EXHIBIT 10.4(c)
CONSENT NUMBER 3 AND THIRD AMENDMENT
CONSENT NUMBER 3 AND THIRD AMENDMENT, dated as of February 27, 1997 (this
"AMENDMENT"), to the Credit Agreement, dated as of June 27, 1996 (the "CREDIT
AGREEMENT"), among Hexcel Corporation (the "COMPANY"), the Foreign Borrowers
from time to time parties thereto (together with the Company, the "BORROWERS"),
the banks and other financial institutions from time to time parties thereto
(the "LENDERS"), Citibank, N.A., as collateral agent (in such capacity, the
"COLLATERAL AGENT"), and Credit Suisse First Boston (formerly, Credit Suisse),
as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT"; together
with the Collateral Agent, the "AGENTS").
W I T N E S S E T H :
WHEREAS, the Borrowers are parties to the Credit Agreement;
WHEREAS, the Borrowers have requested that the Agents and the Lenders
consent to certain transactions and agree to amend certain provisions of the
Credit Agreement, as more fully described herein;
WHEREAS, the Agents and the Lenders are willing to consent to such
transactions and to agree to such amendments, but only upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Borrowers, the Lenders and the Agents hereby agree as
follows:
1. DEFINITIONS. All terms defined in the Credit Agreement shall have such
defined meanings when used herein unless otherwise defined herein.
2. AMENDMENT OF SECTION 1.1. Section 1.1 of the Credit Agreement hereby is
amended by:
(a) deleting from the definition of the term "Change of Control"
contained therein each reference to the phrase "Ciba-Geigy Limited and its
Affiliates" and by substituting (in each such case) therefor the phrase
"Chemical Holdings and its Affiliates";
(b) deleting from the definition of the term "Inventory" contained
therein the phrase "Ciba-Geigy or any of its Affiliates" and by substituting
therefor the phrase "Specialty Chemicals or any of its Affiliates";
(c) deleting therefrom in its entirety the definitions of the terms
"Governance Agreement", "Manufacturing and Supply Agreement" and "Strategic
Alliance Agreement"; and
(d) inserting therein, in proper alphabetical order, the following new
definitions:
"GOVERNANCE AGREEMENT" means the Governance Agreement dated as of
February 29, 1996 by and between Chemical Holdings (as successor to
Ciba-Geigy Limited) and the Company, as the same may be amended,
supplemented or otherwise modified from time to time.
"MANUFACTURING AND SUPPLY AGREEMENT" means that certain Manufacturing
and Supply Agreement between the Company and Ciba Specialty Chemicals
Corporation (as successor to Ciba-Geigy Corporation) dated as of February
29, 1996.
"SPECIALTY CHEMICALS" means, collectively, Chemical Holdings and Ciba
Specialty Chemicals Corporation, a Delaware corporation, and their
successors.
"CHEMICAL HOLDINGS" means Ciba Specialty Chemicals Holding Inc., a
Swiss corporation, and its successors.
"STRATEGIC ALLIANCE AGREEMENT" means the Strategic Alliance Agreement
dated as of September 29, 1995 and amended as of December 12, 1995 and as
of February 28, 1996, among the Company and Specialty Chemicals (as
successor to Ciba-Geigy), as such agreement may be amended, supplemented
or otherwise modified from time to time in accordance with SECTION 13.16.
3. AMENDMENT OF SECTION 7.10(D). Section 7.10(d) of the Credit Agreement
hereby is amended by deleting each reference to the phrase "any Lender" and "any
Lender's" and by substituting therefor the phrase "such Lender" and "such
Lender's", respectively.
4. AMENDMENT OF SECTION 11.1. Section 11.1 of the Credit Agreement hereby
is amended by:
(a) inserting in clause (b) thereof, immediately after the phrase
"within forty-five (45) days after the end of each fiscal quarter of each
Fiscal Year" and immediately before the comma which follows such phrase, the
phrase "(other than the last fiscal quarter of each Fiscal Year)".
(b) deleting clause (g) thereof in its entirety and by substituting
therefor the following:
(g) HEXCEL POTTSVILLE CORPORATION. Within thirty (30) days of their
delivery in accordance with Sections 9.02 and 11.08 of the Special
Security Agreement dated as of February 29, 1996 (as the same may be
amended, supplemented or otherwise modified from time to time), by and
among Specialty Chemicals (as successor to Ciba-Geigy), the Company,
Hexcel Pottsville Corporation and the United States Department of Defense
(the "SPECIAL SECURITY AGREEMENT") and to the extent not prohibited by
applicable Directives, copies of the annual implementation and compliance
report and the quarterly report to Affiliates required to be delivered
pursuant to Sections 9.02 and 11.08, respectively, of the Special
Security Agreement.
5. AMENDMENT OF SECTION 13.1. Section 13.1 of the Credit Agreement hereby
is amended by (a) deleting the word "and" which appears at the end of clause (l)
thereof, (b) deleting the period which appears at the end of clause (m) thereof
and by substituting therefor a semi-colon followed by the word "and" and (c)
inserting therein as a new clause (n) the following:
(n) Indebtedness of the Company owing to employees of the Company and
its Subsidiaries on account of employee contributions to a non-qualified
401(k)-type restoration plan.
6. AMENDMENT OF SECTION 13.2(I). Section 13.2(i) of the Credit Agreement
hereby is amended by deleting said Section in its entirety and by substituting
therefor the following:
(i) the Company may sell the Specified Equipment to Specialty Chemicals
or any Affiliate of Specialty Chemicals pursuant to the Manufacturing and
Supply Agreement; and
7. AMENDMENT OF SECTION 13.3(F). Section 13.3(f) of the Credit Agreement
hereby is amended by deleting said Section in its entirety and by substituting
therefor the following:
(f) Liens relating to raw materials supplied by Specialty Chemicals to
the Company pursuant to the Manufacturing and Supply Agreement, and Liens
relating to the Company's inventory of raw materials and finished products
which are required to be purchased by Specialty Chemicals pursuant to the
Manufacturing and Supply Agreement upon termination thereof; and
8. AMENDMENT OF SECTION 13.4. Section 13.4 of the Credit Agreement hereby
is amended by:
(a) deleting from clause (e) thereof the amount "$4,500,000" and by
substituting therefor the amount "$8,000,000";
(b) deleting from clause (e) thereof the amount "$6,500,000" and by
substituting therefor the amount "$10,000,000"; and
(c) (i) deleting the word "and" which appears at the end of clause (m)
thereof, (ii) deleting the period which appears at the end of clause (n)
thereof and by substituting therefor a semi-colon followed by the word "and"
and (iii) inserting therein as a new clause (o) the following:
(o) Investments by the Company made with the proceeds of Indebtedness
permitted pursuant to Section 13.1(n).
9. AMENDMENT OF SECTION 13.6. Section 13.6 of the Credit Agreement hereby
is amended by deleting clause (d) thereof in its entirety and by substituting
therefor the following:
(d) payments with respect to the purchase from time to time by the
Company of its common stock (for not more than market price) with the
proceeds of the exercise by grantees under any equity-based incentive plan;
10. AMENDMENT OF SECTION 14.2. Section 14.2 of the Credit Agreement hereby
is amended by deleting the ratio set forth therein for each period set forth
below and by substituting therefor the ratio set forth below opposite such
period:
FISCAL QUARTER MINIMUM RATIO
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First Fiscal Quarter of 1997................................................. 1.00
Second Fiscal Quarter of 1997................................................ 1.00
Third Fiscal Quarter of 1997................................................. 1.15
Fourth Fiscal Quarter of 1997................................................ 1.25
First Fiscal Quarter of 1998................................................. 1.50
Second Fiscal Quarter of 1998................................................ 1.50
Third Fiscal Quarter of 1998 and each Fiscal Quarter ending thereafter....... 2.00
11. AMENDMENT OF SECTION 15.1. Section 15.1 of the Credit Agreement hereby
is amended by deleting clauses (o) and (p) thereof in their entireties and by
substituting therefor the following:
(o) SUBORDINATED NOTES. (A) Prior to the first to occur of (i) ▇▇▇▇▇
▇, ▇▇▇▇, (▇▇) the payment in full of all Obligations and the termination of
all Commitments and (iii) the extension of the Revolving Credit Termination
Date without the consent of Specialty Chemicals, or (B) at any time when any
Event of Default in SECTION 15.1(A) shall have occurred and be continuing,
Specialty Chemicals shall cease to hold directly or indirectly (through one
or more Wholly-owned Subsidiaries) one hundred percent (100%) of the
outstanding principal amount of the Subordinated Notes; PROVIDED, that if a
Wholly-owned Subsidiary of Chemical Holdings becomes a holder of all or any
portion of the Subordinated Notes, it shall not constitute an Event of
Default under this SECTION 15.1(O) in the event that Chemical Holdings
effects a Broad Distribution (as defined in the Governance Agreement) of up
to 20% of the Capital Stock of such Wholly-owned Subsidiary, but only if (1)
such distribution has a bona fide business purpose (other than the sale or
distribution of Subordinated Notes) and (2) the Subordinated Notes
"beneficially owned" (as defined in Rule 13d-3 under the Exchange Act) by
such Subsidiary do not constitute a material portion of the total assets of
such Subsidiary.
(p) VOTING STOCK OF THE COMPANY. Chemical Holdings shall cease to
"beneficially own" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, at least forty percent (40%) of the Voting
Stock of the Company.
12. ACKNOWLEDGEMENT OF SPIN-OFF. Each Lender hereby acknowledges that
Ciba-Geigy intends to spin-off or otherwise distribute equity interests or
rights to purchase equity interests in Specialty Chemicals (including, without
limitation, its equity interest in the Company and the Subordinated Notes) to
the public shareholders of Ciba-Geigy (the "SPIN-OFF") and hereby waives
compliance with such provisions of the Credit Agreement as are necessary to
permit the Spin-Off.
13. CONSENT TO AMENDMENT OF BY-LAWS. Each Lender hereby consents that the
Company may amend its by-laws in order to replace references to Ciba-Geigy with
references to Specialty Chemicals and waive compliance with the provisions of
Section 13.14 of the Credit Agreement to the extent and only to the extent
necessary to permit such amendments.
14. CONSENT TO LIQUIDATION OF BROCHIER. Each Lender hereby (a) consents
that Brochier may transfer (whether by dividend or otherwise) all of its assets
to Hexcel S.A. [France], Hexcel Fabrics S.A. and/or Hexcel Composites S.A.
[France]and be dissolved and (b) waives compliance with the provisions of
Section 13.9 of the Credit Agreement to the extent and only to the extent
necessary to permit such transfer
and dissolution. From and after such transfer of all or substantially all of its
assets, the "Foreign Borrower" status of Brochier shall be deemed to have been
terminated in accordance with the provisions of Section 3.6 of the Credit
Agreement.
15. CONSENT TO INVESTMENT IN HEXCEL BELGIUM. Each Lender hereby consents
that the Company and its Subsidiaries may make Investments in Hexcel Belgium or
otherwise acquire assets of Hexcel Belgium; PROVIDED that (a) such Investment or
acquisition would have constituted "Permitted Belgian Capital" if it had taken
the form of an equity Investment made by the Company in Hexcel Belgium or an
intercompany loan made by the Company to Hexcel Belgium and (b) the
determination of whether the requirements of clause (a) of this proviso have
been satisfied shall be made without giving effect to the provisions of clause
(a) of the proviso to the definition of the term "Permitted Belgian Capital"
contained in Section 1.1 of the Credit Agreement.
16. CONSENT TO REPURCHASE OF LODI FACILITY. Each Lender hereby consents
that the Company and its Subsidiaries may acquire the Lodi Facility for
aggregate consideration of (a) not more than $1,500,000 in cash and (b)
forgiveness of mortgage indebtedness of approximately $2,000,000. Each Lender
hereby (x) waives compliance with the provisions of Sections 13.4 and 13.16 of
the Credit Agreement to the extent and only to the extent necessary to permit
such acquisition for such consideration and (y) acknowledges and agrees that
such acquisition shall be deemed not to constitute an "Investment" for purposes
of the Credit Agreement.
17. CONSENT TO STOCK SALE. Each Lender hereby consents that the Company
may sell, transfer or otherwise convey a portion of the issued and outstanding
capital stock of Salver, and that Salver may issue its capital stock, to any
Wholly-owned Subsidiary of the Company and waives compliance with the provisions
of Section 13.13 of the Credit Agreement to the extent and only to the extent
necessary to permit such sale, transfer, other conveyance or issuance; PROVIDED,
HOWEVER, that, after giving effect to such sale, transfer, other conveyance or
issuance of capital stock, not less than 90% (on a fully diluted basis) of the
issued and outstanding capital stock of Salver shall be owned directly by the
Company.
18. CONSENT TO DESIGNATION OF ADDITIONAL BORROWERS. Each Lender hereby
consents that each of Hexcel Fabrics S.A. and Hexcel Composites S.A. [France]
shall be designated as an "Additional Borrower" for all purposes under the
Credit Agreement and the other Loan Documents; PROVIDED that nothing contained
in this Section 3 shall be deemed to constitute a waiver of any of the
provisions of Section 9.3 of the Credit Agreement.
19. CONDITIONS TO EFFECTIVENESS. This Amendment shall become effective on
and as of the date that the Administrative Agent shall have received:
(a) counterparts of this Amendment, duly executed by the Company, the
European Overdraft Bank and the Requisite Lenders; and
(b) each of (i) a guarantee made by Hexcel Pacific Rim Corporation, a
California corporation, substantially in the form of Exhibit I to the Credit
Agreement, executed and delivered by a duly authorized officer of Hexcel
Pacific Rim Corporation and (ii) a first priority, perfected security
interest in all of the issued and outstanding capital stock of Hexcel
Pacific Rim Corporation pursuant to a pledge agreement substantially similar
to the form of Exhibit J to the Credit Agreement;
PROVIDED that, in addition to the satisfaction of the foregoing conditions, it
shall be a condition precedent to the effectiveness of Section 18 hereof that
the Collateral Agent shall have received a first priority, perfected security
interest in 65% of the issued and outstanding capital stock of each of Hexcel
Fabrics S.A. and Hexcel Composites S.A., together with a legal opinion of S.G.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or other counsel reasonably acceptable to the Administrative
Agent) with respect to matters substantially similar to the legal opinion
delivered by them in connection with the closing of the Credit Agreement.
20. REPRESENTATIONS AND WARRANTIES. The Company, as of the date hereof and
after giving effect to the amendments contained herein, hereby confirms,
reaffirms and restates the representations and warranties made by it and each
Foreign Borrower in Section 10 of the Credit Agreement and otherwise in the Loan
Documents to which it is a party; PROVIDED that each reference to the Credit
Agreement therein
shall be deemed to be a reference to the Credit Agreement after giving effect to
this Amendment (including, without limitation, the designation of each of Hexcel
Fabrics S.A. and Hexcel Composites S.A. as an Additional Borrower pursuant to
Section 3 hereof).
21. LIMITED EFFECT. The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Agent under any of the Loan
Documents, nor constitute a waiver or amendment of any provisions of any of the
Loan Documents. Except as expressly modified herein, all of the provisions and
covenants of the Credit Agreement and the other Loan Documents are and shall
continue to remain in full force and effect in accordance with the terms thereof
and are hereby in all respects ratified and confirmed.
22. COUNTERPARTS. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts (which may include
counterparts delivered by facsimile transmission) and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Any
executed counterpart delivered by facsimile transmission shall be effective as
for all purposes hereof.
23. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
HEXCEL CORPORATION
HEXCEL S.A. [Belgium]
HEXCEL S.A. [Lyon]
BROCHIER S.A.
SALVER S.R.L.
HEXCEL (U.K.) LIMITED
HEXCEL COMPOSITES LIMITED
HEXCEL COMPOSITES GMBH
HEXCEL S.A. [SPAIN] (formerly known as Hercules
Aerospace Espana S.A.)
By: /s/ S. C. FORSYTH
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Title: Attorney-in-Fact
CREDIT SUISSE FIRST BOSTON (formerly, Credit
Suisse), as the Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Associate
CITIBANK, N.A. as Collateral Agent and as a
Lender (including, without limitation, as
European Overdraft Bank)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Attorney-in-Fact
CREDIT SUISSE FIRST BOSTON (formerly, Credit
Suisse), as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Associate
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
BANQUE NATIONALE DE PARIS, SAN ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
THE CHASE MANHATTAN BANK (as successor by merger
to The Chase Manhattan Bank, N.A.)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Title: First Vice President
ISTITUTO BANCARIO SAN PAOLO DI TORINO, S.P.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: First Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President
SOCIETE GENERALE, New York Branch
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
SWISS BANK CORPORATION, New York and Cayman
Island Branches
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Associate Director
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Associate Director
UNION BANK OF SWITZERLAND, New York Branch
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
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Title: Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Assistant Treasurer
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Vice President