AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 29, 2003
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HEXCEL CORPORATION
(Exact name of Registrant as specified in its charter)
| Delaware | 3290 | 94-1109521 | ||
| (State or other jurisdiction of incorporation or organization |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901-3238
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Ira J. Krakower
Senior Vice President and General Counsel
Hexcel Corporation
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901-3238
(203) 969-0666
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
SEE TABLE OF ADDITIONAL REGISTRANTS
Copies to:
Joseph A. Coco, Esq.
Thomas W. Greenberg, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement as determined by market conditions.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: o
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box: ý
If this Form is filed to register additional securities or an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: o
CALCULATION OF REGISTRATION FEE
| Title of Each Class of Securities to Be Registered |
Amount to Be Registered |
Proposed Maximum Offering Price per Unit (1) |
Proposed Maximum Aggregate Offering Price (1) |
Amount of Registration Fee |
||||
|---|---|---|---|---|---|---|---|---|
| 9.875% Senior Secured Notes due 2008 | (2) | 100% | (2) | (3) | ||||
| Guarantees of the 9.875% Senior Secured Notes due 2008 | — | — | — | (4) | ||||
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
TABLE OF ADDITIONAL REGISTRANTS
| Name |
State of Incorporation or Organization |
Primary Standard Industrial Classification Number |
I.R.S. Employer Identification Number |
|||
|---|---|---|---|---|---|---|
| Clark-Schwebel Corporation Two Stamford Plaza 281 Tresser Boulevard Stamford, Connecticut 06901-3238 (203) 969-0666 |
Delaware | 3290 | 57-1071290 | |||
Clark-Schwebel Holding Corp. Two Stamford Plaza 281 Tresser Boulevard Stamford, Connecticut 06901-3238 (203) 969-0666 |
Delaware |
3290 |
51-0383398 |
|||
CS Tech-Fab Holding, Inc. Two Stamford Plaza 281 Tresser Boulevard Stamford, Connecticut 06901-3238 (203) 969-0666 |
Delaware |
3290 |
57-1071293 |
|||
Hexcel Pottsville Corporation Two Stamford Plaza 281 Tresser Boulevard Stamford, Connecticut 06901-3238 (203) 969-0666 |
Delaware |
3290 |
23-2827480 |
This Registration Statement contains a form of prospectus that may be used by any broker-dealer subsidiary of Goldman, Sachs & Co. in connection with offers and sales of the previously issued securities described therein in market-making transactions.
SUBJECT TO COMPLETION, DATED JULY 29, 2003
Hexcel Corporation
9.875% Senior Secured Notes due 2008
Investing in the notes involves risks. See "Risk Factors" on page 6.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these notes or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
We pay interest on the notes on April 1 and October 1 of each year. The first such payment will be made on October 1, 2003. The notes will mature on October 1, 2008. We have the option to redeem all or a portion of the notes at any time on or after April 1, 2006 at the redemption prices set forth in this prospectus. There is no sinking fund for the notes. We may, on one or more occasions, use the net proceeds from one or more equity offerings to redeem up to 35% of the aggregate principal amount of the notes at the redemption price set forth in this prospectus.
Our obligations under the notes are jointly and severally guaranteed by our current and future material domestic subsidiaries. In addition, the notes and the guarantees are secured on a first-priority basis by substantially all of our domestic fixed assets, other than excluded assets, as described in "Description of Notes—Security."
Private equity funds affiliated with Goldman, Sachs & Co. own approximately 38% of our voting stock and these funds have the right to appoint up to three members of our ten member board of directors.
This prospectus has been prepared for and will be used by Goldman, Sachs & Co. and its broker-dealer subsidiaries in connection with offers and sales of the notes in market-making transactions from time to time. These transactions may occur in the open market or may be privately negotiated, at prices related to prevailing market prices at the time of sale or at negotiated prices. Goldman, Sachs & Co. may act as principal or agent in these market-making transactions. Hexcel will not receive any of the proceeds of such sales of the notes but will pay any expenses incurred in connection with this registration.
Goldman, Sachs & Co.
The date of this prospectus is , 2003.
No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this offering circular. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the notes offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so.
| About this Prospectus | 2 | |
| Available Information | 2 | |
| Forward-Looking Statements | 3 | |
| Hexcel Corporation | 5 | |
| Risk Factors | 6 | |
| Consolidated Ratio of Earnings to Fixed Charges | 14 | |
| Use of Proceeds | 14 | |
| Description of Notes | 15 | |
| Plan of Distribution | 88 | |
| Legal Matters | 88 | |
| Experts | 89 |
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This prospectus is part of a registration statement that we filed with the SEC using a "shelf" registration process. You should read this prospectus together with the additional information described under the heading "Available Information." You may also obtain from the SEC a copy of the registration statement and exhibits that we filed with the SEC. The registration statement contains additional information that may be important to you.
The outstanding notes were originally issued by us on , 2003 in an exchange offer to holders of our 9.875% Senior Secured Notes due 2008, which were issued by us on March 19, 2003 in an offering pursuant to Rule 144A and Regulation S under the Securities Act.
This prospectus may be used by Goldman, Sachs & Co. ("Goldman Sachs") and its broker-dealer subsidiaries in connection with offers and sales of the notes in market-making transactions from time to time. These transactions may occur in the open market or may be privately negotiated, at prices related to prevailing market prices at the time of sale or at negotiated prices.
The terms "Hexcel," "we," "our" and "us" as used in this prospectus refer to Hexcel Corporation, the issuer of the notes and its subsidiaries as a combined entity, except where the context makes it clear that such term means only the parent company.
We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission, or SEC. You may read and copy any document Hexcel files at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-888-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from the SEC's web site at www.sec.gov or from our web site at www.hexcel.com. However, the information on our web site does not constitute a part of this prospectus.
In this document, we "incorporate by reference" the information we file with the SEC, which means that we can disclose important information to you by referring to that information. The information incorporated by reference is considered to be a part of this prospectus, and later information filed with the SEC will update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or after the date of this prospectus until the offering is completed:
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You may request a copy of these filings at no cost, by writing or telephoning Hexcel at: Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut 06901, (203) 969-0666, Attention: Investor Relations.
You should rely only upon the information provided in this prospectus or incorporated by reference into this prospectus. We have not authorized anyone to provide you with different information. You should not assume that the information in this prospectus, including any information incorporated by reference, is accurate as of any date other than the date of this prospectus.
This prospectus includes and incorporates by reference forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to future prospects, developments and business strategies. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," and similar terms and phrases, including references to assumptions. Such statements are based on current expectations, are inherently uncertain, and are subject to changing assumptions. These statements are contained in sections entitled "Summary," "Risk Factor," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and other sections of this prospectus and in the documents incorporated by reference in this prospectus.
Such forward-looking statements include, but are not limited to:
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Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. Such factors include, but are not limited to, the following: changes in general economic and business conditions; changes in current pricing and cost levels; changes in political, social and economic conditions and local regulations, particularly in Asia and Europe; foreign currency fluctuations; changes in aerospace delivery rates; reductions in sales to any significant customers, particularly Airbus or Boeing; changes in sales mix; changes in government defense procurement budgets; changes in military aerospace programs technology; industry capacity; competition; disruptions of established supply channels; manufacturing capacity constraints; and the availability, terms and deployment of capital.
If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. In addition to other factors that affect our operating results and financial position, neither past financial performance nor our expectations should be considered reliable indicators of future performance. Investors should not use historical trends to anticipate results or trends in future periods. Further, our stock price is subject to volatility. Any of the factors discussed above could have an adverse impact on our stock price. In addition, failure of sales or income in any quarter to meet the investment community's expectations, as well as broader market trends, can have an adverse impact on our stock price. We do not undertake an obligation to update its forward-looking statements or risk factors to reflect future events or circumstances.
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We are the world's leading producer of advanced structural materials. We develop, manufacture and market lightweight, high-performance reinforcement products, composite materials and structures for use in commercial aerospace, space and defense, electronics and general industrial applications. Our materials are used in a wide variety of end products, such as commercial and military aircraft, space launch vehicles and satellites, printed wiring boards, computers, cellular telephones, soft body armor, high-speed trains and ferries, cars and trucks, wind turbine blades, reinforcements for bridges and other structures, window blinds, and a wide variety of recreational equipment.
We are a vertically integrated manufacturer of products organized around three strategic business segments, presented in order of manufacturing integration from raw materials to finished products.
With 18 manufacturing facilities located in six countries around the world and joint ventures in Asia, Europe and the United States, we are well positioned to take advantage of opportunities for growth worldwide. For the fiscal year ended December 31, 2002, 44% of our sales were of products manufactured outside the United States. We serve our international markets through manufacturing facilities and sales offices located in the United States and Europe, and through sales offices located in Asia, Australia and South America.
We believe that we have achieved a degree of vertical integration unmatched by any competitor. This vertical integration enhances our control over the cost, quality and delivery of our products, and enables us to offer a variety of solutions to our customers' mission critical, structural materials needs. We have maintained a longstanding relationship with our key customers for many years, including Boeing and the European Aeronautic Defense and Space Company ("EADS"), the parent company of Airbus.
For the fiscal year ended December 31, 2002, we generated net sales of $850.8 million. For the three months ended March 31, 2003, we generated net sales of $228.6 million.
We are incorporated under the laws of the State of Delaware. Our principal executive offices are located at Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut 06901. Our general telephone number is 203-969-0666.
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You should carefully consider the risks described below as well as other matters described in this prospectus.
Risks Relating to Our Indebtedness and the Notes
We have substantial debt that could limit our ability to make payments on the notes and reduce the effectiveness of our operations.
We have substantial debt and debt service requirements. We may not be able to generate sufficient cash flow from operations or obtain sufficient funding to satisfy our debt service obligations, including the payment of interest and principal at final maturity on the notes. As of March 31, 2003, we had approximately $531.9 million of total debt (of which $125.0 million consisted of the notes and the balance consisted of other debt). This substantial level of debt has important consequences, including:
We may not be able to generate sufficient cash flow to meet our debt service obligations, including payments on the notes.
Our ability to generate sufficient cash flow from operations to make scheduled payments on our debt obligations will depend on our future financial performance, which will be affected by a range of economic, competitive and business factors, many of which are outside of our control. If we do not generate sufficient cash flow from operations to satisfy our debt obligations, including payments on the notes, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We may not be able to refinance our existing debt or obtain additional financing on acceptable terms. We may not be able to sell assets and if assets are sold, the amount of proceeds or timing of such sales may not be sufficient to satisfy our debt obligations. In addition, the sales of assets or the terms of a refinancing or additional debt may not be permitted under the terms of our various debt instruments then in effect. Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms would likely result in an event of default under all of our material debt and impair our ability to satisfy our obligations on the notes.
We do not expect to generate sufficient cash flow from operations to repay our senior credit facility when it matures or the notes when they mature. We expect that our ability to repay the notes at their scheduled maturity will be dependent in whole or in part on (i) replacing our senior credit facility on or prior to its maturity and (ii) refinancing all or a portion of the notes before they mature.
Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indenture do not fully prohibit us or our subsidiaries from doing so. If new debt is added
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to our and our subsidiaries' current debt levels, the related risks that we and they now face could intensify. See "Description of Notes."
We may not be able to finance future operations and capital needs because of restrictions contained in our debt agreements.
The operating and financial restrictions and covenants that are contained in our existing debt agreements and that will be contained in any future financing agreements may impair our ability to finance future operations or capital needs. In addition, our senior credit facility requires that we maintain compliance with specified financial ratios. A breach of any of these restrictions or covenants could cause a default under the notes and our other debt. A significant portion of our debt may then become immediately due and payable. We may not have, or be able to obtain, sufficient funds to make these accelerated payments, including payments on the notes.
Your right to receive payments on these notes could be adversely affected if any of our non-guarantor subsidiaries declares bankruptcy, liquidate, or reorganize.
Some, but not all, of our subsidiaries guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of our non-guarantor subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us. Our non-guarantor subsidiaries account for approximately 44% of our consolidated net sales to external customers and approximately 31% of our long-lived assets as of December 31, 2002.
The notes will not be secured by all of our assets. The proceeds from the collateral for the notes may be insufficient to make payments on the notes.
Our lenders under our existing senior credit facility have a security interest in a substantial portion of our accounts receivable and inventory. The notes are secured by substantially all of our and our domestic subsidiaries' property, plant and equipment, intangibles, intellectual property, certain intercompany notes and other obligations receivable, and 100% of the outstanding voting stock of our Domestic Subsidiaries other than Clark-Schwebel Holding Corp., Clark-Schwebel Corporation, CS Tech-Fab Holding, Inc. and Hexcel Technologies, Inc. In addition, 65% of the capital stock of each first-tier material foreign subsidiary owned by us, and all intercompany notes representing debt owed from a foreign subsidiary to Hexcel Corporation or a domestic subsidiary, have been pledged to both the lenders under our existing senior credit facility and the notes on an equal basis. The collateral for the notes may be less liquid than the collateral for our existing senior credit facility. We cannot assure you that the liquidation value of the collateral for the notes would be adequate to repay the principal amount of and any accrued and unpaid interest on the notes.
We may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture.
Upon the occurrence of specific kinds of change of control events, we will be required to offer to repurchase all outstanding notes at 101% of the principal amount thereof plus accrued and unpaid interest to the date of repurchase. However, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes or that restrictions in our senior credit facility will not allow such repurchases. In addition, certain important corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a "Change of Control" under the indenture. See "Description of Notes—Repurchase at the Option of Holders."
If an active trading market does not develop for these notes, you may not be able to resell them.
You may find it difficult to sell your notes because there is no existing trading market for the notes. We do not intend to apply for listing or quotation of the notes on any exchange. Therefore, we
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do not know the extent to which investor interest will lead to the development of a trading market or how liquid that market might be. Although Goldman Sachs has informed us that they currently intend to make a market in the notes, they are not obligated to do so, and any market-making may be discontinued at any time without notice. As a result, the market price of the notes could be adversely affected.
In addition, the market for non-investment grade debt, such as the notes, has been subject to disruptions that have caused substantial volatility in the prices of these securities. These disruptions may have an adverse effect on holders of the notes.
Federal and state statutes allow courts, under specific circumstances, to void guarantees and require note holders to return payments received from guarantors.
The notes are guaranteed by certain of our wholly owned, domestic subsidiaries. Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to all other debts of that guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee:
In addition, any payment by that guarantor pursuant to its guarantee could be voided and required to be returned to the guarantor, or to a fund for the benefit of the creditors of the guarantor.
The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:
On the basis of historical financial information, recent operating history and other factors, we believe that each guarantor, after giving effect to its guarantee of these notes, will not be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay such debts as they mature. We cannot assure you, however, as to what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.
The collateral securing the notes could be impaired in the event we were to file for bankruptcy.
The notes are secured by a first-priority lien in substantially all of our domestic fixed assets and will give you the right to foreclose upon and sell the collateral upon the occurrence of an event of default. This right, however, would be subject to limitations under applicable bankruptcy laws if we
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became subject to a bankruptcy proceeding. To the extent your rights as a secured creditor are limited or set aside in a bankruptcy proceeding, you would lose some or all of the benefit of the security that the collateral was intended to provide.
A trustee in bankruptcy might be able to void a future pledge of collateral.
A future pledge of collateral made in favor of the Joint Collateral Agent might be voidable by the pledgor (as debtor in possession) or its trustee in bankruptcy in certain circumstances. These circumstances include, among others, the following:
If a pledge of future collateral is voided, such collateral will no longer secure the notes.
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Risks Relating to Our Business
Decreased demand in the commercial aerospace industry could significantly impair our sales, profit margins and financial condition.
Further reductions in the demand for new commercial aircraft could result in reduced net sales for our commercial aerospace products and could further reduce our profit margins. Approximately 46% of our net sales for the year ended December 31, 2002 were derived from sales to the commercial aerospace industry. Reductions in demand for commercial aircraft or a delay in deliveries could result from many factors, including a terrorist event similar to that which occurred on September 11, 2001 and any subsequent military response, changes in the propensity for the general public to travel by air, a rise in the cost of aviation fuel, consolidation of airlines and slower macroeconomic growth.
In addition, our customers continue to emphasize the need for improved yield in the use of our products and cost reduction throughout the commercial aerospace supply chain. In response to these pressures, we reduced the price of some commercial aerospace products in recent years and are likely to continue to do so in the future. Where possible, we seek to offset or mitigate the impact of such price and cost reductions by productivity improvements and reductions in the costs of the materials and services we procure.
The industries in which we operate are cyclical, and downturns in them may result in significant volatility in our sales, earnings and cash flows.
The core industries in which we operate are, to varying degrees, cyclical and have historically experienced downturns. We are currently in the midst of cyclical downturns in the commercial aerospace and electronics industries. A further deterioration in these industries may continue and it is uncertain as to whether, when and to what extent these industries will recover. Any further deterioration or a lack of recovery in these industries could lead to further reductions in our operating profitability, increase our net losses, and result in a breach of the financial maintenance covenants under our senior credit facility.
A significant decline in business with Boeing or Airbus could materially impair our business, operating results, prospects and financial condition.
Approximately 22% and 23% of our sales for the years ended December 31, 2002 and December 31, 2001, respectively, were made to Boeing and its related subcontractors. Approximately 15% and 16% of our sales for the years ended December 31, 2002 and December 31, 2001, respectively, were made to EADS, including Airbus and its related subcontractors. Accordingly, the loss of, or significant reduction in purchases by, either of these customers from Hexcel could materially impair our operating results and weaken our financial condition.
Reductions in space and defense spending could result in a decline in our net sales.
The growth in military aircraft production that has occurred in recent years may not be sustained and production may cease to grow. The production of military aircraft depends upon U.S. and European defense budgets and the related demand for defense and related equipment. These defense budgets may decline and sales of defense and related equipment to foreign governments may not continue at expected levels. Approximately 17% of our net sales for the year ended December 31, 2002 were derived from the space and defense industry. The space and defense industry is largely dependent upon government defense budgets, particularly the U.S. defense budget.
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A decrease in supply or increase in cost of our raw materials could result in a material decline in our profitability.
Because we purchase large volumes of raw materials, such as epoxy and phenolic resins, aluminum foil, carbon fiber, fiberglass yarn and aramid paper and fiber, any decrease in the supply or increase in the cost of the our raw materials could significantly reduce our profit margins. We may experience a decrease in the supply or an increase in price of our raw materials. Our profitability depends largely on the price and continuity of supply of these raw materials, which are supplied by a limited number of sources. In addition, qualification to use raw materials in some of our products limits the extent to which we are able to substitute alternative materials for these products. Our ability to pass on these costs to our customers is, to a large extent, dependent on the terms of our contracts with our customers and industry conditions, including the extent to which our customers would switch to alternative materials we do not produce in the event of an increase in the prices of our products.
Our substantial international operations are subject to uncertainties that could affect our operating results.
We believe that revenue from sales outside the U.S. will continue to account for a material portion of our total revenue for the foreseeable future. Additionally, we have invested significant resources in our international operations and we intend to continue to make such investments in the future. Our international operations are subject to numerous risks, including:
Any one of the above could reduce our net sales, cash flows and profitability, cause us to fail to make scheduled payments of principal of or interest on the notes and reduce the market value and liquidity of the notes.
During the past several years, some countries in which we operate or plan to operate have been characterized by varying degrees of inflation and uneven growth rates. We currently do not have political risk insurance in the countries in which we conduct business. While we carefully consider these risks when evaluating our international operations and investments, our broad international operations could cause a reduction in our net sales, cash flows or profitability.
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We could be required to devote substantial financial and personnel resources to comply with environmental and safety requirements.
Our operations, like those of other companies engaged in similar businesses, require the handling, use, storage and disposal of certain regulated materials. As a result, we are subject to various federal, state, regional, local and foreign laws and regulations pertaining to pollution and protection of the environment, health and safety, governing among other things, emissions to air, discharge to waters and the generation, handling, storage, treatment and disposal of waste and other materials, and remediation of contaminated sites. We have made and will continue to make capital and other expenditures in order to comply with these laws and regulations. However, the requirements of these laws and regulations are complex, change frequently, and could become more stringent in the future.
We have been named as "potentially responsible parties" under the federal Superfund law or similar state laws at several sites requiring clean up based on disposal of wastes they generated. These laws generally impose liability for costs to investigate and remediate contamination without regard to fault and under certain circumstances liability may be joint and several resulting in one responsible party being held responsible for the entire obligation. Liability may also include damages to natural resources. In addition to the foregoing, we have incurred and likely will continue to incur expenses to investigate and clean up several existing and former company-owned or leased properties. We have incurred substantial expenses for all these sites over a number of years, a portion of which has been covered by insurance. Although it is possible that new information could require us to reassess our potential exposure to all pending investigations and remediations, we believe that, based on currently available information, the resolution of these matters will not require the expenditure of material financial resources or require an unduly burdensome devotion of our personnel. See the section entitled "Legal Proceedings" in our Annual Report on Form 10-K/A (Amendment No. 1) for the year ended December 31, 2002, which is incorporated herein by reference.
We believe that our business, operations and facilities are being operated in substantial compliance with applicable environmental and health and safety laws and regulations, many of which provide for substantial fines and criminal sanctions for violations. Based on information presently known to us and existing accrued environmental reserves, we do not expect environmental costs or contingencies to be material. However, potentially material expenditures could be required in the future. For example, we may be required to comply with evolving environmental and health and safety laws, regulations or requirements that may be adopted or imposed in the future or to address newly discovered information or conditions that require a response. The operation of manufacturing plants entails risks in these areas, however, and we may incur material costs or liabilities in the future.
Most of our properties have been the subject of Phase I Environmental Site Assessments. However, not all potential instances of soil and groundwater contamination may have been identified, even at those sites where Environmental Site Assessments have been conducted. Accordingly, we may discover previously unknown environmental conditions and the cost of remediating such conditions may be material.
The interests of our significant shareholders may be different than your interests.
Investors affiliated with Berkshire Partners LLC and Greenbriar Equity Group LLC (the "Berkshire and Greenbriar investors") and investors affiliated with The Goldman Sachs Group, Inc. (the "Goldman Sachs investors") each have the ability to influence our affairs so long as each maintains its ownership of respective specified percentages of our outstanding voting securities, and the interests of each of these investors may not in all cases be the same as your interests. As of March 31, 2003, the Goldman Sachs investors owned approximately 38% of our outstanding voting securities and the Berkshire and Greenbriar investors together owned approximately 35% of our outstanding voting securities. Under our governance agreement with the Goldman Sachs investors, the Goldman Sachs
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investors are entitled to designate up to three people to serve on our ten-member Board of Directors, and are entitled to designate one director to serve on each committee of our Board of Directors. Under our stockholders agreement with the Berkshire and Greenbriar investor group, the Berkshire and Greenbriar investors are entitled to designate up to two people to serve on our Board of Directors, and are entitled to designate one director to serve on each committee of our Board of Directors. In addition, the governance agreement and the stockholders agreement each provide that our Board of Directors will not authorize specified types of significant transactions without the approval of the directors designated by each of the respective investors. The interests of these investors may be different than your interests.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of earnings to fixed charges for the years ended December 31, 1998, 1999, 2000, 2001 and 2002 and for the period ended March 31, 2003.
| |
Year Ended December 31, |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
1998 |
1999 |
2000 |
2001 |
2002 |
Three Months Ended March 31, 2003 |
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| |
(dollars in millions) |
||||||||||||||||||
| Income (loss) before Taxes, Equity in Earnings | $ | 78.3 | $ | (5.0 | ) | $ | 75.0 | $ | (383.7 | ) | $ | 7.7 | $ | (0.5 | ) | ||||
| Interest Expense, Including Amortization of Debt Issuance Costs | 38.7 | 73.9 | 68.7 | 64.8 | 62.8 | 13.7 | |||||||||||||
| Interest Portion of Rentals(1) | 2.7 | 3.1 | 2.3 | 1.8 | 1.3 | 0.5 | |||||||||||||
| Earnings (Loss) Before Provision for Taxes and Fixed Charges | $ | 119.7 | $ | 72.0 | $ | 146.0 | $ | (317.1 | ) | $ | 71.8 | $ | 13.7 | ||||||
| Interest Expense, Including Amortization of Debt Issuance Costs | $ | 38.7 | $ | 73.9 | $ | 68.7 | $ | 64.8 | $ | 62.8 | $ | 13.7 | |||||||
| Interest Portion of Rentals(1) | 2.7 | 3.1 | 2.3 | 1.8 | 1.3 | 0.5 | |||||||||||||
| Total Fixed Charges | $ | 41.4 | $ | 77.0 | $ | 71.0 | $ | 66.6 | $ | 64.1 | $ | 14.2 | |||||||
| Ratio of Earnings to Fixed Charges(2) | 2.9 | N/A | 2.1 | N/A | 1.1 | N/A | |||||||||||||
This prospectus is delivered in connection with the sale of the notes by Goldman Sachs and its broker-dealer subsidiaries in market-making transactions. We will not receive any of the proceeds from such transactions.
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You can find the definitions of certain terms used in this description under the subheading "Certain Definitions." In this description, the word "Hexcel" refers only to Hexcel Corporation and not to any of its Subsidiaries.
The notes were issued under an indenture among Hexcel, the Guarantors and Wells Fargo Bank Minnesota, National Association, as trustee. The terms of the notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended. The Security Documents referred to below under the caption "—Security" defines the terms of the security interests that secure the notes.
The following description is a summary of the material provisions of the indenture and the Security Documents. It does not restate those agreements in their entirety. We urge you to read the indenture and the Security Documents because they, and not this description, define your rights as holders of the notes. We have filed a copy of the indenture and certain of the Security Documents as exhibits to our Annual Report on Form 10-K/A, Amendment No. 1, for the fiscal year ended December 31, 2002. Copies of the indenture and certain of the Security Documents are available as set forth below under "—Additional Information." Certain defined terms used in this description but not defined below under "—Certain Definitions" have the meanings assigned to them in the indenture.
The registered holder of a note is treated as the owner of it for all purposes. Only registered holders have rights under the indenture.
Brief Description of the Notes and the Guarantees
The Notes
The notes:
The Guarantees
The notes are guaranteed by Clark-Schwebel Holding Corp., Clark-Schwebel Corporation, CS Tech-Fab Holding, Inc. and Hexcel Pottsville Corporation and may in the future be guaranteed by Hexcel's other Domestic Subsidiaries pursuant to the covenant entitled "—Certain Covenants—Additional Subsidiary Guarantees and Liens."
Each guarantee of the notes:
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Not all of Hexcel's Subsidiaries guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any non-guarantor Subsidiaries, such non-guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to us. Our non-guarantor Subsidiaries generated approximately 44% of our consolidated net sales to external customers and held approximately 31% of our consolidated long-lived assets as of December 31, 2002.
As of March 31, 2003, all of our Subsidiaries were "Restricted Subsidiaries." However, under certain circumstances, we are permitted to designate certain of our Subsidiaries as "Unrestricted Subsidiaries." Our Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the indenture. Our Unrestricted Subsidiaries will not guarantee the notes.
Principal, Maturity and Interest
The notes were issued initially in an aggregate principal amount of $125.0 million. Hexcel may issue additional notes from time to time. Any offering of additional notes is subject to the covenant described below under the caption "—Certain Covenants—Incurrence of Indebtedness." The notes and any additional notes subsequently issued under the indenture will be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Any additional notes subsequently issued under the indenture would be secured by the Collateral on an equal and ratable basis. Hexcel may Incur future Indebtedness, in addition to additional notes, which may be pari passu with the notes offered hereby and also have the benefit of the security interests in the Collateral. See "—Security" and the definition of "Permitted Liens" under the caption "—Certain Definitions." Hexcel will issue notes in denominations of $1,000 and integral multiples of $1,000. The notes will mature on October 1, 2008.
Interest on the notes accrues at the rate of 9.875% per annum and is payable semi-annually in arrears on April 1 and October 1, commencing on October 1, 2003. Hexcel will make each interest payment to the holders of record on the immediately preceding March 15 and September 15.
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Interest on the notes accrues from the March 19, 2003 or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
Methods of Receiving Payments on the Notes
All payments on notes will be made at the office or agency of the paying agent and registrar within the City and State of New York unless Hexcel elects to make interest payments by check mailed to the holders at their address set forth in the register of holders.
Paying Agent and Registrar for the Notes
The trustee will initially act as paying agent and registrar. Hexcel may change the paying agent or registrar without prior notice to the holders of the notes, and Hexcel or any of its Subsidiaries may act as paying agent or registrar.
Transfer and Exchange
A holder may transfer or exchange notes in accordance with the indenture. The registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents in connection with a transfer of notes. Holders will be required to pay all taxes due on transfer. Hexcel is not required to transfer or exchange any note selected for redemption. Also, Hexcel is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.
Subsidiary Guarantees
The notes and all other Secured Obligations are, and future Secured Obligations will be, guaranteed by Clark-Schwebel Holding Corp., Clark-Schwebel Corporation, CS Tech-Fab Holding, Inc. and Hexcel Pottsville Corporation and may in the future be guaranteed by certain of Hexcel's other Domestic Subsidiaries pursuant to the covenant entitled "—Certain Covenants—Additional Subsidiary Guarantees and Liens." The Subsidiary Guarantees are joint and several obligations of the Guarantors. The obligations of each Guarantor under its Subsidiary Guarantee are limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance under applicable law. The Subsidiary Guarantees of each Guarantor are secured by all Collateral owned or at any time acquired by that Guarantor and are pari passu in right of payment with all existing and future Senior Indebtedness of that Guarantor, including Indebtedness under the New Senior Credit Facility. See "Risk Factors—Federal and State statutes allow courts, under specific circumstances, to void guarantees and liens granted by the guarantors and require holders of notes to return payments received from guarantors or their property."
A Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than Hexcel or another Guarantor, unless:
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The Subsidiary Guarantee of a Guarantor and all security interests granted by that Guarantor to the Joint Collateral Agent will be released:
See "—Repurchase at the Option of Holders—Asset Sales" and "—Collateral and Security—Release of Note Liens."
Security
The notes and the Subsidiary Guarantees are secured by first priority security interests (subject to Permitted Prior Liens) and subject to Lien sharing in favor of the holders of future Parity Lien Debt, in substantially all of Hexcel's and its Domestic Subsidiaries' property, plant and equipment, patents, trademarks and other intellectual property, customer and supplier contracts (which will not include accounts and related rights that are Credit Facility Collateral) and other general intangibles, intercompany notes and other instruments and obligations receivable, and certain other investment property, 100% of the outstanding voting stock of Hexcel's Domestic Subsidiaries, other than Clark-Schwebel Holding Corp., CS Tech-Fab Holding, Inc., Hexcel Technologies, Inc. and Clark-Schwebel Corporation, and, as described under the caption "—Intercreditor Provisions Relating to Working Capital Facility Liens—Equal and Ratable Sharing of Liens on Foreign Subsidiary Collateral," the outstanding voting stock of Hexcel's material first-tier Foreign Subsidiaries (but not more than 65% of the voting stock of such Foreign Subsidiaries) and intercompany notes outstanding from Hexcel's Foreign Subsidiaries. Collateral does not include Credit Facility Collateral (which includes inventory, and accounts receivable) and other Excluded Assets.
The notes, the Subsidiary Guarantees and future Parity Lien Debt are also secured by first priority security interests, subject to Lien sharing provisions in favor of the holders of Obligations under a Qualified Credit Facility, upon Equity Interests issued and intercompany notes owing by Foreign Subsidiaries to Hexcel or a Domestic Subsidiary.
Hexcel, the Guarantors and the Joint Collateral Agent entered into Security Documents defining the terms of the security interests that secure the notes and the Subsidiary Guarantees. These security interests upon Collateral owned by Hexcel or any Guarantor secure the payment and performance when due of all of the Note Obligations of Hexcel or that Guarantor.
Pursuant to the Security Documents, Hexcel may Incur future Indebtedness which may be pari passu with the notes and also have the benefit of the security interests in the Collateral. Such Indebtedness will be Senior Indebtedness and may only be Incurred if:
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Additionally, any such Indebtedness shall have a Stated Maturity no earlier than any Stated Maturity of the notes and the Liens on Collateral securing such Indebtedness must be permitted by clause (2) of the definition of "Permitted Liens." See the definition of "Parity Lien Debt."
The Collateral will be released with respect to the notes:
See "—Collateral and Security—Release of Note Liens."
Optional Redemption
At any time prior to April 1, 2006, Hexcel may on any one or more occasions redeem up to 35% of the aggregate principal amount of notes issued under the indenture (including the original principal amount of any Additional Securities) at a redemption price of 109.875% of the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the redemption date, with the Net Cash Proceeds of Equity Offerings; provided that:
Except pursuant to the preceding paragraph, the notes will not be redeemable at Hexcel's option prior to April 1, 2006.
After April 1, 2006, Hexcel may redeem all or a part of the notes upon not less than 30 nor more than 60 days' notice at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Special Interest, if any, on the notes redeemed, to the
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applicable redemption date, if redeemed during the twelve-month period beginning on April 1 of the years indicated below:
| Year |
Percentage |
||
|---|---|---|---|
| 2006 | 104.938 | % | |
| 2007 | 102.469 | % | |
| 2008 and thereafter | 100.000 | % |
Mandatory Redemption
Hexcel is not required to make mandatory redemption or sinking fund payments with respect to the notes except as provided below under "—Repurchase at the Option of Holders."
Repurchase at the Option of Holders
Change of Control
Upon the occurrence of a "Change of Control," each holder may require Hexcel to purchase its notes at a purchase price equal to 101% of the principal amount of the notes plus accrued and unpaid interest and Special Interest, if any, to the date of purchase. The following are "Change of Control" events:
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Within 30 days after any Change of Control, we will mail a notice to each holder of notes, a "Change of Control Offer," stating:
The paying agent will promptly mail to each holder of notes properly tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each new note will be in a principal amount of $1,000 or an integral multiple of $1,000.
Hexcel will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
Hexcel will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by Hexcel and purchases all notes validly tendered and not withdrawn under the Change of Control Offer.
Hexcel will comply with the requirements of the securities laws in connection with the purchase of notes as a result of a Change of Control. To the extent that the provisions of any securities laws conflict with the provisions of the covenant described under this caption, we will comply with the applicable securities laws and will not be deemed to have breached our obligations under the change of control covenant.
The Change of Control purchase feature of the notes may make more difficult or discourage a sale or takeover of Hexcel and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of negotiations between Hexcel and the Initial Purchasers. It is not the result of our knowledge of any specific effort to accumulate common stock of Hexcel or to obtain control of Hexcel or part of a plan by management to adopt a series of anti-takeover provisions. We have no present intention to engage in a transaction involving a Change of Control, although it is possible that we could decide to do so in the future.
Subject to the limitations discussed below, we could enter into transactions that would not constitute a Change of Control under the indenture, but that could increase the amount of Indebtedness outstanding at that time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to Incur additional Indebtedness are contained in the covenant described under the caption "—Certain Covenants—Incurrence of Indebtedness." These restrictions can only be waived with the consent of the holders of a majority in principal amount of the notes then outstanding. Except for the limitations contained in this covenant, however, the indenture will not contain any covenants or provisions that may afford holders of the notes protection in the event of a highly leveraged transaction.
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The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the properties or assets of Hexcel and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require Hexcel to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Hexcel and its Subsidiaries taken as a whole to another Person or group may be uncertain.
Future Indebtedness that we may Incur may contain prohibitions on the occurrence of events that would constitute a Change of Control or require us to repurchase the Indebtedness upon a Change of Control. Moreover, the exercise by the holders of notes of their right to require us to purchase the notes could cause a default under such other Indebtedness, even if the Change of Control itself does not. Finally, our ability to pay cash to the holders of notes following the occurrence of a Change of Control may be limited by our then existing financial resources. We cannot assure you that sufficient funds will be available when necessary to make any required repurchases.
Our obligation to purchase the notes as a result of a Change of Control may be waived or modified with the written consent of the holders of a majority in principal amount of the notes.
Asset Sales
Hexcel will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
Within 360 days after the receipt of the Net Available Cash from the Asset Sale, an amount equal to 100% of the Net Available Cash from the Asset Sale shall be applied by Hexcel or the Restricted Subsidiary, as the case may be:
Notwithstanding the above, Hexcel and the Restricted Subsidiaries will not be required to apply any Net Available Cash according to the foregoing paragraph except to the extent that the aggregate
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Net Available Cash from all Asset Sales which are not applied according to the foregoing paragraph exceeds $15.0 million. Pending application of Net Available Cash under this covenant, the Net Available Cash will be invested in Cash Equivalents which, in the case of an Asset Sale of Equity Interests or assets of a Domestic Subsidiary, must be held by the Joint Collateral Agent as part of the Collateral in a segregated account that includes only proceeds of Asset Sales and interest earned thereon (an "Asset Sale Proceeds Account").
Any Net Available Cash from Asset Sales that is not applied or invested as provided in the preceding paragraph will constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million, Hexcel will make an Asset Sale Offer to all holders of notes and all holders of Parity Lien Debt that contains provisions similar to those set forth in the indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of notes and such other Parity Lien Debt that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, Hexcel may use those Excess Proceeds for any purpose not otherwise prohibited by the indenture. If the aggregate principal amount of notes and Parity Lien Debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the notes and the Parity Lien Debt will be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
Hexcel will comply with the requirements of the securities laws in connection with the purchase of the notes under this covenant. To the extent that the provisions of any securities laws conflict with provisions of this covenant, Hexcel will comply with the applicable securities laws and shall not be deemed to have breached its obligations under this covenant.
The agreements governing Hexcel's other Indebtedness contain prohibitions of certain events, including events that would constitute a Change of Control or an Asset Sale. In addition, the exercise by the holders of notes of their right to require Hexcel to repurchase the notes upon a Change of Control or an Asset Sale could cause a default under these other agreements, even if the Change of Control or Asset Sale itself does not, due to the financial effect of such repurchases on Hexcel. Finally, Hexcel's ability to pay cash to the holders of notes upon a repurchase may be limited by Hexcel's then existing financial resources. See "Risk Factors—We may be unable to purchase your notes upon a change of control."
Selection and Notice
If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption as follows:
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No notes of $1,000 or less can be redeemed in part. Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the indenture. Notices of redemption may not be conditional.
If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder of notes upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.
Certain Covenants
Restricted Payments
Hexcel will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly make a Restricted Payment. "Restricted Payment," with respect to any Person means:
unless, at the time of and after giving effect to such Restricted Payment:
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The preceding provisions will not prohibit:
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provided, further, however, that the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded in the calculation of the amount of Restricted Payments;
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issued or acquired; provided, however, that the amount of any of these payments shall be included in the calculation of Restricted Payments;
The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Hexcel or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined in good faith by the Board of Directors whose resolution with respect thereto will be delivered to the trustee. Not later than the date of making any Restricted Payment, Hexcel will deliver to the trustee an officers' certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this "Restricted Payments" covenant were computed.
Incurrence of Indebtedness
Hexcel will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that Hexcel or any Restricted Subsidiary may Incur Indebtedness if, on the date of the Incurrence and after giving effect to the Incurrence on a pro forma basis (including a pro forma application of the net proceeds therefrom), the Consolidated Coverage Ratio exceeds 2.0 to 1.0.
The first paragraph of this covenant will not prohibit the Incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):
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preceding such date; provided that the amount of this clause (a) shall not exceed 55% of the total of clauses (a) and (b) of this clause (2) on any date of calculation; plus
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Hexcel will not Incur:
For purposes of determining compliance with this "Incurrence of Indebtedness" covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (11) above, or is entitled to be Incurred pursuant to the first paragraph of this covenant, Hexcel will be permitted to classify such item of Indebtedness on the date of its Incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant. Indebtedness under Credit Facilities outstanding on the date on which notes are first issued and authenticated under the indenture will be deemed to have been Incurred on such date in reliance on the exception provided by clauses (1) or (2) of the definition of Permitted Debt, as applicable.
In determining amounts of Indebtedness outstanding under this covenant and to avoid duplication, Indebtedness of a Person resulting from the grant by that Person of security interests with respect to, or from the issuance by that Person of guarantees of, or from the assumption of obligations with respect to letters of credit supporting, Indebtedness Incurred by that Person under the indenture, or Indebtedness which that Person is otherwise permitted to Incur under the indenture, shall not be deemed to be a separate Incurrence of Indebtedness by that Person.
Liens
Hexcel will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, Incur, assume or suffer to exist any Lien of any kind on any asset now owned or hereafter acquired, except Permitted Liens. Hexcel will not and will not permit any of its Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any pledge of or other Lien on the outstanding Equity Interests of Clark-Schwebel Holding Corp. or Clark-Schwebel Corporation.
Additionally, Hexcel will not, and will not permit any of its Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist any Lien of any kind:
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Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
Hexcel will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:
However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:
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Merger, Consolidation or Sale of Assets
Hexcel may not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not Hexcel is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of Hexcel and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person; unless:
In addition, Hexcel may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This "Merger, Consolidation or Sale of Assets" covenant will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Hexcel and any Domestic Restricted Subsidiary of Hexcel or a merger of a Domestic Restricted Subsidiary into Hexcel.
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Transactions with Affiliates
Hexcel will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:
The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:
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Additional Subsidiary Guarantees and Liens
If:
(each such event set forth in clauses (1) through (3) above, a "Triggering Event"), then such Subsidiary or group of Subsidiaries will become a Guarantor or Guarantors and execute a supplemental indenture within 10 Business Days of the date on which such Triggering Event occurred; provided, however, this covenant will not apply to all Subsidiaries that have properly been designated as Unrestricted Subsidiaries in accordance with the indenture for so long as they continue to constitute Unrestricted Subsidiaries; and provided, further, however, that clause (2) above will not apply to any Domestic Subsidiary with an EBITDA for the last four-quarter period for which internal financial statements are available of less than $250,000.
If Hexcel or any other Obligor at any time owns or acquires property (except property that is at such time an Excluded Asset) that is not subject to a valid, enforceable and perfected Note Lien held by the Joint Collateral Agent as security for the Note Obligations and any Parity Lien Obligations, or if Hexcel or any of its Subsidiaries at any time grants or permits to exist any consensual lien upon any property, except Credit Facility Collateral, constituting an Excluded Asset as security for any Parity Lien Obligation or Credit Facility Obligation, then Hexcel will, or will cause such Subsidiary to, concurrently:
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If Hexcel or any Subsidiary creates or permits to exist any Lien on any Foreign Subsidiary Collateral as security for any Obligations under any Qualified Credit Facility, then Hexcel will, or will cause such Subsidiary to, concurrently grant the Joint Collateral Agent valid, enforceable and perfected Liens upon such Foreign Subsidiary Collateral as security for Note Obligations and Parity Lien Obligations.
Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries
Hexcel will not sell any shares of Capital Stock of a Restricted Subsidiary, and shall not permit any Restricted Subsidiary to issue or sell shares of its Capital Stock, in each case, other than preferred stock within the meaning of "Qualified Preferred Stock," as defined in the indenture, except:
The issuance or sale of shares of Capital Stock of any Restricted Subsidiary of Hexcel will not violate the provisions above if the shares are issued or sold in connection with:
Business Activities
Hexcel will not, and will not permit any Restricted Subsidiary to, engage in any business other than a Permitted Business.
Advances to Restricted Subsidiaries
All advances to Restricted Subsidiaries made by Hexcel or any Guarantor after the date of the indenture will be evidenced by intercompany notes in favor of Hexcel or such Guarantor. These intercompany notes will be pledged pursuant to the Security Documents to secure the Note Obligations and any Parity Lien Obligations. Each intercompany note will be payable upon demand and will bear interest at the same rate as the notes. A form of intercompany note will be attached as an exhibit to the indenture.
Hexcel and any Guarantors will not permit any Restricted Subsidiary in respect of which Hexcel or such Guarantor, as applicable, is a creditor by virtue of an intercompany note to Incur any Indebtedness that is subordinate or junior in right of payment to any Indebtedness of such Restricted Subsidiary unless the Indebtedness so incurred is also subordinated in right of payment to all intercompany notes of such Restricted Subsidiary.
Payments for Consent
Hexcel will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for or as an
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inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the notes unless such consideration is offered to be paid and is paid to all holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
Reports
Whether or not required by the Commission's rules and regulations, so long as any notes are outstanding, Hexcel will furnish to the holders of notes, within the time periods specified in the Commission's rules and regulations:
If Hexcel has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management's Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of Hexcel and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of Hexcel.
All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on Hexcel's consolidated financial statements by Hexcel's certified independent accountants. In addition, following the consummation of the exchange offer contemplated by the registration rights agreement, Hexcel will file a copy of each of the reports referred to in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request.
If, at any time after consummation of the exchange offer contemplated by the registration rights agreement, Hexcel is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, Hexcel will nevertheless continue filing the reports specified in the preceding paragraph with the Commission within the time periods specified above unless the Commission will not accept such a filing. Hexcel agrees that it will not take any action for the purpose of causing the Commission not to accept any such filings. If, notwithstanding the foregoing, the Commission will not accept Hexcel's filings for any reason, Hexcel will post the reports referred to in the preceding paragraph on its website within the time periods that would apply if Hexcel were required to file those reports with the Commission.
In addition, Hexcel and the Guarantors agree that, for so long as any notes remain outstanding, at any time they are not required to file the reports required by the preceding paragraphs with the Commission, they will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act of 1933, as amended (the "Securities Act").
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Security Documents
The payment of the principal of and interest and premium and Special Interest, if any, on the notes when due, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by Hexcel pursuant to the notes or by any Guarantor pursuant to the Subsidiary Guarantees, the payment of all other Note Obligations and the performance of all other obligations of Hexcel and its Subsidiaries under the Note Documents are secured as provided in the Security Documents and will be secured by all Security Documents delivered as required or permitted by the indenture. Such security interests will also secure any Parity Lien Obligations.
Further Assurances
Hexcel will, and will cause each of its Subsidiaries to, do or cause to be done all acts and things which may be required, or which the Joint Collateral Agent from time to time may reasonably request, to assure and confirm that the Joint Collateral Agent holds, for the benefit of the holders of Note Obligations and Parity Lien Obligations, duly created, enforceable and perfected Liens upon the Collateral as contemplated by the indenture and the Security Documents, so as to render the same available for the security and benefit of the indenture and of the notes, Subsidiary Guarantees and all other Note Obligations and Parity Lien Obligations, according to the intent and purposes herein expressed.
Upon request of the Joint Collateral Agent at any time and from time to time, Hexcel will, and will cause each of its Subsidiaries to, promptly execute, acknowledge and deliver such Security Documents, instruments, certificates, notices and other documents and take such other actions as the Joint Collateral Agent may reasonably request to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred as contemplated by the indenture for the benefit of the holders of Note Obligations and the holders of Parity Lien Obligations. If Hexcel or such Subsidiary fails to do so, the Joint Collateral Agent is hereby irrevocably authorized and empowered, with full power of substitution, to execute, acknowledge and deliver such Security Documents, instruments, certificates, notices and other documents and, subject to the indenture, take such other actions in the name, place and stead of Hexcel or such Subsidiary, but the Joint Collateral Agent will have no obligation to do so and no liability for any action taken or omitted by it in good faith in connection therewith.
Hexcel will comply with the provisions of TIA §314(b).
To the extent applicable, Hexcel will cause TIA §313(b), relating to reports, and TIA §314(d), relating to the release of property or securities or relating to the substitution therefore of any property or securities to be subjected to the Lien of the Security Documents, to be complied with. Any certificate or opinion required by TIA §314(d) may be made by an officer of Hexcel except in cases where TIA §314(d) requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected or reasonably satisfactory to the trustee.
To the extent applicable, Hexcel will furnish to the trustee, prior to each proposed release of Collateral pursuant to the Security Documents:
If any Collateral is released in accordance with the indenture or any Security Document at a time when the trustee is not itself also the Joint Collateral Agent and if Hexcel has delivered the certificates and documents required by the Security Documents and this covenant, the trustee will determine
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whether it has received all documentation required by TIA §314(d) in connection with such release and, based on such determination and the opinion of counsel delivered pursuant to the indenture, will deliver a certificate to the Joint Collateral Agent setting forth such determination.
Joint Collateral Agent
Hexcel will appoint a bank or trust company to serve as Joint Collateral Agent for the benefit of the holders of the notes and the other Parity Lien Obligations from time to time. The Joint Collateral Agent may, but need not be, the same institution serving at any time as trustee under the indenture.
The Joint Collateral Agent will be subject to such directions as may be given it by the trustee from time to time as required or permitted by the indenture and by any trustee or other representative of any holder of any Parity Lien Obligations. The relative rights with respect to control of the Joint Collateral Agent will be specified in any Joint Collateral Agent Undertaking. Except as directed by the trustee as required or permitted by the indenture or any Joint Collateral Agent Undertaking, the Joint Collateral Agent will not be obligated:
Release of Note Liens
The Note Liens will be released with respect to the notes:
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Collateral Sharing With Parity Liens
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then, subject to the terms of the Joint Collateral Agent Undertaking, the trustee will direct the Joint Collateral Agent to execute and deliver such amendment to the Security Documents, if any, as may be necessary to accomplish the foregoing and the Joint Collateral Agent will countersign the Joinder Agreement thereby confirming that it will hold the Note Liens and all such Security Documents and the Liens granted thereby for the benefit of the holders of the Note Obligations and Parity Lien Obligations on the terms of such Joint Collateral Agent Undertaking.
Equal and Ratable Lien Sharing by Holders of Notes and Holders of Parity Lien Debt
Notwithstanding (i) anything to the contrary contained in the Note Documents or any indenture, agreement or instrument governing, evidencing or relating to any Parity Lien Obligations, (ii) the time, order or method of attachment of the Note Liens or the Parity Liens, (iii) the time or order of filing or recording of financing statements or other documents filed or recorded to perfect any Lien upon any Collateral, (iv) the time of taking possession or control over any Collateral or (v) the rules for determining priority under the Uniform Commercial Code or any other law governing relative priorities of secured creditors:
Amendment
No amendment or supplement to the provisions of the indenture governing the sharing of Collateral with Parity Liens will:
Any such amendment or supplement that imposes any obligation upon the Collateral Agent or adversely affects the rights of the Joint Collateral Agent in its individual capacity will become effective only with the consent of the Joint Collateral Agent.
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Intercreditor Provisions Relating to Working Capital Facility Liens
Equal and Ratable Sharing of Liens on Foreign Subsidiary Collateral
Notwithstanding (i) anything to the contrary contained in the Note Documents, any indenture, agreement or instrument governing, evidencing or relating to any Parity Lien Obligations or any Obligations in respect of any Qualified Credit Facility, (ii) the time, order or method of attachment of Liens securing any Obligations under any Qualified Credit Facility or any Note Liens or Parity Liens, (iii) the time or order of filing or recording of financing statements or other documents filed or recorded to perfect any Lien upon any Foreign Subsidiary Collateral or proceeds thereof, (iv) the time of taking possession or control over any Foreign Subsidiary Collateral or proceeds thereof or (v) the rules for determining priority under the Uniform Commercial Code or any other law governing relative priorities of secured creditors, and regardless of whether Liens upon Foreign Subsidiary Collateral or proceeds thereof are enforced by the Credit Facility Agent or the Joint Collateral Agent or any agent on their behalf:
The provisions set forth in clause (1) of the immediately preceding paragraph shall not apply to:
Disclaimer of Consensual Liens
The Joint Collateral Agent will not claim or enforce any consensual lien upon any Credit Facility Collateral.
The Credit Facility Agent will not claim or enforce any consensual lien upon any Collateral or Excluded Asset other than (a) Credit Facility Collateral and (b) Foreign Subsidiary Collateral and proceeds thereof.
The holders of Note Obligations and Parity Lien Obligations shall be entitled to receive and retain, free from any Lien securing Credit Facility Obligations, all payments made in cash by Hexcel or any other Obligor and all amounts received with respect to Note Obligations and Parity Lien Obligations through the exercise of a set-off or other similar right, even if such cash constitutes proceeds of property subject to a Lien securing Credit Facility Obligations.
The holders of Credit Facility Obligations shall be entitled to receive and retain, free from any Note Lien or Parity Lien thereon, all payments made in cash by Hexcel or any other Obligor and all amounts received with respect to Credit Facility Obligations through the exercise of a set-off or other similar right, even if such cash constitutes proceeds of property subject to a Note Lien or Parity Lien.
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If any cash proceeds of Credit Facility Collateral or Foreign Subsidiary Collateral are converted into, or invested in property subject to Note Liens or Parity Liens at any time when the Joint Collateral Agent has not received written notice from the Credit Facility Agent or any holder of Indebtedness outstanding under a Qualified Credit Facility stating that such Indebtedness has become due and payable in full (whether at maturity, upon acceleration or otherwise), then all Liens upon such cash proceeds securing Credit Facility Obligations shall be released and discharged concurrently with such conversion or investment.
If any cash proceeds of Collateral are converted into or invested in property subject to Liens securing Credit Facility Obligations at any time when the Credit Facility Agent has not received written notice from the Joint Collateral Agent or any holder of notes or Parity Lien Debt stating that the notes or Parity Lien Debt has become due and payable in full (whether at maturity, upon acceleration or otherwise), then all Note Liens and Parity Liens upon such cash proceeds shall be released and discharged concurrently with such conversion or investment.
The provisions of this section do not apply to, restrict or affect any judicial lien, including any attachment or judgment lien.
Consent to License to Use Intellectual Property; Access to Information; Access to Real Property to Process and Sell Inventory
If so requested at any time by the Credit Facility Agent, the Joint Collateral Agent shall deliver its written consent (given without any representation, warranty or obligation whatsoever) to any grant by any Obligor to the Credit Facility Agent of a non-exclusive royalty-free license to use any patent, trademark or proprietary information of such Obligor that is subject to a consensual Lien held by the Joint Collateral Agent, in connection with the enforcement of any consensual Lien held by the Credit Facility Agent upon any inventory of Hexcel or any Subsidiary and to the extent the use of such patent, trademark or proprietary information is necessary or appropriate, in the good faith opinion of the Credit Facility Agent, to manufacture, produce, complete, remove or sell any such inventory in any lawful manner. Any consent so delivered by the Joint Collateral Agent shall be binding on its successors and assigns, including a purchaser of the patent, trademark or proprietary information subject to such license at a foreclosure sale conducted in foreclosure of any Note Lien or Parity Lien thereon.
If the Joint Collateral Agent or a purchaser at a foreclosure sale conducted in foreclosure of any Note Lien or Parity Lien takes actual possession of any documentation of Hexcel or a Subsidiary (whether such documentation is in the form of a writing or is stored in any data equipment or data record in the physical possession of the Joint Collateral Agent or the foreclosure purchaser), then upon request of the Credit Facility Agent and reasonable advance notice, the Joint Collateral Agent or such foreclosure purchaser will permit the Credit Facility Agent or its representative to inspect and copy such documentation if and to the extent the Credit Facility Agent certifies to the Joint Collateral Agent that:
If, upon enforcement of any Note Lien or Parity Lien held by the Joint Collateral Agent, the Joint Collateral Agent or a purchaser at a foreclosure sale conducted in foreclosure of any Note Lien or
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Parity Lien takes actual possession of any real property, equipment or fixtures of any Obligor, then, if so requested by the Credit Facility Agent and upon reasonable advance notice, the Joint Collateral Agent or such foreclosure purchaser will allow the Credit Facility Agent and its officers, employees and agents (but not any of its transferees) reasonable and non-exclusive access to and use of such real property, equipment and fixtures, for a period not exceeding 180 consecutive calendar days (the "Processing and Sale Period"), as necessary or reasonably appropriate to manufacture, produce, complete, remove or sell, in any lawful manner, any inventory upon which the Credit Facility Agent holds a Lien, subject to the following conditions and limitations:
The Joint Collateral Agent and such purchaser (i) shall provide reasonable cooperation, reasonable support and reasonable assistance to the Credit Facility Agent in connection with the manufacture, production, completion, removal and sale of any Credit Facility Collateral by the Credit Facility Agent as provided above and (ii) shall be entitled to receive, from the Credit Facility Agent, fair compensation and reimbursement for their reasonable costs and expenses incurred in connection with such cooperation, support and assistance to the Credit Facility Agent. The Joint Collateral Agent and such purchaser (or its transferee or successor) shall not otherwise be required to manufacture, produce, complete, remove, insure, protect, store, safeguard, sell or deliver any inventory subject to any Lien held by the Credit Facility Agent or to provide any support, assistance or cooperation to the Credit Facility Agent in respect thereof.
Amendment; Waiver
No amendment or supplement to the provisions set forth above under the caption "—Intercreditor Provisions Relating to Working Capital Facility Liens" will:
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Any such amendment or supplement that:
Enforcement
The rights and obligations set forth in or arising under the indenture and described under the caption "—Intercreditor Provisions Relating to Working Capital Facility Liens" are enforceable only by the Joint Collateral Agent and Credit Facility Agent under a Qualified Credit Facility against each other (and their respective successors, including, but only to the extent expressly provided herein, a purchaser at a foreclosure sale conducted in foreclosure of Note Liens or Parity Liens) and against the Obligors. No other Person (including holders of Note Obligations, Parity Lien Obligations or Credit Facility Obligations) shall be entitled to enforce any such right or shall be obligated to perform any such obligation; however, such provisions will be binding on the holders of Note Obligations, Parity Lien Obligations and Credit Facility Obligations.
Relative Rights
The provisions set forth under the caption "—Intercreditor Provisions Relating to Working Capital Facility Liens" set forth certain relative rights, as lienholders, of the Collateral Agent and the Credit Facility Agent. Nothing in the indenture will:
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Events of Default and Remedies
Each of the following is an Event of Default:
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However, a default under clauses (4), (5) or (7) will not constitute an Event of Default until the trustee or the holders of 25% in principal amount of the outstanding notes notify Hexcel of the default and Hexcel does not cure the default within the time specified after receipt of the notice.
If an Event of Default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the outstanding notes may declare the principal of and accrued but unpaid interest and Special Interest on all the notes to be due and payable. Upon this declaration, the principal, interest and Special Interest, if any, shall be due and payable immediately. If an Event of Default relating to events of bankruptcy, insolvency or reorganization of Hexcel occurs and is continuing, the principal of, interest and Special Interest, if any, on all the notes will become and be immediately due and payable. Under some circumstances, the holders of a majority in principal amount of the outstanding notes may rescind any acceleration with respect to the notes and its consequences.
Except to enforce the right to receive payment of principal, premium, Special Interest, if any, or interest when due, no holder of a note may pursue any remedy with respect to the indenture or the notes unless:
The indenture provides that if a Default occurs and is continuing and is known to the trustee, the trustee must mail to each holder of the notes notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of, interest or Special Interest, on any note, the trustee may withhold notice if a committee of its trust officers in good faith determines that withholding notice is in the interests of the holders of the notes. In addition, Hexcel is required to deliver to the trustee, after the end of each fiscal year, a certificate indicating whether the signers of the certificate know of any Default that occurred during the previous year. Hexcel also is required to deliver to the trustee, within 30 days after its occurrence, written notice of any event which would constitute a Default, its status and what action Hexcel is taking or proposes to take in respect to the event.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of Hexcel or any Guarantor, as such, will have any liability for any obligations of Hexcel or the Guarantors under the notes, the indenture, the Subsidiary Guarantees, the Security Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.
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Legal Defeasance and Covenant Defeasance
Hexcel may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes and all obligations of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal Defeasance") except for:
In addition, Hexcel may, at its option and at any time, elect to have the obligations of Hexcel and the Guarantors released with respect to certain covenants that are described in the indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default and Remedies" will no longer constitute an Event of Default with respect to the notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
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The Collateral will be released in whole as provided above under the caption "—Security" upon a Legal Defeasance or Covenant Defeasance in accordance with the provisions described in this section.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the indenture or the notes may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any existing default or compliance with any provision of the indenture or the notes may be waived with the consent of the holders of a majority in principal amount of the then outstanding notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes). An amendment or supplement to, or waiver of, the provisions of the indenture described above under the caption "—Intercreditor Provisions Relating to Working Capital Facility Liens" will become effective only as set forth under the caption "—Intercreditor Provisions Relating to Working Capital Facility Liens—Amendment; Waiver."
Without the consent of each holder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting holder):
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In addition, no amendment or supplement to the provisions of the Security Documents described above under "—Security" will impose any obligation on the trustee or adversely affect the rights of the trustee in its individual capacity without the consent of the trustee.
Notwithstanding the preceding, without the consent of any holder of notes, Hexcel, the Guarantors and the trustee may amend or supplement the indenture, the Subsidiary Guarantees, the notes or any Security Documents:
The consent of the holders of the notes is not necessary under the indenture to approve the particular form of any proposed amendment. It is sufficient if the consent approves the substance of the proposed amendment.
After an amendment under the indenture becomes effective, Hexcel is required to mail to holders of the notes a notice briefly describing the amendment. However, the failure to give notice to all holders of the notes, or any defect in the notice, will not impair or affect the validity of the amendment.
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The indenture will be discharged and will cease to be of further effect as to all notes issued thereunder, when:
In addition, Hexcel must deliver an officers' certificate and an opinion of counsel reasonably acceptable to the trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of Hexcel or any Guarantor, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign.
The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture provides that in case an Event of Default occurs and is continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of notes, unless such holder has offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.
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Additional Information
Anyone who receives this prospectus may obtain a copy of the indenture and the Security Documents without charge by writing to Hexcel Corporation, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut, 06901, Attention: Investor Relations.
Depository Procedures
The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. Hexcel takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters.
DTC has advised Hexcel that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
DTC has also advised Hexcel that, pursuant to procedures established by it:
Investors in the Global Notes who are Participants in DTC's system may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are Participants in such system. All interests in a Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.
Except as described below, owners of interest in the Global Notes will not have notes registered in their names, will not receive physical delivery of notes in certificated form and will not be considered the registered owners or "holders" thereof under the indenture for any purpose.
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Payments in respect of the principal of, and interest and premium, if any, on, a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the indenture. Under the terms of the indenture, Hexcel and the trustee will treat the Persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither Hexcel, the trustee nor any agent of Hexcel or the trustee has or will have any responsibility or liability for:
DTC has advised Hexcel that its current practice, upon receipt of any payment in respect of securities such as the notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or Hexcel. Neither Hexcel nor the trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the notes, and Hexcel and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the notes described herein, cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.
DTC has advised Hexcel that it will take any action permitted to be taken by a holder of notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute such notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue
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such procedures at any time. Neither Hexcel nor the trustee nor any of their respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for definitive notes in registered certificated form ("Certificated Notes") if:
In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures) and will bear a customary restrictive legend unless that legend is not required by applicable law.
Exchange of Certificated Notes for Global Notes
Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the trustee a written certificate (in the form provided in the indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such notes.
Same Day Settlement and Payment
Hexcel will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, and interest) by wire transfer of immediately available funds to the accounts specified by the Global Note holder. Hexcel will make all payments of principal, interest and premium, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the holders of the Certificated Notes or, if no such account is specified, by mailing a check to each such holder's registered address. Hexcel expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.
Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised Hexcel that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC's settlement date.
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Certain Definitions
Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.
"Affiliate" means:
For the purposes of this definition, "control" when used with respect to any person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. For purposes of the covenants described under the captions "—Repurchase at the Option of the Holders—Asset Sales" and "—Certain Covenants—Affiliate Transactions "only, "affiliate" shall also mean any beneficial owner of capital stock representing 10% or more of the total voting power of the voting stock (on a fully diluted basis) of Hexcel or of rights or warrants to purchase such capital stock (whether or not currently exercisable) and any person who would be an affiliate of any such beneficial owner pursuant to the first sentence hereof.
"Asset Sale" means any direct or indirect sale, lease, transfer, conveyance or other disposition (or series of related sales, leases, transfers, conveyances or dispositions) of shares of Capital Stock of a Restricted Subsidiary (other than directors' qualifying shares), property or other assets (each referred to for the purposes of this definition as a "disposition") by Hexcel or any Restricted Subsidiary (including any disposition by means of a merger, consolidation or similar transaction) involving an amount in excess of $3.0 million other than:
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"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "Person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "Person" will be deemed to have beneficial ownership of all securities that such "Person" has the right to acquire by conversion or exercise of other securities, whether or not such right is exercisable immediately. The terms "Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means the board of directors of Hexcel or any committee thereof duly authorized to act on behalf thereof.
"Borrowing Base" means, as of any date, an amount equal to:
"Capital Lease Obligation" means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP. The amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP. The Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.
"Capital Stock" means:
"Cash Equivalents" means:
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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), at the time as of which any investment therein is made, by at least one "nationally recognized statistical rating organization" (as defined in Rule 436 under the Securities Act);
"Clark-Schwebel Lease" means the Lease Agreement dated as of September 15, 1998 between CSI Leasing Trust, William J. Wade and Hexcel CS Corporation.
"Collateral" means property in which Hexcel or any other Obligor now or hereafter has rights (or the power to transfer a security interest) that is subject to a Note Lien.
"Collateral Agency Agreement" means the Collateral Agency Agreement dated March 19, 2003 among Hexcel, the Joint Collateral Agent and the representative of Parity Lien Debt.
"Consolidated Coverage Ratio" as of any date of determination means the ratio of (x) the aggregate amount of EBITDA for the most recent four consecutive fiscal quarters ending at least 45 days prior to the date of such determination to (y) Consolidated Interest Expense for such four fiscal quarters; provided, however, that:
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For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro forma calculations shall be determined in good faith by a responsible financial or accounting officer of Hexcel. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any interest rate protection agreement applicable to such Indebtedness if such interest rate protection agreement has a remaining term as at the date of determination in excess of 12 months).
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"Consolidated Interest Expense" means, for any period, the sum of, without duplication:
Notwithstanding the foregoing, in no event will:
be included in the calculation of Consolidated Interest Expense.
"Consolidated Net Income" means, for any period, the net income (loss) of Hexcel and its consolidated Subsidiaries; provided, however, that there shall not be included in such Consolidated Net Income:
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Notwithstanding the foregoing, for the purposes of the covenant described under the caption "—Certain Covenants—Restricted Payments" only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to Hexcel or a Restricted Subsidiary to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under such covenant pursuant to clause (3)(d) of the first paragraph thereof.
"Convertible Preferred Stock" means Hexcel's series A and series B convertible preferred stock.
"Credit Facilities" means:
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"Credit Facility Agent" means, at any time in respect of any Qualified Credit Facility, the administrative agent, collateral agent or collateral trustee for holders of Obligations under such Qualified Credit Facility which holds the Liens securing such Obligations.
"Credit Facility Collateral" means, at any time in respect of any Qualified Credit Facility:
in the case of each of paragraphs (1) and (2), together with all rights under the contract for such sale relating to or affecting the creation or collection of such account or the completion or sale of such inventory, together with all Liens, letters of credit, guarantees and other obligations securing or supporting such accounts, together with the cash and non-cash proceeds thereof;
"Credit Facility Indebtedness" means any and all Indebtedness and other amounts payable under or in respect of the Credit Facilities including principal, premium (if any), interest (including interest accruing at the contract rate specified in the Credit Facilities (including any rate applicable upon default) on or after the filing of any petition in bankruptcy, or the commencement of any similar state, federal or foreign reorganization or liquidation proceeding, relating to Hexcel and interest that would accrue but for the commencement of such proceeding whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.
"Credit Facility Obligations" means Indebtedness under a Qualified Credit Facility permitted to be incurred under clauses (1), (2) or (11) of the second paragraph under the caption "—Certain Covenants—Incurrence of Indebtedness" and other Obligations (not constituting Indebtedness) under such Credit Facility (which may, but need not, include Hedging Obligations and obligations under deposit account services agreements and cash management contracts with any lender that is or at any time was party to such Credit Facility or any of its Affiliates).
"Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event (1) matures or is mandatorily redeemable pursuant to a
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sinking fund obligation or otherwise, (2) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock or (3) is mandatorily redeemable or must be purchased, upon the occurrence of certain events or otherwise, in whole or in part, in each case on or prior to the first anniversary of the Stated Maturity of the Securities; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the first anniversary of the Stated Maturity of the Securities shall not constitute Disqualified Stock if (1) the "asset sale" or "change of control" provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the terms applicable to the notes described under the caption "—Repurchase at the Option of the Holders" and (2) any such requirement only becomes operative after compliance with such terms applicable to the notes, including the purchase of any notes tendered pursuant thereto; and provided, further, however, that neither of Hexcel's series A preferred stock nor its series B preferred stock shall be deemed to be Disqualified Stock.
"Domestic Foreign Holding Company" means any Subsidiary that was formed under the laws of the United States or any state of the United States or the District of Columbia or that owns, directly or indirectly, the stock of one or more Foreign Subsidiaries; provided that the fair market value of the gross assets of such Subsidiary (not including the portion of such fair market value which is attributable to (x) the stock of any Foreign Subsidiary owned, directly or indirectly, by such Subsidiary and (y) any asset held directly by such Subsidiary for less than 31 calendar days) does not exceed $1.0 million.
"Domestic Subsidiary" means any Restricted Subsidiary of Hexcel that was formed under the laws of the United States or any state of the United States or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of Hexcel; provided, however, that a Domestic Foreign Holding Company shall not constitute a Domestic Subsidiary.
"EBITDA" for any period for any Person means the sum of Consolidated Net Income plus, without duplication, the following to the extent deducted in calculating such Consolidated Net Income:
Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders.
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"Equally and Ratably" means:
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Obligations, on the other hand, that such Liens, guarantees, supporting obligations or loss sharing rights or proceeds:
For the purposes of clause (1) in this definition, (A) the "Credit Facility Sharing Amount" shall consist solely of reimbursement obligations in respect of letters of credit that are outstanding on the Sharing Rate Determination Date, the principal of and interest and premium (if any) of Indebtedness, including the amount of any unfunded revolver commitments that are funded within 30 calendar days of the Sharing Rate Determination Date, constituting Credit Facility Obligations under a Qualified Credit Facility and Hedging Obligations (included at the termination value thereof) and Obligations under deposit account services agreements and cash management contracts with any lender that is or at any time was party to such Qualified Credit Facility or any of its Affiliates; and (B) the "Sharing Ratio Determination Date" shall be the 30th day following the earliest date on which the Indebtedness under the Qualified Credit Facility has first become due and payable in full, the notes have first become due and payable in full, or any Parity Lien Debt has first become due and payable in full, in each case at maturity, by acceleration or otherwise provided, however, that in the event that any Hedging Obligation is terminated within five business days after the earliest such date, the Sharing Ratio Determination Date for such Hedging Obligation shall be such termination date otherwise it shall be the earliest such date.
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"Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of common stock of Hexcel pursuant to an effective registration statement under the Securities Act or in a valid private placement.
"Excluded Assets" means:
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"Existing Indebtedness" means Indebtedness of Hexcel and its Subsidiaries (other than Indebtedness under the New Senior Credit Facility) in existence on the date of the indenture, until such amounts are repaid.
"Existing Joint Ventures" means:
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"Financing Transactions" means:
"Foreign Subsidiary" means a Subsidiary that is incorporated in a jurisdiction other than, and the majority of the assets of which are located outside of, the United States, a State thereof and the District of Columbia.
"Foreign Subsidiary Collateral" means
"GAAP" means generally accepted accounting principles in the United States as in effect from time to time.
"Governance Agreement" means 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.
"guarantee" means any obligation, contingent or otherwise, of any person directly or indirectly guaranteeing any Indebtedness of any other person and any obligation, direct or indirect, contingent or otherwise, of such person:
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provided, however, that the term "guarantee" shall not include:
The term "guarantee" used as a verb has a corresponding meaning.
"Guarantors" means each of:
and their respective successors and assigns.
"Hedging Obligations" of any Person means the obligations of such Person pursuant to any interest rate protection agreement or currency exchange protection agreement or other similar agreement or arrangement involving interest rates, currencies, commodities or otherwise.
"Incur" means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary; provided, further, that any amendment, modification or waiver of any provision of any document pursuant to which Indebtedness was previously Incurred shall not be deemed to be an Incurrence of Indebtedness as long as such amendment, modification or waiver does not:
The term "Incurrence" when used as a noun shall have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of determination (without duplication):
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For purposes of this definition, the obligation of such Person with respect to the redemption, repayment or repurchase price of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price shall be calculated in accordance with the terms of such stock as if such stock were redeemed, repaid or repurchased on any date on which Indebtedness shall be required to be determined pursuant to the indenture; provided, however, that if such stock is not then permitted to be redeemed, repaid or repurchased, the redemption, repayment or repurchase price shall be the book value of such stock as reflected in the most recent financial statements of such Person. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the amount of liability required by GAAP to be accrued or reflected on the most recently published balance sheet of such Person; provided, however, that:
"Intercreditor Agreement" means the Intercreditor and Agency Agreement, dated March 19, 2003, among the Joint Collateral Agent, the Trustee, Fleet Capital Corporation as the Administrative Agent for the lenders and Fleet Capital Corporation as Intercreditor Agent and Security Trustee (as such agreement may be amended, modified, supplemented or restated).
"Investment" by any Person in any other Person means any direct or indirect advance, loan (other than advances to customers or suppliers in the ordinary course of business that are recorded as
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accounts receivable on the balance sheet of such former Person) or other extension of credit (including by way of guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such latter Person that are or would be classified as investments on a balance sheet of such former Person prepared in accordance with GAAP. In determining the amount of any Investment in respect of any property or assets other than cash, such property or asset shall be valued at its fair market value at the time of such Investment (unless otherwise specified in this definition), as determined in good faith by the Board of Directors. For purposes of the definition of "Unrestricted Subsidiary," the definition of "Restricted Payment" and the covenant described under the caption "—Certain Covenants—Restricted Payments,"
"Joint Collateral Agent" means a bank or trust company that:
in its capacity as such collateral agent, and any successor in such capacity. The Joint Collateral Agent is currently HSBC Bank USA.
"Joint Collateral Agent Undertaking" means a declaration of trust for a collateral trust, a collateral trust agreement or a collateral agency agreement executed and delivered by Hexcel and the Joint Collateral Agent on customary terms reasonably satisfactory to the trustee, which shall include assumption by the Joint Collateral Agent of all of the obligations of the Joint Collateral Agent set forth in or arising under the indenture.
"Joint Venture" means the Existing Joint Ventures, and any other joint venture, partnership or other similar arrangement whether in corporate, partnership or other legal form which is formed by Hexcel or any Restricted Subsidiary and one or more Persons which own, operate or service a Permitted Business.
"Joint Venture Subsidiary" means a Restricted Subsidiary formed by Hexcel or any Restricted Subsidiary and one or more Persons which own, operate or service a Permitted Business.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the
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nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Majority Lenders" means, at any time in respect of any Qualified Credit Facility, lenders party thereto then holding or committed to provide at least a majority in principal amount of the aggregate loans, letters of credit and other extensions of credit outstanding or committed thereunder.
"Net Available Cash" from an Asset Sale means the aggregate amount of cash received in respect of an Asset Sale (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to such properties or assets or received in any other noncash form) therefrom, in each case net of:
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"Net Cash Proceeds" with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys' fees, accountants' fees, printing costs, underwriters' or placement agents' fees, discounts or commissions and brokerage, stock exchange listing fees, consultant and other fees actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.
"New Senior Credit Facility" means that certain Credit Agreement, by and among Hexcel and the lenders thereunder, providing for up to $115.0 million of revolving credit borrowings and letters of credit, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Non-Recourse Debt" means Indebtedness:
"Note Documents" means the indenture, the notes, the Subsidiary Guarantees, the Security Documents, the Joint Collateral Agent Undertaking and each Intercreditor Agreement.
"Note Lien" means, to the extent securing Note Obligations, a Lien granted by a Security Document as security for Note Obligations and any Parity Lien Obligations.
"Note Obligations" means the notes (including all additional notes), the Subsidiary Guarantees and all other Obligations of any Obligor under the Note Documents.
"Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
"Obligor" means Hexcel, the Guarantors and each other Subsidiary which has granted the Joint Collateral Agent a Lien upon any of its property as security for any Note Obligations.
"Parity Lien" means, to the extent securing Parity Lien Obligations, a Lien that (a) is granted by a Security Document and held by the Joint Collateral Agent as security for Note Obligations and Parity
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Lien Obligations and (b) is not subordinated, by contract or pursuant to a judicial order requiring equitable subordination, to any other Lien.
"Parity Lien Debt" means the principal of and interest and premium (if any) on Indebtedness of Hexcel (other than additional notes) permitted to be incurred if: (x) the condition set forth in the first paragraph of the covenant entitled "—Certain Covenants—Incurrence of Indebtedness" is satisfied; or (y)such Indebtedness is Permitted Debt permitted to be incurred pursuant to clause (11) of the second paragraph of the covenant entitled "—Certain Covenants—Incurrence of Indebtedness" and such Indebtedness:
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"Parity Lien Obligations" means Parity Lien Debt and all other Obligations of any Obligor under each indenture or agreement governing, securing or relating to any Parity Lien Debt.
"Parity Lien Representatives" means the representatives of the holders of Parity Lien Debt who become a party to the Collateral Agency Agreement.
"Permitted Business" means any business conducted by Hexcel and its Restricted Subsidiaries on the issue date and any business reasonably related, ancillary or complementary to the business of Hexcel and its Restricted Subsidiaries on the issue date.
"Permitted Holders" means:
"Permitted Investments" means an Investment:
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"Permitted Liens" means:
"Permitted Prior Liens" means (a) Liens described in clauses (6), (7) or (9) of the definition of "Permitted Liens" and (b) Liens that arise by operation of law and are not voluntarily granted, to the extent entitled by law to priority over the security interests created by the Security Documents.
"Permitted Refinancing Indebtedness" means Indebtedness that refunds, refinances, replaces, renews, repays or extends (including pursuant to any defeasance or discharge mechanism) (collectively, "refinances," and "refinanced" shall have a correlative meaning) any Indebtedness Incurred in compliance with the indenture (including Indebtedness of Hexcel that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of
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another Restricted Subsidiary) including Indebtedness that refinances Permitted Refinancing Indebtedness; provided, however, that:
provided, further, however, that Permitted Refinancing Indebtedness shall not include Indebtedness of a Subsidiary that refinances Indebtedness of Hexcel.
"Person" means any individual, corporation, partnership, Joint Venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
"Plans" means any employee benefit plan, retirement plan, deferred compensation plan, restricted stock plan, health, life, disability or other insurance plan or program, employee stock purchase plan, employee stock ownership plan, pension plan, stock option plan or similar plan or arrangement of Hexcel or any Subsidiary, or any successor thereof and "Plan" shall have a correlative meaning.
"Qualified Credit Facility" means a Credit Facility:
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The New Senior Credit Facility shall constitute a Qualified Credit Facility upon due authorization, execution and delivery by the Administrative Agent thereunder of the Intercreditor Agreement. So long as the New Senior Credit Facility remains outstanding, no other Credit Facility shall become a Qualified Credit Facility unless such Credit Facility is permitted under the terms of the New Senior Credit Facility and this Indenture.
"Registration Rights Agreements" means (1) the Registration Rights Agreement among Hexcel, Berkshire Fund V, Limited Partnership, Berkshire Fund VI, Limited Partnership, Berkshire Investors LLC, Greenbriar Co-Investment Partners, L.P. and Greenbriar Equity Fund, L.P. and (2) the Amended and Restated Registration Rights Agreement 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.
"Restricted Investment" means an Investment other than a Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
"Restructuring Plan" means the business consolidation and restructuring actions with respect to: (i) the EuroCore rationalization involving the Duxford, England, Welkenraedt, Belgium and Casa Grande, Arizona facilities; (ii) the consolidation and reorganization of carbon weaving and decorative fabric production involving the Decines and Les Avenieres, France facilities; (iii) the consolidation and reorganization of fabric production between the Anderson, South Carolina, Washington, Georgia and Statesville, North Carolina facilities and (iv) equipment relocation to the Salt Lake City, Utah facility.
"Secured Indebtedness" means any Indebtedness of Hexcel secured by a Lien.
"Secured Parties" means the Joint Collateral Agent, the trustee, the holders from time to time of the notes, each Parity Lien Representative and each holder from time to time of Parity Lien Debt.
"Security Documents" means the Joint Collateral Agent Undertaking and one or more security agreements, pledge agreements, collateral assignments, mortgages, deed of trust or other grants or transfers for security executed and delivered by Hexcel or any other Obligor creating (or purporting to create) a Lien upon property (other than Excluded Assets) owned or to be acquired by Hexcel or such other Obligor in favor of the Joint Collateral Agent or the trustee for the benefit of the holders of the notes (or in favor of any agent of the Joint Collateral Agent or the trustee), the Subsidiary Guarantees and any other Obligations in respect of the Note Obligations.
"Senior Indebtedness" means:
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provided, however, that Senior Indebtedness shall not include:
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"Senior Subordinated Indebtedness" means Hexcel's 93/4% Senior Subordinated Notes Due 2009 and any other Indebtedness of Hexcel that specifically provides that such Indebtedness is to rank pari passu with the 93/4% Senior Subordinated Notes Due 2009 in right of payment and is not subordinated by its terms in right of payment to any Indebtedness or other obligation of Hexcel which is not Senior Indebtedness.
"Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof.
"Specified Properties" shall mean Hexcel's manufacturing plants located in Lancaster, Ohio, Livermore, California, Welkenraedt, Belgium and Lodi, New Jersey and the property referred to as "Plant Three" in Kent, Washington.
"Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
"Stockholders Agreement" means 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.
"Subordinated Notes" means Hexcel's:
"Subordinated Obligation" means any Indebtedness of Hexcel (whether outstanding on the issue date or thereafter Incurred) that is contractually subordinated or junior in right of payment to the notes pursuant to a written agreement, including the Subordinated Notes.
"Subsidiary" means, with respect to any specified Person:
"Unrestricted Subsidiary" means:
The Board of Directors may designate any Subsidiary of Hexcel (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any capital stock or Indebtedness of, or holds any lien on any property of, Hexcel or any other Subsidiary of Hexcel that is not a Subsidiary of the Subsidiary to be so designated; provided,
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however, that either (A) the Subsidiary to be so designated has total assets of $1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such designation would be permitted under the covenant described under the caption "—Certain Covenants—Restricted Payments."
The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation (x) Hexcel could Incur $1.00 of additional Indebtedness under the first paragraph of the covenant described under the caption "—Certain Covenants—Incurrence of Indebtedness" and (y) no Default shall have occurred and be continuing. Any such designation by the Board of Directors shall be evidenced to the trustee by promptly filing with the trustee a copy of the resolution of the Board of Directors giving effect to such designation and an officers' certificate certifying that such designation complied with the foregoing provisions.
"Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors or other similar governing entity of such Person.
"Weighted Average Life to Maturity" means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing (x) the sum of the products of the numbers of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or scheduled redemption multiplied by the amount of such payment by (y) the sum of all such payments.
"Wholly Owned Restricted Subsidiary" of any specified Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) will at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
This prospectus is to be used by Goldman Sachs and other broker-dealer subsidiaries of Goldman Sachs in connection with offers and sales of the notes in market-making transactions effected from time to time. Goldman Sachs may act as a principal or agent in such market-making transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties when it acts as agent for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices.
Certain affiliates of Goldman Sachs beneficially own Hexcel equity securities, which in the aggregate constituted approximately 38% of the equity ownership of Hexcel as of March 31, 2003. Goldman Sachs has informed us that it does not intend to confirm sales of the notes to any accounts over which it exercises discretionary authority without the prior specific written approval of such transactions by the customer.
We have been advised by Goldman Sachs that, subject to applicable laws and regulations, Goldman Sachs currently intends to continue to make a market in the notes. However, Goldman Sachs is not obligated to do so, and any such market-making may be interrupted or discontinued at any time without notice. In addition, such market-making activity will be subject to the limits imposed by the Securities Act of 1933 and the Securities Exchange Act of 1934. There can be no assurance that an active trading market will be sustained. See "Risk Factors—If a reasonably active trading market does not continue for these notes you may not be able to resell them."
Goldman Sachs and its affiliates may in the future engage in commercial and/or investment banking transactions with Hexcel and its affiliates. Goldman Sachs acted as an initial purchaser in
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connection with the initial sale of the notes in March 2003 and received a customary underwriting discount in connection with that transaction. Goldman Sachs and its affiliates may, from time to time, trade the notes for its own account in connection with its principal activities. Such sales may be made pursuant to this prospectus or otherwise pursuant to an applicable exemption from registration. Additionally, in the future, Goldman Sachs and its affiliates may, from time to time, own notes as a result of its market-making activities.
Hexcel will not receive any of the proceeds of such sales of the notes but will pay all expenses it incurs in connection with the registration of the notes.
Hexcel and Goldman Sachs have entered into a registration rights agreement with respect to the use by Goldman Sachs of this prospectus. Pursuant to such agreement, Hexcel has agreed to indemnify Goldman Sachs against certain liabilities, including liabilities under the Securities Act.
Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York, has passed upon the validity and enforceability of the notes.
The consolidated financial statements of Hexcel Corporation, Hexcel S.A. and Hexcel Holdings (UK) Limited, incorporated in this prospectus by reference to the Hexcel Corporation Annual Report on Form 10-K/A (Amendment No. 3) for the year ended December 31, 2002 have been so incorporated in reliance on the reports of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.
The financial statements of BHA Aero Composite Parts Co., Ltd. as of and for the years ended December 31, 2002 and 2001 incorporated in this prospectus by reference from Hexcel Corporation's Form 10-K/A (Amendment No. 3) have been audited by Deloitte Touche Tohmatsu, independent auditors, as stated in their report (which report expresses an unqualified opinion and includes an explanatory paragraph referring to BHA Aero Composite Parts Co., Ltd.'s ability to continue as a going concern), which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of Asahi-Schwebel Co., Ltd. as of and for the year ended March 31, 2003 incorporated in this prospectus by reference from Hexcel Corporation's Form 10-K/A (Amendment No. 3) have been audited by Deloitte Touche Tohmatsu, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following sets forth expenses, other than underwriting fees and commissions, expected to be borne by the Registrant, in connection with the distribution of the Securities being registered:
| Securities and Exchange Commission registration fee | 0 | |||
| NASD filing fee | 0 | |||
| Blue Sky fees and expenses | 0 | |||
| Rating agency fees | 0 | |||
| Transfer agent fees | 0 | |||
| Trustee's fees | 0 | |||
| Legal | $ | 17,500 | ||
| Printing | 0 | |||
| Accounting | $ | 30,000 | ||
| Miscellaneous | $ | 2,500 | ||
| Total | $ | 50,000 | ||
Hexcel will pay all expenses it incurs in connection with the distribution of the Securities being registered.
Item 15. Indemnification of Directors and Officers
Set forth below is a description of certain provisions of the Delaware General Corporation Law (the "DGCL"), the Certificates of Incorporation of the Company, Clark-Schwebel Corporation, Clark-Schwebel Holding Corp., Hexcel Pottsville Corporation and CS Tech-Fab Holding, Inc. (together with Clark-Schwebel Corporation, Clark-Schwebel Holding Corp. and Hexcel Pottsville Corporation, the "Guarantors") and the Hexcel Corporation 2003 Incentive Stock Plan (the "Incentive Stock Plan"), as such provisions relate to the indemnification of the directors and officers of the Company. This description is intended only as a summary and is qualified in its entirety by reference to the applicable provisions of the DGCL, the Certificate of Incorporation of the Company, the Bylaws of the Company and the Incentive Stock Plan, which are incorporated herein by reference.
Section 145 of the DGCL provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at its request in such capacity at another corporation or business organization, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal proceeding, had no reasonable cause to believe that such person's conduct was unlawful. A Delaware corporation may indemnify officers and directors against expenses (including attorneys' fees) in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses that such officer or director actually and reasonably incurred.
Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of a corporation shall not be personally liable to the corporation or its stockholders for
II-1
monetary damages for breach of his fiduciary duty as a director; provided, however, that such clause shall not apply to any liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (Liability of Directors for Unlawful Payment of Dividend or Unlawful Stock Purchase or Redemption) or (iv) for any transaction from which the director derived an improper personal benefit.
Each of the Certificate of Incorporation of the Company and each Guarantor provides for the elimination of personal liability of a director for breach of fiduciary duty, to the full extent permitted by the DGCL. Each Certificate of Incorporation also provides that the Company and each Guarantor, as applicable, shall indemnify its respective directors and officers to the full extent permitted by the DGCL; provided, however, that the Company and each Guarantor, as applicable, shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the Board of Directors of the Company or the relevant Guarantor, as applicable. Each Certificate of Incorporation further provides that the Company and each Guarantor may, to the extent authorized from time to time by their respective Boards of Directors, provide rights to indemnification similar to those provided to the directors and officers of the Company and each Guarantor, as applicable, and to their respective employees and agents who are not directors or officers of the Company or the relevant Guarantor, as applicable.
Pursuant to the Incentive Stock Plan, no member of the Compensation Committee of the Board of Directors of the Company, or such other committee or committees of the Board of Directors as may be designated by the Board of Directors from time to time to administer the Incentive Stock Plan, shall be liable for any action or determination made in good faith, and the members of such committee or committees shall be entitled to indemnification in the manner provided in the Company's Certificate of Incorporation.
Item 16. Exhibits
| Exhibit No. |
Description |
|
|---|---|---|
2.1 |
Asset Purchase Agreement dated March 31, 2000 between Hexcel Corporation and Britax Cabin Interiors, Inc. (incorporated herein by reference to Exhibit 2.1 to Hexcel's Current Report on Form 8-K dated May 10, 2000). |
|
3.1 |
Restated Certificate of Incorporation of Hexcel Corporation (incorporated herein by reference to Exhibit 1 to Hexcel's Registration Statement on Form 8-A dated July 9, 1996, Registration No. 1-08472). |
|
3.2 |
Certificate of Amendment, dated March 19, 2003, to the Restated Certificate of Incorporation of Hexcel Corporation (incorporated herein by reference to Exhibit 3.2 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
3.3 |
Amended and Restated Bylaws of Hexcel Corporation (incorporated herein by reference to Exhibit 3.3 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
3.4 |
Certificate of Incorporation of Clark-Schwebel Corporation (incorporated herein by reference to Exhibit 3.4 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.5 |
By-laws of Clark-Schwebel Corporation (incorporated herein by reference to Exhibit 3.5 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
II-2
3.6 |
Certificate of Incorporation of Clark-Schwebel Holding Corp. (incorporated herein by reference to Exhibit 3.6 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.7 |
By-laws of Clark-Schwebel Holding Corp. (incorporated herein by reference to Exhibit 3.7 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.8 |
Certificate of Incorporation of CS Tech-Fab Holding, Inc. (incorporated herein by reference to Exhibit 3.8 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.9 |
By-laws of CS Tech-Fab Holding, Inc. (incorporated herein by reference to Exhibit 3.9 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.10 |
Certificate of Incorporation of Hexcel Pottsville Corporation. (incorporated herein by reference to Exhibit 3.10 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.11 |
By-laws of Hexcel Pottsville Corporation. (incorporated herein by reference to Exhibit 3.11 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
4.1 |
Indenture dated as of January 21, 1999 between Hexcel Corporation and The Bank of New York, as trustee, relating to the issuance of the 93/4% Senior Subordinated Notes due 2009 (incorporated herein by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-4 (No. 333-71601), filed on February 2, 1999). |
|
4.2 |
Indenture dated as of August 1, 1986 between Hexcel and the Bank of California, N.A., as trustee, relating to the 7% Convertible Subordinated Notes due 2011 of the Company (incorporated herein by reference to Exhibit 4.3 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997). |
|
4.2(a) |
Instrument of Resignation, Appointment and Acceptance, dated as of October 1, 1993 (incorporated herein by reference to Exhibit 4.10 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993). |
|
4.3 |
Indenture, dated as of March 19, 2003 among Hexcel Corporation, the Guarantors named therein and Wells Fargo Bank Minnesota, National Association, as trustee, relating to the 9.875% Senior Secured Notes due 2008 (incorporated herein by reference to Exhibit 4.4 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
4.4 |
Certificate of Designation of Series A Convertible Preferred Stock of Hexcel Corporation (incorporated herein by reference to Exhibit 4.5 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
4.5 |
Certificate of Designation of Series B Convertible Preferred Stock of Hexcel Corporation (incorporated herein by reference to Exhibit 4.6 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
5.1* |
Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Company. |
|
II-3
12.1* |
Statement regarding the computation of ratio of earnings to fixed charges for the Company, for the years ending December 31, 1998, 1999, 2000, 2001 and 2002 and the period ending March 31, 2003 (included in the prospectus). |
|
21.1 |
Subsidiaries of the Company (incorporated herein by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002). |
|
23.1* |
Consent of Independent Accountants—PricewaterhouseCoopers LLP (Hexcel Corporation). |
|
23.2* |
Consent of Independent Accountants—PricewaterhouseCoopers LLP (Hexcel S.A. and Hexcel Holdings (UK) Limited). |
|
23.3* |
Consent of Independent Accountants—PricewaterhouseCoopers (NITTOBO ASCO Glass Fiber Co., Ltd.). |
|
23.4* |
Consent of Independent Accountants—PricewaterhouseCoopers (Asahi-Schwebel (Taiwan) Co., Ltd.). |
|
23.5* |
Consent of Independent Auditors—Deloitte Touche Tohmatsu (BHA Aero Composite Parts Co. Ltd.). |
|
23.6* |
Consent of Independent Auditors—Deloitte Touche Tohmatsu (Asahi-Schwebel Co., Ltd.). |
|
23.7* |
Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1). |
|
24.1* |
Powers of Attorney (included on the signature pages of the Registration Statement). |
|
25.1 |
Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as trustee, under the Indenture relating to the 9.875% Senior Secured Notes due 2008 (incorporated by reference to Exhibit 25.1 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003)). |
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
II-4
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offer thereof.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Stamford, state of Connecticut, on July 29, 2003.
| HEXCEL CORPORATION | |||
By: |
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth Executive Vice President and Chief Financial Officer |
||
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Stephen C Forsyth and Ira J. Krakower, individually, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this registration statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| SIGNATURE |
TITLE |
DATE |
||
|---|---|---|---|---|
| /s/ DAVID E. BERGES David E. Berges |
Chairman of the Board; Chief Executive Officer; President; Director | July 29, 2003 | ||
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth |
Executive Vice President; Chief Financial Officer |
July 29, 2003 |
||
/s/ WILLIAM J. FAZIO William J. Fazio |
Controller; Principal Accounting Officer |
July 29, 2003 |
||
/s/ JOEL S. BECKMAN Joel S. Beckman |
Director |
July 29, 2003 |
||
/s/ H. ARTHUR BELLOWS, JR. H. Arthur Bellows, Jr. |
Director |
July 29, 2003 |
||
/s/ SANDRA L. DERICKSON Sandra L. Derickson |
Director |
July 29, 2003 |
||
/s/ JAMES J. GAFFNEY James J. Gaffney |
Director |
July 29, 2003 |
||
II-6
/s/ SANJEEV K. MEHRA Sanjeev K. Mehra |
Director |
July 29, 2003 |
||
/s/ LEWIS RUBIN Lewis Rubin |
Director |
July 29, 2003 |
||
/s/ PETER M. SACERDOTE Peter M. Sacerdote |
Director |
July 29, 2003 |
||
/s/ ROBERT J. SMALL Robert J. Small |
Director |
July 29, 2003 |
||
/s/ MARTIN L. SOLOMON Martin L. Solomon |
Director |
July 29, 2003 |
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Stamford, state of Connecticut, on July 29, 2003.
| CLARK-SCHWEBEL CORPORATION | |||
By: |
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth Vice President |
||
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Stephen C Forsyth and Ira J. Krakower, individually, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this registration statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| SIGNATURE |
TITLE |
DATE |
||
|---|---|---|---|---|
| /s/ DAVID E. BERGES David E. Berges |
Chief Executive Officer | July 29, 2003 | ||
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth |
Vice President; Principal Financial Officer; Director |
July 29, 2003 |
||
/s/ WILLIAM J. FAZIO William J. Fazio |
Vice President; Principal Accounting Officer |
July 29, 2003 |
||
/s/ IRA J. KRAKOWER Ira J. Krakower |
Vice President; Director |
July 29, 2003 |
||
/s/ JOSEPH H. SHAULSON Joseph H. Shaulson |
President; Director |
July 29, 2003 |
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Stamford, state of Connecticut, on July 29, 2003.
| CLARK-SCHWEBEL HOLDING CORP. | |||
By: |
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth Vice President |
||
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Stephen C Forsyth and Ira J. Krakower, individually, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this registration statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| SIGNATURE |
TITLE |
DATE |
||
|---|---|---|---|---|
| /s/ DAVID E. BERGES David E. Berges |
Chief Executive Officer | July 29, 2003 | ||
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth |
Vice President; Principal Financial Officer; Director |
July 29, 2003 |
||
/s/ WILLIAM J. FAZIO William J. Fazio |
President; Principal Accounting Officer |
July 29, 2003 |
||
/s/ IRA J. KRAKOWER Ira J. Krakower |
Vice President; Director |
July 29, 2003 |
II-9
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Stamford, state of Connecticut, on July 29, 2003.
| CS TECH-FAB HOLDING, INC. | |||
By: |
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth Vice President |
||
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Stephen C Forsyth and Ira J. Krakower, individually, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this registration statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| SIGNATURE |
TITLE |
DATE |
||
|---|---|---|---|---|
| /s/ DAVID E. BERGES David E. Berges |
Chief Executive Officer | July 29, 2003 | ||
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth |
Vice President; Principal Financial Officer; Director |
July 29, 2003 |
||
/s/ WILLIAM J. FAZIO William J. Fazio |
Controller |
July 29, 2003 |
||
/s/ IRA J. KRAKOWER Ira J. Krakower |
Vice President; Director |
July 29, 2003 |
||
/s/ JOSEPH H. SHAULSON Joseph H. Shaulson |
President; Director |
July 29, 2003 |
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Stamford, state of Connecticut, on July 29, 2003.
| HEXCEL POTTSVILLE CORPORATION | |||
By: |
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth Vice President |
||
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Stephen C Forsyth and Ira J. Krakower, individually, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this registration statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| SIGNATURE |
TITLE |
DATE |
||
|---|---|---|---|---|
| /s/ DAVID E. BERGES David E. Berges |
Chief Executive Officer | July 29, 2003 | ||
/s/ STEPHEN C. FORSYTH Stephen C. Forsyth |
Vice President; Principal Financial Officer; Director |
July 29, 2003 |
||
/s/ WILLIAM J. FAZIO William J. Fazio |
Controller |
July 29, 2003 |
||
/s/ IRA J. KRAKOWER Ira J. Krakower |
Vice President; Director |
July 29, 2003 |
II-11
| Exhibit No. |
Description |
|
|---|---|---|
| 2.1 | Asset Purchase Agreement dated March 31, 2000 between Hexcel Corporation and Britax Cabin Interiors, Inc. (incorporated herein by reference to Exhibit 2.1 to Hexcel's Current Report on Form 8-K dated May 10, 2000). | |
3.1 |
Restated Certificate of Incorporation of Hexcel Corporation (incorporated herein by reference to Exhibit 1 to Hexcel's Registration Statement on Form 8-A dated July 9, 1996, Registration No. 1-08472). |
|
3.2 |
Certificate of Amendment, dated March 19, 2003, to the Restated Certificate of Incorporation of Hexcel Corporation (incorporated herein by reference to Exhibit 3.2 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
3.3 |
Amended and Restated Bylaws of Hexcel Corporation (incorporated herein by reference to Exhibit 3.3 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
3.4 |
Certificate of Incorporation of Clark-Schwebel Corporation (incorporated herein by reference to Exhibit 3.4 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.5 |
By-laws of Clark-Schwebel Corporation (incorporated herein by reference to Exhibit 3.5 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.6 |
Certificate of Incorporation of Clark-Schwebel Holding Corp. (incorporated herein by reference to Exhibit 3.6 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.7 |
By-laws of Clark-Schwebel Holding Corp. (incorporated herein by reference to Exhibit 3.7 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.8 |
Certificate of Incorporation of CS Tech-Fab Holding, Inc. (incorporated herein by reference to Exhibit 3.8 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.9 |
By-laws of CS Tech-Fab Holding, Inc. (incorporated herein by reference to Exhibit 3.9 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.10 |
Certificate of Incorporation of Hexcel Pottsville Corporation. (incorporated herein by reference to Exhibit 3.10 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
3.11 |
By-laws of Hexcel Pottsville Corporation. (incorporated herein by reference to Exhibit 3.11 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003). |
|
4.1 |
Indenture dated as of January 21, 1999 between Hexcel Corporation and The Bank of New York, as trustee, relating to the issuance of the 93/4% Senior Subordinated Notes due 2009 (incorporated herein by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-4 (No. 333-71601), filed on February 2, 1999). |
|
4.2 |
Indenture dated as of August 1, 1986 between Hexcel and the Bank of California, N.A., as trustee, relating to the 7% Convertible Subordinated Notes due 2011 of the Company (incorporated herein by reference to Exhibit 4.3 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997). |
|
4.2(a) |
Instrument of Resignation, Appointment and Acceptance, dated as of October 1, 1993 (incorporated herein by reference to Exhibit 4.10 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993). |
|
4.3 |
Indenture, dated as of March 19, 2003 among Hexcel Corporation, the Guarantors named therein and Wells Fargo Bank Minnesota, National Association, as trustee, relating to the 9.875% Senior Secured Notes due 2008 (incorporated herein by reference to Exhibit 4.4 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
4.4 |
Certificate of Designation of Series A Convertible Preferred Stock of Hexcel Corporation (incorporated herein by reference to Exhibit 4.5 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
4.5 |
Certificate of Designation of Series B Convertible Preferred Stock of Hexcel Corporation (incorporated herein by reference to Exhibit 4.6 to Hexcel's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003). |
|
5.1* |
Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Company. |
|
12.1* |
Statement regarding the computation of ratio of earnings to fixed charges for the Company, for the years ending December 31, 1998, 1999, 2000, 2001 and 2002 and the period ending March 31, 2003 (included in the prospectus). |
|
21.1 |
Subsidiaries of the Company (incorporated herein by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002). |
|
23.1* |
Consent of Independent Accountants—PricewaterhouseCoopers LLP (Hexcel Corporation). |
|
23.2* |
Consent of Independent Accountants—PricewaterhouseCoopers LLP (Hexcel S.A. and Hexcel Holdings (UK) Limited). |
|
23.3* |
Consent of Independent Accountants—PricewaterhouseCoopers (NITTOBO ASCO Glass Fiber Co., Ltd.). |
|
23.4* |
Consent of Independent Accountants—PricewaterhouseCoopers (Asahi-Schwebel (Taiwan) Co., Ltd.). |
|
23.5* |
Consent of Independent Auditors—Deloitte Touche Tohmatsu (BHA Aero Composite Parts Co. Ltd.). |
|
23.6* |
Consent of Independent Auditors—Deloitte Touche Tohmatsu (Asahi-Schwebel Co., Ltd.). |
|
23.7* |
Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1). |
|
24.1* |
Powers of Attorney (included on the signature pages of the Registration Statement). |
|
25.1 |
Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as trustee, under the Indenture relating to the 9.875% Senior Secured Notes due 2008 (incorporated by reference to Exhibit 25.1 to the Company's Registration Statement on Form S-4 (No. 333-106934, filed on July 10, 2003)). |