving the validity and
continuity of the security rights granted and to be granted by the Foreign
Borrowers under or pursuant to this Credit Agreement and the other Loan
Documents, each of the Lenders hereby acknowledges and consents to (i) the
pledge of the shares of Hexcel Holding (U.K.) Limited in connection with the
Charge Over Shares, (ii) the pledge of the shares of Hexcel S.A. in connection
with the French Pledge, (iii) the grant of security under the Austrian Security
Documents and (iv) the grant of security under the German Security Documents,
undertaking to pay to FCC, acting in its own capacity, amounts (a) equal to the
amounts due from time to time by the Foreign Borrowers to FCC and the Lenders
-128-
under the Obligations and (b) due and payable at the same time as the
corresponding amounts under the Obligations are or shall be due and payable
(such payment undertaking and the obligations and liabilities resulting
therefrom, "PARALLEL DEBT"). The Lenders hereby agree that the Parallel Debt is
a claim of FCC which is independent and separate from, and without prejudice to,
the claims of the Administrative Agent and the Lenders in respect of the
Obligations, and is not a claim which is held jointly with the Lenders, provided
that to the extent any amounts are paid to FCC under the Parallel Debt or that
FCC otherwise receives monies in payment of the Parallel Debt, the total amount
due and payable under the Obligations shall be decreased as if said amounts were
received directly in payment of the outstanding Obligations. FCC, acting in its
own capacity, hereby agrees to transfer to the Administrative Agent for the
benefit of the Lenders all proceeds that it receives in connection with any
enforcement action taken under or pursuant to the Charge Over Shares governing
the pledge of the Capital Stock of Hexcel Holding (U.K.) Limited, the French
Pledge governing the pledge of the Capital Stock of Hexcel S.A., the Austrian
Security Documents and the German Security Documents, respectively.
For the purposes of ensuring and preserving the validity and continuity of
security rights to be granted by the Austrian Borrower pursuant to the Austrian
Security Documents: (a) the Austrian Borrower hereby irrevocably and
unconditionally undertakes to pay to the Administrative Agent all amounts
whatsoever, without any limitation, owing by the Austrian Borrower to each of
the Lenders (whether actually or contingently) under and in accordance with the
terms of this Agreement, upon such amounts becoming due and payable (such
obligation and undertaking being hereinafter referred to as the "AUSTRIAN
OBLIGATIONS"), and (b) the Austrian Borrower and the Administrative Agent
acknowledge that the Austrian Obligations are obligations and liabilities of the
Austrian Borrower to the Administrative Agent under this Agreement, separate and
independent from, and without prejudice to, the identical obligations which the
Austrian Borrower has to the other Lenders or any of them under this Agreement,
provided that the total amount due and payable under or in respect of the
Austrian Obligations shall be decreased to the extent that the Austrian Borrower
pays any amounts under and in the manner required under this Agreement and the
amount of Obligations shall be decreased to the extent that the Austrian
Borrower pays any Austrian Obligations. Nothing in this Agreement shall in any
way negate or affect the obligations which the Austrian Borrower may have under
or in respect of this Agreement to the other Lenders or any of them.
13. THE ADMINISTRATIVE AGENT.
13.1. AUTHORIZATION.
(a) The Administrative Agent is authorized to take such
action on behalf of each of the Lenders and to exercise all such powers as
are hereunder and under any of the other Loan Documents and any related
documents delegated to the Administrative Agent, together with such powers
as are reasonably incident thereto, PROVIDED that no duties or
responsibilities not
-129-
expressly assumed herein or therein shall be implied to have been assumed
by the Administrative Agent.
(b) The relationship between the Administrative Agent and
each of the Lenders is that of an independent contractor. The use of the
term "ADMINISTRATIVE AGENT" is for convenience only and is used to
describe, as a form of convention, the independent contractual relationship
between the Administrative Agent and each of the Lenders. Nothing contained
in this Credit Agreement nor the other Loan Documents shall be construed to
create an agency, trust or other fiduciary relationship between the
Administrative Agent and any of the Lenders.
(c) As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Administrative Agent is
nevertheless a "REPRESENTATIVE" of the Lenders, as that term is defined in
Article 1 of the Uniform Commercial Code, for purposes of actions for the
benefit of the Lenders and the Administrative Agent with respect to all
collateral security and guaranties contemplated by the Loan Documents. Such
actions include the designation of the Administrative Agent as "SECURED
PARTY", "MORTGAGEE" or the like on all financing statements and other
documents and instruments, whether recorded or otherwise, relating to the
attachment, perfection, priority or enforcement of any security interests,
mortgages or deeds of trust in collateral security intended to secure the
payment or performance of any of the Obligations, all for the benefit of
the Lenders and the Administrative Agent.
13.2. EMPLOYEES AND AGENTS. The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents. The Administrative Agent may utilize the services of such
Persons as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrowers.
13.3. NO LIABILITY. Neither the Administrative Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.
13.4. NO REPRESENTATIONS.
13.4.1. GENERAL. The Administrative Agent shall not be
responsible for the execution or validity or enforceability of this Credit
Agreement, the
-130-
Revolving Credit Notes, the Letters of Credit , any of the other Loan
Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Revolving Credit Notes, or for the
value of any such collateral security or for the validity, enforceability
or collectability of any such amounts owing with respect to the Revolving
Credit Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Borrowers or any of their Subsidiaries, or be bound to ascertain or inquire
as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the
Revolving Credit Notes or to inspect any of the properties, books or
records of the Borrowers or any of their Subsidiaries. The Administrative
Agent shall not be bound to ascertain whether any notice, consent, waiver
or request delivered to it by the Borrowers or any of their Subsidiaries or
any holder of any of the Revolving Credit Notes shall have been duly
authorized or is true, accurate and complete. The Administrative Agent has
not made nor does it now make any representations or warranties, express or
implied, nor does it assume any liability to the Lenders, with respect to
the credit worthiness or financial conditions of the Borrowers or any of
their Subsidiaries. Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and
based upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this Credit
Agreement.
13.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
compliance with the conditions set forth in Section 10, each Lender that
has executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Administrative Agent or the Lead
Arranger to such Lender for consent, approval, acceptance or satisfaction,
or required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender, unless an officer of the Administrative Agent
or the Lead Arranger active upon the Borrowers' account shall have received
notice from such Lender not less than five (5) days prior to the Closing
Date specifying such Lender's objection thereto and such objection shall
not have been withdrawn by notice to the Administrative Agent or the Lead
Arranger to such effect on or prior to the Closing Date.
13.5. PAYMENTS.
13.5.1. PAYMENTS TO ADMINISTRATIVE AGENT. A payment by any
Borrower or any Guarantor to the Administrative Agent hereunder or any of
the other Loan Documents for the account of any Lender shall constitute a
payment to such Lender. The Administrative Agent agrees promptly to
distribute to each Lender such Lender's PRO RATA share of payments received
by the Administrative Agent for the account of the Lenders except as
otherwise expressly provided herein or in any of the other Loan Documents.
-131-
13.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the opinion
of the Administrative Agent the distribution of any amount received by it
in such capacity hereunder, under the Revolving Credit Notes or under any
of the other Loan Documents might involve it in liability, it may refrain
from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the
Administrative Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over the same in such manner and to such Persons as
shall be determined by such court.
13.5.3. DELINQUENT LENDERS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Lender that fails (a) to make available to the
Administrative Agent its PRO RATA share of any Revolving Credit Loan or to
purchase any Letter of Credit Participation or (b) to comply with the
provisions of Section 15.1 with respect to making dispositions and
arrangements with the other Lenders, where such Lender's share of any
payment received, whether by setoff or otherwise, is in excess of its PRO
RATA share of such payments due and payable to all of the Lenders, in each
case as, when and to the full extent required by the provisions of this
Credit Agreement, shall be deemed delinquent (a "DELINQUENT LENDER") and
shall be deemed a Delinquent Lender until such time as such delinquency is
satisfied. A Delinquent Lender shall be deemed to have assigned any and all
payments due to it from the Borrower, whether on account of outstanding
Revolving Credit Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining nondelinquent Lenders for application to, and
reduction of, their respective PRO RATA shares of all outstanding Revolving
Credit Loans and Unpaid Reimbursement Obligations. The Delinquent Lender
hereby authorizes the Administrative Agent to distribute such payments to
the nondelinquent Lenders in proportion to their respective PRO RATA shares
of all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. A Delinquent Lender shall be deemed to have satisfied in full
a delinquency when and if, as a result of application of the assigned
payments to all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations of the nondelinquent Lenders, the Lenders' respective PRO RATA
shares of all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
13.6. HOLDERS OF REVOLVING CREDIT NOTES. The Administrative Agent may deem
and treat the payee of any Revolving Credit Note or the purchaser of any Letter
of Credit Participation as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a different
name by such payee or by a subsequent holder, assignee or transferee.
-132-
13.7. INDEMNITY. The Lenders ratably agree hereby to indemnify and hold
harmless the Administrative Agent and its affiliates from and against any and
all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Administrative
Agent or such affiliate has not been reimbursed by the Borrowers as required by
Section 15.2), and liabilities of every nature and character arising out of or
related to this Credit Agreement, the Revolving Credit Notes, or any of the
other Loan Documents or the transactions contemplated or evidenced hereby or
thereby, or the Administrative Agent's actions taken hereunder or thereunder,
except to the extent that any of the same shall be directly caused by the
Administrative Agent's willful misconduct or gross negligence.
13.8. ADMINISTRATIVE AGENT AS LENDER. In its individual capacity, FCC shall
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the Revolving Credit Loans made by it, and as the holder
of any of the Revolving Credit Notes and as the purchaser of any Letter of
Credit Participations as it would have were it not also the Administrative
Agent.
13.9. RESIGNATION. The Administrative Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Lenders and the
Borrowers. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent. Unless a Default or Event of
Default shall have occurred and be continuing, such successor Administrative
Agent shall be reasonably acceptable to the Borrowers. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent shall, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a financial institution having a rating of
not less than A or its equivalent by S&P. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's
resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
13.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Lender hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Administrative Agent thereof. The Administrative
Agent hereby agrees that upon receipt of any notice under this Section 13.10 it
shall promptly notify the other Lenders of the existence of such Default or
Event of Default.
13.11. RELEASE OF COLLATERAL. The Lenders hereby authorize the
Administrative Agent to enter into any agreement or execute any document
evidencing the release of any liens and security interests in connection with
any sale or other disposition of Collateral permitted hereunder.
-133-
13.12. INTERCREDITOR AGREEMENT. Each of the Lenders hereby authorizes the
Administrative Agent to enter into the Intercreditor Agreement and agrees to be
bound by the provisions thereof.
14. ASSIGNMENT AND PARTICIPATION.
14.1. CONDITIONS TO ASSIGNMENT BY LENDERS.
Except as provided herein, each Lender may assign to one or more commercial
banks, other financial institutions or other Persons (an "ASSIGNEE"), all or a
portion of its interests, rights and obligations under this Credit Agreement
(including all or a portion of its Commitment Percentage and Commitment and the
same portion of the Revolving Credit Loans at the time owing to it, the
Revolving Credit Notes held by it); PROVIDED that (a) each of the Administrative
Agent, the Issuing Bank and the Fronting Bank and, unless a Default or Event of
Default shall have occurred and be continuing, the Borrowers shall have given
its prior written consent to such assignment, which consent of the Borrowers
will not be unreasonably withheld, (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender's rights and
obligations under this Credit Agreement, (c) each assignment (or, in the case of
assignments by a Lender to its Lender Affiliates, the aggregate holdings of such
Lender and its Lender Affiliates after giving effect to such assignments), shall
be in an amount that is a whole multiple of $5,000,000 or in an integral
multiple of $1,000,000 in excess thereof (or such lesser amount as shall
constitute the aggregate holdings of such Lender) and (d) the parties to such
assignment shall execute and deliver to the Administrative Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of EXHIBIT E hereto (an "ASSIGNMENT AND ACCEPTANCE"),
together with any Revolving Credit Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (y) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder, and (z) the assigning Lender shall, to the extent provided in such
assignment and upon payment to the Administrative Agent of the registration fee
referred to in Section 14.3, be released from its obligations under this Credit
Agreement. Notwithstanding anything in this Credit Agreement or any of the other
Loan Documents to the contrary, an Assignee shall be entitled to the benefit of
Sections 4.3.2, 4.6 and 4.7; PROVIDED, that, in the case of subsection 4.3.2,
such Assignee shall have complied with the requirements of subsection 4.3.3 in
the same manner as if such Assignee were an initial Lender under this Credit
Agreement and shall have provided the Administrative Agent, as applicable, and
Hexcel, prior to the date of the assignment, two (2) properly completed and
validly executed copies of each of the applicable IRS Forms X-0XXX, X-0XXX and
W-9 (or successor forms thereto) and PROVIDED, FURTHER, that no Assignee shall
be entitled to receive any greater amount pursuant to any such subsection than
the assignor Lender would have been entitled to receive in respect of the amount
assigned by the assignor Lender to such Assignee had no such assignment
occurred.
-134-
14.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Lender makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant
hereto or the attachment, perfection or priority of any security
interest or mortgage,
(b) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition
of the Borrowers or any of their Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations,
or the performance or observance by the Borrowers or any of their
Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations under
this Credit Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the most recent
financial statements referred to in Section 6.4 and Section 7.4 and
such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Lender, the Administrative Agent or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement;
(e) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such
powers under this Credit Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto;
(f) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Lender;
(g) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
-135-
(h) such assignee acknowledges that it has complied with the
provisions of Section 4.3.3.
14.3. REGISTER. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"REGISTER") for the recordation of the names and addresses of the Lenders and
the Commitment Percentage of, and principal amount of the Revolving Credit Loans
owing to, the Lenders from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrowers and
the Lenders at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Lender agrees to pay to the
Administrative Agent a registration fee in the sum of $3,500.
14.4. NEW REVOLVING CREDIT NOTES. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Administrative Agent shall
(a) record the information contained therein in the Register, and (b) give
prompt notice thereof to the Borrowers and the Lenders (other than the assigning
Lender). Within five (5) Business Days after receipt of such notice, the
Borrowers, at their own expense, shall execute and deliver to the Administrative
Agent, in exchange for each surrendered Revolving Credit Note, a new Revolving
Credit Note to the order of such Assignee in an amount equal to the amount
assumed by such Assignee pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Revolving Credit Note to the order of the assigning Lender in an amount equal to
the amount retained by it hereunder. Such new Revolving Credit Notes shall
provide that they are replacements for the surrendered Revolving Credit Notes,
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Revolving Credit Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Revolving Credit Notes. The surrendered Revolving
Credit Notes shall be cancelled and returned to the Borrowers.
14.5. PARTICIPATIONS. Each Lender may sell participations to one or more
Lenders or other entities ("Participants") in all or a portion of such Lender's
rights and obligations under this Credit Agreement and the other Loan Documents
("Participations"); PROVIDED that (a) any such sale or participation shall not
affect the rights and duties of the selling Lender hereunder to the Borrowers
and (b) the only rights granted to the participant pursuant to such
participation arrangements with respect to waivers, amendments or modifications
of the Loan Documents shall be the rights to approve waivers, amendments or
modifications that would reduce the principal of or the interest rate on any
Revolving Credit Loans, extend the term or increase the amount of the Commitment
of such Lender as it relates to such participant, reduce the amount of any
Commitment Fee or Letter of Credit Fees to which such participant is entitled or
extend any regularly scheduled payment date for principal or
-136-
interest. Notwithstanding anything in this Credit Agreement or any of the other
Loan Documents to the contrary, a Participant shall be entitled to the benefit
of Section 4.3.2, 4.6 and 4.7; PROVIDED that, in the case of subsection 4.3.2,
such Participant shall have complied with the requirements of subsection 4.3.3
in the same manner as if such Assignee were an initial Lender under this Credit
Agreement and shall have provided the Administrative Agent, as applicable, and
Hexcel, prior to the date of the transfer of the participation, two (2) properly
completed and validly executed copies of each of the applicable IRS Forms
X-0XXX, X-0XXX and W-9 (or successor forms thereto) and PROVIDED, FURTHER, that
no Participant shall be entitled to receive any greater amount pursuant to any
such subsection than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by the transferor
Lender to such Participant had no such transfer occurred.
14.6. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Lender shall
retain its rights to be indemnified pursuant to Section 15.3 with respect to any
claims or actions arising prior to the date of such assignment. Anything
contained in this Section 14 to the contrary notwithstanding, any Lender may at
any time pledge or assign a security interest in all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Revolving Credit Notes) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to (a) any of the twelve Federal
Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341 and (b) with respect to any Lender that is a fund that invests in
bank loans, to any lender or any trustee for, or any other representative of,
holders of obligations owed or securities issued by such fund as security for
such obligations or securities or any institutional custodian for such fund or
for such lender. Any foreclosure or similar action by any Person in respect of
such pledge or assignment shall be subject to the other provisions of this
Section 14. No such pledge or the enforcement thereof shall release the pledgor
Lender from its obligations hereunder or under any of the other Loan Documents,
provide any voting rights hereunder to the pledgee thereof, or affect any rights
or obligations of the Borrowers or Administrative Agent hereunder.
14.7. ASSIGNMENT BY THE BORROWERS. None of the Borrowers shall assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Lenders.
15. PROVISIONS OF GENERAL APPLICATIONS.
15.1. SETOFF.
Regardless of the adequacy of any collateral, if any of the Obligations are
due and payable and have not been paid or any Event of Default shall have
occurred, any deposits or other sums credited by or due from any of the Lenders
to any Borrower and any securities or other property of such Borrower in the
possession of such Lender may be applied to or set off by such Lender against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of such Borrower to such Lender (it being understood and
agreed that, notwithstanding anything in this Credit Agreement or any of the
other Loan
-137-
Documents to the contrary, deposits, sums, securities or other property of any
Foreign Subsidiary (including any Foreign Borrower) will not serve at any time,
directly or indirectly, to collateralize or otherwise offset the Obligations of
Hexcel or any Domestic Subsidiary, and, in addition, the deposits, sums,
securities or other property of a Foreign Subsidiary will only serve to
collateralize or offset the Obligations of another Foreign Borrower if such
Foreign Subsidiary is owned by such Foreign Borrower). ANY AND ALL RIGHTS TO
REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY BORROWER
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders
agrees with each other Lender that (a) if an amount to be set off is to be
applied to Indebtedness of any Borrower to such Lender, other than Indebtedness
evidenced by the Revolving Credit Notes held by such Lender, such amount shall
be applied ratably to such other Indebtedness and to the Indebtedness evidenced
by all such Revolving Credit Notes held by such Lender, and (b) if such Lender
shall receive from any Borrower, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Revolving Credit Notes held by such Lender by proceedings against such
Borrower at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Revolving Credit Note or Revolving Credit Notes
held by such Lender any amount in excess of its ratable portion of the payments
received by all of the Lenders with respect to the Revolving Credit Notes held
by all of the Lenders, such Lender will make such disposition and arrangements
with the other Lenders with respect to such excess, either by way of
distribution, PRO TANTO assignment of claims, subrogation or otherwise as shall
result in each Lender receiving in respect of the Revolving Credit Notes held by
it, its proportionate payment as contemplated by this Credit Agreement; PROVIDED
that if all or any part of such excess payment is thereafter recovered from such
Lender, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest. If, for the
purpose of exercising the right of setoff pursuant to this Section 15.1, it
becomes necessary to convert any amount in Dollars or in any other currency into
any other currency, such conversion shall be made as provided in the first
sentence of Section 12.5.
15.2. EXPENSES. Each of the Borrowers, with respect to itself and its
subsidiaries, agrees to pay (a) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) without duplication of payments
in respect of Non-Excluded Taxes pursuant to Section 4.3.2, any taxes (including
any interest and penalties in respect thereto) payable by the Administrative
Agent or any of the Lenders (other than Excluded Taxes as defined in Section
4.3.2) on or with respect to the transaction contemplated by this Credit
Agreement (such Borrower hereby agreeing to indemnify the Administrative Agent
and Lender with respect thereto), (c) the reasonable fees, reasonable and
documented out-of-pocket expenses and disbursements of the Administrative
Agent's Special Counsel or any local counsel to the Administrative
-138-
Agent incurred in connection with the preparation, syndication, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, any amendments, modifications, approvals, consents or
waivers hereto or hereunder, or the cancellation of any Loan Document upon
payment in full in cash of all of the Obligations or pursuant to any terms of
such Loan Document for providing for such cancellation, (d) the reasonable and
documented fees, reasonable and documented out-of-pocket expenses and
disbursements of the Administrative Agent or any of its affiliates incurred by
the Administrative Agent or such affiliate in connection with the preparation,
syndication, administration or interpretation of the Loan Documents and other
instruments mentioned herein, including all title insurance premiums and
surveyor, engineering, appraisal and examination charges, (e) all reasonable and
documented out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, and reasonable and documented consulting, accounting,
appraisal, investment banker and similar professional fees and charges) incurred
by any Lender or the Administrative Agent in connection with (i) the enforcement
of or preservation of rights under any of the Loan Documents against such
Borrower or any of its Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Lender's or the Administrative Agent's relationship with such Borrower or any of
its Subsidiaries and (f) all reasonable and documented out-of-pocket fees,
expenses and disbursements of any Lender or the Administrative Agent incurred in
connection with Uniform Commercial Code searches or intellectual property
searches. The covenants contained in this Section 15.2 shall survive payment or
satisfaction in full of all other obligations. Each of the Borrowers, with
respect of itself, authorizes the Administrative Agent to debit any account
maintained by the Borrowers with the Administrative Agent and/or to charge the
loan account of the applicable Borrower for any payment required to be made
hereunder with respect to such Borrower or its Subsidiaries. It is understood
and agreed that, notwithstanding anything to the contrary set forth in this
Section 15.2, none of the Foreign Borrowers shall have any obligation to the
Administrative Agent, the Fronting Bank, the Issuing Bank or any Lender
hereunder with respect to fees, costs or any other expenses relating to the
Obligations of any Borrower other than such Foreign Borrower.
15.3. INDEMNIFICATION. Each of the Borrowers, with respect to itself and
its Subsidiaries, agrees to indemnify and hold harmless the Administrative
Agent, its affiliates and the Lenders from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (a) any actual
or proposed use by the Borrowers or any of their Subsidiaries of the proceeds of
any of the Revolving Credit Loans or Letters of Credit, (b) the reversal or
withdrawal of any provisional credits granted by the Administrative Agent upon
the transfer of funds from lock box, bank agency, concentration accounts or
otherwise under any cash management arrangements with the Borrowers or any of
their Subsidiaries or in connection with the provisional honoring of funds
transfers, checks or other items, (c) the Borrowers or any of their Subsidiaries
entering into or performing
-139-
this Credit Agreement or any of the other Loan Documents, (d) with respect to
the Borrowers or any of their Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release or threatened release
of any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including, but
not limited to, claims with respect to wrongful death, personal injury or damage
to property) or (e) any fees, costs, out-of-pocket expenses and bank charges,
including bank charges for returned checks, incurred by the Administrative Agent
or the any Lender in establishing, maintaining or handling agency accounts, lock
box accounts and other accounts for the collection of any of the Collateral or
in connection with Cash Management Services, in each case including, without
limitation, the reasonable and documented fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding except to the extent that any of the foregoing are directly caused by
the gross negligence or willful misconduct of the otherwise indemnified party.
In litigation, or the preparation therefor, the Lenders and the Administrative
Agent and its affiliates shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Borrowers jointly and severally agree
to pay promptly the reasonable and documented fees and expenses of such counsel.
If, and to the extent that the obligations of the Borrowers under this Section
15.3 are unenforceable for any reason, the Borrowers hereby agree to make the
maximum contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The covenants contained in this Section 15.3
shall survive payment or satisfaction in full of all other Obligations. The
Administrative Agent shall, with respect to any Borrower or its Subsidiaries, be
entitled to pay any of the foregoing fees and expenses by causing the debit of
any account maintained by such Borrower or any of its Subsidiaries with the
Administrative Agent or any other institution with which the Administrative
Agent shall have entered into an agency account agreement. It is understood and
agreed that, notwithstanding anything to the contrary set forth in this Section
15.3, none of the Foreign Borrowers shall have any obligation to the
Administrative Agent, the Fronting Bank, the Issuing Bank or any Lender
hereunder with respect to indemnified liabilities relating to the Obligations of
any Borrower other than such Foreign Borrower.
15.4. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
15.4.1. CONFIDENTIALITY. Each of the Lenders and the
Administrative Agent agrees, on behalf of itself and each of its
affiliates, directors, officers, employees and representatives, to use
reasonable precautions to keep confidential, in accordance with their
customary procedures for handling confidential information of the same
nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrowers or any of their
Subsidiaries, PROVIDED that nothing herein shall limit the disclosure of
any such information (a) after such information shall have become public
other than through a violation of this Section 15.4, or becomes available
to any of the Lenders or the Administrative Agent on a nonconfidential
basis from a source other the Borrowers or any of their Subsidiaries which
source is
-140-
not known to such Lender or Administrative Agent to be bound by any
obligation of confidentiality, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Lenders or
the Administrative Agent, (d) to bank examiners or any other regulatory
authority having jurisdiction over any Lender or the Administrative Agent
to the extent required by such authority, or to auditors or accountants,
(e) to the Administrative Agent, any Lender or any Financial Affiliate, (f)
in connection with any litigation related to the Loan Documents or the
transactions pursuant thereto to which any one or more of the Lenders, the
Administrative Agent or any Financial Affiliate is a party, or in
connection with the enforcement of rights or remedies hereunder or under
any other Loan Document, (g) to a Lender Affiliate or a Subsidiary or
affiliate of the Administrative Agent, (h) to any actual or prospective
assignee or participant or any actual or prospective counterparty (or its
advisors) to any swap or derivative transactions referenced to credit or
other risks or events arising under this Credit Agreement or any other Loan
Document so long as such assignee, participant or counterparty, as the case
may be, agrees to be bound by the provisions of Section 15.4 (and each such
prospective assignee, participant, and counterparty shall be required to
agree that if it does not become an assignee, participant or counterparty
it shall return all materials furnished to it by the Borrowers in
connection herewith), or (i) with the consent of any Borrower.
Notwithstanding anything in this Credit Agreement or any of the other Loan
Documents to the contrary, Hexcel and each of the Lenders and the
Administrative Agent (and any of their respective employees,
representatives or other agents) may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Credit Agreement. However, any such
information relating to the tax treatment or tax structure is required to
be kept confidential to the extent necessary to comply with any applicable
federal or state securities laws.
15.4.2. PRIOR NOTIFICATION. Unless specifically prohibited by
applicable law or court order, each of the Lenders and the Administrative
Agent shall, prior to disclosure thereof, notify the Borrowers of any
request for disclosure of any such non-public information by any
governmental agency or representative thereof (other than any such request
in connection with an examination of the financial condition of such Lender
by such governmental agency) or pursuant to legal process.
15.4.3. OTHER. Except as otherwise provided in Section 15.4.1
above, in no event shall any Lender or the Administrative Agent be
obligated or required to return any materials furnished to it or any
Financial Affiliate by the Borrowers or any of their Subsidiaries. The
obligations of each Lender under this Section 15.4 shall supersede and
replace the obligations of such Lender under any confidentiality letter in
respect of this financing signed and delivered by such Lender to the
Borrowers or any of their Subsidiaries prior to the date hereof and shall
be binding upon any assignee of, or purchaser of any participation in, any
interest in any of the Revolving Credit Loans from any Lender.
-141-
15.5. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Revolving Credit Notes, in
any of the other Loan Documents or in any documents or other papers delivered by
or on behalf of the Borrowers or any of their Subsidiaries pursuant hereto shall
be deemed to have been relied upon by the Lenders and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lenders of any of the Revolving Credit Loans
and the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any Letter
of Credit or any amount due under this Credit Agreement or the Revolving Credit
Notes or any of the other Loan Documents remains outstanding or any Lender has
any obligation to make any Revolving Credit Loans or the Administrative Agent
has any obligation to issue, extend or renew any Letter of Credit, and for such
further time as may be otherwise expressly specified in this Credit Agreement.
15.6. NOTICES. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Revolving Credit Notes or any Letter of
Credit Applications shall be in writing and shall be delivered in hand, mailed
by United States registered or certified first class mail, postage prepaid, sent
by overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to Hexcel or any Guarantor, Hexcel Corporation, Two
Stamford Plaza, 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Chief Financial Officer, Facsimile No. 000-000-0000, with a copy
to Xxxxxx X. Xxxxx, Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP, Xxxx Xxxxx
Xxxxxx, Xxx Xxxx , Xxx Xxxx 00000, Facsimile No. 000-000-0000 or at such
other address for notice as such Person shall last have furnished in
writing to the Person giving the notice;
(b) if to any Foreign Borrower, c/o Hexcel Corporation, Two
Stamford Plaza, 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Treasurer, Facsimile No. 000-000-0000, with a copy to Xxxxxx X.
Xxxxx, Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP, Xxxx Xxxxx Xxxxxx, Xxx
Xxxx , Xxx Xxxx 00000, Facsimile No. 000-000-0000 at such other address for
notice as the Foreign Borrower shall last have furnished in writing to the
Person giving the notice;
(c) if to the Administrative Agent, Xxxxx Xxxxxxx at 000
Xxxxxxxxxxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxx 00000, Facsimile No.
000-000-0000, with a copy to Xxxxxxxx Xxxxxxxxx, Xxxxxxx XxXxxxxxx LLP, 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Facsimile No. 000-000-0000 and
with a copy to Xxxxxxx Xxxxxxx, Xxxxxxx XxXxxxxxx LLP, 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Facsimile No. 000-000-0000 or such other
address for notice as the
-142-
Administrative Agent shall last have furnished in writing to the Person
giving the notice; and
(d) if to any Lender, at such Lender's address set forth on
SCHEDULE 1 hereto, or such other address for notice as such Lender shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof. Any notice or other
communication to be made hereunder or under the Revolving Credit Notes, even if
otherwise required to be in writing under other provisions of this Credit
Agreement or the Revolving Credit Notes or any Letter of Credit Applications,
may alternatively be made in an electronic record transmitted electronically
under such authentication and other procedures as the parties hereto may from
time to time agree in writing (but not an electronic record), and such
electronic transmission shall be effective at the time set forth in such
procedures. Unless otherwise expressly provided in such procedures, such an
electronic record shall be equivalent to a writing under the other provisions of
this Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications, and such authentication, if made in compliance with the procedures
so agreed by the parties hereto in writing (but not an electronic record), shall
be equivalent to a signature under the other provisions of this Credit Agreement
or the Revolving Credit Notes or any Letter of Credit Applications.
15.7. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. (a)
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN,
EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS
FOR SUCH PERSON(S) SPECIFIED IN Section 15.6. EACH OF THE BORROWERS HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
(b) Each Foreign Borrowers hereby irrevocably and unconditionally
appoints United States Corporation Services Company, with an office on the date
hereof at 00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (the "PROCESS AGENT"), as its
agent to receive on
-143-
behalf of such Foreign Borrower and its respective property service of copies of
the summons and complaint and any other process which may be served in any such
action or proceeding in any such court of the State of New York or any Federal
court sitting therein and agrees promptly to appoint a successor Process Agent.
In any such action or proceeding in such court of the State of New York or
Federal court sitting therein, such service may be made on the Foreign Borrower
by delivering a copy of such process to the Foreign Borrower in care of the
appropriate Process Agent at such Process Agent's above address and by
depositing a copy of such process in the mails by certified or registered air
mail, addressed to the Foreign Borrower at its address referred to in Section
15.6 (such service to be effective upon such receipt by the appropriate Process
Agent and the depositing of such process in the mails as aforesaid). Each
Foreign Borrower hereby irrevocably and unconditionally authorizes and directs
such Process Agent to accept such service on its behalf. As an alternate method
of service, each Foreign Borrower also irrevocably and unconditionally consents
to the service of any and all process in any such action or proceeding in such
court of the State of New York or any Federal court sitting therein by mailing
of copies of such process to the Foreign Borrowers by certified or registered
air mail at its address referred to in Section 15.6. Each Foreign Borrower
hereby agrees that, to the fullest extent permitted by applicable law, a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(c) To the extent that any Foreign Borrower has or hereafter may acquire
any immunity (sovereign or otherwise) from any legal action, suit or proceeding,
from jurisdiction of any court or from set-off or any legal process (whether
service or notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise) with respect to itself or any
of its property, such Foreign Borrowers hereby irrevocably waives and agrees not
to plead or claim such immunity in respect of its obligations under this Credit
Agreement and the Revolving Credit Notes.
(d) Each Foreign Borrower hereby agrees that the waivers set forth in
this Section 15.7 shall have the fullest extent permitted under the Foreign
Sovereign Immunities Act of 1976 of the United States of America and are
intended to be irrevocable and not subject to withdrawal for purposes of such
Act.
15.8. HEADINGS. The captions in this Credit Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.
15.9. COUNTERPARTS. This Credit Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Credit Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought. Delivery by facsimile by
any of the parties hereto of an executed counterpart hereof or of any amendment
or waiver hereto shall be as effective as an original executed counterpart
hereof or of such amendment or waiver and shall be considered a representation
that an original executed counterpart hereof or such amendment or waiver, as the
case may be, will be delivered.
-144-
15.10. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Credit Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in Section 15.12.
15.11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS CREDIT AGREEMENT, THE REVOLVING CREDIT NOTES OR
ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION
OF THE REVOLVING CREDIT LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES
THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by
law, each of the parties hereto hereby waives any right it may have to claim or
recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. Each of the Borrowers (a) certifies that no
representative, agent or attorney of any Lender or the Administrative Agent has
represented, expressly or otherwise, that such Lender or the Administrative
Agent would not, in the event of litigation, seek to enforce the foregoing
waivers and (b) acknowledges that the Administrative Agent and the Lenders have
been induced to enter into this Credit Agreement, the other Loan Documents to
which it is a party by, among other things, the waivers and certifications
contained herein.
15.12. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval required
or permitted by this Credit Agreement to be given by the Lenders may be given,
and any term of this Credit Agreement, the other Loan Documents or any other
instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrowers or any of their Subsidiaries of any
terms of this Credit Agreement, the other Loan Documents or such other
instrument or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Borrowers and the
written consent of the Required Lenders. Notwithstanding the foregoing, no
amendment, modification or waiver shall:
(a) without the written consent of each of the Borrowers and
each Lender directly affected thereby:
(i) reduce or forgive the principal amount of any
Revolving Credit Loans, Reimbursement Obligations or reduce the
rate of interest on the
-145-
Revolving Credit Notes, the Swing Line Note or the amount of the
Fees (other than interest accruing pursuant to Section 4.11
following the effective date of any waiver by the Required
Lenders of the Default or Event of Default relating thereto);
(ii) increase the amount of such Lender's Commitment or
extend the expiration date of such Lender's Commitment; and
(iii) postpone or extend the Maturity Date or any other
regularly scheduled dates for payments of principal of, or
interest on, the Revolving Credit Loans or Reimbursement
Obligations or any Fees or other amounts payable to such Lender
(it being understood that (A) a waiver of the application of the
default rate of interest pursuant to Section 4.11, and (B) any
vote to rescind any acceleration made pursuant to Section 12.1 of
amounts owing with respect to the Revolving Credit Loans and
other Obligations, shall require only the approval of the
Required Lenders);
(b) without the written consent of all of the Lenders, (i) amend
or waive Section 14.7, this Section 15.12 or the definition of "REQUIRED
LENDERS" or (ii) increase the Total Commitment or (iii) other than pursuant
to a transaction permitted by the terms of this Credit Agreement (as in
effect on the date hereof), release all or a material portion of the
Collateral or any Guarantor from its guaranty obligations under the
Guaranties (other than a Guarantor which would not otherwise meet the
threshold set forth in the definition of "Material Domestic Subsidiary" (as
in effect on the date hereof)) (excluding, if any Borrower or any of its
Subsidiaries becomes a debtor under the federal Bankruptcy Code, the
release of "cash collateral", as defined in Section 363(a) of the federal
Bankruptcy Code pursuant to a cash collateral stipulation with the debtor
approved by the Required Lenders, which shall require the consent of the
Supermajority Lenders); or (iv) increase the percentage of Eligible
Accounts or Eligible Inventory (as applicable) in the calculation of the
Domestic Borrowing Base, the U.K. Borrowing Base, the Austrian Borrowing
Base or the German Borrowing Base or (v) amend the definitions of "Domestic
Borrowing Base" or "U.K. Borrowing Base" or "Austrian Borrowing Base" or
"German Borrowing Base" or of any definition of any component thereof, such
that more credit would be available to the applicable Borrower, based on
the same assets, as would have been available to the applicable Borrower
immediately prior to such amendment, it being understood, however, that:
the foregoing shall not (A) limit the adjustment by the Administrative
Agent of any reserve in the Administrative Agent's administration of the
Revolving Credit Loans as otherwise permitted by this Agreement or (B)
prevent the Administrative Agent or the Co-Collateral Agent from restoring
any component of the Domestic Borrowing Base, the U.K. Borrowing Base, the
Austrian Borrowing Base or the German Borrowing Base, which had been
lowered by the Administrative Agent or the Co-Collateral Agent back to the
value of such component, as stated in this Agreement or to an intermediate
value;
-146-
(c) without the written consent of the Swing Line Lender, amend
or waive Section 2.6.2 or any other provision applicable to the Swing Line
Lender;
(d) without the written consent of the Issuing Bank, amend or
waive Section 3 or any other provision applicable to the issuance,
extension or renewal of any Letters of Credit;
(e) without the written consent of the Fronting Bank, amend or
waive Section 2.11 or any other provision applicable to the Fronting Bank;
and
(f) without the written consent of the Administrative Agent,
amend or waive Section 13, the amount or time of payment of the
Administrative Agent's Fee or any Letter of Credit Fees payable for the
Administrative Agent's account or any other provision applicable to the
Administrative Agent.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Administrative Agent or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrowers shall entitle the Borrowers to other or further
notice or demand in similar or other circumstances.
15.13. SEVERABILITY. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
15.14. TERMINATION. (a) The Administrative Agent, the Fronting Bank, the
Issuing Bank and each of the Lenders hereby agree, notwithstanding anything to
the contrary in this Credit Agreement or any other Loan Document: (i) each
Security Document and the security interests thereunder shall automatically
cease, terminate and be void, all rights to the Collateral shall automatically
revert to the relevant Credit Party, and the obligations of the Credit Parties
thereunder shall automatically be discharged and released, upon repayment in
full, in cash, of all the Obligations and the termination of all lending
commitments hereunder, in each case without any further action by the
Administrative Agent, the Fronting Bank, the Issuing Bank, any Lender or any
other Person, and (ii) the security interest under any Security Document shall
automatically cease, terminate and be void with respect to any Collateral that
is sold, transferred or otherwise disposed of in accordance with the terms of
the Credit Agreement, and all rights with respect to such Collateral shall
automatically revert to the applicable Credit Party, in each case without any
further action by the Administrative Agent, the Fronting Bank, the Issuing Bank,
any Lender or any other Person; PROVIDED that the security interest in the
proceeds and products of such Collateral shall continue; and
-147-
(b) Upon any termination of this Credit Agreement, any Loan Document and/or
the security interest under any Security Document, the Administrative Agent will
at the expense of the applicable Credit Party, execute and deliver to such
Credit Party such documents as such Credit Party shall reasonably request to
evidence the termination of this Credit Agreement, such Loan Documents and/or
such security interest under a Security Document, and the release and
reassignment of any such Collateral, as the case may be.
[SIGNATURE PAGES FOLLOW]
-148-
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as of the date first set forth above.
HEXCEL CORPORATION, as Borrower
and as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
HEXCEL COMPOSITES LIMITED, as
Borrower
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Director
HEXCEL COMPOSITES GMBH
(GERMANY), as Borrower
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
HEXCEL COMPOSITES GMBH
(AUSTRIA), as Borrower
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
[Signature Page to Hexcel
Credit and Guaranty Agreement]
HEXCEL POTTSVILLE CORPORATION,
as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
XXXXX-XXXXXXXX CORPORATION,
as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
XXXXX-XXXXXXXX HOLDING CORP.,
as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
CS TECH-FAB HOLDING, INC.,
as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
[Signature Page to Hexcel
Credit and Guaranty Agreement]
FLEET CAPITAL CORPORATION,
individually, as Administrative Agent and
as Fronting Bank
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
[Signature Page to Hexcel
Credit and Guaranty Agreement]
FLEET NATIONAL BANK, London U.K.
branch, trading as FleetBoston Financial, as
Fronting Bank and Issuing Bank
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
[Signature Page to Hexcel
Credit and Guaranty Agreement]
FLEET NATIONAL BANK, as Issuing Bank
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
[Signature Page to Hexcel
Credit and Guaranty Agreement]
GENERAL ELECTRIC CAPITAL
CORPORATION, individually, as
Co-Collateral Agent and as Syndication Agent
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Signatory
[Signature Page to Hexcel
Credit and Guaranty Agreement]
FOOTHILL CAPITAL CORPORATION,
individually and as Documentation Agent
By: /s/ Xxx Xxxxx
--------------------------------------
Name: Xxx Xxxxx
Title: Senior Vice President
[Signature Page to Hexcel Credit and Guaranty Agreement]
XXXXXXX XXXXX CAPITAL, a division of
Xxxxxxx Xxxxx Business Financial Services
Inc., individually and as Documentation Agent
By: /s/ Xxx Xxxxxxxx
--------------------------------------
Name: Xxx Xxxxxxxx
Title: Director
[Signature Page to Hexcel Credit and Guaranty Agreement]
